CYBRA Corp., a software developer, publisher, and systems integrator focused on auto-identification technology solutions, reported strong top- and bottom-line improvements during its fiscal second quarter ending June 30. 

Revenues for the quarter increased 59 percent over the same period in 2009 as new features previously released for CYBRA's flagship MarkMagic product were met with a positive reception from new and existing customers, the company said. Sales of EdgeMagic, the company's new RFID product, also began to pick up, mirroring the general trend of increased market acceptance of RFID technology. 

Gross margins as a percentage of sales increased 65 percent during the second quarter over the prior year as more profitable software product sales were up 109 percent. The company expects margins to continue to improve into the third quarter of 2010 due to lower reliance on low-margin equipment sales. 

Although the company recognized a second-quarter net loss of $634,128 on a GAAP basis, non-GAAP net income, adjusted to remove the impact of the debt restructuring and other non-cash transactions, showed an improvement of $144,441. The company incurred a debt settlement expense of approximately $695,000 from restructuring a portion of its 8 percent convertible debentures. This resulted from the exchange of old Class B warrants issued in connection with the original debentures and valued at $1,261,000 for new Class B warrants issued in connection with restated debentures and valued at $1,956,000. The company also incurred a beneficial conversion cost in connection with 490,999 shares of common stock issued in payment of accrued interest of $245,499 due on the original debentures at $0.50 compared to the fair market value of those shares on the June 8, 2010 issuance date of $0.59. 

"Despite weakness in our end markets, CYBRA reported yet another quarter of increased revenues and attained profitability on a cash-basis," said CEO Harold Brand. "Looking forward, we expect to continue to benefit from a recovering economy, superior technology, and an emerging trend towards RFID integration among retailers following Wal-Mart's latest moves to require certain of its vendors to begin using RFID tags on their products." 

Financial highlights included the following:

• Revenues increased 59 percent from $306,181 in the second quarter of 2009
to $487,578 in the 2010 quarter.
• Gross margins as a percentage of sales increased 65 percent quarter-over-quarter.
• Non-GAAP net income (loss) rose from a loss of $(55,029) in the 2009
quarter to a profit of $89,412 in the 2010 quarter.
• Operating cash flows rose 769 percent to $56,823 in the second quarter of
2010.
• Completed debt restructuring.