August 15, 2007 at 08:00 AM EDT
GCO Files its Audited Results for 2006

Groupe Conseil Omnitech Inc. ("GCO") (TSX VENTURE: GCO) announces that it filed its audited results for the financial period ended August 31, 2006.

Overview of activities

Since its listing on the stock exchange in January 2005, GCO growth, mainly through acquisitions, has been extremely fast. The Corporation's income went from $3 million as of May 31, 2004 to $24 million as of August 31, 2006. In order to complete all these acquisitions, the Corporation became highly indebted, which resulted in a liquidity crisis due to high debt servicing costs. Considering the difficulties encountered during the integration of the acquisitions, it became necessary, during the 2006 financial period, to consider how to integrate acquisitions and lower operating costs.

In October 2005, the Corporation implemented a cost reduction plan and restructured its business units. When it became clear that these measures were not sufficient, GCO, during the quarters ended May 31 and August 31, 2006, concentrated its operations on high value added activities that constitute its core competence and competitive advantage, abandoned less profitable activities and implemented additional extensive operating costs control measures, including personnel reductions. GCO also regrouped its activities under its two main business units:

- The Business Process Optimization (BPO) unit focuses on process reorganization to increase clients' value-added by using industrial engineering principles, Lean Manufacturing(TM) and Six Sigma in order to reduce delivery or production delays, increasing productivity and efficiency as well as improving quality and customer satisfaction.

- The Process Controls and Optimization (PCO) unit works to integrate equipment, software and networks in order to control them, optimize them, track their performance and transform operational information into business intelligence.

Despite the implementation of these measures, it became obvious for the Board that the reorganization had to be completed with a major financial turnaround considering the indebtedness of the Corporation, which was becoming a major detriment to the continuation of operations. Consequently, on October 31st, 2006, the Corporation and its subsidiaries, Groupe de Gestion GCO inc., Toptech Groupe Conseil inc. and Groupe Cadec inc. filed a notice of intent to make a proposal to their respective creditors in accordance with the provisions section 50.4 of the Bankruptcy and Insolvency Act and on November 7th, 2006, the subsidiary Groupe Isac inc. also filed such a notice of intent.

On January 31st, 2007, GCO and its subsidiaries filed their proposals to creditors with the courts. The proposals to creditors offered the payment of 100% of the value of creditors' claims in common shares of GCO at a price per share of $0.05. At the creditors meeting held on February 23rd, the creditors accepted the proposal and, on March 12, GCO's shareholders also gave their approval. On March 21, the courts homologated the proposals and on July 16, the Corporation obtained its Certificate of Full Performance of Proposal, thus finalizing the process.

Highlights of 2006

- Revenues of $24.5 million, having doubled with the acquisition of Groupe Cadec Inc. and Groupe Isac Inc.

- A reorganisation process started during the period and continued in 2007 with a financial turnaround through a proposal to creditors. As a result:

- Assets write-offs for a value of $17 million

- Operational loss of $7.1 million

- Net loss of $24.7 million

- Non-recurring reorganisation costs of $1.3 million

GCO had consolidated sales of $24.5 million during the fifteen-month financial period ended August 31, 2006, compared to $12 million for the twelve month period of 2005, representing an increase of $12.5 million over the preceding financial period. Of those sales, $11 million came from acquisitions completed during the year.

The company declared a net loss of $24.7 million, compared to a net loss of $537,000 for 2005. Several factors explain this performance: $1.9 million of amortization, $1.6 million of financial costs, as a result of the financing of the acquisitions and the use at full capacity of the credit facilities, asset write-offs for $17 million as a result of the abandon of non profitable activities and an independent valuation at fair market value of the subsidiaries Toptech Groupe Conseil Inc., Groupe Isac Inc. and Groupe Cadec Inc., and reorganisation costs of $1.3 million.


Selected Annual Information

-----------------------------------------------------------------------
                                      (in thousands of Canadian dollars)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
                            31 August 2006   31 May 2005   31 May 2004
                                (15 months)   (12 months)   (12 months)
-----------------------------------------------------------------------
Operating revenues                  24,547        12,077         3,000
-----------------------------------------------------------------------
Amortization                         1,940           609            55
-----------------------------------------------------------------------
Net profit (loss)                  (24,688)         (537)          260
-----------------------------------------------------------------------
Net profit (loss) per share
 (in dollars)                        (0.47)        (0.02)          n/d
-----------------------------------------------------------------------
Total assets                        13,436        27,616         2,615
-----------------------------------------------------------------------
Long-term debt                       2,705         2,452         1,280
-----------------------------------------------------------------------
-----------------------------------------------------------------------

The above table presents a summary of certain elements of the company's financial information, and should be read together with the Management Report and accompanying notes filed with SEDAR.

Philippe Collard, Chief Executive Officer and Chairman declared: "The results for the financial period ended August 31, 2006 unfortunately demonstrate that GCO, despite strong revenues growth, did not integrate and rigorously manage its too numerous acquisitions. Moreover, the Corporation paid too much for these acquisitions using very costly financial vehicles. Since summer of 2006, the turnaround team concentrated its efforts on fixing these problems. As disappointing as financial results for 2006 may be, they do not reflect the progress made since by the Corporation. In a few days, GCO will file its results for the first three quarters of the current financial period and, although a lot of work remains to be done to regain sound financial health, we believe that these figures will demonstrate to our shareholders that GCO is on the right track".

Filing of quarterly statements

GCO will file its quarterly statements for the period ended November 31, 2006, February 28, 2007 and May 31, 2007 and the related management report next week. Since its audited annual financial statements were still pending, GCO could not proceed with the filing of its quarterly statements before their respective filing deadlines.

About Omnitech Consultant Group Inc. ("GCO")

GCO is a Canadian leader in performance engineering. It assists its clients in the improvement of both their business and manufacturing process by reducing delivery or production delays, increasing productivity and efficiency as well as improving quality and customer satisfaction by using industrial engineering principles, Lean Manufacturing(TM) and Six Sigma while integrating equipment, software and networks in order to control them, optimize them, track their performance and transform operational information into business intelligence.



TSX Venture Exchange Inc. assumes no responsibility regarding the relevance or accuracy of this press release.


Contacts:
Groupe Conseil Omnitech inc.
Philippe Collard
Chief Executive Officer
418-626-9090

Groupe Conseil Omnitech inc.
Philippe R. Bertrand
Vice-president, Corporate Affairs
418-626-9090
www.gco.ca

Related Stocks:
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here