Final Results

25 March 2010 Concurrent Technologies Plc Preliminary Results for the year ended 31 December 2010 Concurrent Technologies Plc (the "Company"), a world leading specialist in the design and manufacture of high-end embedded computer products, for critical applications in the defence, aerospace, transportation, telecommunications, scientific and industrial markets, announces preliminary results for the year to 31 December 2010. Financial Highlights * Strong balance sheet, with no loans and net cash, cash equivalents and other financial instruments of £4.6m (2009: £4.9m) after increased dividend payments and continuing significant R&D investments * Total dividend of 1.5p per share for the year; up 7% on last year (2009: 1.4p) * Profit after tax of £2.0m (2009: £2.5m) on turnover of £12.6m (2009: £ 12.9m) * EPS: 2.84p (2009: 3.55p) Operational Highlights * Further diversification of customer base in strengthening market environment * Defence sector remains strong with other markets showing sustainable recovery * Augmented competitive position and 8 new products launched incorporating the latest Intel® processors * Lockheed Martin STAR supplier award for the Company's exceptional performance Outlook * Continual focus on innovative, high technology, higher margin products * Expansion of design engineering capability in the UK and India * Defence sector remains rich in opportunity Michael Collins, Chairman, commented: "Trading conditions in the defence sector remain strong and we continue driving some of our products into military equipment aimed at countering the threat of improvised explosive devices. We are also pleased to note that the recovery in economic conditions within our other markets continues and with a strong order book, we expect a significant increase in sales in the first half of the current year compared to the same period last year. Our pipeline of new products under development remains robust and we look forward to providing further news on these as and when they are launched." Annual General Meeting The annual general meeting of Concurrent Technologies Plc will be held at the Ramada Hotel, A12/A120 junction, Old Ipswich Road, Colchester, Essex CO7 7QY on 20 May 2011 at 4.00 p.m. Enquiries: Concurrent Technologies Plc +44 (0)1206 752 626 Glen Fawcett, Managing Director NexFin (Financial PR) Nicholas Nelson +44 (0)7921 522920 Cenkos Securities plc (NOMAD) +44 (0)131 220 6939 Ken Fleming +44 (0)131 220 9778 Beth McKiernan CHAIRMAN'S STATEMENT I am pleased to report on another profitable year and a promising start to the current financial year. Our commitment to R&D has enabled us to improve our competitive position, attract new customers and maintain a good basis for future growth. The Company is proud of its track record of profitability and associated dividend payments. Financial Summary The Company achieved a profit before tax for 2010 of £2,323,522 (2009: £ 2,797,794), a reduction of 17% over the previous year. Earnings per share for the year were 2.84 pence (2009: 3.55 pence). In the second half of 2010 performance was much stronger than in the first half with profit before tax of £1,318,873, an increase of 31% over the first half (H1 2010: £1,004,649). This result was achieved on sales of £12,639,754, a reduction of 2% compared with 2009 (2009: £12,854,777). The gross margin for the year was 50.9% compared with an especially high 56.4% in the previous year. As we reported at the half year, the results for 2010 were adversely affected by the delay of a defence related order which we had anticipated would be received for delivery in 2010 and which is now expected in 2011. We ended the year with cash, cash equivalents and other financial instruments of £4.59m (2009: £4.91m) and no borrowings, notwithstanding continuing high levels of expenditure on research and development and increased dividend payments. We continue to broaden our already diverse customer base, most of which comprises large, high quality, international businesses in multiple sectors and in many countries. Business Summary The Company is a leading specialist in the design, manufacture and supply of innovative high-end embedded computer products aimed at a wide base of customer types in the defence, telecommunication, aerospace, transportation, scientific and industrial markets. Our products have a long lifecycle which typically provides the Company with high quality sales over many years. The Company's high performance products are based on Intel® long lifecycle components, and cover a range of central processing unit ("CPU") boards and complementary products, which include single and dual processor boards, many using dual-core processors, and, more recently, four-core Intel® Core™ i7 and six-core Intel® Xeon® processors. Many of these CPUs are suitable for CompactPCI®, VPX, VME, AMC and XMC/PMC open architecture standards. A common feature of our newer products is the low level of electrical power required for their very high performance capabilities. Our products deliver extremely high levels of reliability with substantial processing power, making them ideal for use in projects ranging from high-performance military communications systems to commercial industrial control units. In particular, we develop ruggedized versions of many products in our range, for use in harsh and wide temperature environments, making them very appealing for a variety of demanding applications. In addition to hardware design, our engineering teams undertake a significant amount of software and firmware development to provide interoperability between products, allowing customers to transition smoothly when new updates or designs are available. In this way we continue to see strong customer loyalty and long term relationships, as well as new sales following product launches featuring performance upgrades. We also generate software for both on-board and production test purposes, while also providing support for leading operating systems. Review of Operations We have continued to develop many environmentally superior products that can operate at extreme temperatures, elevated altitudes and at high shock and vibration levels. With slight variations in operating capacities and format, these products address many different customer needs. Many of the products released by us in 2010 have featured low power consumption, with consequent higher reliability, which continues to be a critical requirement for end users of embedded computer products. During the course of the year we announced eight significant new launches spanning a broad spectrum of product types including switch fabric, VME, CompactPCI® and AMC boards. Among these boards were those which feature the then latest Intel® Core™ i7 processors, as well as our first products incorporating the very powerful Intel® six-core Xeon® processors (incorporating advanced encryption technology) which are particularly suited for use within the defence, telecommunications and homeland security market sectors. We have continued to respond to the roll-out of new processors by Intel® which we believe validates the close relationship we have with the world leader in silicon innovation and computer processing technology. We will continue to be an early adopter of the low power, multi-core processor technology from Intel®. The Company's design and engineering team is divided between the UK and India but all manufacturing, and testing takes place in our factory in Colchester, UK. Our sales, marketing and customer support teams operate from the UK and overseas offices including the USA and China. The first half of 2010 saw the Company being awarded the prestigious Lockheed Martin Corporation STAR Supplier Award for the Company's exceptional performance as measured by quality, delivery, affordability, management and administration. This goes some way to demonstrating how the Company is viewed in its marketplace. Future Plans We recognise that we operate in an ever changing market place and strive to strengthen our position and seek new opportunities. Our alliance with Intel® will ensure that our position as an early adopter is maintained. This gives us a clear competitive edge and to capitalise fully we will continue with our programme of controlled expansion by increasing our design engineering teams. We believe that we are becoming a key supplier of Intel® based technology to the defence sector and our products are now found in a wide range of ever more sophisticated high-reliability computer systems. Continual investment in R&D is a necessity to ensure a constant expansion of our range of products, with a particular focus on the VPX, VME, AMC and CompactPCI® bus architectures. Moreover, we maintain our objective to design more innovative products for complex, high technology, low to medium volume and high margin applications, along with producing versions targeted for use in very harsh environments. The Company will continue to use its authority to buy back its own shares when the Directors consider it appropriate. Dividend The Board has declared a second interim dividend of 0.95 pence per share (2009: 0.90 pence second interim dividend) which when added to the first interim dividend of 0.55 pence per share will make a total of 1.50 pence per share for the year (2009: 1.40 pence). This will be an increase of 7.1% over dividends paid in 2009. The total cost of this second interim dividend will amount to £ 678,528. The ex-dividend date for the second interim dividend is 23 March 2011, the record date is 25 March 2011 and the payment date is 31 March 2011. The Directors do not intend to recommend a final dividend. Outlook Trading conditions in the defence sector remain strong and we continue driving some of our products into military equipment aimed at countering the threat of improvised explosive devices. We are also pleased to note that the recovery in economic conditions within our other markets continues and with a strong order book, we expect a significant increase in sales in the first half of the current year compared to the same period last year. Our pipeline of new products under development remains robust and we look forward to providing further news on these as and when they are launched. Corporate Governance As an AIM listed company Concurrent Technologies Plc is not obliged to comply with the Combined Code on Corporate Governance. We do however acknowledge the overall importance of the guidelines and apply as many of the principles therein as are appropriate to a company of our size and nature. Annual General Meeting The Annual General Meeting this year will be held on 20 May 2011. Michael Collins Chairman 24 March 2011 All companies and product names are trademarks of their respective organisations. Consolidated Statement of Comprehensive Income Year to Year to 31 December 31 December 2010 2009 CONTINUING OPERATIONS £ £ Revenue 12,639,754 12,854,777 Cost of sales 6,211,615 5,606,328 Gross profit 6,428,139 7,248,449 Net operating expenses 4,160,061 4,531,272 Group operating profit 2,268,078 2,717,177 Finance income 55,444 80,617 Profit before tax 2,323,522 2,797,794 Tax 293,361 259,488 Profit for the year 2,030,161 2,538,306 Other Comprehensive Income Exchange differences on translating foreign 104,379 (228,640) operations Tax relating to components of other comprehensive - - income Other Comprehensive Income for the year, net of 104,379 (228,640) tax Total Comprehensive Income for the year 2,134,540 2,309,666 Profit for the period attributable to: Equity holders of the parent 2,030,161 2,538,306 Total Comprehensive Income attributable to: Equity holders of the parent 2,134,540 2,309,666 Earnings per share Basic earnings per share 2.84p 3.55p Diluted earnings per share 2.82p 3.53p Consolidated Balance Sheet 31 December 31 December 2010 2009 £ £ ASSETS Non-current assets Property, plant and equipment 562,792 591,989 Intangible assets 4,494,646 3,554,243 Deferred tax assets 202,112 183,722 Other financial assets - 2,000,000 5,259,550 6,329,954 Current assets Inventories 2,489,366 2,056,734 Trade and other receivables 3,136,335 2,344,877 Current tax assets 75,919 311,224 Other financial assets 2,000,000 - Cash and cash equivalents 2,592,871 2,914,657 10,294,491 7,627,492 Total assets 15,554,041 13,957,446 LIABILITIES Non-current liabilities Deferred tax liabilities 1,264,554 1,043,198 Long term provisions 55,569 35,580 1,320,123 1,078,778 Current liabilities Trade and other payables 2,041,748 1,770,066 Short term provisions 58,460 33,066 Current tax liabilities 5,812 33,807 2,106,020 1,836,939 Total liabilities 3,426,143 2,915,717 Net assets 12,127,898 11,041,729 EQUITY Capital and reserves Share capital 727,000 727,000 Share premium account 3,405,817 3,405,817 Capital redemption reserve 256,976 256,976 Cumulative translation reserve 230,288 125,909 Profit and loss account 7,507,817 6,526,027 Equity attributable to equity holders of the 12,127,898 11,041,729 parent Total equity 12,127,898 11,041,729 Consolidated Cash Flow Statement Year to Year to 31 December 31 December 2010 2009 £ £ Cash flows from operating activities Profit before tax for the period 2,323,522 2,797,794 Adjustments for: Finance income (55,444) (80,617) Depreciation 214,968 202,165 Amortisation 748,439 486,295 Impairment loss 203,103 149,688 Loss on disposal of property, plant and equipment 1,343 590 (PPE) Share-based payment 22,895 22,642 Exchange differences 30,140 (89,917) (Increase) in inventories (432,632) (642,918) (Increase)/decrease in trade and other receivables (791,458) 1,074,566 Increase/(decrease) in trade and other payables 317,065 (57,060) Cash generated from operations 2,581,941 3,863,228 Tax received/(paid) 109,758 (471,148) Net cash generated from operating activities 2,691,699 3,392,080 Cash flows from investing activities Interest received 55,444 80,617 Purchases of property, plant and equipment (PPE) (174,846) (180,717) Purchases of intangible assets (1,888,628) (2,243,464) Net cash used in investing activities (2,008,030) (2,343,564) Cash flows from financing activities Equity dividends paid (1,036,733) (966,166) Purchase of treasury shares (27,376) (33,179) Net cash used in financing activities (1,064,109) (999,345) Effects of exchange rate changes on cash and cash 58,654 (128,780) equivalents Net increase/(decrease) in cash (321,786) (79,609) Cash at beginning of period 2,914,657 2,994,266 Cash at the end of the period 2,592,871 2,914,657 Consolidated Statement of Changes in Equity Capital Cumulative Profit Share Share redemption translation and loss Total capital premium reserve reserve account Equity £ £ £ £ £ £ Balance at 1 727,000 3,405,817 256,976 354,549 4,944,618 9,688,960 January 2009 Profit for - - - - 2,538,306 2,538,306 the period Exchange - - - (228,640) - (228,640) differences on translating foreign operations Total - - - (228,640) 2,538,306 2,309,666 comprehensive income for the period Share-based - - - - 22,642 22,642 payment Deferred tax - - - - 19,806 19,806 on share based payment Dividends - - - - (966,166) (966,166) paid Purchase of - - - - (33,179) (33,179) treasury shares Balance at 31 727,000 3,405,817 256,976 125,909 6,526,027 11,041,729 December 2009 Profit for - - - - 2,030,161 2,030,161 the period Exchange - - - 104,379 - 104,379 differences on translating foreign operations Total - - - 104,379 2,030,161 2,134,540 comprehensive income for the period Share-based - - - - 22,895 22,895 payment Deferred tax - - - - (7,157) (7,157) on share based payment Dividends - - - - (1,036,733) (1,036,733) paid Purchase of - - - - (27,376) (27,376) treasury shares Balance at 31 727,000 3,405,817 256,976 230,288 7,507,817 12,127,898 December 2010 NOTES 1. The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2010 or 2009, but is derived from those accounts. Statutory accounts for 2009 have been delivered to the Registrar of Companies and those for 2010 will be delivered following the Annual General Meeting. The auditors have reported on those accounts; their reports were (i) unqualified and (ii) did not contain statements under section 498(2) or (3) of the Companies Act 2006 in respect of 2009 or 2010. 2. The calculation of basic earnings per share is based on the weighted average number of Ordinary Shares in issue during 2010 of 71,498,039 (2009: 71,558,889) allowing for an adjustment made as a consequence of the Company having purchased at various times during the year 90,000 (2009: 90,000) Ordinary Shares and on the profit after tax for 2010 of £2,030,161 (2009: £ 2,538,306). The calculation of diluted earnings per share incorporates 505,238 Ordinary Shares (2009: 358,728) in respect of performance related employee share options. The profit after tax is the same as for basic earnings per share. 3. The annual general meeting of Concurrent Technologies Plc will be held at the Ramada Hotel, A12/A120 junction, Old Ipswich Road, Colchester, Essex CO7 7QY on 20 May 2011 at 4.00 p.m. Copies of the Annual Report will be sent to Shareholders and will also be available from the Company's Registered Office: 4, Gilberd Court, Newcomen Way, Colchester, Essex, CO4 9WN, UK, and on the Company's website: www.cct.co.uk.

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