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China Housing & Land Development Inc. (CHLN) Announces Third Quarter 2009 Financial Results
XI’AN, China, Nov. 11, 2009 (PRNewswire-Asia-FirstCall) — China Housing & Land Development, Inc., (“China Housing” or the “Company”, Nasdaq: CHLN) today announced its unaudited financial results for the third quarter ended September 30, 2009.
Highlights for the Third Quarter 2009:
-- Total revenues increased 215% to $23.8 million compared to $7.5 million
in the third quarter of 2008, and increased 5.3% sequentially from
$22.6 million in the second quarter of 2009.
-- Total gross floor area ("GFA") sales were 32,436 sq. meters, compared
to 11,069 sq. meters in the third quarter of 2008 and 31,141 sq. meters
in the second quarter of 2009.
-- Gross profit increased 403% to $7.4 million compared to $1.5 million in
the third quarter of 2008. Third quarter gross margin increased to
31.2% compared to 19.5% in the third quarter of 2008.
-- SG&A expenses as a percentage of total revenue declined to 10.5% from
21.1% in the third quarter of 2008.
-- Operating income was $4.0 million, compared to a net loss of ($3.2
million) in the third quarter of 2008 and income of $5.1 million in the
second quarter of 2009.
-- Net income increased 779% to $12.7 million, compared to $1.4 million in
the third quarter of 2008 and a net loss of ($10.0 million) in the
second quarter of 2009. Third quarter net income included a $5.7
million, or $0.17 per share non-cash gain associated with the
revaluation of derivatives and warrants. Excluding this gain, non-GAAP
net income would have been $7.2 million.
-- Basic and diluted net income per share attributable to ordinary
shareholders was $0.41 and $0.24, compared to basic and diluted
earnings per share of $0.05 and $0.04 in the third quarter of 2008 and
diluted loss per share of ($0.32) in the second quarter of 2009.
Mr. Pingji Lu, China Housing’s Chairman commented, “We are pleased with our results for the third quarter as we continued to see stabilized sales trends and higher average selling prices, most notably with our two major projects-JunJing II Phase One and Two. With 91% of units sold and 82% of available GFA sold, we have pre-sold most of JunJing II Phase One’s available residential units in just over one year. Pre-sales of JunJing II Phase Two commenced in the third quarter and thus far, the average selling price per sq. meter has exceeded Phase One due to Phase Two’s enhanced design layout. Additionally, we are off to a good start with our Puhua Phase One project with initial sales that have exceeded our original expectations. This is our first project within our Baqiao new development zone and we believe our success with this project can further enhance our reputation in Xi’an and the surrounding region. The overall real estate market sentiment in Xi’an has improved each quarter since the beginning of this year and we are particularly satisfied with our 12.9% increase in ASPs from last quarter. We remain focused on providing a steady pipeline of quality, state-of-the-art residential housing and commercial units to meet the rising demand in the marketplace.”
For the quarter ended September 30, 2009, the Company’s revenues were $23.8 million, representing an increase of 215.3% from $7.5 million as compared to the same period of 2008 and a sequential increase of 5.3% from $22.6 million as compared to the 2nd quarter of 2009. The increase primarily stems from the JunJing II Phase One and Two projects under construction.
Total gross floor area sold was 32,436 sq. meters, compared to 11,069 sq. meters in the third quarter of 2008 and 31,141 sq. meters in the second quarter of 2009. Average selling price per square meter increased to RMB 5,001 from RMB 4,430 in the second quarter, reflecting increased stability in Xi’an’s real estate market and the Company’s ability to target its residential units toward working professionals in the region.
Gross profit for the third quarter of 2009 was $7.4 million, up 403% from $1.5 million in the same period of 2008 and up 2.9% sequentially from $7.2 million in the second quarter of 2009. The gross profit margin for the third quarter was 31.2%, compared to 19.5% in the same period of 2008. The increase in gross margin reflects an improvement in market conditions.
Selling, general and administrative (“SG&A”) expenses were $2.5 million for the third quarter of 2009, compared to $1.6 million for the third quarter of 2008 and $1.9 million for the second quarter of 2009. The increase in SG&A expense was due primarily to marketing expenses associated with Tsining JunJing II Phase One and Phase Two as well as administrative and marketing expenses related to the Puhua project. As a percentage of total revenue, SG&A expenses declined year-over-year to 10.5% compared to 21.1% in the third quarter of 2008 and was comparable to 8.6% in the second quarter of 2009.
Operating income increased to $4.0 million compared to an operating loss of ($3.2 million) in the third quarter of 2008 and $5.1 million in the second quarter of 2009.
Net income for the third quarter of 2009 increased 779% to $12.7 million, or $0.41 per basic share and $0.24 per diluted share, compared to $1.4 million, or $0.05 per basic share and $0.04 per diluted share, in the third quarter of 2008 and net loss of ($10.0 million), or ($0.32) per diluted share, in the second quarter of 2009. Adjusted net income excluding a $5.7 million non-cash gain associated with the revaluation of derivatives and warrants, was $7.2 million, or $0.06 per diluted share.
As of September 30, 2009, China Housing reported $19.1 million in cash, compared to $10.1 million as of June 30, 2009 and $37.4 million on December 31, 2008. Total debt was $52.6 million, compared to $48.5 million as of June 30, 2009 and $59.2 million on December 31, 2008, as the Company repaid a portion of its $147 million revolving credit line. Net debt as a percent of total capital was 21.4% at the end of the third quarter of 2009, compared to 15.6% at the end of 2008.
Sequential Quarterly Revenue Breakout Comparison Q3 2009 Q2 2009 Revenue Revenue Project Recognized GFA Sold ASP Recognized GFA Sold ASP ($) (m2) (Rmb) ($) (m2) (Rmb) Projects Under Construction JunJing II Phase One 12,130,788 6,801 4,845 20,020,886 28,367 4,358 JunJing II Phase Two 8,804,441 23,606 4,957 960,176 2,456 5,283 Projects Completed Tsining-24G 1,588,845 1507 7,199 1,018,023 630 11,038 JunJing I (88,081) (166) 3,621 (1,018,606) (788) 8,825 Additional Projects 292,289 688 2,902 200,460 476 2,873 Other Income 1,065,363 -- -- 1,420,979 -- -- Total 23,793,645 32,436 5,001 22,601,919 31,141 4,430 Q-o-Q change 5.3% 4.2% 12.9%
2009 Outlook
Fourth quarter 2009 GFA sales are expected to range from 46,000 to 48,000 square meters, compared to 32,046 sq. meters in the third quarter of 2009, and contract sales in fourth quarter are expected to reach US$32 million to US$34 million. The Company is reporting contract sale estimates which are not subject to percentage of completion alterations in contrast to revenues.
For the full year 2009, total GFA sales are expected to range from 130,000 to 132,000 square meters, compared to 64,167 square meters in 2008. Total contract sales in 2009 are expected to reach US$86 million to US$88 million.
Mr. Lu concluded, “In addition to our current projects under development, we have several new construction projects that can position us for solid growth in the years to come. As of the end of September, we have approximately 272 thousand sq. meters of unsold GFA from our existing projects, primarily JunJing II Phase One, Phase Two and Puhua Phase One. We also have an additional three projects under planning (JunJing III, Park Plaza and Golden Bay). Our balance sheet remains healthy and we will continue to selectively explore new projects both in Xi’an and potentially in other surrounding tier 2 cities in northwest China as the real estate market continues to move off its lows of the past year. We are encouraged by our opportunities as we build a sustainable platform for growth.”
Conference Call Information
China Housing’s management will host an earnings conference call on November 11, 2009 at 8:30 a.m. U.S. Eastern Time. Listeners may access the call by dialing 1-719-325-2115. To listen to the live webcast of the event, please go to http://www.viavid.net . Listeners may access the call replay, which will be available through November 18, by dialing 1-719-457-0820; passcode: 5491295.
About China Housing & Land Development, Inc.
Based in Xi’an, the capital city of China’s Shaanxi province, China Housing & Land Development, Inc., is a leading developer of residential and commercial properties in northwest China. China Housing has been engaged in land acquisition, development, and management, including the sales of residential and commercial real estate properties through its wholly-owned subsidiary in China, since 1992.
China Housing & Land Development is the first and only Chinese real estate development company traded on NASDAQ. The Company’s news releases, project information, photographs, and more are available on the internet at http://www.chldinc.com .
Safe Harbor
This news release may contain forward-looking information about China Housing & Land Development, Inc. which is covered under the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as believe, expect, may, will, should, project, plan, seek, intend, or anticipate or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and China Housing & Land Development’s future performance, operations, and products.
Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Actual performance results may vary significantly from expectations and projections. Further information regarding this and other risk factors are contained in China Housing’s public filings with the U.S. Securities and Exchange Commission.
All information provided in this news release and in any attachments are as of the date of the release, and the companies do not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
Notes to Unaudited Financial Information
This release contains unaudited financial information which is subject to year end audit adjustments. In addition, we are in the process of conducting further evaluations of our internal control over financial reporting for compliance with the requirements of Section 404 under the Sarbanes-Oxley Act. We make no representation of management’s assessment regarding internal control over financial reporting or include an attestation report of the Company’s independent auditors due to a transition period established by rules of the Securities and Exchange Commission for newly public companies. Adjustments to the financial statements may be identified when the audit work is completed, which could result in significant differences between our audited financial statements and this unaudited financial information.
(Financial Tables to Follow) CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES Interim Condensed Consolidated Balance Sheets As of September 30, 2009 and December 31, 2008 (unaudited) September 30, December 31, 2009 2008 ASSETS Cash $ 19,089,130 $ 37,425,340 Cash - restricted 694,334 805,012 Accounts receivable, net of allowance for doubtful accounts of $1,002,074 and $1,278,156, respectively 5,877,162 813,122 Other receivables and prepaid expenses, net 1,518,719 446,497 Notes receivable, net 274,399 811,695 Prepaid other taxes 1,300,432 545,979 Real estate held for development or sale 108,220,307 60,650,011 Property and equipment, net 12,868,210 12,391,501 Asset held for sale 14,300,936 14,308,691 Advance to suppliers 863,478 704,275 Deposits on land use rights 28,432,993 47,333,287 Intangible assets, net 41,654,421 46,043,660 Goodwill 816,433 -- Deferred selling costs 344,354 -- Deferred financing costs 506,245 622,118 Total assets 236,761,553 222,901,188 LIABILITIES Accounts payable $ 18,638,322 $ 10,525,158 Advances from customers 9,252,447 9,264,385 Accrued expenses 4,838,168 3,539,842 Accrued security registration expenses -- 613,483 Payable to acquisition of businesses 6,342,865 8,429,889 Income taxes payable 6,554,658 8,078,709 Other payables 4,398,464 5,183,251 Loans from employees 2,195,218 1,517,039 Loans payable 29,591,867 35,617,442 Deferred tax liability 11,504,676 11,510,915 Warrants liability 4,721,294 1,117,143 Fair value of embedded derivatives 3,777,670 760,398 Convertible debt 14,511,239 13,621,934 Total liabilities 116,326,888 109,779,588 SHAREHOLDERS' EQUITY Common stock: $.001 par value, Authorized 100,000,000 shares issued and outstanding 31,270,679 and 30,893,757, respectively 31,270 30,894 Additional paid in capital 33,062,320 31,390,750 Common stock subscribed 2,487,777 -- Statutory reserves 3,696,038 3,541,226 Retained earnings 42,171,440 38,651,579 Accumulated other comprehensive income 10,155,625 10,397,801 Total China Housing & Land Development, Inc. shareholders' equity 91,604,470 84,012,250 Non-controlling interest 28,830,195 29,109,350 Total shareholders' equity 120,434,665 113,121,600 Total liabilities and shareholders' equity $236,761,553 $222,901,188 CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES Interim Condensed Consolidated Statements of Income and Other Comprehensive Income For The Three and Nine Months Ended September 30, 2009 and 2008 (Unaudited) 3 Months 3 Months 9 Months 9 Months September 30, September 30, September 30, September 30, 2009 2008 2009 2008 REVENUES Sale of properties $22,728,282 $7,475,692 $56,835,091 $25,054,867 Other income 1,065,363 70,070 3,405,156 482,022 Total revenues 23,793,645 7,545,762 60,240,247 25,536,889 COSTS AND EXPENSES Cost of properties and land 16,374,170 6,071,599 41,266,855 19,691,432 Selling, general, and administrative expenses 2,501,688 1,594,514 5,853,458 4,161,865 Stock based compensation 87,777 3,000,000 87,777 3,000,000 Security registration expenses 579,775 -- 1,786,517 -- Other expenses 284,044 60,848 474,167 76,758 Interest expense 417,809 638,228 1,202,786 1,736,344 Accretion expense on convertible debt 311,319 266,541 889,305 691,782 Change in fair value of embedded derivatives (2,695,306) (2,101,825) 3,017,272 (2,556,313) Change in fair value of warrants (3,042,752) (2,939,563) 4,012,736 (3,895,615) Foreign exchange loss -- (103,344) -- -- Total costs and expenses 14,818,524 6,486,998 58,590,873 22,906,253 Income before provision for income taxes 8,975,121 1,058,764 1,649,374 2,630,636 Recovery of income taxes (3,652,886) (388,308) (1,591,331) -- NET INCOME 12,628,007 1,447,072 3,240,705 2,630,636 Less: net loss attributable to non-controlling interest (86,121) -- (279,155) -- Net income attributable to China Housing & Land Development, Inc. 12,714,128 1,447,072 3,519,860 2,630,636 OTHER COMPREHENSIVE INCOME (LOSS) Gain (loss) in foreign exchange 69,244 911,996 (242,176) 6,176,248 COMPREHENSIVE INCOME $12,783,372 $2,359,068 $3,277,684 $8,806,884 WEIGHTED AVERAGE SHARES OUTSTANDING Basic 31,134,137 30,877,453 30,987,760 30,389,712 Diluted 32,972,253 30,882,483 30,996,953 30,436,461 NET INCOME PER SHARE Basic $0.41 $0.05 $0.11 $0.09 Diluted $0.24 $0.04 $0.11 $0.07 CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES Interim Condensed Consolidated Statements of Cash Flows For The Nine Months Ended September 30, 2009 and 2008 (Unaudited) September 30, September 30, 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 3,240,705 $ 2,630,636 Adjustments to reconcile net income to cash provided by (used in) operating activities: Bad debt expense 80,713 -- Depreciation 471,788 233,915 Exchange gain -- (103,344) Loss on disposal of fixed assets and inventory 50,501 15,088 Amortization of stock issued for investor relations fees -- 107,987 Stock-based compensation 87,777 3,000,000 Security registration expenses settled with common stock to be issued 1,786,517 -- Change in fair value of warrants 4,012,736 (3,895,615) Change in fair value of embedded derivatives 3,017,272 (2,556,313) Accretion expense on convertible debt 889,305 691,782 Non-cash proceeds from sale of properties (31,673) (2,904,172) (Increase) decrease in assets: Accounts receivable (4,702,750) (1,444,437) Prepaid other taxes (803,561) -- Real estate held for development or sale (35,859,057) (16,437,686) Advances to suppliers (159,660) 486,434 Refund (deposit) on land use rights 11,534,025 (4,386,535) Other receivable and deferred charges 234,834 24,339 Deferred selling costs (344,134) -- Deferred financing costs 155,873 162,269 Increase (decrease) in liabilities: Accounts payable 8,103,243 2,852,863 Advances from customers (135,544) 5,981,215 Accrued expenses 1,165,695 740,465 Other payables (1,941,379) 40,646 Income taxes payable (1,621,435) (123,908) Net cash used in operating activities (10,808,209) (14,884,371) CASH FLOWS FROM INVESTING ACTIVITIES: Change in restricted cash 110,130 (755,376) Purchase of buildings, equipment and automobiles (587,595) (868,817) Notes receivable collected 212,140 139,327 Cash acquired in business combinations 519,309 -- Proceeds from sale of property and equipment 194,006 867,806 Net cash provided by (used in) investing activities 447,990 (617,060) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of convertible debt -- 19,230,370 Loans from bank 12,444,063 32,213,727 Repayments of loans payable (18,447,426) (20,044,097) Loans from or repayment to employees, net 678,545 (990,087) Repayment of payables for acquisition of businesses (3,841,072) (3,656,905) Proceeds from exercise of warrants 1,184,662 -- Proceeds from issuance of common stock and warrants -- 8,415 Net cash (used in) provided by financing activities (7,981,228) 26,761,423 (DECREASE)/INCREASE IN CASH (18,341,447) 11,259,992 Effects on foreign currency exchange 5,237 773,037 CASH, beginning of period 37,425,340 2,351,015 CASH, end of period $ 19,089,130 $ 14,384,044
CEL-SCI (CVM) Collaborators Present Data Suggesting That LEAPS Technology Has Ability to Modify Immune Response
VIENNA, Va., Nov. 9 /PRNewswire-FirstCall/ — CEL-SCI Corporation (NYSE Amex: CVM) announced today that Dr. Kenneth S. Rosenthal, Professor of Immunology and Microbiology of Northeastern Ohio Universities College of Medicine and Pharmacy, reported on work conducted in collaboration with scientists at the Cleveland Clinic and CEL-SCI on CEL-SCI’s LEAPS vaccine technology. The data was presented at the 7th GTCbio Vaccine: “All Things Considered” Conference in Crystal City, Virginia.
Working with LEAPS vaccines for herpes simplex virus, HIV, rheumatoid arthritis and most recently, H1N1 influenza, the scientists’ studies show that LEAPS peptide immunogens can convert precursor cells from mouse or humans to become dendritic cells (DC), the cell that directs the subsequent immune response. These DCs produce interleukin 12 (IL12p70), but without production of the pro-inflammatory cytokines that promote symptoms of a cytokine storm, such as tumor necrosis factor alpha or interleukin 1. Immunization with a LEAPS-immunogen for herpes simplex virus activates a protective T cell immune response against the virus in mice while a LEAPS-immunogen for treatment of rheumatoid arthritis (CEL-2000) reduces the production of the pro-inflammatory cytokines to block the progression of disease in mouse models of rheumatoid arthritis.
Dr. Rosenthal commented, “LEAPS immunogens are unique in their ability to simultaneously produce and activate a specific type of dendritic cell that can turn on or modulate antigen specific T cell responses without generating the pro-inflammatory cytokines associated with cytokine storm. The ability to activate the desired immune response should make LEAPS immunogens inherently safe vaccines. Finding of similar results for mouse and human cells in our laboratory studies adds confidence that the effects in the body will be the same in mice and man. ”
Geert Kersten, CEO of CEL-SCI Corporation said: “We feel that this new data is encouraging and supportive of our H1N1 treatment for hospitalized patients where the goal is to produce a specific anti H1N1 immune response that will steer the immune system towards protection and away from a cytokine storm which may be responsible for many patients’ deaths.”
CEL-SCI’s L.E.A.P.S.(TM) (Ligand Epitope Antigen Presentation System) technology allows the Company to direct an immune response against specific disease epitopes. In the case of CEL-SCI’s investigational LEAPS-H1N1 treatment, this involves non-changing regions of H1N1 Pandemic Flu, Avian Flu (H5N1), and the Spanish Flu. This is intended to enable stimulation of the specifically-needed immune responses, while avoiding the administration of regions of H1N1, and other viruses, which may exacerbate the problem of cytokine storm, which CEL-SCI scientists believe may be involved in the death of some H1N1 patients.
The concept behind the L.E.A.P.S. technology is to directly mimic cell/cell interactions on the T-cell surface with synthetic peptides. The L.E.A.P.S. constructs containing the antigenic disease epitope linked to a Immune / T-cell binding ligand (I/TCBL) can be manufactured by peptide synthesis or by covalently linking the two peptides. Depending upon the type of L.E.A.P.S. construct and I/TCBL used, CEL-SCI is able to direct the outcome of the immune response towards the development of T-cell function with primarily effector T-cell functions (T Lymphocyte; helper/effector T lymphocyte, type 1 or 2 [Th1 or Th2], cytotoxic [Tc] or suppressor [Ts]). Therefore, it would appear that the L.E.A.P.S. construct represents a chimeric peptide with bi-functional behavior.
CEL-SCI Corporation is developing products that empower immune defenses. Its lead product is Multikine® which is being readied for a global Phase III trial in advanced primary head and neck cancer. CEL-SCI is also developing a treatment for hospitalized H1N1 patients using it’s L.E.A.P.S. technology platform, and expects to soon finish the validation of it’s state-of-the-art manufacturing facility in Maryland.
For more information, please visit www.cel-sci.com
When used in this report, the words “intends,” “believes,” “anticipated” and “expects” and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those projected. Factors that could cause or contribute to such differences include, lack of regulatory clearance to proceed with clinical trials, an inability to duplicate the clinical results demonstrated in clinical studies that have been completed or that are initiated in the future, timely development of any potential products that can be shown to be safe and effective, unwillingness of regulatory authorities to engage in further regulatory dialogue, receiving necessary regulatory approvals, difficulties in manufacturing any of the Company’s potential products, inability to raise the necessary capital, and the risk factors set forth from time to time in CEL-SCI Corporation’s SEC filings, including but not limited to its report on Form 10- K/A for the year ended September 30, 2008. The Company undertakes no obligation to publicly release the result of any revision to these forward-looking statements which may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
SOURCE CEL-SCI Corporation
Merrimac (MRM) Announces Third Quarter 2009 Results — Record Bookings, Backlog and Strong Earnings
Nov. 9, 2009 (PR Newswire) — WEST CALDWELL, N.J., Nov. 9 /PRNewswire-FirstCall/ — Merrimac Industries, Inc. (Amex: MRM), a leader in the design and manufacture of RF Microwave components, subsystem assemblies and micro-multifunction modules (MMFM®), today announced its results for the third quarter of 2009.
Third Quarter and First Nine Months of 2009 Financial Highlights
-- Third quarter of 2009 record bookings were $12,522,000 resulting in a record backlog of $24,789,000 as of October 3, 2009. -- Net sales for the third quarter of fiscal year 2009 decreased slightly 0.7% or $57,000 to $8,271,000, compared to the third quarter of 2008 net sales of $8,328,000. Net sales for the first nine months of 2009 increased 11.1% or $2,391,000 to $23,967,000 compared to $21,576,000 for the first nine months of 2008. -- Gross profit for the third quarter of 2009 increased 32.9% or $990,000 to $3,995,000 compared to $3,005,000 for the third quarter of 2008. Gross profit for the first nine months of 2009 increased 41.1% or $3,127,000 to $10,744,000 from $7,617,000 in the first nine months of 2008. -- Gross profit percentage for the third quarter of 2009 increased to 48.3% compared to 36.1% for the third quarter of 2008 and gross profit percentage for the first nine months of 2009 was 44.8% compared to 35.3% for the first nine months of 2008. -- Operating income for the third quarter and first nine months of 2009 was $1,443,000 and $3,344,000, respectively, compared to an operating income of $501,000 for the third quarter of 2008 and an operating loss of $229,000 in the first nine months of 2008. -- Net income for the third quarter and first nine months of 2009 was $931,000 and $2,506,000, respectively, compared to a net income of $463,000 for the third quarter of 2008 and a net loss of $432,000 in the first nine months of 2008. -- Net income per share, basic and diluted, for the third quarter of 2009 was $0.31 compared to net income per share, basic and diluted, of $0.16 for the third quarter of 2008. For the first nine months of 2009 net income per share, basic and diluted, was $0.84, compared to a net loss per share, basic and diluted, of $0.15 for the first nine months of 2008.
Chairman and CEO Mason N. Carter commented, “In every respect our third quarter and nine months performance reflects the strength of our focused business model. Record orders, backlog and outstanding operating performance are a confirmation of our committed teams in New Jersey and Costa Rica. Our overall business performance is meeting or exceeding every internal target and bodes well for a strong finish to 2009.”
Third Quarter and First Nine Months of 2009 Results
Net sales.
Net sales in the third quarter of 2009 were relatively flat compared to the third quarter of 2008. Net sales decreased $57,000 or 0.7% to $8,271,000, from the third quarter of 2008 net sales of $8,328,000. Net sales for the first nine months of 2009, increased $2,391,000 or 11.1% to $23,967,000 compared to $21,576,000 for the first nine months of 2008. The increase in net sales for the first nine months of 2009 is primarily due to our focused strategy concentrating on aerospace and defense markets. This strategy has resulted in more orders from our key aerospace and defense customers including increased sales of Multi-Mix® products to defense industry related customers.
Cost of sales and gross profit.
Gross profit and gross profit percentage increased for both the third quarter and first nine months of 2009 compared to the same periods in 2008. Gross profit for the third quarter of 2009 increased $990,000 or 32.9%, to $3,995,000 compared to $3,005,000 for the third quarter of 2008. Gross profit percentage for the third quarter of 2009 was 48.3% compared to 36.1% for the third quarter of 2008. Gross profit for the first nine months of 2009 increased 41.1% or $3,127,000 to $10,744,000 from $7,617,000 in the first nine months of 2008. Gross profit percentage for the first nine months of 2009 was 44.8% compared to 35.3% for the first nine months of 2008.
The increase in consolidated gross profit in the third quarter was due to the increase in gross profit percentage. The improved gross profit percentage in the third quarter of 2009 compared to 2008 was primarily due to several orders that shipped in third quarter of 2009 with above average gross profit margins while the same quarter last year had four large orders that shipped with very low gross profit margins. The increase in consolidated gross profit in the first nine months of 2009 compared to the same periods in 2008 was due to the combination of improved gross profit percentage and an increase in net sales. The increase in net sales also had a favorable impact on our gross profit percentage in the third quarter and first nine months of 2009, allowing us to better absorb fixed manufacturing costs.
Selling, general and administrative expenses.
Selling, general and administrative expenses were $2,451,000 for the third quarter of 2009, an increase of $52,000 or 2.2%, compared to $2,398,000 in the third quarter of 2008. The increase in expenses for the third quarter of 2009 was primarily due to an increase in commissions that was offset in part by the restructuring charges incurred in the third quarter of 2008 that did not recur in 2009. When expressed as a percentage of net sales, selling, general and administrative expenses increased from 28.8% of sales in the third quarter of 2008 to 29.6% of sales in the third quarter of 2009. For the first nine months of 2009, selling, general and administrative expenses were $7,122,000 compared to $6,994,000 in the first nine months of 2008 an increase of $129,000 or 1.8%. The increase in such expenses for the first nine months of 2009 was primarily due to higher professional fees and commissions that were largely offset by decreases in selling, marketing and proposal expenses. When expressed as a percentage of net sales, selling, general and administrative expenses decreased from 32.4% of sales in the first nine months of 2008 to 29.7% of sales in the first nine months of 2009.
Operating income (loss).
Operating income for the third quarter and first nine months of 2009 was $1,443,000 and $3,344,000, respectively, compared to an operating income of $501,000 for the third quarter of 2008 and an operating loss of $229,000 in the first nine months of 2008. The improvement in operating income for the third quarter 2009 was primarily due to the improved gross profit resulting from increased gross profit percentages. The improvement in operating income for the first nine months of 2009 was due to a combination of improved gross profit, resulting from the increase in net sales and improved gross profit percentages, and the decrease in research and development costs compared to the first nine months of 2008.
Income taxes.
Provision for income tax expense was $443,000 and $686,000 in the third quarter and first nine months of 2009 compared to $10,000 in each of the third quarter and first nine months of 2008. The provision for income taxes in the third quarter and first nine months of 2009 is based on the expectation that we will fully utilize our net operating loss carryforwards in 2009.
Discontinued operations.
Income from discontinued operations was $0 and $51,000 in the third quarter and first nine months of 2009, respectively, compared to a loss from discontinued operations of $11,000 and $66,000 in the third quarter and first nine months of 2008, respectively.
Net income (loss).
Net income for the third quarter and first nine months of 2009 was $931,000 and $2,506,000, respectively, compared to a net income of $463,000 for the third quarter of 2008 and a net loss of $432,000 in the first nine months of 2008. Net income per share, basic and diluted for the third quarter of 2009 was $0.31 compared to net income per share, basic and diluted of $0.16 for the third quarter of 2008. For the first nine months of 2009 net income per share basic and diluted was $0.84, compared to a net loss per share, basic and diluted, of $0.15 for the first nine months of 2008.
Investors are invited to participate in the financial results conference call on Tuesday, November 10, 2009 at 4:15 p.m. (Eastern) by dialing 1-888-481-2844 (for International callers: 1-719-325-2201) five minutes prior to the scheduled start time, and reference the Merrimac Industries 3rd Quarter 2009 Financial Results conference call or passcode number 3742041. For those unable to participate, a replay will be available for seven days by dialing 1-888-203-1112, or 1-719-457-0820 for international callers, passcode number 3742041.
This conference call will also be broadcast live over the Internet by logging on to the web at this address:
http://www.videonewswire.com/event.asp?id=63835
Should you be unable to participate during the live webcast, a link to the archived webcast will be posted on the Merrimac Industries, Inc. website http://www.merrimacind.com.
About Merrimac
Merrimac Industries, Inc. is a leader in the design and manufacture of RF Microwave signal processing components, subsystem assemblies, and Multi-Mix® micro-multifunction modules (MMFM®), for the worldwide Defense, Satellite Communications (Satcom), Commercial Wireless and Homeland Security market segments. Merrimac is focused on providing Total Integrated Packaging Solutions® with Multi-Mix® Microtechnology, a leading edge competency providing value to our customers through miniaturization and integration. Multi-Mix® MMFM® provides a patented and novel packaging technology that employs a platform modular architecture strategy that incorporates embedded semiconductor devices, MMICs, resistors, passive circuit elements and plated-through via holes to form a three-dimensional integrated module used in High Power, High Frequency and High Performance mission-critical applications. Merrimac Industries facilities are registered under ISO 9001:2000, an internationally developed set of quality criteria for manufacturing operations.
Merrimac Industries, Inc. has facilities located in West Caldwell, NJ and San Jose, Costa Rica and has approximately 210 co-workers dedicated to the design and manufacture of signal processing components, gold plating of high-frequency microstrip and bonded stripline Teflon (PTFE) circuits and subsystems providing Total Integrated Packaging Solutions® for wireless applications. Merrimac (MRM) is listed on the American Stock Exchange. Multi-Mix®, Multi-Mix PICO®, MMFM®, System In A Package®, SIP® and Total Integrated Packaging Solutions® are registered trademarks of Merrimac Industries, Inc. For more information about Merrimac Industries, Inc. please visit our website http://www.merrimacind.com.
This press release contains statements relating to future results of the Company (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to: risks associated with demand for and market acceptance of existing and newly developed products as to which the Company has made significant investments, particularly its Multi-Mix® products; risks associated with adequate capacity to obtain raw materials and reduced control over delivery schedules and costs due to reliance on sole source or limited suppliers; slower than anticipated penetration into the satellite communications, defense and wireless markets; failure of our Original Equipment Manufacturer or OEM customers to successfully incorporate our products into their systems; changes in product mix resulting in unexpected engineering and research and development costs; delays and increased costs in product development, engineering and production; reliance on a small number of significant customers; the emergence of new or stronger competitors as a result of consolidation movements in the market; the timing and market acceptance of our or our OEM customers’ new or enhanced products; general economic and industry conditions; the ability to protect proprietary information and technology; competitive products and pricing pressures; our ability and the ability of our OEM customers to keep pace with the rapid technological changes and short product life cycles in our industry and gain market acceptance for new products and technologies; risks relating to governmental regulatory actions in communications and defense programs; and inventory risks due to technological innovation and product obsolescence, as well as other risks and uncertainties as are detailed from time to time in the Company’s Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
MERRIMAC INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Quarters Ended Nine Months Ended -------------- ----------------- October 3, September 27, October 3, September 27, 2009 2008 2009 2008 ---- ---- ---- ---- (Restated) (Restated) Net sales $8,271,178 $8,327,790 $23,966,766 $21,575,742 ---------- ---------- ----------- ----------- Costs and expenses: Cost of sales 4,276,310 5,323,091 13,222,933 13,958,812 Selling, general and administrative 2,450,671 2,398,255 7,122,290 6,993,520 Research and development 101,665 105,114 318,187 852,513 Gain on sale of asset - - (40,579) - ---------- ---------- ----------- ----------- 6,828,646 7,826,460 20,622,831 21,804,845 ---------- ---------- ----------- ----------- Operating income (loss) 1,442,532 501,330 3,343,935 (229,103) Interest and other expense, net (68,210) (17,336) (202,252) (126,516) ---------- ---------- ----------- ----------- Income (loss) from continuing operations before income taxes 1,374,322 483,994 3,141,683 (355,619) Provision for income taxes 443,279 10,000 686,014 10,000 ---------- ---------- ----------- ----------- Income (loss) from continuing operations 931,043 473,994 2,455,669 (365,619) Income (loss) from discontinued operations, net of income taxes - (10,956) 50,505 (65,992) ---------- ---------- ----------- ----------- Net income (loss) $ 931,043 $ 463,038 $ 2,506,174 $ (431,611) ========== ========== =========== =========== Income (loss) per common share from continuing operations - basic $ 0.31 $ 0.16 $ 0.83 $ (0.13) Income (loss) per common share from discontinued operations - basic $ - $ - $ 0.01 $ (0.02) ---------- ---------- ----------- ----------- Net income (loss) per common share - basic $ 0.31 $ 0.16 $ 0.84 $ (0.15) ========== ========== =========== =========== Income (loss) per common share from continuing operations - diluted $ 0.31 $ 0.16 $ 0.82 $ (0.13) Income (loss) per common share from discontinued operations - diluted $ - $ - $ 0.02 $ (0.02) ---------- ---------- ----------- ----------- Net income (loss) per common share - diluted $ 0.31 $ 0.16 $ 0.84 $ (0.15) ========== ========== =========== =========== Weighted average number of shares outstanding-basic 2,986,022 2,948,037 2,966,501 2,940,112 Weighted average number of shares outstanding -diluted 3,013,986 2,965,537 3,000,131 2,940,112 MERRIMAC INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS October 3, January 3, 2009 2009 ---- ---- (UNAUDITED) (NOTE 1) ASSETS Current assets: Cash and cash equivalents $ 3,219,940 $ 1,191,768 Accounts receivable, net allowance for doubtful accounts of $30,000 7,559,992 5,765,575 Inventories, net 5,604,220 4,899,706 Other current assets 840,012 542,320 Costs and estimated earnings in excess of billings on uncompleted contracts 3,249,726 1,880,338 ----------- ----------- Total current assets 20,473,890 14,279,707 ----------- ----------- Property, plant and equipment 38,179,022 37,765,928 Less accumulated depreciation and amortization 30,433,635 28,556,441 ----------- ----------- Property, plant and equipment, net 7,745,387 9,209,487 Other assets 437,398 543,217 ----------- ----------- Total assets $28,656,675 $24,032,411 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 291,667 $ 291,667 Accounts payable 700,737 794,351 Accrued liabilities 1,704,998 1,432,124 Customer deposits 2,137,761 654,133 Income taxes payable 213,565 17,448 ----------- ----------- Total current liabilities 5,048,728 3,189,723 Long-term debt, net of current portion 2,306,945 2,611,111 Deferred liabilities 50,621 64,254 ----------- ----------- Total liabilities 7,406,294 5,865,088 ----------- ----------- Commitments and contingencies Stockholders' equity: Preferred stock, par value $.01 per share: Authorized: 1,000,000 shares No shares issued - - Common stock, par value $.01 per share: 20,000,000 shares authorized; 3,355,361 and 3,315,229 shares issued; and 2,992,456 and 2,952,324 shares outstanding, respectively 33,554 33,153 Additional paid-in capital 20,956,407 20,379,924 Retained earnings 3,382,584 876,410 ----------- ----------- 24,372,545 21,289,487 Less treasury stock, at cost - 362,905 shares at October 3, 2009 and January 3, 2009 (3,122,164) (3,122,164) ----------- ----------- Total stockholders' equity 21,250,381 18,167,323 ----------- ----------- Total liabilities and stockholders' equity $28,656,675 $24,032,411 =========== =========== Contact: Mason N. Carter, Chairman & CEO 973-575-1300, ext. 1202 mnc@merrimacind.com
Presstek (PRST) Announces Third Quarter 2009 Financial Results
GREENWICH, CT — (Marketwire) — 11/09/09 — In the news release, “Presstek Announces Third Quarter 2009 Financial Results,” issued earlier today by Presstek, Inc. (NASDAQ: PRST), we are advised by the company that the table titled “CONTINUING OPERATIONS SUPPLEMENTAL FINANCIAL INFORMATION” included a number of incorrect figures as originally issued. Complete corrected text follows.
Presstek Announces Third Quarter 2009 Financial Results
Improved Sequential Operating Results, Excluding $3.7 Million of Non-Routine Inventory and Restructuring Charges; New Credit Facility Expected to Be in Place by December 15; Reaffirming Positive EBITDA Expected in Q4
GREENWICH, CT — November 9, 2009 — Presstek, Inc. (NASDAQ: PRST), a leading manufacturer and marketer of digital offset printing business solutions, today reported financial and operating results for the third quarter ended October 3, 2009. The Company reported total revenue of $33.0 million in the third quarter of 2009, compared with $48.5 million in the third quarter of 2008, a decline of $15.5 million, or approximately 32 percent. During the third quarter of 2009, the Company incurred a loss from continuing operations of $6.6 million, or $0.18 per share, including (on a pre-tax basis) a largely non-cash inventory-related charge of $2.7 million and a restructuring charge of $1.0 million related to the $10 million cost reduction program announced in the second quarter of 2009. Excluding pre-tax non-routine charges of $3.7 million in the third quarter of 2009 and $0.4 million in the third quarter of 2008, the loss from continuing operations would have been $3.0 million, or $0.08 per share, in the third quarter of 2009, compared with income from continuing operations of $1.0 million, or $0.03 per share, in the third quarter of 2008. (See “Information Regarding Non-GAAP Measures”)
Results from continuing operations exclude the Company’s Lasertel subsidiary, which is currently being marketed for sale and is recorded in discontinued operations. The Company expects to reach an agreement for the sale of its Lasertel subsidiary in the fourth quarter of 2009 with a closing anticipated in the first quarter of 2010. Lasertel’s results improved during the third quarter of 2009 with income from operations, net of tax, of $0.7 million, compared with a loss from operations, net of tax, of $0.4 million in the same period last year.
“Although revenues for the quarter continue to be impacted by the global economic recession, sequential quarterly revenues have stabilized and we anticipate that revenue will begin to grow,” said Presstek Chairman, President and Chief Executive Officer, Jeff Jacobson. “We have successfully reduced expenses and managed cash, while staying focused on our strategic initiatives of expanding our product portfolio and distribution channels. During the third quarter, we debuted and sold our first 52DI with aqueous coating capability to Quad/Graphics, the largest privately held printer in the world, and have already accepted several additional customer orders. We also introduced Aeon, our first long-run, non-preheat thermal CTP plate, which will be available by the end of this year. In addition, we have made tremendous progress expanding our distribution channels to nearly 60 distributor locations in our Europe, Africa, Middle East and Asia Pacific regions.”
Third Quarter 2009 Financial Results
Total revenue in the third quarter of 2009 was $33.0 million, compared with $48.5 million in the third quarter of 2008.
?Equipment revenue declined 76 percent to $3.6 million in the third
quarter of 2009, compared with $15.2 million for the same period last year.
Sales of equipment have been negatively impacted by the global economic
recession that has caused credit markets to tighten and customers to delay
major capital investment decisions.
?Consumables revenue totaled $22.2 million in the third quarter of 2009,
compared with $25.1 million for the same period last year. The decline in
consumables revenue was primarily related to lower industry print volume,
as well as lower sales in the Company's "traditional" portfolio of
consumables products as customers continue to migrate from analog to
digital solutions. However, sequential quarterly revenue increased $1.0
million, or 4.9 percent.
?Service revenue declined approximately 12 percent to $7.2 million in the
third quarter of 2009 primarily due to a decrease in the level of
traditional equipment service and lower print volume.
Third quarter 2009 margin was impacted by an abnormally large inventory charge of $2.7 million to Cost of Goods Sold that lowered gross margin to 23.3 percent, compared with 34.7 percent in the third quarter of 2008. Excluding this unusual charge, gross margin in the third quarter of 2009 would have been 31.5 percent. This charge, which is mostly non-cash, was driven in large part by lower production volume levels in Presstek’s equipment manufacturing plant and the impact of a change in certain product strategies. In addition, during the quarter, Presstek refined the calculations and assumptions used to determine the allocation of manufacturing spending between period costs and capitalized variances. The Company is evaluating the need for actions to further enhance its manufacturing cost efficiencies.
Third quarter 2009 operating expenses declined to $13.9 million, reflecting a year-over-year improvement of $0.8 million, or 5.7 percent. Lower expenses resulted primarily from cost reduction activities. During the second quarter of 2009, the Company implemented a cost reduction program that is substantially complete and is expected to result in annualized savings of approximately $10 million. A restructuring charge of $1.0 million related to the program was recorded in the third quarter of 2009. Excluding the impact of restructuring charges in both periods, third quarter 2009 operating expenses were down $1.5 million, or 11 percent, compared with the same period last year.
“During the last two years, we have implemented business improvement initiatives that have resulted in gross profit and operating expense improvements of approximately $40 million,” said Presstek Executive Vice President and Chief Financial Officer, Jeff Cook. “With the vast majority of the cost cutting initiatives complete, we have a cost structure that is appropriately aligned with our revenue base. I am optimistic that our lean cost structure combined with the positive sales prospects we are seeing will lead to positive EBITDA in the fourth quarter of 2009.”
Interest expense increased to $0.5 million in the third quarter of 2009, compared with $0.1 million in the third quarter of 2008. The increase is due to higher interest rates and a $250,000 fee associated with a modification of the Company’s credit agreement. The Company is in discussions concerning a new credit facility and expects to have an arrangement in place on or prior to December 15, 2009 sufficient to repay the Company’s outstanding indebtedness and provide for continuing operations.
The Company’s third quarter 2009 debt net of cash totaled $16.2 million, compared with $13.3 million in the third quarter of 2008. Debt net of cash is down 56 percent from its high of $37.0 million in March 2007.
“With the anticipated continued impact of the economy on our financial results, we had previously indicated that, excluding non-routine charges in both quarters, our third quarter operating loss would be in line with our second quarter loss of $3.6 million. In addition, we would be incurring costs related to Print 09, North America’s largest printing trade show held during the third quarter,” added Jacobson. “I am encouraged that with a third quarter operating loss of $2.4 million, absent non-routine charges, the business performed better than expected. With the talented and dedicated employees we have and the steps we have taken to ensure that we are well positioned to thrive once the economy turns around, I am confident of the Company’s future success.”
Information Regarding Non-GAAP Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides non-GAAP financial measures, including income (loss) from continuing operations, excluding non-routine charges; operating income (loss), excluding non-routine charges; gross margin, excluding non-routine charges; operating expenses, excluding the impact of restructuring charges; EBITDA from continuing operations; cash earnings from continuing operations, excluding non-routine charges; working capital, excluding short-term debt; debt net of cash and other GAAP measures adjusted for certain charges, which the Company believes are useful to help investors better understand its past financial performance and prospects for the future. A full reconciliation of GAAP to non-GAAP measures is provided in the financial tables below. Supplemental financial information has been provided with this release to provide additional details on the Company’s performance.
Conference Call and Webcast Information
Management will discuss Presstek’s third quarter 2009 results in a conference call on Monday, November 9, 2009 at 10:30 a.m. Eastern Time. Conference call information is below:
Conference Call Access: Domestic Dial In: (888) 396-2386 International Dial In: (617) 847-8712 Passcode: 14582468
In addition, for those unable to participate at the time of the call, a rebroadcast will be available following the call from Monday, November 9, 2009 at 1:30 PM Eastern Time until Friday, November 16, 2009 Eastern Time at Midnight.
Rebroadcast Access: Domestic Dial In: 888-286-8010 International Dial In: 617-801-6888 Passcode: 30398536
An archived webcast of this conference call will also be available on the “Investor Events Calendar” page of the Company’s web site, www.presstek.com.
About Presstek
Presstek, Inc. is a leading manufacturer and marketer of high tech digital imaging solutions to the graphic arts and laser imaging markets. Presstek’s patented DI®, CTP and plate products provide a streamlined workflow in a chemistry-free environment, thereby reducing printing cycle time and lowering production costs. Presstek solutions are designed to make it easier for printers to cost effectively meet increasing customer demand for high-quality, shorter print runs and faster turnaround while providing improved profit margins. Presstek subsidiary, Lasertel, Inc., manufactures semiconductor laser diodes for Presstek’s and external customers’ applications. For more information visit www.presstek.com, or call 603-595-7000 or email: info@presstek.com. DI is a registered trademark of Presstek, Inc.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:
Certain statements contained in this News Release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expected revenue, gross margins, operating income (loss), EBITDA, asset impairments, expectations concerning the level of costs, the level of customer demand, the results of the Company’s cost reduction measures, the Company’s expectation concerning the sale of its Lasertel subsidiary, the ability of the Company to achieve its stated objectives, and the Company’s expectations concerning its ability to obtain a new credit facility. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: the severity and length of the current economic downturn, the impact of the economic downturn on the availability of credit for the Company’s customers, the ability of the Company to continue to have access to its revolving credit facility, the ability of the Company to obtain an adequate credit facility to replace its current credit facility and provide for operations, the Company’s ability to successfully market its Lasertel subsidiary for sale, market acceptance of and demand for the Company’s products and resulting revenue, the ability of the Company to successfully expand into new territories, the ability of the Company to meet its stated financial and operational objectives, the Company’s dependence on its partners (both manufacturing and distribution), the results of the pending formal investigation by the Securities and Exchange Commission and the impact of any civil penalty on the Company, the ability of the Company’s insurer to fund certain costs associated with the SEC investigation, and other risks and uncertainties detailed in the Company’s 2008 Annual Report on Form 10-K and the Company’s other reports on file with the Securities and Exchange Commission. The words “looking forward,” “looking ahead,” “believe(s),” “should,” “may,” “expect(s),” “anticipate(s),” “project(s),” “likely,” “opportunity,” expressions of optimism concerning future events or results, and similar expressions, among others, identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to update any forward-looking statements contained in this news release.
PRESSTEK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per-share data)
(Unaudited)
Three months ended Nine months ended
October September October September
3, 27, 3, 27,
2009 2008 2009 2008
--------- --------- --------- ---------
Revenue
Equipment $ 3,627 $ 15,235 $ 13,827 $ 42,957
Consumables 22,150 25,053 65,170 81,807
Service and parts 7,229 8,246 21,979 26,170
--------- --------- --------- ---------
Total revenue 33,006 48,534 100,976 150,934
--------- --------- --------- ---------
Cost of revenue
Equipment 8,152 12,937 18,015 37,207
Consumables 11,982 12,652 35,603 41,452
Service and parts 5,172 6,096 16,528 19,561
--------- --------- --------- ---------
Total cost of revenue 25,306 31,685 70,146 98,220
--------- --------- --------- ---------
Gross profit 7,700 16,849 30,830 52,714
--------- --------- --------- ---------
Operating expenses
Research and development 1,379 1,059 3,803 3,697
Sales, marketing and customer
support 6,276 7,088 19,525 22,411
General and administrative 4,946 5,932 17,239 18,321
Amortization of intangible
assets 225 258 712 823
Restructuring and other
charges 1,040 374 1,162 1,569
Goodwill impairment - - 19,114 -
--------- --------- --------- ---------
Total operating expenses 13,866 14,711 61,555 46,821
--------- --------- --------- ---------
Income (loss) from operations (6,166) 2,138 (30,725) 5,893
Interest and other expense, net (745) (359) (531) (646)
--------- --------- --------- ---------
Income (loss) from continuing
operations before income taxes (6,911) 1,779 (31,256) 5,247
Provision for income taxes (264) 1,153 16,366 2,731
--------- --------- --------- ---------
Income (loss) from continuing
operations (6,647) 626 (47,622) 2,516
Income (loss) from discontinued
operations, net of income
taxes $ 706 $ (431) $ (959) $ (1,536)
--------- --------- --------- ---------
Net income (loss) $ (5,941) $ 195 $ (48,581) $ 980
========= ========= ========= =========
Earnings (loss) per share -
basic
Income (loss) from continuing
operations $ (0.18) $ 0.02 $ (1.30) $ 0.07
Income (loss) from
discontinued operations 0.02 (0.01) (0.02) (0.04)
--------- --------- --------- ---------
$ (0.16) $ 0.01 $ (1.32) $ 0.03
========= ========= ========= =========
Earnings (loss) per share -
diluted
Income (loss) from continuing
operations $ (0.18) $ 0.02 $ (1.30) $ 0.07
Income (loss) from
discontinued operations 0.02 (0.01) (0.02) (0.04)
--------- --------- --------- ---------
$ (0.16) $ 0.01 $ (1.32) $ 0.03
========= ========= ========= =========
Weighted average shares
outstanding
Weighted average shares
outstanding - basic 36,638 36,603 36,668 36,586
Dilutive effect of stock
options - 13 - 12
--------- --------- --------- ---------
Weighed average shares
outstanding - diluted 36,638 36,616 36,668 36,598
========= ========= ========= =========
PRESSTEK, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
October 3, January 3,
2009 2009
--------- ---------
ASSETS
Current assets
Cash and cash equivalents $ 7,220 $ 4,738
Accounts receivable, net 24,609 30,759
Inventories 33,134 37,607
Assets of discontinued operations 14,743 13,330
Deferred income taxes 503 7,066
Other current assets 2,693 4,095
--------- ---------
Total current assets 82,902 97,595
Property, plant and equipment, net 24,744 25,530
Goodwill - 19,114
Intangible assets, net 4,190 4,174
Deferred income taxes 739 10,494
Other noncurrent assets 497 606
--------- ---------
Total assets $ 113,072 $ 157,513
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt and capital lease
obligation $ 834 $ 4,074
Line of credit 22,612 12,415
Accounts payable 10,189 12,060
Accrued expenses 9,286 13,261
Deferred revenue 6,818 7,300
Liabilities of discontinued operations 5,801 5,702
--------- ---------
Total current liabilities 55,540 54,812
Other long-term liabilities 151 170
--------- ---------
Total liabilities 55,691 54,982
--------- ---------
Stockholders' equity
Preferred stock - -
Common stock 368 366
Additional paid-in capital 119,604 117,985
Accumulated other comprehensive loss (4,144) (5,954)
Accumulated deficit (58,447) (9,866)
--------- ---------
Total stockholders' equity 57,381 102,531
--------- ---------
Total liabilities and stockholders' equity $ 113,072 $ 157,513
========= =========
PRESSTEK, INC.
CONTINUING OPERATIONS SUPPLEMENTAL FINANCIAL INFORMATION
$000's
(Unaudited)
Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009
-------- -------- --------- ---------- ----------
Key Units
DI Presses
(Excludes QMDI) 37 25 13 11 12
CtP Platesetters
(Excludes DPM) 36 35 24 21 15
Revenue - Growth
Portfolio
DI Presses
(Excludes QMDI) 12,867 7,528 3,521 3,732 2,923
Presstek Branded
DI Plates 4,653 4,661 4,025 4,301 4,318
-------- -------- --------- ---------- ----------
Total DI Revenue 17,520 12,189 7,546 8,033 7,241
Presstek CtP
Platesetters
(Excludes DPM) 2,228 2,039 1,109 1,505 1,081
Chemistry Free CtP
Plates 4,064 4,402 3,426 3,678 3,745
-------- -------- --------- ---------- ----------
Total CtP Revenue 6,292 6,441 4,535 5,183 4,826
Service Transfer (976) (1,176) (601) (603) (596)
Service Revenue 2,804 3,002 2,723 2,588 2,603
-------- -------- --------- ---------- ----------
Total Revenue -
Growth Portfolio 25,640 20,456 14,203 15,201 14,074
======== ======== ========= ========== ==========
Revenue - Traditional
Portfolio
QMDI Platform 3,456 3,417 2,962 2,987 3,056
Polyester CtP
Platform 4,077 3,601 3,575 3,178 3,228
Other DI Plates 2,059 1,693 1,295 1,128 1,438
Conventional/Other 7,943 7,916 7,775 6,608 6,772
-------- -------- --------- ---------- ----------
Total Product
Revenue -
Traditional 17,535 16,627 15,607 13,901 14,494
Service Transfer (85) (102) (190) (190) (188)
Service Revenue -
Traditional 5,444 5,336 4,840 4,598 4,626
-------- -------- --------- ---------- ----------
Total Revenue -
Traditional
Portfolio 22,894 21,861 20,257 18,309 18,932
======== ======== ========= ========== ==========
-------- -------- --------- ---------- ----------
Total Revenue 48,534 42,318 34,460 33,510 33,006
======== ======== ========= ========== ==========
Product Revenue
Components %
Growth 52.8% 48.3% 41.2% 45.4% 42.6%
Traditional 47.2% 51.7% 58.8% 54.6% 57.4%
Geographic Revenues
(Origination)
North America 35,244 32,374 26,715 26,076 26,810
Europe 13,290 9,944 7,745 7,434 6,196
-------- -------- --------- ---------- ----------
Consolidated 48,534 42,318 34,460 33,510 33,006
======== ======== ========= ========== ==========
Gross Margin
Presstek
Equipment 15.1% 11.7% 5.9% 0.9% -124.8%
Consumables 49.5% 51.2% 46.7% 43.5% 45.9%
Service 26.1% 29.7% 20.8% 25.3% 28.5%
-------- -------- --------- ---------- ----------
Consolidated 34.7% 37.9% 35.1% 32.9% 23.3%
======== ======== ========= ========== ==========
Operating Expense
(Excluding Special
Charges) (A) $ 14,337 $ 16,409 $ 13,851 $ 14,602 $ 12,826
Profitability
Net income (loss) $ 195 $ (456) $ (1,191) $ (41,449) $ (5,941)
Add back: Loss
from discontinued
operations 431 1,070 85 1,580 (706)
-------- -------- --------- ---------- ----------
Net income (loss)
from continuing
operations 626 614 (1,106) (39,869) (6,647)
Add back:
Interest 147 121 56 110 491
Other (income)
expense 212 (1,705) (516) 136 254
Tax charge
(benefit) 1,153 49 (275) 16,905 (264)
Impairment /
Other charges - - - 19,114 2,700
Non cash portion
of equity
compensation
(2006 forward
123R related) 498 482 457 505 389
Restructuring
and Other
charges 374 539 84 38 1,040
-------- -------- --------- ---------- ----------
Operating income
(loss) from
continuing
operations 3,010 100 (1,300) (3,061) (2,037)
Add back:
Depreciation
and
amortization 1,379 1,172 1,191 1,150 1,231
Other income
(expense) (212) 1,705 516 (136) (745)
-------- -------- --------- ---------- ----------
EBITDA From
Continuing
Operations (A) $ 4,177 $ 2,977 $ 407 $ (2,047) $ (1,551)
======== ======== ========= ========== ==========
Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009
-------- -------- --------- ---------- ----------
Cash Earnings From
Continuing
Operations
Income (loss) from
continuing
operations 626 614 (1,106) (39,869) (6,647)
Add back:
Restructuring
and Other
charges 374 539 84 38 1,040
Impairment /
Other charges - - - 19,114 2,700
Depreciation
and
amortization 1,379 1,172 1,191 1,150 1,231
Non cash portion
of equity
compensation
(2006 forward
123R related) 498 482 457 505 389
Non cash portion
of taxes 749 36 (454) 17,071 (299)
-------- -------- --------- ---------- ----------
Cash Earnings
From
Continuing
Operations (A) 3,626 2,843 172 (1,991) (1,586)
======== ======== ========= ========== ==========
Working Capital
Current assets
(excluding net
assets of
discontinued
operations) $ 93,152 $ 84,263 $ 83,850 $ 73,994 $ 68,159
-------- -------- --------- ---------- ----------
Current
liabilities
Short-term debt 15,130 16,489 14,941 17,592 23,446
All other current
liabilities 37,163 32,575 33,847 31,345 26,293
-------- -------- --------- ---------- ----------
Current
liabilities 52,293 49,064 48,788 48,937 49,739
-------- -------- --------- ---------- ----------
Working capital 40,859 35,199 35,062 25,057 18,420
Add back
short-term debt 15,130 16,489 14,941 17,592 23,446
-------- -------- --------- ---------- ----------
Working capital,
excluding
short-term
debt (A) $ 55,989 $ 51,688 $ 50,003 $ 42,649 $ 41,866
======== ======== ========= ========== ==========
Debt net of cash (A)
Calculation of
total debt:
Current portion
of long-term
debt $ 3,240 $ 4,074 $ 2,454 $ 1,644 $ 834
Line of credit 11,890 12,415 12,487 15,948 22,612
Long-term debt,
net of current
portion 834 - - - -
-------- -------- --------- ---------- ----------
Total debt 15,964 16,489 14,941 17,592 23,446
Cash 2,634 4,738 5,262 4,453 7,220
-------- -------- --------- ---------- ----------
Debt net of
cash $ 13,330 $ 11,751 $ 9,679 $ 13,139 $ 16,226
======== ======== ========= ========== ==========
Days Sales
Outstanding 60 69 74 69 66
Days Inventory
Outstanding 87 87 100 105 99
Capital Expenditures $ 437 $ 831 $ 180 $ 238 $ 257
Employees 622 608 612 608 553
A. Operating expenses, excluding special charges and EBITDA from continuing operations [earnings before interest, taxes, depreciation, amortization and restructuring and merger-related charges (credits)]; Working capital, excluding short-term debt; Debt net of cash; and Cash earning from continuing operations are not measures of performance under accounting principles generally accepted in the United States of America (“GAAP”) and should not be considered alternatives for, or in isolation from, the financial information prepared and presented in accordance with GAAP. Presstek’s management believes that EBITDA provides meaningful supplemental information regarding Presstek’s current financial performance and prospects for the future. Presstek’s management believes that Cash earnings from continuing operations provide meaningful supplemental information regarding Presstek’s current financial performance and prospects for the future. Presstek’s management believes that Working capital, excluding short-term debt, provides meaningful supplemental information regarding Presstek’s ability to meet its current liability obligations. Presstek’s management believes that Debt net of cash provides meaningful information on Presstek’s debt relative to its cash position. Presstek believes that both management and investors benefit from referring to these non-GAAP measures in assessing the performance of Presstek’s ongoing operations and liquidity, and when planning and forecasting future periods. These non-GAAP measures also facilitate management’s internal comparisons to Presstek’s historical operating results and liquidity. Our presentations of these measures, however, may not be comparable to similarly titled measures used by other companies. Reconciliations of these measures to GAAP are included in the tables above.
** Certain amounts may be subject to reclassification to conform to current presentation.
Reconciliation of GAAP amounts to Non-GAAP amounts
(Dollar amounts in thousands)
Three months ended Three months ended
October 3, 2009 September 27, 2008
---------------------------- ----------------------------
GAAP Adjust- Non-GAAP GAAP Adjust- Non-GAAP
amounts ments amounts amounts ments amounts
-------- --------- -------- -------- -------- --------
Revenue $ 33,006 $ - $ 33,006 $ 48,534 $ - $ 48,534
Gross profit 7,700 2,700 10,400 16,849 - 16,849
23.3% 31.5% 34.7% 34.7%
Operating
expenses 13,866 1,040 12,826 14,711 374 14,337
Operating
income (6,166) 3,740 (2,426) 2,138 374 2,512
Income before
income taxes (6,911) 3,740 (3,171) 1,779 374 2,153
Provision for
income taxes (264) 127 (137) 1,153 (34) 1,119
Income (loss)
from
continuing
operations (6,647) 3,613 (3,034) 626 408 1,034
Loss from
discontinued
operations,
net of income
taxes 706 706 (431) (431)
Net income (5,941) (2,328) 195 603
Earnings (loss)
per share from
continuing
operations $ (0.18) $ 0.10 $ (0.08) $ 0.02 $ 0.01 $ 0.03
Three months ended Three months ended
October 3, 2009 July 4, 2009
---------------------------- ----------------------------
GAAP Adjust- Non-GAAP GAAP Adjust- Non-GAAP
amounts ments amounts amounts ments amounts
-------- --------- -------- -------- --------- --------
Revenue $ 33,006 $ - $ 33,006 $ 33,510 $ - $ 33,510
Gross profit 7,700 2,700 10,400 11,036 - 11,036
Operating
expenses 13,866 1,040 12,826 33,754 19,152 14,602
Operating loss
excluding
non-routine
charges (6,166) 3,740 (2,426) (22,718) 19,152 (3,566)
Adjustments represent non-routine charges for non-cash inventory
write-downs and restructuring charges in Q309, restructuring charges in
Q308, goodwill impairment and restructuring charges in Q209.
eOn Communications (EONC) Reports Strong Fourth Quarter and Total Year Revenue with Fourth Quarter Profitability
SAN JOSE, Calif., Nov. 9 /PRNewswire-FirstCall/ — eOn Communications Corporation((TM)) (Nasdaq: EONC) (the “Company”), a leading provider of telecommunications solutions, today reported fourth quarter and fiscal year ended July 31, 2009 results.
Fourth quarter revenue increased 217% to $5,089,000 from $1,604,000 in the fourth quarter of last year and increased 106% compared to revenues of $2,465,000 in the third quarter of this year. Net income for the quarter was $111,000 or $0.04 per common share compared to a net loss of $338,000 or $0.12 per common share in the quarter ended July 31, 2008. Included in the net income for the quarter was $480,000 of imputed interest expense due to the amortization of the difference between the face value of the contingent obligation to the former Cortelco shareholders and the discounted present value of the note payable recorded on the balance sheet. Net income for the quarter excluding the impact of the imputed interest expense was $591,000 or $0.22 per common share.
Total year revenue increased 52% to $10,645,000 from $6,994,000 in fiscal year 2008. Net loss for the fiscal year ended July 31, 2009 was $339,000 or $0.12 per common share compared to net loss of $3,452,000 or $1.27 per common share for the fiscal year ended July 31, 2008. Net income for the year excluding the impact of the imputed interest expense was $141,000 or $0.05 per common share.
eOn’s operating results for the quarter ended July 31, 2009 represent the second consecutive profitable quarter. Financial results for the current fiscal year include net income of $430,000 of Cortelco Systems Holding Corp., which was acquired on April 1, 2009.
Cash, cash equivalents and marketable securities increased 18% to $3,010,000 from $2,545,000 as of July 31, 2008.
“I would like to thank everyone in the organization for their continued efforts to return eOn Communications to profitability,” commented Mr. David S. Lee, Chairman of eOn’s Board of Directors. “For the fourth quarter of 2009 all divisions (eOn US, Cortelco and eOn China) were profitable resulting in net earnings per share of $0.22 before imputed interest expense. With our recent reorganization and merger with Cortelco, I feel that the company is now positioned to achieve positive results going forward.”
The Company also today announces that its Annual Shareholder Meeting will be held at 2:00 PM on December 8, 2009 at the Company’s offices in San Jose, CA. Shareholders of record as of November 6, 2009 will be entitled to vote at the Annual Meeting.
About eOn Communications
eOn Communications Corporation((TM)) is a global provider of innovative communications solutions. Backed by over 20 years of telecommunications engineering expertise, our solutions enable our customers to easily leverage advanced technologies in order to communicate more effectively. To find out more information about eOn Communications and its solutions, visit the World Wide Web at www.eoncommunications.com, or call 800-955-5321.
Note:
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including technical and competitive factors, which could cause the Company’s results and the timing of certain events to differ materially from those discussed in the forward-looking statements. Such risks are detailed in eOn Communications Corporation’s most recent Form 10-Q filing with the Securities and Exchange Commission.
eOn Communications Corporation, the mark eOn, and eQueue are trademarks of eOn Communications Corporation.
eOn Communications Corporation Condensed Consolidated Statements of Operations (Dollars in thousands, except per share data) Unaudited For the Years Ended July 31, --------------- 2009 2008 ---- ---- REVENUE Third party revenue $10,355 $6,646 Related party revenue 290 348 --- --- Net revenue 10,645 6,994 COST OF REVENUE Third party cost of revenue 5,659 2,832 Related party cost of revenue 204 323 --- --- Cost of revenue 5,863 3,155 ----- ----- Gross profit 4,782 3,839 OPERATING EXPENSE Selling, general and administrative (including $243 and $210 of related party management fees, respectively) 3,633 3,893 Research and development 926 2,641 Other expense,net 120 283 --- --- Total operating expense 4,679 6,817 ----- ----- Income (loss) from continuing operations 103 (2,978) Interest (expense) income (466) 117 Equity earnings of unconsolidated equity investee 29 - --- --- Loss from continuing operations before income taxes (334) (2,861) Income tax expense (5) - --- --- Loss from continuing operations after income taxes (339) (2,861) DISCONTINUED OPERATIONS Loss from discontinued operations - (604) Gain on disposal of discontinued operations, net of tax of $0 - 13 --- --- Loss from discontinued operations - (591) --- --- Net loss $(339) $(3,452) ===== ======= Weighted average shares outstanding Basic and diluted 2,735 2,725 Basic and diluted loss per share: From continuing operations $(0.12) $(1.05) From discontinued operations, net of tax - (0.22) --- ---- Basic and diluted net loss per share $(0.12) $(1.27) ====== ====== eOn Communications Corporation Condensed Consolidated Balance Sheets (Dollars in thousands, except share and per share amounts) As of July 31, -------------- 2009 2008 ---- ---- ASSETS Current assets: Cash and cash equivalents $3,010 $1,545 Marketable securities - 1,000 Trade accounts receivable, net of allowance of $332 and $680, respectively 2,943 932 Trade accounts receivable - related party 228 84 Inventories 5,032 2,501 Deferred income taxes 270 - Prepaid and other current assets 242 177 --- --- Total current assets 11,725 6,239 Property and equipment, net 209 176 Intangibles, net 410 251 Investments 1,136 900 Investment in unconsolidated equity investee 140 - Other non-current assets - 88 --- --- Total assets $13,620 $7,654 ======= ====== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade accounts payable $1,127 $214 Trade accounts payable - related party 11 126 Notes payable, related party 1,157 138 Accrued expenses and other 1,628 1,145 ----- ----- Total current liabilities 3,923 1,623 Note payable, related party, net of current portion 3,891 - ----- --- Total liabilities 7,814 1,623 ----- ----- Commitments and contingencies Stockholders' equity: Preferred stock, $0.001 par value, (10,000,000 shares authorized, no shares issued and outstanding) - - Common stock, $0.005 par value (10,000,000 shares authorized, 2,873,992 and 2,869,608 shares issued, respectively) 14 14 Additional paid-in capital 56,048 55,931 Treasury stock, at cost (139,580 shares) (1,503) (1,502) Accumulated deficit (48,856) (48,517) Accumulated other comprehensive income 103 105 --- --- Total stockholders' equity 5,806 6,031 ----- ----- Total liabilities and stockholders' equity $13,620 $7,654
DUSA Pharmaceuticals Reports Third Quarter 2009 Corporate Highlights and Financial Results
Nov. 6, 2009 (PR Newswire) — WILMINGTON, Mass., Nov. 6 /PRNewswire-FirstCall/ — DUSA Pharmaceuticals, Inc.® (Nasdaq GM: DUSA), a dermatology company that is developing and marketing Levulan® Photodynamic Therapy (PDT) and other products focused on patients with common skin conditions, reported today its corporate highlights and financial results for the third quarter ended September 30, 2009.
Third quarter and year-to-date financial highlights include:
— Domestic PDT revenues totaled $6.2 million for the third quarter of2009, representing a $1.5 million, or 32%, improvement as compared tothe third quarter of 2008. Year-to-date 2009 domestic PDT revenuestotaled $18.7 million, representing a $3.8 million, or 25%, improvementyear over year.– Domestic Kerastick® revenues totaled $5.8 million for the third quarterof 2009, representing a $1.4 million, or 32%, improvement as compared tothe third quarter of 2008. Year-to-date 2009 domestic Kerastick®revenues totaled $17.1 million, representing a $3.4 million, or 25%,improvement year over year.– Domestic BLU-U® revenues totaled $0.5 million for the third quarter of2009, representing a $0.1 million, or 22%, improvement as compared tothe third quarter of 2008. Year-to-date 2009 domestic BLU-U® revenuestotaled $1.6 million, representing a $0.4 million, or 32%, improvementyear over year.– Kerastick® gross margins for the third quarter of 2009 reached a recordhigh of 86%.– Non-GAAP loss for the third quarter of 2009 improved 86% year over year,and narrowed to $0.2 million.
Management Comments:
“We are excited to report the improvement in many of our key financial indicators this quarter,” stated Robert Doman, President and CEO. “The combination of strong top line PDT revenue growth, the achievement of record Kerastick margins, and reductions in our overall spending drove our non-GAAP loss to a record low point.”
“We experienced significant growth in Kerastick revenue during the third quarter. This is due in part to solid execution by the sales and marketing team and a 33% increase in BLU-U volume year-to-date. This represents the 16th consecutive quarter of year over year domestic Kerastick growth.”
“In October, we announced an important milestone in the Company’s history, having surpassed cumulative Kerastick sales of one million units. The achievement of this milestone demonstrates the relevance that PDT is gaining in the medical dermatology community,” continued Doman.
“For the remainder of the year, we will focus our efforts on further capitalizing on the significant growth potential that exists for Levulan PDT in the treatment of actinic keratoses (AKs),” concluded Doman.
Third Quarter 2009 Financial Results:
Total product revenues were $6.9 million in the third quarter of 2009, up 21% from $5.7 million in the third quarter of 2008. PDT revenues totaled $6.7 million, up $1.5 million, or 30%, from $5.2 million for the comparable 2008 period. The increase in PDT revenues was attributable to a 32% increase in Kerastick® revenues and a 7% increase in BLU-U® revenues. The Kerastick® revenue improvement was driven by a 20% increase in our domestic Kerastick® volume and an overall 10% increase in our average selling price. Kerastick® sales volumes increased to 53,622 in the third quarter of 2009 from 44,668 units sold in the third quarter of 2008. Domestic Kerastick® sales volumes increased by 7,938 units, or 20%, and were supplemented by a 1,016 unit increase in our international sales volumes. The BLU-U® revenue increase was driven by a 4% increase in sales volume. There were 59 units sold during the quarter, as compared to the prior year quarterly total of 57 units. Non-PDT revenues totaled $0.2 million versus $0.6 million for the comparable 2008 period. Non-PDT revenues were adversely impacted by the absence of Nicomide® royalty revenues in 2009. DUSA has not received the installment payments due under its exclusive Nicomide® patent license agreement with River’s Edge since June 2009. The Company is currently evaluating its options to collect the amounts due from River’s Edge.
DUSA’s net loss on a GAAP basis for the third quarter of 2009 was ($0.4) million, or ($0.02) per common share, compared to a net loss of ($2.8) million, or ($0.12) per common share, in the third quarter of 2008.
DUSA’s non-GAAP net loss for the third quarter of 2009, after adjustments for stock-based compensation expense, consideration provided to the former Sirius shareholders, and the non-cash change in fair value of warrants, was ($0.2) million, or ($0.01) per common share, compared to a net loss of ($1.6) million, or ($0.07) per common share, in the prior year period. The decrease in the Company’s net loss was primarily the result of the year over year increase in our PDT revenues and lower operating costs due to the absence of spending on our Phase IIb acne clinical trial which concluded in 2008.
Please refer to the section entitled “Use of Non-GAAP Financial Measures” and the accompanying financial table included at the end of this release for a reconciliation of GAAP to non-GAAP results for the three and nine month periods ending September 30, 2008 and 2009, respectively.
Year-to-Date 2009 Financial Results:
Total product revenues for the nine month period ended September 30, 2009 were $21.0 million, down 3% from $21.8 million in comparable prior year period. PDT revenues totaled $19.8 million, up $3.4 million, or 21% from $16.4 million for the comparable 2008 period. The increase in PDT revenues was attributable to a 20% increase in Kerastick® revenues and a 26% increase in BLU-U® revenues. The Kerastick® revenue improvement was driven by a 13% increase in our domestic Kerastick® volume and an overall 13% increase in our average selling price. Kerastick® sales volumes increased to 155,384 in 2009 from 145,256 units sold in 2008. Domestic Kerastick® sales volumes increased by 15,966 units, or 13%, and were partially offset by a 5,838 unit decrease in our international sales volumes. The BLU-U® revenue increase was driven by a 29% increase in sales volume. There were 198 units sold during in 2009, representing a 44 unit increase over the prior year total of 154 units. Non-PDT revenues totaled $1.2 million versus $5.4 million for the comparable 2008 period. Non-PDT revenues were adversely impacted by the absence of Nicomide® sales in 2009. In response to discussions with the Food and Drug Administration (FDA) regarding our marketing of certain products considered by the FDA to be marketed unapproved drugs, the Company stopped shipping Nicomide® into the wholesale channel in June of 2008.
DUSA’s net loss on a GAAP basis for the nine months ended September 30, 2009 was ($2.9) million or ($0.12) per common share, compared to a net loss of ($4.3) million or ($0.18) per common share in 2008.
DUSA’s non-GAAP net loss, after adjustments for stock-based compensation expense, a milestone payment made related to the Sirius acquisition, consideration provided to the former Sirius shareholders, and the non-cash change in fair value of warrants, for the nine months ending September 30, 2009 was ($1.9) million, or ($0.08) per common share, in 2009, compared to ($2.5) million, or ($0.10) per common share, in 2008. The decrease in our net loss was primarily the result of the year over year decrease in our operating costs due mainly to the absence of spending on our Phase IIb acne clinical trial which concluded in 2008, and a Prescription Drug User Fee Act (PDUFA) charge accrued in the prior year period.
As of September 30, 2009, total cash, cash equivalents, and marketable securities were $15.0 million, compared to $18.9 million at December 31, 2008.
Other Updates:
— Solid Organ Transplant Recipients Clinical Development.– In May 2009, the Company announced the initiation of its Phase IIclinical trial that is examining the safety and efficacy of PDT forthe treatment of broad area AKs and the prevention of squamous cellcarcinomas in high risk chronically immunosuppressed solid organtransplant recipients. All seven clinical sites have been initiatedand trial enrollment is currently underway.– In May 2008, DUSA filed an Orphan Drug Designation application withthe FDA with respect to the prevention of cancer occurrence in thesepatients. The Company received initial correspondence that theapplication was not granted on the basis that the agency believesthat the prevalence of the target population with the disease stateis greater than 200,000, which is the maximum number of patientsallowed under the Orphan Drug legislation. During the third quarterof 2009, DUSA met with the FDA to clarify and explain in more detailour rationale for the application and, based on that meeting, theagency has invited us to submit an amendment to our application forfurther evaluation. DUSA is in the process of drafting the amendmentand expects to submit it to the FDA later this month.
— BLU-U® Claims Expansion.– In May 2009, the Company filed a 510(k) application with the FDA toexpand the allowed claims on BLU-U® to include severe acne. Thefiling was based on the results of our Phase IIb clinical trial. Wereceived a response to our application from the FDA in June 2009.The agency requested additional information in order to complete itsreview of our application, including supplementary clinical data insupport of our claims. Based on the FDA’s requests and theanticipated costs of additional clinical trials, the Company hasdecided not to pursue the 510(k) application for an expansion of theBLU-U® claims at this time.
Revenues Table, Condensed Consolidated Balance Sheets, Condensed Consolidated Statement of Operations and GAAP to Non-GAAP reconciliation follow:
Revenues for the three month and nine month periods were comprised of the following:
Three-months ended Nine-months endedSeptember 30, September 30,2009 2008 2009 2008(Unaudited) (Unaudited) (Unaudited) (Unaudited)PDT Drug & Device Product RevenuesKerastick(R) Product Revenues:United States $5,790,000 $4,374,000 $17,096,000 $13,720,000Canada 162,000 72,000 404,000 449,000Korea 201,000 186,000 498,000 710,000Other 91,000 99,000 261,000 289,000Subtotal Kerastick(R)Product Revenues 6,244,000 4,731,000 18,259,000 15,168,000BLU-U(R) Product Revenues:United States 456,000 376,000 1,577,000 1,198,000Korea – 50,000 – 50,000Subtotal BLU-U(R)Product Revenues 456,000 426,000 1,577,000 1,248,000Total PDT Drug & DeviceProduct Revenues 6,700,000 5,157,000 19,836,000 16,416,000Total Non-PDT ProductRevenues 230,000 569,000 1,198,000 5,352,000TOTAL PRODUCT REVENUES $6,930,000 $5,726,000 $21,034,000 $21,768,000
DUSA Pharmaceuticals, Inc.Condensed Consolidated Balance SheetsSeptember 30, December 31,2009 2008(Unaudited)————————–ASSETSCURRENT ASSETSCash and cash equivalents $5,016,994 $3,880,673Marketable securities 10,012,948 15,002,830Accounts receivable, net 2,519,214 2,367,803Inventory 2,336,167 2,812,825Prepaid and other current assets 1,647,408 1,873,801——— ———TOTAL CURRENT ASSETS 21,532,731 25,937,932Restricted cash 174,170 173,844Property, plant and equipment, net 1,721,488 1,937,978Deferred charges and other assets 68,099 160,700—— ——-TOTAL ASSETS $23,496,488 $28,210,454=========== ===========LIABILITIES AND SHAREHOLDERS’ EQUITYCURRENT LIABILITIESAccounts payable $188,417 $305,734Accrued compensation 889,230 1,515,912Other accrued expenses 2,343,822 3,226,571Deferred revenue 1,045,505 611,602——— ——-TOTAL CURRENT LIABILITIES 4,466,974 5,659,819Deferred revenues 3,061,700 4,157,305Warrant liability 474,137 436,458Other liabilities 133,544 244,673——- ——-TOTAL LIABILITIES 8,136,355 10,498,255SHAREHOLDERS’ EQUITYCapital stockAuthorized: 100,000,000 shares;40,000,000 shares designated ascommon stock, no par, and60,000,000 shares issuable inseries or classes; and 40,000junior Series A preferred shares.Issued and outstanding: 24,108,908and 24,089,452 shares of commonstock, no par, at September 30,2009 and December 31, 2008,respectively 151,683,399 151,663,943Additional paid-in capital 8,122,801 7,514,900Accumulated deficit (144,725,805) (141,850,925)Accumulated other comprehensive loss 279,738 384,281TOTAL SHAREHOLDERS’ EQUITY 15,360,133 17,712,199———- ———-TOTAL LIABILITIES AND SHAREHOLDERS’EQUITY $23,496,488 $28,210,454=========== ===========
DUSA Pharmaceuticals, Inc.Consolidated Statement of OperationsThree-months ended Nine-months endedSeptember 30, September 30,2009 2008 2009 2008(Unaudited) (Unaudited) (Unaudited) (Unaudited)Product revenues $6,930,110 $5,726,071 $21,033,920 $21,767,810Cost of product revenuesand royalties 1,594,692 1,462,028 4,973,782 4,950,039Gross margin 5,335,418 4,264,043 16,060,138 16,817,771Operating costs:Research and development 963,245 1,487,816 3,225,049 5,049,327Marketing and sales 3,013,351 2,967,431 9,460,766 9,520,865General andadministrative 1,877,928 1,911,028 6,360,325 6,603,989Impairment charge forcontingentconsideration – 1,500,000 – 1,500,000Settlements, net – 650 75,000 (282,775)Total operating costs 5,854,524 7,866,925 19,121,140 22,391,406Loss from operations (519,106) (3,602,882) (3,061,002) (5,573,635)Other income:Other income, net 79,815 114,260 223,801 538,212Gain/(loss) on change infair value of warrants 24,051 651,767 (37,679) 775,636Net loss $(415,240) $(2,836,855) $(2,874,880) $(4,259,787)Basic and diluted netloss per common share $(0.02) $(0.12) $(0.12) $(0.18)Weighted average numberof common shares 24,108,908 24,078,610 24,099,786 24,078,546
Use of Non-GAAP Financial Measures
In addition to reporting financial results in accordance with GAAP, DUSA has provided in the table below non-GAAP financial measures adjusted to exclude stock-based compensation expense, consideration provided to the former Sirius shareholders, and the non-cash change in fair value of warrants. The Company believes that this presentation is useful to help investors better understand DUSA’s financial performance, competitive position and prospects for the future. Management believes that these non-GAAP financial measures assist in providing a more complete understanding of the Company’s underlying operational results and trends, and in allowing for a more comparable presentation of results. Management uses these measures along with their corresponding GAAP financial measures to help manage the Company’s business and to help evaluate DUSA’s performance compared to the marketplace. However, the presentation of non-GAAP financial measures is not meant to be considered in isolation or as superior to or as a substitute for financial information provided in accordance with GAAP. The non-GAAP financial measures used by the Company may be calculated differently from, and, therefore, may not be comparable to, similarly titled measures used by other companies.
Investors are encouraged to review the reconciliations of these non-GAAP financial measures to the comparable GAAP results, contained in the table below.
Three-months ended Nine-months endedSeptember 30, September 30,2009 2008 2009 2008(Unaudited) (Unaudited) (Unaudited) (Unaudited)GAAP net loss $(415,240) $(2,836,855) $(2,874,880) $(4,259,787)Stock-basedcompensation (a) 207,178 353,262 631,770 1,042,812Payment onacquisition (b) – 1,500,000 – 1,500,000Consideration to formerSirius shareholders (c) 5,000 – 310,000 -Change in fair valueof warrants (d) (24,051) (651,767) 37,679 (775,636)Non-GAAP adjustednet loss $(227,113) $(1,635,360) $(1,895,431) $(2,492,611)Non-GAAP basic anddiluted net lossper common share $(0.01) $(0.07) $(0.08) $(0.10)Weighted averagenumber of commonshares 24,108,908 24,078,610 24,099,786 24,078,546(a) Stock-based compensation expense resulting from the applicationof SFAS 123(R).(b) Milestone payment related to Sirius Laboratories acquisition.(c) Payment of $100,000 and accrual of $210,000 related to the release,consent and the third amendment to the merger agreement between DUSAand the former Sirius shareholders.(d) Non-cash gain/loss on change in fair value of warrants.
Conference Call Details and Dial-in Information
In conjunction with this announcement, DUSA will host a conference call
today:
Friday, November 6th – 8:30 a.m. EasternIf calling from the U.S. or Canada use the following toll-free number:800.647.4314Password – DUSAFor international callers use 502.498.8422Password – DUSAA recorded replay of the call will be available approximately 15minutes following the callU.S. or Canada callers use 877.863.0350International callers use 858.244.1268
The call will be accessible on our web site approximately six hours following the call at www.dusapharma.com.
About DUSA Pharmaceuticals
DUSA Pharmaceuticals, Inc. is an integrated dermatology pharmaceutical company focused primarily on the development and marketing of its Levulan® PDT technology platform, and complementary dermatology products. Levulan® PDT is currently approved for the treatment of Grade 1 and 2 actinic keratoses of the face and scalp. DUSA also markets other dermatology products, including ClindaReach®. DUSA is researching the use of broad area Levulan® PDT to treat AKs and prevent squamous cell carcinomas in immunosuppressed solid organ transplant recipients and is supporting research related to oral leukoplakia in collaboration with the National Institutes of Health. DUSA is based in Wilmington, Mass. Please visit our web site at www.dusapharma.com.
Except for historical information, this news release contains certain forward-looking statements that represent our current expectations and beliefs concerning future events, and involve certain known and unknown risk and uncertainties. These forward-looking statements relate to Levulan’s growth potential, expectations for filing an amendment to a regulatory application, and management’s beliefs concerning non-GAAP financial measures. These forward-looking statements are further qualified by important factors that could cause actual results to differ materially from future results, performance or achievements expressed or implied by those in the forward-looking statements made in this release. These factors include, without limitation, actions by health regulatory authorities, changing economic conditions, launch of competitive products, the status of our patent portfolio, reliance on third parties, sufficient funding, and other risks and uncertainties identified in DUSA’s Form 10-K for the year ended December 31, 2008.
CEL-SCI (CVM) to Conduct First Clinical Study of Investigational LEAPS-H1N1 Treatment
VIENNA, Va., Nov. 6 /PRNewswire/ — CEL-SCI Corporation (NYSE Amex: CVM), a developer of vaccines and therapeutics for the prevention and treatment of infectious diseases and a late-stage oncology company, announced today that an Institutional Review Board of The Johns Hopkins University School of Medicine (Johns Hopkins) has given clearance for the Company’s first clinical study to proceed. As a result, Johns Hopkins will host the study, which will be led by Principal Investigator Jonathan M. Zenilman, MD, Professor of Medicine, Johns Hopkins School of Medicine and Chief of Infectious Diseases Division, Johns Hopkins Bayview Medical Center. As previously announced, this initial study will involve taking blood from hospitalized, laboratory-confirmed H1N1 patients and activating their cells with the LEAPS H1N1 investigational therapy in order to assess the cells’ response as the basis for the planned future treatment of this patient population under a next-stage clinical trial protocol.
In September, the Company announced that the FDA had indicated that the Company could commence this study. In order for FDA to fully consider a next-stage clinical trial to evaluate LEAPS-H1N1 treatment of hospitalized patients with laboratory-confirmed H1N1 Pandemic Flu under an Exploratory IND, FDA has asked CEL-SCI to submit a detailed follow-up regulatory filing with extensive additional data.
“We are pleased that such a prestigious medical center has given clearance to proceed with this first study of our LEAPS-H1N1 treatment,” said Geert Kersten, CEL-SCI’s Chief Executive Officer. “Given the nature and severity of the virus, we are working diligently with our CRO and Johns Hopkins, and actively preparing submissions to the FDA, to support the fastest and most effective way to conduct clinical trials going forward for this unique investigational treatment.”
The initiation of CEL-SCI’s rapidly-accelerated LEAPS-H1N1 clinical development program builds on CEL-SCI’s pioneering work with its LEAPS technology in the context of H1N1. CEL-SCI’s L.E.A.P.S.(TM) (Ligand Epitope Antigen Presentation System) technology allows the Company to direct an immune response against specific disease epitopes. In the case of CEL-SCI’s investigational LEAPS-H1N1 treatment, this involves non-changing regions of H1N1 Pandemic Flu, Avian Flu (H5N1), and the Spanish Flu. This is intended to enable stimulation of the specifically-needed immune responses, while avoiding the administration of regions of H1N1, and other viruses, which may exacerbate the problem of cytokine storm, which CEL-SCI scientists believe may be involved in the death of some H1N1 patients.
L.E.A.P.S. technology is a novel T-cell modulation platform technology that enables CEL-SCI to design and synthesize, non-recombinantly, proprietary immunogens. The L.E.A.P.S. technology combines a small peptide that activates the immune system with a small peptide from a disease-related protein, such as the H1N1 hemagglutinin molecule, to make an investigational product that induces defined immune responses. Each L.E.A.P.S. construct is composed of a T cell binding ligand (TCBL) which previously has demonstrated the ability to induce and elicit protective immunity and antigen-specific antibody production in animal models. Thus, extensive animal studies conducted to date indicate that any disease for which an antigenic sequence has been identified, such as infectious, parasitic, malignant or autoimmune diseases and allergies, are potential therapeutic or preventive sites for the application of L.E.A.P.S. technology.
About CEL-SCI Corporation
CEL-SCI Corporation is developing products that empower immune defenses. Its lead product is Multikine® which is being readied for a global Phase III trial in advanced primary head and neck cancer. CEL-SCI is also developing an immunotherapy to prevent and treat swine and other influenzas using its L.E.A.P.S. technology platform and expects to soon finish the validation of its state-of-the-art facility in Maryland which it expects to utilize to launch aseptic filling for stem cell produced therapies and other biological products. The Company has operations in Vienna, Virginia, and Baltimore, Maryland.
For more information, please visit www.cel-sci.com.
When used in this report, the words “intends,” “believes,” “anticipated” and “expects” and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those projected. Factors that could cause or contribute to such differences include, lack of regulatory clearance to proceed with clinical trials, an inability to duplicate the clinical results demonstrated in clinical studies that have been completed or that are initiated in the future, timely development of any potential products that can be shown to be safe and effective, unwillingness of regulatory authorities to engage in further regulatory dialogue, receiving necessary regulatory approvals, difficulties in manufacturing any of the Company’s potential products, inability to raise the necessary capital, and the risk factors set forth from time to time in CEL-SCI Corporation’s SEC filings, including but not limited to its report on Form 10- K/A for the year ended September 30, 2008. The Company undertakes no obligation to publicly release the result of any revision to these forward-looking statements which may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
EXL (EXLS) Reports 2009 Third Quarter Results
Nov. 6, 2009 (PR Newswire) — NEW YORK, Nov. 6 /PRNewswire-FirstCall/ — ExlService Holdings, Inc. (Nasdaq: EXLS), a leading provider of outsourcing and transformation services, today announced its financial results for the quarter ended September 30, 2009.
Rohit Kapoor, President and CEO, commented: “We experienced strong revenue growth this quarter and continued momentum in the market place. Our results reflect the investments and efforts that we have directed to execution and client centricity. In our outsourcing business, our team ensured a smooth ramp-up and efficient employee on-boarding for our recently acquired clients. In transformation services, we expanded our existing client relationships while increasing the annuity-based percentage of the business.
We are also pleased to announce a new eight-year agreement to service the back-office operations of American Express Business Travel and the associated acquisition of American Express’ Global Travel Service Center operations in Gurgaon, India. We estimate achieving more than $160 million in revenues over the life of the contract. Through this transaction, we will deepen our relationship with one of our key clients as well as expand our capability set in analytics, exception processing, and transaction processing. This acquisition also adds an experienced management team and an additional delivery center to EXL. We expect the transaction to close first quarter next year.”
Vishal Chhibbar, CFO, commented: “The investments we made in expanding our delivery infrastructure in the first half of this year are paying off. Sequential revenue growth was 13.7% quarter on quarter. We delivered outsourcing revenues of $37.7 million and transformation revenues of $10.5 million. We generated $9.7 million in operating cash flows and ended the quarter with a cash balance of $117.5 million versus $114.3 million last quarter. Adjusted operating margin for the quarter increased to 14.8% due to higher utilization of our physical infrastructure and people as well as strong execution across business lines. We are pleased to increase our calendar year 2009 guidance for revenue to $178.0 million – $180.0 million from $170.0 million – $175.0 million and our adjusted operating margin to 13.0% – 13.5% from 10.0% – 12.0%.”
Financial Highlights
Financial highlights are based on continuing operations of the Company and exclude the sale of the Pune assets providing services to Aviva under the BOT arrangement, which is treated as a discontinued operation as of the third quarter of 2008. Reconciliations of adjusted financial measures to GAAP are included at the end of this release.
— Revenues for the quarter ended September 30, 2009 were $48.2 millioncompared to $46.6 million for the quarter ended September 30, 2008 and$42.4 million for the quarter ended June 30, 2009. Revenues attributableto outsourcing services for the quarter ended September 30, 2009 were$37.7 million compared to $34.5 million in the quarter ended September30, 2008 and $34.5 million in the quarter ended June 30, 2009.Transformation services revenues for the quarter ended September 30,2009 were $10.5 million compared to $12.0 million in the quarter endedSeptember 30, 2008 and $7.9 million in the quarter ended June 30, 2009.
— Gross margin for the quarter ended September 30, 2009 was 40.2% comparedto 39.8% for the quarter ended September 30, 2008 and 39.1% for thequarter ended June 30, 2009. Gross margin for outsourcing services was41.0% for the quarter ended September 30, 2009 compared to 41.9% for thequarter ended June 30, 2009. Transformation services gross margin was37.5% for the quarter ended September 30, 2009 compared to 26.8% for thequarter ended June 30, 2009.
— Operating margin for the quarter ended September 30, 2009 was 10.7%compared to 11.3% for the quarter ended September 30, 2008 and 6.6% forthe quarter ended June 30, 2009; adjusted operating margin for thequarter ended September 30, 2009, excluding the impact of stock-basedcompensation expense and amortization of intangibles, was 14.8% comparedto 14.7% for the quarter ended September 30, 2008 and 11.3% for thequarter ended June 30, 2009.
— Diluted earnings per share to common stockholders for the quarter endedSeptember 30, 2009 were $0.14 compared to $0.01 for the quarter endedSeptember 30, 2008 and $0.04 for the quarter ended June 30, 2009.
Business Announcements
— Signed eight-year agreement with American Express to provide businessprocess services in conjunction with the acquisition of AmericanExpress’ Global Travel Service Center operations in Gurgaon, India. Thepurchase price for this transaction will be approximately $30.0 millionnet of working capital adjustments at closing.
— Awarded a five-year outsourcing contract with a global P&C andreinsurance company to provide business process services from both ourIndia facilities and our new Romanian facility currently in development.
— Increased annuity-based transformation revenues to comprise ofapproximately one-third of total transformation.
— Reduced days sales outstanding in the third quarter of 2009 to 59 daysfrom 68 days in the second quarter of 2009 and 76 days in the thirdquarter of 2008.
— Experienced quarterly attrition in the third quarter of 22.0% forbillable employees compared to 22.0% in the second quarter 2009 and37.3% for the third quarter of 2008.
2009 Outlook
The Company is increasing its guidance for calendar year 2009:
— Revenues of $178.0 million to $180.0 million from $170.0 million to$175.0 million.
— Adjusted operating margin, excluding the impact of stock-basedcompensation expense and amortization of intangibles, of 13.0% and 13.5%from 10.0% and 12.0%.
Conference Call
EXL will host a conference call on Friday, November 6, at 8:00 a.m. (ET) to discuss the company’s quarterly results and operating performance. The conference call will be available live via the internet by accessing the investor relations section of EXL’s website at www.exlservice.com, where the accompanying presentation and an investor factsheet can also be accessed. Please go to the website at least fifteen minutes prior to the call to register, download and install any necessary audio software.
To listen to the conference call via phone, please dial 1-800-884-5695 or 1-617-786-2960 and enter “73278987.” For those who cannot access the live broadcast, a replay will be available by dialing 1-888-286-8010 or 1-617-801-6888 and entering “85132426” from two hours after the end of the call until 11:59 p.m. (ET) on November 13, 2009. The replay will also be available on the EXL website (www.exlservice.com).
EXL will host its First Annual Investor Day on Friday, November 6, 2009 at 9:30 a.m. (ET) in New York City at the NASDAQ MarketSite in Times Square. To listen to the investor day events via phone, please dial 1-888-452-4007 or 1-719-325-2481 and reference “EXLService Investor Day 2009.” The event will also be made available via live audio webcast on the investor relations section of EXL’s website at www.exlservice.com. Slides will be made available. For those who cannot access the live broadcast, an archived webcast of the presentations will be available on the EXL website (www.exlservice.com) after the end of the event.
About ExlService Holdings, Inc.
ExlService Holdings, Inc. (Nasdaq: EXLS) is a leading provider of outsourcing and transformation services. EXL’s outsourcing services include a full spectrum of business process outsourcing services from offshore delivery centers requiring ongoing process management skills. Transformation services enable continuous improvement of client processes by bringing together EXL’s capabilities in decision analytics, risk and financial management and operations and process excellence services. Headquartered in New York, EXL primarily serves the needs of Global 1000 companies in the insurance, utilities, financial services and transportation and logistics sectors. Find additional information about EXL at www.exlservice.com.
This press release contains forward-looking statements. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to the Company’s operations and business environment, all of which are difficult to predict and many of which are beyond the Company’s control. Forward-looking statements include information concerning the Company’s possible or assumed future results of operations, including descriptions of its business strategy. These statements may include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of management’s experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect the Company’s actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors are discussed in more details in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. These risks could cause actual results to differ materially from those implied by forward-looking statements in this release.
You should keep in mind that any forward-looking statement made herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect the Company. The Company has no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws.
EXLSERVICE HOLDINGS, INC.CONSOLIDATED STATEMENTS OF INCOME(Unaudited)(In thousands, except share and per share amounts)Three months ended Nine months endedSeptember 30, September 30,————- ————-2009 2008 2009 2008—- —- —- —-Revenues $48,186 $46,573 $131,557 $138,019Cost of revenues(exclusive ofdepreciation andamortization) 28,803 28,046 78,986 86,902—— —— —— ——Gross profit 19,383 18,527 52,571 51,117—— —— —— ——Operating expenses:General andadministrativeexpenses 7,770 7,349 22,137 24,193Selling and marketingexpenses 3,516 3,081 10,040 8,366Depreciation andamortization 2,918 2,832 8,137 8,302—– —– —– —–Total operating expenses 14,204 13,262 40,314 40,861—— —— —— ——Income from continuingoperations 5,179 5,265 12,257 10,256Other income/(expense):Foreign exchangegain/(loss) (1,995) (6,637) (5,014) (5,847)Interest and otherincome, net 269 1,157 856 2,294— —– — —–Income/(loss) fromcontinuing operationsbefore income taxes 3,453 (215) 8,099 6,703Income tax provision/(benefit) (541) (589) (169) (984)—- —- —- —-Income from continuingoperations 3,994 374 8,268 7,687Income/(loss) fromdiscontinued operations,net of taxes – (1,449) (139) 3,302- —— —- —–Net income/(loss) tocommon stockholders $3,994 $(1,075) $8,129 $10,989====== ======= ====== =======Earnings/(loss) per share(a):BasicContinuing operations $0.14 $0.01 $0.29 $0.27Discontinued operations – (0.05) – 0.11- —– – —-$0.14 $(0.04) $0.28 $0.38===== ====== ===== =====Diluted:Continuing operations $0.14 $0.01 $0.28 $0.26Discontinued operations – (0.05) – 0.11- —– – —-$0.14 $(0.04) $0.28 $0.38===== ====== ===== =====Weighted-average numberof shares used incomputing earningsper share:Basic 28,930,344 28,846,137 28,893,515 28,801,102Diluted 29,368,390 29,127,304 29,202,856 29,257,254(a) Per share amounts may not foot due to rounding.EXLSERVICE HOLDINGS, INC.CONSOLIDATED BALANCE SHEETS(Unaudited)(In thousands, except share and per share amounts)September 30, December 31,2009 2008—- —-AssetsCurrent assets:Cash and cash equivalents $117,510 $112,174Short-term investments 816 153Restricted cash 1,311 203Accounts receivable, net of allowancefor doubtful accounts of $259 atSeptember 30, 2009 and $128 atDecember 31, 2008 31,578 33,714Deferred tax assets 4,490 3,401Advance income-tax, net 101 2,033Prepaid expenses and other current assets 3,546 6,199—– —–Total current assets 159,352 157,877——- ——-Fixed assets, net of accumulateddepreciation of $35,787 atSeptember 30, 2009 and $27,727 atDecember 31, 2008 22,702 24,518Goodwill 19,595 17,557Intangible assets 710 -Restricted cash 3,744 281Deferred tax assets, net 7,735 3,047Other assets 10,500 8,689—— —–Total assets $224,338 $211,969======== ========Liabilities and Stockholders’ EquityCurrent liabilities:Accounts payable $2,254 $3,371Deferred revenue 3,379 2,961Accrued employee cost 12,176 14,725Accrued expenses and other currentliabilities 12,157 18,011—— ——Total current liabilities 29,966 39,068—— ——Non-current liabilities 3,433 1,569—– —–Total liabilities 33,399 40,637—— ——Commitments and contingenciesPreferred stock, $0.001 par value;15,000,000 shares authorized, none issued – -Stockholders’ equity:Common stock, $0.001 par value;100,000,000 shares authorized,29,179,013 shares issued and outstandingas of September 30, 2009 and 29,054,145shares issued and outstanding as ofDecember 31, 2008 29 29Additional paid-in capital 122,308 116,676Retained earnings 78,150 70,021Accumulated other comprehensive loss (8,572) (14,491)—— ——-191,915 172,235——- ——-Less: 247,030 shares as of September 30,2009 and 237,080 shares as ofDecember 31, 2008, held intreasury, at cost (976) (903)—- —-Total stockholders’ equity 190,939 171,332——- ——-Total liabilities and stockholders’ equity $224,338 $211,969======== ========
EXLSERVICE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Reconciliation of Adjusted Financial Measures to GAAP Measures
In addition to its reported operating results in accordance with U.S. generally accepted accounting principles (GAAP), EXL has included in this release adjusted financial measures that the Securities and Exchange Commission defines as “non-GAAP financial measures.” Management believes that these adjusted financial measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company’s results because the adjustments eliminate the impact of the following two items which do not directly link to the Company’s ongoing performance: (i) stock compensation and (ii) expenses associated with the amortization of acquisition-related intangibles. The Company also believes that it is unreasonably difficult to provide its financial outlook in accordance with GAAP for a number of reasons including, without limitation, the Company’s inability to predict its future stock-based compensation expense under SFAS 123R and the amortization of intangibles associated with further acquisitions. The adjusted financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from those financial statements should be carefully evaluated.
The following table shows the reconciliation of these adjusted financial measures from GAAP measures for the three month periods ended September 30, 2009, September 30, 2008 and June 30, 2009:
(Amounts in thousands)
Ocean Power Technologies (OPTT) Project Wins A $66.5m Award from Australian Federal Government
Nov. 6, 2009 (Business Wire) — Ocean Power Technologies (Australasia) Pty Ltd (“OPTA”), a subsidiary of Ocean Power Technologies, Inc. (NASDAQ:OPTT)(LSE:OPT) (“OPT”) is pleased to announce that, in partnership with Leighton Contractors Pty Ltd (“Leighton”), it has received a A$66.46 million grant from the Federal Government of Australia to build a 19 MW wave power project off the coast of Victoria, Australia.
The award is one of four renewable energy projects approved by the Federal Government after considering over 30 applications, and is the sole wave energy venture.
The Government funding will be used by OPTA and Leighton to advance the construction of a wave power station to be built in three phases off the coast of Victoria near the city of Portland, with a total expected capacity of 19 MW – sufficient to fulfill the energy needs of approximately 10,000 homes. The project is to be developed by a special purpose company, Victorian Wave Partners Pty Ltd, that was formed by OPTA and Leighton following the signing of an agreement (as announced December 19, 2008) to collaborate in pursuing wave power projects off the east and south coasts of Australia. It is expected that work will begin on the project by the second quarter of calendar year 2010.
Dr. George W. Taylor, founder and Executive Chairman of OPT, and Chief Executive of OPTA, said: “We are delighted to have received this vote of confidence from the Australian Federal Government, which has taken a bold step to spur adoption of renewables and wave energy in particular. Our Victoria, Australia project is expected to be one of the first utility-scale wave energy projects globally, and the latest example of OPT’s lead in turning wave energy technology into a commercial reality worldwide.” Taylor, who was born and educated in Australia, continued, “We are delighted to have this opportunity to use OPT’s PowerBuoy® technology in Australia.”
The award was announced by the Australian Resources & Energy Minister, Martin Ferguson, under the Renewable Energy Demonstration Program (REDP), which has awarded funding totaling A$235 million to four renewable energy projects, aimed at meeting the Government’s target of generating 20% of the country’s energy needs from renewable sources by 2020.
The grant is conditional on the signing of a Funding Deed stipulating the conditions for the grant, which includes funding milestones. Victorian Wave Partners will be required to seek additional funding to enable the completion of the 19 MW wave power station.
Forward-Looking Statements
This release may contain “forward-looking statements” that are within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company’s current expectations about its future plans and performance, including statements concerning the impact of marketing strategies, new product introductions and innovation, deliveries of product, sales, earnings and margins. These forward-looking statements rely on a number of assumptions and estimates which could be inaccurate and which are subject to risks and uncertainties. Actual results could vary materially from those anticipated or expressed in any forward-looking statement made by the Company. Please refer to the Company’s most recent Form 10-K for a further discussion of these risks and uncertainties. The Company disclaims any obligation or intent to update the forward-looking statements in order to reflect events or circumstances after the date of this release.
About Ocean Power Technologies
Ocean Power Technologies, Inc. (Nasdaq: OPTT and London Stock Exchange AIM: OPT) is a pioneer in wave-energy technology that harnesses ocean wave resources to generate reliable, clean and environmentally-beneficial electricity. OPT has a strong track record in the advancement of wave energy and participates in a $150 billion annual power generation equipment market. The Company’s proprietary PowerBuoy® system is based on modular, ocean-going buoys that capture and convert predictable wave energy into low-cost, clean electricity. The Company is widely recognized as a leading developer of on-grid and autonomous wave-energy generation systems, benefiting from over a decade of in-ocean experience. OPT’s technology and systems are insured by Lloyds Underwriters of London. OPT is headquartered in Pennington, New Jersey with offices in Warwick, UK. More information can be found at www.oceanpowertechnologies.com.
About Leighton Holdings Limited
Leighton Holdings Limited is the parent company of Australia’s largest project development and contracting group. Founded in Victoria in 1949, the organization has grown from a small, privately owned civil engineering firm into a dynamic group that includes Thiess, John Holland, Leighton Properties, Leighton Contractors, Leighton International and Leighton Asia. With 37,000 employees, the Group’s operations are throughout the Asia-Pacific region on projects in Australia, New Zealand, Hong Kong, Indonesia, Malaysia, Singapore, the Philippines, Thailand, Vietnam, China, Taiwan, Sri Lanka, Macau, India and the Gulf Region. Leighton Holdings is listed on the Australian Stock Exchange (ASX:LEI) and has its head office in Sydney. Leighton Contractors is committed to becoming a leader in the renewable energy sector and has been involved in a number of sustainable energy projects in recent years, including the design and construction of numerous wind farms, biofuel projects and clean power stations throughout Australia.
Agilysys (AGYS) Reports Unaudited Fiscal 2010 Second-Quarter and First-Half Results
Nov. 4, 2009 (PR Newswire) — CLEVELAND, Nov. 4 /PRNewswire-FirstCall/ —
— Quarterly Net Income from Continuing Operations Improves Sharply to $2.9Million, or $0.12 Per Diluted Share, on 9% Lower Revenue– Revenue Increases 20% Sequentially– Debt Free With $48.2 Million Cash on Hand at Sept. 30 vs $36.2 Millionat Fiscal Year-End
Agilysys, Inc. (Nasdaq: AGYS), a leading provider of innovative IT solutions, today announced unaudited financial results for the fiscal 2010 second quarter and first half ended September 30, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030915/AGLSLOGO )
Second-Quarter Unaudited Results of Operations
Revenue declined 9.0% to $156.0 million, compared with $171.4 million in the second quarter of fiscal 2009. Hardware sales declined 3.5%, services declined 32.6% and software sales increased 14.0%. Consolidated revenues rebounded 19.8% from the $130.2 million reported in the first quarter, due to double-digit growth in hardware, software and services.
Cost-cutting initiatives and lower acquisition-related intangible amortization drove selling, general and administrative (SG&A) expense down $12.4 million, or 23.9%, to $39.6 million. The Company recently executed an additional $9 million in annual savings of which approximately $4 million will be realized in the second half of fiscal 2010.
The Company’s operating income, excluding restructuring and asset impairment charges (“Charges”), improved $6.2 million to $4.3 million from the operating loss of $1.9 million last year. Lower sales and gross profit year-over-year were more than offset by lower SG&A expense. Adjusted EBITDA (operating income plus depreciation and amortization), excluding Charges, increased 44.9% to $7.4 million for the quarter, compared with $5.1 million a year ago.
Agilysys reported net income from continuing operations of $2.9 million, or $0.12 per diluted share, a significant increase from the loss of $105.3 million, or a loss of $4.66 per share, recorded in the previous year.
“We are pleased to report strong sequential growth in sales and positive net earnings for the quarter. The improvement in profitability reflects the tangible benefits realized from our cost-saving efforts,” said Martin Ellis, President and Chief Executive Officer. “In addition to improved bottom-line performance, our order pipeline has started to show modest recovery from the depressed levels of the past several quarters.”
Fiscal 2010 First-Half Unaudited Results of Operations
First-half 2010 revenue was $286.2 million compared with revenue of $351.2 million in the first six months of 2009. Revenue in the first half of fiscal 2010 decreased 18.5% reflecting lower sales in each of the company’s three business segments. Hardware declined 13.6%, services declined 36.3% and software decreased 8.2%.
SG&A expense declined $23.7 million, or 22.0%, to $84.1 million, largely due to cost reductions. Approximately $44 million in annual costs have been eliminated since the first quarter of fiscal year 2009 when the company began aggressively reducing SG&A expenses to align cost structure with deteriorating market demand. Adjusted EBITDA, excluding Charges, was $1.1 million for the six-month period, versus $3.3 million in the comparable period of fiscal 2009.
For the first six months of fiscal 2010, the company reported a net loss from continuing operations of $9.5 million, or a loss of $0.42 per share, compared with a net loss from continuing operations of $165.4 million, or a loss of $7.33 per share, in the first six months of fiscal 2009.
Business Outlook
The year-over-year declines in revenue have moderated and while some economic indicators have improved, market conditions still reflect uncertainty regarding the overall business environment and demand for IT products. Ellis commented: “The business is stabilizing, our pipeline has improved, and we expect to see a seasonal increase in sales in our third quarter ending December. As we look to the balance of fiscal 2010, we plan to continue to focus on those items under our control that can help produce tangible improvements in results. Near-term, we are optimistic regarding our outlook for the third quarter of the fiscal year and expect financial performance in second half to improve versus the first half.”
Conference Call Information
A conference call will be held at 11:00 a.m. ET on November 4, 2009 to review unaudited second-quarter and first-half fiscal 2010 results. A slide deck will be the basis for the review. Both the slide deck and the conference call can be accessed via the Investor Relations section of www.agilysys.com. In addition, a replay of the call will be archived on the Web site. If you are unable to participate during the live webcast, the call will be archived at the Investor Relations section of www.agilysys.com.
Forward-Looking Language
This release contains certain management expectations, which may constitute forward-looking information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the Private Securities Reform Act of 1995. Forward-looking information speaks only as to the date of this presentation and may be identified by use of words such as “may,” “will,” “believes,” “anticipates,” “plans,” “expects,” “estimates,” “projects,” “targets,” “forecasts,” “continues,” “seeks,” or the negative of those terms or similar expressions. Many important factors could cause actual results to be materially different from those in forward-looking information including, without limitation, competitive factors, disruption of supplies, changes in market conditions, pending or future claims or litigation, or technology advances. No assurances can be provided as to the outcome of cost reductions, business strategies, future financial results, unanticipated downturns to our relationships with customers, unanticipated difficulties integrating acquisitions, new laws and government regulations, interest rate changes, and unanticipated deterioration in economic and financial conditions in the United States and around the world. We do not undertake to update or revise any forward-looking information even if events make it clear that any projected results, actions, or impact, express or implied, will not be realized.
Other potential risks and uncertainties that may cause actual results to be materially different from those in forward-looking information are described in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC), under Item 1A, “Risk Factors.” Copies are available from the SEC or the Agilysys website.
Use of Non-GAAP Financial Information
To supplement the unaudited condensed consolidated financial statements presented in accordance with U.S. GAAP in this release, certain non-GAAP financial measures as defined by the SEC rules are used. Management believes that such information can enhance investors’ understanding of the Company’s ongoing operations and is a measure used in the Company’s debt agreement. The non-GAAP measures included in this release have been reconciled to the comparable GAAP measures within an accompanying table, shown on the last page of this release.
About Agilysys, Inc.
Agilysys is a leading provider of innovative IT solutions to corporate and public-sector customers, with special expertise in select markets, including retail and hospitality. The Company uses technology–including hardware, software and services–to help customers resolve their most complicated IT needs. The Company possesses expertise in enterprise architecture and high availability, infrastructure optimization, storage and resource management, identity management and business continuity; and provides industry-specific software, services and expertise to the retail and hospitality markets. Headquartered in Cleveland, Agilysys operates extensively throughout North America, with additional sales offices in the United Kingdom and Asia.
News releases and other information on Agilysys are available on the Internet at: www.agilysys.com.
Investor Contact:Curtis StoutVice President and TreasurerAgilysys, Inc.440-519-8635curtis.stout@agilysys.comMedia Contact:Maureen MorrealeSenior Communications ManagerAgilysys, Inc.440-519-8161maureen.morreale@agilysys.com
AGILYSYS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)Three Months Ended Six Months Ended(In thousands, except Sep 30, Sep 30,share and per-share ———————– ———————–data) 2009 2008 2009 2008—- —- —- —-Net sales:Products $126,925 $128,313 $231,818 $265,892Services 29,070 43,125 54,367 85,297—— —— —— ——Total net sales 155,995 171,438 286,185 351,189Cost of goods sold:Products 99,623 99,449 185,503 212,890Services 12,499 21,881 24,958 41,169—— —— —— ——Total cost ofgoods sold 112,122 121,330 210,461 254,059——- ——- ——- ——-Gross margin 43,873 50,108 75,724 97,130Selling, general andadministrative expenses 39,618 52,032 84,144 107,834Asset impairmentcharges – 112,020 – 145,643Restructuring charges 54 510 68 23,573– — — ——Operating income (loss) 4,201 (114,454) (8,488) (179,920)Other expense(income):Other expense (income),net 81 (242) (390) (480)Interest income (9) (215) (42) (462)Interest expense 253 197 460 452— — — —Income (loss) beforeincome taxes 3,876 (114,194) (8,516) (179,430)Income tax expense(benefit) 988 (8,917) 1,003 (14,080)— —— —– ——-Income (loss) fromcontinuing operations 2,888 (105,277) (9,519) (165,350)Loss from discontinuedoperations (52) (1,312) (41) (1,274)— —— — ——Net income (loss) $2,836 $(106,589) $(9,560) $(166,624)====== ========= ======= =========Income (loss) per share- basicIncome (loss) fromcontinuing operations $0.13 $(4.66) $(0.42) $(7.33)Loss fromdiscontinuedoperations (0.00) (0.06) (0.00) (0.05)—– —– —– —–Net income (loss) $0.13 $(4.72) $(0.42) $(7.38)===== ====== ====== ======Income (loss) per share- dilutedIncome (loss) fromcontinuingoperations $0.12 $(4.66) $(0.42) $(7.33)Loss fromdiscontinuedoperations (0.00) (0.06) (0.00) (0.05)—– —– —– —–Net income (loss) $0.12 $(4.72) $(0.42) $(7.38)Weighted averageshares outstandingBasic 22,625,654 22,601,549 22,626,491 22,569,206Diluted 22,879,030 22,601,549 22,626,491 22,569,206Cash dividends pershare $0.03 $0.03 $0.06 $0.06
AGILYSYS, INC.BUSINESS SEGMENT INFORMATION (UNAUDITED)Three Months Ended Six Months EndedSep 30, Sep 30,———————– ———————–(In thousands) 2009 2008 2009 2008—- —- —- —-Hospitality (HSG)Total revenue $23,836 $23,488 $40,386 $48,242Elimination ofintersegment revenue (514) (43) (1,057) (82)—- — —— —Revenue fromexternal customers $23,322 $23,445 $39,329 $48,160======= ======= ======= =======Gross margin $14,237 $14,435 $23,777 $28,844======= ======= ======= =======61.0% 61.6% 60.5% 59.9%Depreciation andamortization $1,104 $1,855 $2,227 $3,186Operating income(loss) 3,997 (102,906) 2,095 (108,765)—– ——– —– ——–Adjusted EBITDA $5,101 $(101,051) $4,322 $(105,579)====== ========== ====== =========Goodwill andintangible assetimpairment $- $103,387 $- $110,852Retail (RSG)Total revenue $23,582 $29,437 $47,970 $67,704Elimination ofintersegment revenue (19) (148) (20) (316)— —- — —-Revenue fromexternal customers $23,563 $29,289 $47,950 $67,388======= ======= ======= =======Gross margin $4,694 $6,094 $10,070 $14,493====== ====== ======= =======19.9% 20.8% 21.0% 21.5%Depreciation andamortization $44 $53 $94 $141Operating income(loss) 1,133 (5,942) 2,763 (20,314)—– —— —– ——-Adjusted EBITDA $1,177 $(5,889) $2,857 $(20,173)====== ======= ====== ========Goodwill impairment $- $6,549 $- $24,910Technology (TSG)Total revenue $109,126 $120,047 $198,950 $238,748Elimination ofintersegment revenue (16) (1,343) (44) (3,107)— —— — ——Revenue fromexternal customers $109,110 $118,704 $198,906 $235,641======== ======== ======== ========Gross margin $24,909 $29,009 $42,638 $51,446======= ======= ======= =======22.8% 24.4% 21.4% 21.8%Depreciation andamortization $817 $4,061 $4,768 $8,534Operating income(loss) 6,320 5,732 3,786 (26,313)—– —– —– ——-Adjusted EBITDA $7,137 $9,793 $8,554 $(17,779)====== ====== ====== ========Goodwill impairment $- $2,084 $- $9,881Restructuring charge $- $510 $- $23,573
AGILYSYS, INC.BUSINESS SEGMENT INFORMATION(Unaudited)Three Months Ended Six Months EndedSep 30, Sep 30,———————– ———————–(In thousands) 2009 2008 2009 2008—- —- —- —-Corporate / OtherGross margin $33 $570 $(761) $2,347=== ==== ===== ======Depreciation andamortization (a) $1,205 $1,079 $2,409 $2,098Operating loss (7,249) (11,338) (17,132) (24,528)—— ——- ——- ——-Adjusted EBITDA $(6,044) $(10,259) $(14,723) $(22,430)======= ======== ======== ========Restructuring charge $54 $- $68 $-ConsolidatedTotal revenue $156,544 $172,972 $287,306 $354,694Elimination ofintersegmentrevenue (549) (1,534) (1,121) (3,505)—- —— —— ——Revenue fromexternal customers $155,995 $171,438 $286,185 $351,189======== ======== ======== ========Gross margin $43,873 $50,108 $75,724 $97,130======= ======= ======= =======28.1% 29.2% 26.5% 27.7%Depreciation andamortization (a) $3,170 $7,048 $9,498 $13,959Operating income(loss) 4,201 (114,454) (8,488) (179,920)—– ——– —— ——–Adjusted EBITDA $7,371 $(107,406) $1,010 $(165,961)====== ========= ====== =========Goodwill andintangible assetimpairment $- $112,020 $- $145,643Restructuring charge $54 $510 $68 $23,573(a) Does not include the amortization of deferred financing feestotaling $132 and $57 for the three months ended Sept. 30, 2009 and2008, respectively, and $220 and $113 for the six months endedSept. 30, 2009 and 2008, respectively, all of which related to theCorporate/Other segment.
AGILYSYS, INC.CONDENSED CONSOLIDATED BALANCE SHEETSSep 30, Mar 31,(In thousands) 2009 2009—- —-ASSETS (Unaudited)Current assets:Cash and cash equivalents $48,197 $36,244Accounts receivable, net 125,166 151,944Inventories, net 22,036 27,216Deferred income taxes – current,net 6,845 6,836Prepaid expenses and othercurrent assets 5,337 4,564Income taxes receivable 3,874 3,871Assets of discontinued operations- current 285 1,075— —–Total current assets 211,740 231,750Goodwill 50,563 50,382Intangible assets, net 29,877 35,699Deferred income taxes – non-current,net 511 511Other non-current assets 18,467 29,008Assets of discontinued operations -non-current – 56Property and equipment, net 29,471 27,030—— ——Total assets $340,629 $374,436======== ========LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities:Accounts payable $92,832 $28,042Floor plan financing – 74,159Deferred revenue 20,435 18,709Accrued liabilities 20,665 37,807Long-term debt – current 195 238Liabilities of discontinuedoperations – current 575 1,176— —–Total current liabilities 134,702 160,131Other non-current liabilities 21,827 21,588Shareholders’ equity:Common shares, without par value,at $0.30 stated value; authorized80,000,000 shares; 31,606,831shares issued and 23,031,119shares outstanding at Sep 30, 2009 9,370 9,366Treasury stock (8,575,712 and8,896,778 shares at Sep 30, 2009,and Mar 31, 2009, respectively) (2,670) (2,670)Capital in excess of stated value (9,934) (11,036)Retained earnings 189,027 199,947Accumulated other comprehensiveloss (1,693) (2,890)—— ——Total shareholders’ equity 184,100 192,717——- ——-Total liabilities andshareholders’ equity $340,629 $374,436======== ========
AGILYSYS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)Six Months Ended(In thousands) Sep 30,————————Operating activities: 2009 2008—- —-Net loss $(9,560) $(166,624)Add: Loss from discontinuedoperations 41 1,274– —–Loss from continuing operations (9,519) (165,350)Adjustments to reconcile net lossfrom continuing operations to netcash provided by (used for)operating activities (net ofeffects from business acquisitions):Impairment of goodwill andintangible assets – 166,223Gain on redemption of cost basisinvestment – (51)Gain on partial redemption ofinvestment in The Reserve Fund’sPrimary Fund (70) -Loss on the sale of securities 91 -Depreciation 1,891 1,927Amortization 7,827 12,145Deferred income taxes (9) (18,372)Stock-based compensation 1,073 2,152Changes in working capital:Accounts receivable 26,778 32,699Inventories 5,180 2,001Accounts payable 65,150 (76,327)Accrued and other liabilities (15,309) (40,816)Income taxes payable (798) 946Other changes, net (866) (3,252)Other non-cash adjustments (2,357) (2,487)—— ——Total adjustments 88,581 76,788—— ——Net cash provided by (used for)operating activities 79,062 (88,562)Investing activities:Proceeds from (claim on) The ReserveFund’s Primary Fund 2,337 (7,657)Proceeds from redemption of costbasis investment – 7,172Proceeds from the borrowings againstcompany-owned life insurancepolicies 12,500 -Change in cash surrender value ofcompany-owned life insurancepolicies (107) (103)Acquisition of businesses, net ofcash acquired – (2,381)Purchase of property and equipment (5,923) (2,603)—— ——Net cash provided by (used for)investing activities 8,807 (5,572)Financing activities:Floor plan financing agreement, net (74,159) 75,551Proceeds from borrowings undercredit facility 5,000 -Principal payments under creditfacility (5,000) -Principal payment under long-termobligations (206) (47)Issuance of common shares 33 -Debt financing costs (1,520) -Dividends paid (1,360) (1,358)—— ——Net cash used for (provided by)financing activities (77,212) 74,146Effect of exchange rate changeson cash 1,092 (101)—– —-Cash flows provided by (used for)continuing operations 11,749 (20,089)Cash flows of discontinued operations:Operating cash flows 204 (29)Investing cash flows – 35– –Net increase (decrease) in cash 11,953 (20,083)Cash at beginning of period 36,244 69,935—— ——Cash at end of period $48,197 $49,852======= =======
AGILYSYS, INC.RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA(Unaudited)Three Months Ended Six Months EndedSep 30, Sep 30,———————– ———————–(In thousands) 2009 2008 2009 2008—- —- —- —-Net income (loss) $2,836 $(106,589) $(9,560) $(166,624)Plus:Interest expense, net 244 (18) 418 (10)Other income, net 81 (242) (390) (480)Income tax expense(benefit) 988 (8,917) 1,003 (14,080)Depreciation andamortizationexpense (a) 3,170 7,048 9,498 13,959Loss from discontinuedoperations, net oftax 52 1,312 41 1,274– — — —–Adjusted EBITDA 7,371 (107,406) 1,010 (165,961)Asset impairmentcharges – 112,020 – 145,643Restructuring charges 54 510 68 23,573– — — ——Adjusted EBITDA excludingasset impairment andrestructuring charges $7,425 $5,124 $1,078 $3,255====== ====== ====== ======(a) Depreciation and amortization expense excludes amortization ofdeferred finance costs, totaling $132 and $57 for the three monthsended Sept. 30, 2009 and 2008, respectively, and totaling $220 and$113 for the six months ended Sept. 30, 2009 and 2008,respectively, as such costs are already included in interestexpense, net.
MOD-PAC CORP. (MPAC) Reports Earnings per Share of $0.29 on $12.6 million in Revenue in Third Quarter 2009
Nov. 4, 2009 (Business Wire) — MOD-PAC CORP. (NASDAQ: MPAC), a manufacturer of custom and stock paper board packaging and personalized print products, today reported total revenue of $12.59 million in the third quarter of 2009, which ended October 3, 2009, relatively flat compared with revenue of $12.64 million in the 2008 third quarter. Strong sales growth in the custom folding carton line was offset by reduced sales in the stock packaging and personalized print lines which have been impacted heavily by the weak economy and the elimination of sales to the commercial print market due to the rationalization of the Company’s specialty print and direct mail product line in June this year. Excluding last year’s specialty print and direct mail sales, total revenue in the recent quarter grew $1.0 million, or 8.8%, as compared with the 2008 third quarter.
Net income for the quarter was $1.01 million, or $0.29 per diluted share compared with net income of $14 thousand, or $0.00 per diluted share, in the third quarter of 2008. Net income increased as a result of improved operating leverage from the rationalization and a $263 thousand fair value adjustment to increase the specialty print and direct mail assets.
Third Quarter 2009 Sales Review: Existing customers drove custom folding carton growth
Sales of folding cartons, which include custom folding cartons and stock packaging, were up 11.2%, or $1.18 million, to $11.65 million in the 2009 third quarter from $10.47 million in the prior year third quarter. Custom folding carton sales drove the product line increase.
Custom folding carton sales for the third quarter of 2009 were $9.41 million, up $1.21 million, or 14.8%, from 2008 third quarter sales of $8.19 million. Greater sales from two large existing customers and the addition of one new customer, more than offset reduced sales from customers impacted by the economy and decreased waste sales due to a drop in the recycled paperboard market.
Stock packaging sales were $2.24 million in the 2009 third quarter, a decline of $39 thousand, or 1.7%, from $2.28 million the prior year period. The stock packaging line has been impacted by economic conditions over the last year.
Print service sales, which are now solely comprised of personalized print, were down
$1.23 million, or 60.7%, to $0.80 million in the 2009 third quarter compared with $2.03 million in the same period in 2008. Of the decline, $1.06 million was related to sales in last year’s third quarter for specialty print and direct mail to the commercial market which the Company exited in June of this year. Personalized print sales declined $169 thousand, or 17.5%, to $0.80 million in the current quarter compared with sales of $0.97 million in last year’s third quarter. The decrease was primarily due to weakness in economic conditions.
Mr. Daniel G. Keane, President and CEO of MOD-PAC CORP., commented, “Our custom folding carton sales have grown exceptionally well. Many of our customers produce private label products for the consumer staples market. Consumers in this economic environment are highly cost conscious and tend to buy more store brands which drives sales for our customers. Importantly, as our customers are realizing stronger sales, we are also capturing a greater percentage of their business and adding new accounts.”
Third Quarter Operating Results: Product line rationalization improved operating leverage
Gross profit for the 2009 third quarter was $2.52 million, or 20.0% of total revenue, compared with gross profit of $1.98 million, or 15.6% of total revenue, in the same period the prior year. The improvement in gross profit and margin was driven by the measurable savings realized from the product line rationalization. Savings were realized through lower depreciation expense and decreased labor and supply costs. Lower freight and utility costs also helped margin improvement. Partially offsetting those gains were generally weaker custom folding carton sales mix and decreased product waste sales due to a drop in the recycled paperboard market.
Selling, general and administrative (SG&A) expense was relatively flat at $1.84 million, or 14.6% of total revenue, in the third quarter of 2009 when compared with $1.85 million, or 14.7% of total revenue, in the same period the prior year. Lower labor costs due to reduced headcount from the product line rationalization combined with decreased professional service fees more than offset increased commission expense.
Mr. David B. Lupp, Chief Operating Officer and Chief Financial Officer commented, “Our strategic decision to rationalize our product lines and refine our focus to our core products is validated by this quarter’s strong results. Our concentration is on establishing a solid business model that can succeed in all economic environments. We are generating cash, strengthening our balance sheet, maintaining cost discipline, and driving our value proposition to grow sales.”
Other income was $0.4 million in the third quarter of 2009. Included in this balance is a $263 thousand fair value adjustment to increase the balance of assets held for sale associated with the rationalized product line based on bids received in a public auction held in September 2009. These assets had previously been written down in the second quarter of 2009. Also included in other income was a $104 thousand gain on the sale of assets associated with the rationalized product line.
Adjusted earnings before interest, asset impairment, fair value adjustment, taxes, depreciation and amortization, and non-cash option expense (Adjusted EBITDA) was $1.51 million in the third quarter of 2009 compared with $1.04 million in the 2008 third quarter. The Company believes that, when used in conjunction with GAAP measures, Adjusted EBITDA, which is a non-GAAP measure, helps in the understanding of operating performance. (See the reconciliation of Net Income or Loss to Adjusted EBITDA in the attached table.)
As required by generally accepted accounting principles, in the second quarter of 2009 the Company recorded a full valuation allowance on its net deferred tax asset due to the uncertainty with respect to utilizing it in the future based on a past trend of operating losses. As a result, the effective tax rate for the third quarter of 2009 was 0% compared with an effective tax rate of 74.1% in the third quarter of 2008.
Liquidity: Cash from asset and insurance policy sales used to pay down $1.7 million on line
Cash and cash equivalents were $0.32 million at October 3, 2009, an increase compared with $0.17 million at July 4, 2009 and $0.20 million at December 31, 2008. MOD-PAC generated $1.0 million in cash from operations during the quarter from higher net income and non-cash depreciation and amortization expense, partially offset by increased working capital requirements. Also, in the third quarter of 2009, the Company surrendered life insurance policies and received the cash surrender value of $0.86 million and sold assets associated with its rationalized product line for net proceeds of $0.2 million. Proceeds were used to pay down debt and to increase cash on hand.
Capital expenditures in the third quarter of 2009 were $0.14 million compared with $0.34 million in the same period last year. Equipment upgrades made up the bulk of the third quarter 2009 expenditures. Capital expenditures were $0.8 million in the first nine months of 2009 compared with $1.6 million in the same period last year. Capital expenditures are expected to be approximately $1.0 million in fiscal year 2009. Depreciation and amortization was $2.5 million in the first nine months of 2009 compared with $2.9 million for the first nine months of 2008. Lower depreciation reflects a reduced asset base from the write-down of assets associated with the rationalized product line in the second quarter of 2009.
MOD-PAC has access to a $5.0 million committed line of credit with a commercial bank, which expires in March 2010. The line of credit balance at October 3, 2009, was $0.6 million, down $1.7 million from $2.3 million at July 4, 2009, and down $0.4 million from $1.0 million at December 31, 2008. An additional $0.2 million of the line of credit was in use through standby letters of credit. The Company believes that cash and cash equivalents and net cash provided by operations and its available line are sufficient to meet requirements in 2009 and beyond.
On October 9, 2009, MOD-PAC entered into a contract to sell its Blasdell, NY facility. The sale is subject to various terms and conditions and there is no assurance that the facility will be sold. The net proceeds of the sale are expected to approximate the carrying value of the property at October 3, 2009.
There were no shares repurchased by the Company in the first nine months of 2009. MOD-PAC has authorization to repurchase 75,885 shares.
Nine-Month Review: 16.7% growth in custom folding carton sales more than offsets other product line declines
Net sales for the nine months of 2009 were up 2.3% to $35.7 million compared with $34.9 million in the first nine months of 2008. New customer accounts and business expansion from several existing customers drove the 16.7% year-to-date growth in custom folding carton sales to $25.9 million, compared with $22.2 million in the corresponding period in 2008. Stock packaging sales were down 7.9% to $5.9 million for the first nine months of 2009, while personalized print sales declined 22.5% to $2.4 million over the same time period. Both product lines were negatively affected by reduced demand due to economic conditions. For the nine-month period last year, there was $3.2 million in specialty print and direct mail sales compared with the $1.5 million in the first half of this year while the Company still had the full product line. Excluding this product line from both years, total sales were $34.2 million for the nine-month period in 2009 up 7.8% compared with $31.7 million for the same period last year.
Gross profit for the first nine months of 2009 was $4.4 million, or 12.2% of total revenue, down from gross profit of $4.6 million, or 13.0% of total revenue, in the same period the prior year. The decline was driven by generally weaker sales mix, decreased waste sales due to a drop in the recycled paperboard market, and increased labor and repairs expense, partially offset by lower depreciation expense.
SG&A expense decreased 3.3% to $5.8 million, or 16.1% of total revenue, in the first nine months of 2009 compared with $6.0 million, or 17.0% of total revenue, in the first nine months of 2008. Lower professional service costs as a result of cost reduction initiatives implemented in 2008 contributed to the reduction in year-over-year expenses.
Included in the first nine months of 2009, was $2.2 million of expense that was associated with the write-down of impaired assets in the second quarter of 2009 due to the Company’s rationalization of the specialty print and direct mail product line.
Other income was $0.4 million in the first nine months of 2009, compared with $93 thousand in the same period the prior year. Included in the 2009 year-to-date balance is the previously noted adjustment to increase assets held for sale to fair value and the gain on the sale of assets associated with the rationalized product line.
For the nine-month period, Adjusted EBITDA was $1.5 million in 2009 compared with $1.8 million in 2008. (See the reconciliation of Net Income or Loss to Adjusted EBITDA in the attached table.)
Webcast and Conference Call
The release of the financial results will be followed by a company-hosted teleconference and webcast on Wednesday, November 4 at 4:30 p.m. Eastern Time. During the teleconference, Daniel G. Keane, President and Chief Executive Officer, and David B. Lupp, Chief Operating Officer and Chief Financial Officer, will review the financial and operating results for the period and discuss MOD-PAC CORP.’s corporate strategy and outlook. A question-and-answer session will follow.
The MOD-PAC conference call can be accessed the following ways:
The live webcast can be found at http://www.modpac.com. Participants should go to the website 10 – 15 minutes prior to the scheduled conference in order to register and download any necessary audio software.
The teleconference can be accessed by dialing (201) 689-8562 and requesting Conference ID Number 334954 approximately 5 – 10 minutes prior to the call.
The archived webcast will be at http://www.modpac.com. A transcript will also be posted once available. A replay can also be heard by calling (201) 612-7415 and entering conference ID number 334954 and account number 3055. The telephonic replay will be available from 7:30 p.m. Eastern Time the day of the teleconference through 11:59 p.m. Eastern Time on November 11, 2009.
ABOUT MOD-PAC CORP.
MOD-PAC CORP. is a high value-added, on demand print services firm providing products and services in two product categories: folding cartons and personalized print. Within folding cartons, MOD-PAC provides CUSTOM FOLDING CARTONS for branded and private label consumer products in the food and food service, healthcare, medical and automotive industries. The Company also offers a line of STOCK PACKAGING primarily to the retail confectionary industry. MOD-PAC’s PERSONALIZED PRINT product line is a comprehensive offering for consumer and corporate social occasions.
MOD-PAC’s strategy for growth is to leverage its capabilities to innovate and aggressively integrate technology into its production operations providing cost-effective solutions for its customers. Through its large, centralized facility, the Company has captured significant economies of scale by channeling large numbers of small-to-medium-sized orders through its operations due to its rapid order change out skills. Applying its lean manufacturing processes coupled with state-of-the-art printing technologies, MOD-PAC is able to address short-run, highly variable content needs of its customers with quick turn around times relative to industry standards.
Additional information on MOD-PAC can be found at its website: http://www.modpac.com.
Safe Harbor Statement: This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. One can identify these forward-looking statements by the use of the words such as “expect,” “anticipate,” “plan,” “may,” “will,” “estimate” or other similar expressions. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materially. Important factors, which could cause actual results to differ materially, include market events, competitive pressures, changes in technology, customers preferences and choices, success at entering new markets, the execution of its strategy, marketing and sales plans, the rate of growth of internet related sales, the effectiveness of agreements with print distributors and other factors which are described in MOD-PAC’s annual report on Form 10K on file with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking information in this press release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.
FINANCIAL TABLES FOLLOW.
MOD-PAC CORP.
CONSOLIDATED INCOME STATEMENT DATA
(unaudited)
(in thousands except per share data)
Three months ended Nine months ended
10/3/2009 9/27/2008 10/3/2009 9/27/2008
Revenue
Product sales $ 12,446 $ 12,504 $ 35,727 $ 34,922
Rent 141 133 399 356
Total Revenue 12,587 12,637 36,126 35,278
Cost of products sold 10,071 10,662 31,732 30,675
Gross profit 2,516 1,975 4,394 4,603
Gross profit margin 20.0 % 15.6 % 12.2 % 13.0 %
Selling, general and administrative expense 1,841 1,854 5,799 5,994
Write-down of impaired assets 0 0 2,175 0
Income (Loss) from operations 675 121 (3,580 ) (1,391 )
Operating loss margin 5.4 % 1.0 % -9.9 % -3.9 %
Interest expense, net 64 79 194 203
Other income 400 12 410 93
Income (Loss) before taxes 1,011 54 (3,364 ) (1,501 )
Income tax expense (benefit) 0 40 (118 ) (477 )
Net income (loss) $ 1,011 $ 14 $ (3,246 ) $ (1,024 )
Basic earnings (loss) per share: $ 0.29 $ 0.00 $ (0.95 ) $ (0.30 )
Diluted earnings (loss) per share: $ 0.29 $ 0.00 $ (0.95 ) $ (0.30 )
Weighted average diluted shares outstanding 3,470 3,430 3,430 3,436
MOD-PAC CORP.
PRODUCT LINE REVENUE DATA
(unaudited)
($, in thousands)
Three Months Ended % Nine Months Ended % 2009 YTD % of
10/3/2009 9/27/2008 change 10/3/2009 9/27/2008 change Total
FOLDING CARTONS
Custom folding cartons $ 9,408 $ 8,194 14.8 % $ 25,888 $ 22,189 16.7 % 72.5 %
Stock packaging 2,239 2,278 -1.7 % 5,888 6,392 -7.9 % 16.5 %
Folding cartons subtotal 11,647 10,472 11.2 % 31,776 28,581 11.2 % 89.0 %
PRINT SERVICES
Specialty print & direct mail 0 1,064 -100.0 % 1,519 3,201 -52.5 % 4.2 %
Personalized 799 968 -17.5 % 2,432 3,140 -22.5 % 6.8 %
Print services subtotal 799 2,032 -60.7 % 3,951 6,341 -37.7 % 11.0 %
Total product revenue $ 12,446 $ 12,504 -0.5 % $ 35,727 $ 34,922 2.3 % 100.0 %
MOD-PAC CORP.
CONSOLIDATED BALANCE SHEET DATA
(dollars in thousands)
October 3, 2009 December 31,
(Unaudited) 2008
Current assets:
Cash and cash equivalents $ 315 $ 200
Trade accounts receivable, net of allowance
of $186 in 2009 and $170 in 2008 5,457 4,750
Inventories 4,118 4,313
Prepaid expenses 406 357
Total current assets 10,296 9,620
Property, plant and equipment, at cost 63,579 68,707
Less accumulated depreciation (47,685 ) (47,116 )
Net property, plant and equipment 15,894 21,591
Assets held for sale 2,091 –
Other assets 465 1,340
Totals assets $ 28,746 $ 32,551
Current liabilities:
Current maturities of long-term debt $ 186 $ 168
Accounts payable 2,902 3,222
Accrued expenses 729 581
Line of credit, current 600 –
Total current liabilities 4,417 3,971
Line of credit, long-term – 1,000
Long-term debt 2,301 2,413
Other liabilities 52 37
Deferred income taxes – 118
Total liabilities $ 6,770 $ 7,539
Shareholders’ equity:
Common stock, $.01 par value
Authorized 20,000,000 shares, issued
3,443,557 in 2009, 3,439,347 in 2008 34 34
Class B common stock, $.01 par value
Authorized 5,000,000 shares, issued
637,272 in 2009, 641,482 in 2008 7 7
Additional paid-in capital 2,595 2,385
Retained earnings 25,555 28,801
28,191 31,227
Less treasury shares, at cost 650,698 in
2009 and 2008 (6,215 ) (6,215 )
Total shareholders’ equity 21,976 25,012
Total liabilities and shareholders’ equity $ 28,746 $ 32,551
MOD-PAC CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
(Unaudited)
Nine Months Ended
October 3,
2009
September 27,
2008
Cash flows from operating activities:
Net loss $ (3,246 ) $ (1,024 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 2,531 2,850
Provision for doubtful accounts 45 11
Stock option compensation expense 210 208
Deferred income taxes (118 ) (479 )
Write-down of impairment of assets 2,175 –
Fair value adjustment for assets held for sale (263 ) –
Gain on disposal of assets (80 ) (54 )
Cash flows from changes in operating assets and liabilities
Accounts receivable (752 ) (1,149 )
Inventories 195 (598 )
Prepaid expenses (49 ) (57 )
Other liabilities 15 (234 )
Accounts payable (320 ) 648
Accrued expenses 148 (5 )
Net cash provided by operating activities 491 117
Cash flows from investing activities:
Proceeds from the sale of assets 212 125
Proceeds from the cash surrender value of officers’ life insurance policies 857
–
Change in other assets (78 ) (45 )
Capital expenditures (841 ) (1,601 )
Net cash provided by (used in) investing activities 150 (1,521 )
Cash flows from financing activities:
Principal payments on long-term debt (126 ) (79 )
(Decrease) increase in line of credit (400 ) 1,125
Proceeds from loans – 580
Purchase of treasury stock – (150 )
Deferred financing fees – (5 )
Net cash (used in) provided by financing activities (526 ) 1,471
Net increase in cash and cash equivalents 115 67
Cash and cash equivalents at beginning of year 200 98
Cash and cash equivalents at end of period $ 315 $ 165
MOD-PAC CORP.
Reconciliation between GAAP Net Income or Loss and Adjusted EBITDA
(in thousands) Three Months Ended Nine Months Ended
10/3/2009 9/27/2008 10/3/2009 9/27/2008
GAAP Net Income (Loss) $ 1,011 $ 14 $ (3,246 ) $ (1,024 )
Interest 63 79 194 203
Write-down of impaired assets 0 0 2,175 0
Fair value adjustment for assets held for sale (263 ) 0 (263 ) 0
Taxes 0 40 (118 ) (477 )
Depreciation and amortization 662 860 2,531 2,850
Stock-based compensation 41 45 210 208
Adjusted EBITDA $ 1,514 $ 1,038 $ 1,483 $ 1,760
Adjusted EBITDA = earnings before interest, asset impairment, fair value adjustment, taxes, depreciation and amortization and non-cash option expense.
Seabridge Gold (SA) Reports Positive Drill Results From Kerr Zone
TORONTO, CANADA — (Marketwire) — 11/03/09 — Seabridge Gold Inc. (TSX: SEA)(NYSE Amex: SA) –
Results from this year’s core drill program at KSM’s Kerr zone should successfully upgrade in-pit inferred resources to measured and indicated and improve the waste to ore ratio by converting material previously defined as waste to mineral resources.
Seabridge President Rudi Fronk commented that “this year’s drilling on all three zones at KSM more than achieved our objectives. We are highly confident that we have upgraded the inferred resources in the proposed pit. We have also expanded the resource and improved the ore to waste ratio by discovering new zones and expanding the predicted width of the mineralization. Our next steps are to complete a new KSM resource estimate by year end, followed by new mine plans and culminating in a Preliminary Feasibility Study in March 2010.”
The 30 year mine plan in the 2009 Preliminary Assessment captured 1.29 billion tonnes of mineralized material of which 277 million (21%) was classified as inferred mineral resources. To upgrade these in-pit inferred resources to the measured and indicated categories, additional drilling was completed during the 2009 program at the Mitchell, Sulphurets and Kerr zones. Drill results from the Mitchell and Sulphurets zone were announced previously, with results exceeding expectations (see news releases dated October 27, 2009 and October 14, 2009). Conversion of in pit inferred resources to measured and indicated will enable Seabridge to report them as mine reserves in its Preliminary Feasibility Study scheduled for completion in March 2010.
At the Kerr zone, the mine plan captured 148 million tonnes in the indicated category (grading 0.25 grams per tonne gold and 0.47% copper) plus 18 million tonnes in the inferred category (grading 0.23 gpt gold and 0.43% copper). Four holes totaling approximately 900 meters were drilled this summer to upgrade the in-pit inferred resources in the Kerr zone. Assay results of the four infill holes are as follows:
———————————————————————— To Length Gold CopperDrill Hole Depth (meters) From (meters) (meters) (meters) (gpt) (%)———————————————————————— 72.0 134.0 62.0 0.17 0.18 K-09-01 351.0 ————- ——– ——– —– —— 218.2 351.0 132.8 0.19 0.57————————– ————- ——– ——– —– —— K-09-02 201.0 85.0 201.0 116.0 0.25 0.39————————– ————- ——– ——– —– —— 21.3 92.3 71.0 0.30 0.75 K-09-03 175.0 ————- ——– ——– —– —— 92.3 144.4 52.1 0.16 0.24————————– ————- ——– ——– —– —— K-09-04 150.0 6.8 120.0 113.2 0.19 0.37————————– ————- ——– ——– —– ——
The above reported drill holes were designed to intersect the true width of the Kerr zone.
Descriptions of the four infill drill holes follow.
K-09-01: Southern portion of the Kerr zone, section 58500, drilled at 90 degrees azimuth and inclination of minus 53 degrees. This is an infill hole down-dip of the zone. The upper mineral intercept was not predicted by the model and should convert material previously classified as waste to mineral resources. Gold and copper grades in the lower zone met expectations and the mineralized width was greater than predicted by the resource model.
K-09-02: North-central part of the Kerr zone, section 59500, drilled at azimuth 90 degrees and inclination of minus 70 degrees. This is an infill hole on the down-dip side of the zone. Grade and width of mineralization are consistent with the resource model.
K-09-03: Northern part of the Kerr zone, section 59750, drilled at an inclination of minus 55 degrees and azimuth 90 degrees. This is an infill hole on the up-dip side of the zone. Overall widths of mineralization are consistent with the resource model. Gold and copper grades in the upper interval exceed predictions from the resource model and in the lower interval are in line with expectations.
K-09-04: Northern part of the Kerr zone, section 59850, drilled at azimuth 90 degrees and inclination of minus 60 degrees. This is an infill hole on the up-dip side of the zone. The width and grade of mineralization are as predicted from the resource model.
The 100% owned KSM project, located near Stewart, British Columbia, Canada, is one of the world’s largest undeveloped gold/copper projects. The following table summarizes NI 43-101 compliant mineral resources prepared by Resource Modeling Incorporated for all three zones at the KSM project using a 0.50 gram per tonne gold equivalent cut-off grade (see news releases dated March 11, 2009 and March 25, 2009 for details).
KSM Mineral Resources at 0.50 gpt Gold Equivalent Cutoff-Grade——————————————————————— Zone Measured Mineral Resources——————————————————————— Tonnes (000) Au (g/t) Au Ozs (000) Cu (%) Cu Lbs (millions)——————————————————————— Mitchell 579,300 0.66 12,292 0.18 2,298———————- ——– ———— —— —————–Sulphurets No measured resources——————————————————————— Kerr No measured resources——————————————————————— Total 579,300 0.66 12,292 0.18 2,298———————- ——– ———— —— ————————————————————————————— Zone Indicated Mineral Resources———————————————————————- Tonnes (000) Au (g/t) Au Ozs (000) Cu (%) Cu Lbs (millions)———————————————————————- Mitchell 930,600 0.62 18,550 0.18 3,692———————- ——– ———— —— —————–Sulphurets 87,300 0.72 2,021 0.27 520———————- ——– ———— —— —————– Kerr 225,300 0.23 1,666 0.41 2,036———————- ——– ———— —— —————– Total 1,243,200 0.56 22,237 0.23 6,248———————- ——– ———— —— ————————————————————————————– Zone Measured plus Indicated Mineral Resources——————————————————————— Tonnes (000) Au (g/t) Au Ozs (000) Cu (%) Cu Lbs (millions)——————————————————————— Mitchell 1,509,900 0.64 30,842 0.18 5,990———————- ——– ———— —— —————–Sulphurets 87,300 0.72 2,021 0.27 520———————- ——– ———— —— —————– Kerr 225,300 0.23 1,666 0.41 2,036———————- ——– ———— —— —————– Total 1,822,500 0.59 34,529 0.21 8,546———————- ——– ———— —— ————————————————————————————— Zone Inferred Mineral Resources———————————————————————- Tonnes (000) Au (g/t) Au Ozs (000) Cu (%) Cu Lbs (millions)———————————————————————- Mitchell 514,900 0.51 8,442 0.14 1,589———————- ——– ———— —— —————–Sulphurets 160,900 0.63 3,259 0.17 603———————- ——– ———— —— —————– Kerr 69,900 0.18 405 0.39 601———————- ——– ———— —— —————– Total 745,700 0.50 12,106 0.17 2,793———————- ——– ———— —— —————–
Resource Modeling Incorporated is an independent consulting firm under the direction of Michael J. Lechner, Licensed Registered Geologist (Arizona) #37753, P.Geo. (British Columbia) #155344, AIPG CPG #10690 and a Qualified Person under NI-43-101.
Exploration activities at KSM are being conducted by Seabridge personnel under the supervision of William E. Threlkeld, Senior Vice President of Seabridge and a Qualified Person as defined by National Instrument 43-101. An ongoing and rigorous quality control/quality assurance protocol is being employed during the 2009 program including blank and reference standards in every batch of assays. Cross-check analyses are being conducted at a second external laboratory on 10% of the samples. Samples are being assayed at Eco Tech Laboratory Ltd., Kamloops, B.C., using fire assay atomic adsorption methods for gold and total digestion ICP methods for other elements.
Seabridge holds a 100% interest in several North American gold resource projects. The Company’s principal assets are the KSM property located near Stewart, British Columbia, Canada and the Courageous Lake gold project located in Canada’s Northwest Territories. For a breakdown of Seabridge’s mineral resources by project and resource category please visit the Company’s website at http://www.seabridgegold.net/resources.php.
All resource estimates reported by the Corporation were calculated in accordance with the Canadian National Instrument 43-101 and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Statements relating to the estimated or expected future production and operating results and costs and financial condition of Seabridge, planned work at the Corporation’s projects and the expected results of such work are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by words such as the following: expects, plans, anticipates, believes, intends, estimates, projects, assumes, potential and similar expressions. Forward-looking statements also include reference to events or conditions that will, would, may, could or should occur. Information concerning exploration results and mineral reserve and resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. These forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable at the time they are made, are inherently subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation: uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from logistical, technical or other factors; the possibility that results of work will not fulfill projections/expectations and realize the perceived potential of the Corporation’s projects; uncertainties involved in the interpretation of drilling results and other tests and the estimation of gold reserves and resources; risk of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of environmental issues at the Corporation’s projects; the possibility of cost overruns or unanticipated expenses in work programs; the need to obtain permits and comply with environmental laws and regulations and other government requirements; fluctuations in the price of gold and other risks and uncertainties, including those described in the Corporation’s Annual Information Form filed with SEDAR in Canada (available at www.sedar.com) for the year ended December 31, 2008 and in the Corporation’s Annual Report Form 20-F filed with the U.S. Securities and Exchange Commission on EDGAR (available at www.sec.gov/edgar.shtml).
Forward-looking statements are based on the beliefs, estimates and opinions of the Corporation’s management or its independent professional consultants on the date the statements are made.
Donegal Insurance Group (DGICA) Wins Applied Systems Interface Partner Award
MARIETTA, Pa., Nov. 3, 2009 (GLOBE NEWSWIRE) — Donegal Insurance Group (Nasdaq:DGICA) (Nasdaq:DGICB) recently received the 2009 Interface Partner Award from insurance technology company Applied Systems. The award recognizes Donegal’s achievements in agency-carrier communication.
Applied Systems acknowledged Donegal’s leadership and innovations, citing the carrier’s commitment to providing agents with download, real-time inquiry and real-time rating.
“We are pleased to receive this award in recognition of our commitment to develop and maintain technology comparable to our very large competitors,” said Donald H. Nikolaus, President and Chief Executive Officer of Donegal Insurance Group. “We have appreciated the assistance of Applied Systems in developing real-time agency interfaces to significantly streamline our data exchange and communications with our independent agents.”
Donegal received the partnership award during a ceremony in Kansas City, Missouri, at 2009 TENCon, the Technology, Education & Networking Conference hosted by ASCnet, the Applied Systems Client Network.
“The continued commitment of Donegal and other forward-thinking carriers keeps our industry advancing,” said Doug Johnston, Vice President, Partner Relations & Product Innovations at Applied Systems. “We recognize the company’s dedication to interface partnerships with its agencies, and for overall benefit to the industry.”
Donegal Insurance Group consists of seven property and casualty insurance companies that provide full lines of personal, farm, and commercial insurance to various regions in the country through a network of independent insurance agencies. For more information about Donegal Insurance Group, please visit www.donegalgroup.com.
Applied Systems Inc. develops, sells and supports insurance agency and broker management systems and provides services for accounting, customer, policy, claims management, and all related agent and broker functions. More than 130,000 users in 11,000 agencies of every size and complexity level use Applied Systems solutions built around core systems Epic, TAM, Vision and DORIS. In addition, the company leads the industry in agency-carrier real-time and batch communication solutions. For more information about Applied Systems, please visit www.appliedsystems.com.
United Security Bancshares, Inc. (USBI) Reports Third Quarter Results
THOMASVILLE, Ala., Nov. 3 /PRNewswire-FirstCall/ — United Security Bancshares, Inc. (Nasdaq: USBI) today reported net income of $1.0 million, or $0.17 per diluted share, for the third quarter ended September 30, 2009, compared with $1.4 million, or $0.23 per diluted share, for the same period of 2008.
“We are pleased to report that United Security maintained its solid profitability in the third quarter despite the weak economy,” stated R. Terry Phillips, President and Chief Executive Officer of United Security Bancshares, Inc. “We remain focused on improving our operating results but expect that the continuation of soft real estate markets and higher unemployment in our core markets will result in lower loan demand and will put additional pressure on our loan quality metrics.”
“United Security and First United Security Bank continue to be rated as ‘well-capitalized,’ the highest regulatory rating. We believe that our strong capital base provides us with an important buffer to the soft economy. We remain diligent in monitoring our loan quality metrics and working through our non-performing assets to minimize future losses and to protect our capital base,” continued Mr. Phillips.
Third Quarter Results
United Security’s net income was down from 2008 due to lower net interest income, lower non-interest income and higher non-interest expenses. Net interest income was reduced by lower loan demand and lower interest rates. Non-interest expenses were up from 2008 due to higher costs for FDIC insurance premiums and increased expenses for other real estate owned (OREO).
Interest income totaled $11.8 million in the third quarter of 2009, compared with $12.8 million in the third quarter of 2008. The decrease in interest income was due to a decline in yield and a change in the mix of earning assets.
Interest expense declined 17.5% to $3.3 million in the third quarter of 2009, compared with $4.0 million in the third quarter of 2008. The decline in interest expense was due primarily to lower rates, offset partially by an increase in interest-bearing liabilities. Average deposits increased 3.1% to $499.3 million, compared with $484.1 million in the third quarter of 2008.
Net interest income decreased 3.8% to $8.5 million in the third quarter of 2009, compared with $8.8 million in the third quarter of the prior year. Net interest margin was 5.46% in the third quarter of 2009, compared with 5.91% in the third quarter of 2008. The decline in net interest income was due to a decrease in average loans, combined with the decline in net interest margin.
“Our net interest margin has been under pressure due to our asset yields declining at a faster rate than our funding costs since last year,” noted Mr. Phillips. “The overall decline in our loans has also resulted in our excess liquidity being invested in short-term investments that have a much lower yield than our loan portfolio. In addition, the increase in non-accrual loans since last year has reduced our interest income, further affecting our margin.”
Provision for loan losses was $1.5 million in the third quarter of 2009, or 1.5% annualized of average loans, compared with $1.9 million, or 1.9% annualized of average loans, in the third quarter of 2008. Net interest income after provision for loan losses rose to $7.0 million in the third quarter of 2009, compared with $6.9 million in the third quarter of 2008.
“Our provision for loan losses was up slightly from the second quarter of 2009, reflecting an increase in our non-performing loans,” stated Mr. Phillips. “We have experienced an increase in our non-performing loans since last year as a result of the soft economy. We remain focused on working through our non-performing loans and foreclosed real estate to improve our credit quality and to improve our future earnings potential.”
Total non-interest income decreased 21.7% to $1.2 million in the third quarter of 2009, compared with $1.5 million in the third quarter of the prior year. The decline in non-interest income was due to lower service charges, credit life insurance income and other income.
Non-interest expense increased 8.5% to $7.0 million in the third quarter of 2009, compared with $6.4 million in the third quarter of 2008. Salary and employee benefit costs were up 8% to $3.5 million due, in part, to higher health insurance costs. Other expenses rose 14.8% to $2.6 million due to higher FDIC insurance premiums and costs related to OREO, offset partially by lower legal expenses compared with the third quarter of 2008.
Nine Month Results
For the first nine months of 2009, net income increased 8.0% to $5.2 million, or $0.86 per diluted share, compared with $4.8 million, or $0.79 per diluted share, for the first nine months of 2008. The 2009 results include $2.7 million, or $0.30 per share, of non-interest income related to the settlement of a lawsuit.
For the 2009 nine-month period, net interest income declined 3.6% to $25.4 million, compared with $26.4 million for the same period last year. The decrease in net interest income was due primarily to a decline in interest earned on loans related to lower volume and yields.
Provision for loan losses declined to $4.9 million in the first nine months of 2009, or 1.5% annualized of average loans, compared with $5.5 million, or 1.7% annualized of average loans, for the same period in 2008.
Non-interest income rose 40.2% to $6.4 million for the first nine months of 2009, compared with $4.6 million for the same period in 2008. The increase in non-interest income resulted primarily from proceeds of $2.7 million from the settlement of a lawsuit.
Non-interest expense was up 6.0% for the first nine months of 2009 to $19.6 million, compared with $18.5 million in the same period of 2008. The increase was due to higher salary and benefits, FDIC insurance and assessment costs, offset partially by lower legal expenses.
Shareholders’ equity totaled $82.7 million, or book value of $13.75 per share, at the end of the third quarter of 2009. Return on average assets for the first nine months of 2009 was 1.01%, and return on average equity was 8.64%. Regular dividends were $0.11 per share in the third quarter of 2009.
About United Security Bancshares, Inc.
United Security Bancshares, Inc. is a bank holding company that operates nineteen banking offices in Alabama through First United Security Bank. In addition, the Company’s operations include Acceptance Loan Company, Inc., a consumer loan company, and FUSB Reinsurance, Inc., an underwriter of credit life and credit accident and health insurance policies sold to the bank’s and ALC’s consumer loan customers. The Company’s stock is traded on the Nasdaq Capital Market under the symbol “USBI.”
Forward-Looking Statements
This press release contains forward-looking statements as defined by federal securities laws. Statements contained in this press release that are not historical facts are forward-looking statements. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. USBI undertakes no obligation to update these statements following the date of this press release, except as required by law. In addition, USBI, through its senior management, may make from time to time forward-looking public statements concerning the matters described herein. Such forward-looking statements are necessarily estimates reflecting the best judgment of USBI’s senior management based upon current information and involve a number of risks and uncertainties. Certain factors that could affect the accuracy of such forward-looking statements are identified in the public filings made by USBI with the Securities and Exchange Commission, and forward-looking statements contained in this press release or in other public statements of USBI or its senior management should be considered in light of those factors. With respect to the adequacy of the allowance for loan losses for USBI, these factors include, but are not limited to, the rate of growth (or lack thereof) in the economy, the relative strength and weakness in the consumer and commercial credit sectors and in the real estate markets and collateral values. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.
UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(Dollars in Thousands, Except Per Share Data)September 30, December 31,2009 2008—- —-(Unaudited)ASSETSCash and Due from Banks $11,641 $13,246Interest-Bearing Deposits in Banks 128 126— —Total Cash and Cash Equivalents 11,769 13,372Federal Funds Sold 19,875 1,105Investment Securities Available-for-Sale, atfair market value 192,852 184,213Investment Securities Held-to-Maturity, atcost 1,250 0Federal Home Loan Bank Stock, at cost 5,700 5,236Loans, net of allowance for loan losses of$7,992 and $8,532, respectively 397,746 399,483Premises and Equipment, net 17,542 17,495Cash Surrender Value of Bank-Owned LifeInsurance 12,039 11,724Accrued Interest Receivable 4,608 4,843Goodwill 4,098 4,098Investment in Limited Partnerships 1,879 1,993Other Assets 25,868 24,440—— ——Total Assets $695,226 $668,002======== ========LIABILITIES AND SHAREHOLDERS’ EQUITYDeposits $500,014 $485,117Accrued Interest Expense 3,037 3,402Short-Term Borrowings 718 2,294Long-Term Debt 100,000 90,000Other Liabilities 8,709 8,525—– —–Total Liabilities 612,478 589,338——- ——-Commitments and ContingenciesShareholders’ Equity:Common Stock, par value $0.01 per share,10,000,000 shares authorized; 7,317,560shares issued; 6,017,649 and 6,018,154 sharesoutstanding, respectively 73 73Surplus 9,233 9,233Accumulated Other Comprehensive Income, netof tax 4,356 2,476Retained Earnings 90,211 87,999Less Treasury Stock: 1,299,911 and 1,299,406shares at cost, respectively (21,125) (21,117)——- ——-Total Shareholders’ Equity 82,748 78,664—— ——Total Liabilities and Shareholders’ Equity $695,226 $668,002======== ========UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME(Dollars in Thousands, Except Per Share Data)Three Months Ended Nine Months EndedSeptember 30, September 30,2009 2008 2009 2008—- —- —- —-(Unaudited) (Unaudited)INTEREST INCOME:Interest and Fees on Loans $9,661 $10,535 $29,150 $32,860Interest on Investment Securities 2,143 2,299 6,568 6,541—– —– —– —–Total Interest Income 11,804 12,834 35,718 39,401INTEREST EXPENSE:Interest on Deposits 2,338 3,047 7,515 10,174Interest on Borrowings 952 941 2,793 2,867— — —– —–Total Interest Expense 3,290 3,988 10,308 13,041—– —– —— ——NET INTEREST INCOME 8,514 8,846 25,410 26,360PROVISION FOR LOAN LOSSES 1,489 1,927 4,857 5,467—– —– —– —–NET INTEREST INCOME AFTER PROVISIONFOR LOAN LOSSES 7,025 6,919 20,553 20,893NON-INTEREST INCOME:Service and Other Chargeson Deposit Accounts 758 842 2,150 2,448Credit Life Insurance Income 231 295 646 554Other Income 218 404 3,615 1,572— — —– —–Total Non-Interest Income 1,207 1,541 6,411 4,574NON-INTEREST EXPENSE:Salaries and Employee Benefits 3,538 3,276 10,175 9,641Occupancy Expense 498 503 1,412 1,403Furniture and Equipment Expense 316 361 926 1,064Other Expense 2,598 2,263 7,117 6,414—– —– —– —–Total Non-Interest Expense 6,950 6,403 19,630 18,522—– —– —— ——INCOME BEFORE INCOME TAXES 1,282 2,057 7,334 6,945PROVISION FOR INCOME TAXES 255 655 2,166 2,159— — —– —–NET INCOME $1,027 $1,402 $5,168 $4,786====== ====== ====== ======BASIC AND DILUTED NET INCOMEPER SHARE $0.17 $0.23 $0.86 $0.79===== ===== ===== =====DIVIDENDS PER SHARE $0.11 $0.27 $0.49 $0.81===== ===== ===== =====
SOURCE United Security Bancshares, Inc.
Taseko (TGB) Announces a New 7.7 Million Oz Gold and 3.6 Billion Lb Copper Reserve at Prosperity
Nov. 2, 2009 (PR Newswire) — VANCOUVER, Nov. 2 /PRNewswire-FirstCall/ – Taseko Mines Limited (TSX: TKO; NYSE Amex: TGB) (“Taseko” or the “Company”) is pleased to announce a 70% increase in mineral reserves at its 100% owned Prosperity Project, from 487 million tonnes to 830 million tonnes.
The reserve increase will add 3.0 million ounces of recoverable gold and 1.6 billion lbs of recoverable copper to the Prosperity reserve base, bringing total recoverable metal to 7.7 million ounces of gold and 3.6 billion lbs of copper.
This increase in recoverable metal, under present mine design criteria, extends Prosperity’s mine life from 20 years to 33 years.
Reserves were previously based on a $5.25 Net Smelter Return (“NSR”) cut-off using gold and copper prices of $500/oz and $1.50/lb, respectively. Current reserves are based on a $5.50 NSR cut-off using gold and copper prices of $650/oz and $1.65/lb, respectively.
Russell Hallbauer, President and CEO of Taseko commented, “In keeping with our historically conservative approach to reserve calculations, we have modestly adjusted our gold and copper price assumptions to better reflect longer-term metal price expectations. This increase in metal price assumptions will allow us to mine deeper, higher grade mineralization.
Prosperity now has the largest gold/copper reserve base of any mining project in Canada. At present gold and copper prices the projected operating costs per ounce of gold, net of copper credit, will be negative US$330/oz. With the size of this reserve and the longevity of its mine life, Prosperity will be one of the great mines of Canada. The 64% increase in recoverable gold and 80% increase in recoverable copper will allow Prosperity to operate for over 3 decades.
We look forward to the upcoming completion of our Environmental Assessment Review and getting on with building a mine that can benefit so many local, provincial and national stakeholders.”
------------------------------------------------------------------------- Mineral Reserves @ C$5.50 NSR/t Cut-off ------------------------------------------------------------------------- Grade Recoverable Metal Contained Metal Size ----------------------------------------------- M Tonnes Au Cu Au Cu Au Cu (g/t) (%) (M oz) (B lbs) (M oz) (B lbs) ------------------------------------------------------------------------- Proven 481 0.46 0.26 5.0 2.4 7.1 2.8 ------------------------------------------------------------------------- Probable 350 0.35 0.18 2.7 1.2 3.9 1.4 ------------------------------------------------------------------------- Total 831 0.41 0.23 7.7 3.6 11.0 4.2 ------------------------------------------------------------------------- Note: Recoveries for Cu and Au are 87% and 69% respectively
Remaining measured and indicated resources are grading 0.40 g/t gold and 0.30% copper containing 2.3 million ounces of gold and 1.2 billion lbs of copper (no recoveries applied).
The mineral resource and reserve estimations were completed by Taseko staff under the supervision of Scott Jones, P.Eng., Vice-President, Engineering and a Qualified Person under National Instrument 43-101. Mr Jones has verified the methods used to determine grade and tonnage in the geological model, reviewed the long range mine plan, and directed the updated economic evaluation. The estimates for the reserves used long term metal prices of US$1.65/lb for copper and US$650/oz for gold and a foreign exchange of C$0.82 per US dollar. Mr Jones has reviewed this release. A technical report will be filed on www.sedar.com.
Russell Hallbauer President and CEO No regulatory authority has approved or disapproved of the information contained in this news release.
Forward Looking Statements
This release includes certain statements that may be deemed “forward-looking statements”. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include capital market conditions, commodities market prices, exploitation and exploration successes, lack of continuity of mineralization, continued availability of capital and financing, the ability to obtain and maintain required permits, including environmental, construction and mining permits and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company’s annual Form 40-F filing with the United States Securities and Exchange Commission or the Company’s home jurisdiction filings at www.sedar.com.
Mountain Lake (MOA) Arranges Financing for Fall Drilling of its Little River Gold-Antimony project in Newfoundland
Nov. 2, 2009 (Filing Services Canada) — Mountain Lake Resources Inc (MOA – TSX Venture, MLKRF – OTCBB_Pink_Sheets), (“Mountain Lake” or the “Company”) reports it is arranging a non-brokered private placement (the “Offering”) to raise $450,000. Under the terms of the Offering, the Company expects to place 1,500,000 flow-through share units (the “Units”).
The Units will be offered at a price of $0.30 and will consist of one flow-through share and one-half of a transferable common share purchase warrant (the “Warrants”), with each full warrant exercisable at a price of $0.45 per common share for a period of 24 months following the close of the offering. The Company has the right to accelerate the expiry date of the Warrants if the volume weighted average closing price of the Company’s common shares, as traded on the TSX Venture Exchange, exceeds $0.90 per share for more than 20 consecutive trading days. In that event, the Warrants will expire 30 days after the Company has given notice of the accelerated expiry to the Warrant holders.
The net proceeds from the Offering will be used to fund the Company’s fall/winter exploration work in Newfoundland, which will commence with the initial phase of drilling on the Little River project where a recent trenching program returned up to 32.7 gpt gold and 5.5% antimony in bedrock grab samples.
The offering is subject to TSX Venture Exchange approval. All securities issued in connection with this offering will be subject to a four-month hold period in accordance with securities regulation.
About Mountain Lake Resources Inc.
Mountain Lake Resources Inc. (TSX-V: MOA) is a diversified junior mining and exploration company whose corporate strategy is to build shareholder value through the exploration and development of economically viable mineral properties. Current projects include: a 30% interest in the Valentine Lake gold project (Newfoundland) with and option to acquire the remaining 70% interest from Richmont Mines Inc.; a 100% interest in the Bobby’s Pond base metals project (Newfoundland) with an option to acquire initially a 51% interest in the surrounding claims from Cornerstone Resources; an option to earn a 100% interest in the Little River gold+/-antimony exploration property (Newfoundland); and a 2,350,000 share (~6.5%) stake in Etruscan Diamonds Limited, an alluvial diamond operation (South Africa). For more information visit: www.mountain-lake.com
Blockbuster Reports Strong Attach Rates on Consumer Electronics Powered by Roxio CinemaNow
NOVATO, Calif. and DALLAS, Nov. 2 /PRNewswire-FirstCall/ — Sonic Solutions® (Nasdaq: SNIC) and Blockbuster Inc. (NYSE: BBI, BBI.B), today announced that the recently launched BLOCKBUSTER On Demand® movie service, has exceeded all initial launch expectations and is being rapidly embraced by consumers who are looking for the latest movie releases on their connected TVs and set-top players. Reflecting the growing interest in digital delivered entertainment and the broad appeal of the Blockbuster brand, device reports show BLOCKBUSTER On Demand is driving attach rates over 50% higher than historic figures for Roxio CinemaNow(TM) powered services and increasing transaction volume beyond expectations.
“Latest device reports are a clear indication that we’ve found a winning formula in combining our Roxio CinemaNow content delivery platform with one of the most recognizable brands in entertainment,” said Dave Habiger, CEO of Sonic Solutions. “The Blockbuster brand clearly means ‘new movies here’ and is prompting consumers to jump at the chance to see first run hits from the comfort of their living rooms.”
The BLOCKBUSTER On Demand service is built on Sonic’s Roxio CinemaNow video platform, enabling consumers to find and access their favorite Hollywood hits from a broad range of consumer electronics devices, including availability now on select Samsung HDTVs, Blu-ray Players and Home Theater Systems as well as TiVo DVRs. Providing the same flexibility in compatibility and portability that consumers have come to expect from physical DVDs, the Roxio CinemaNow platform makes it possible for device manufacturers to add internet-delivered video services to their devices quickly and easily with leading brands, such as Blockbuster.
“Our alliances with Samsung and TiVo have allowed us to bring service to millions of homes across the country and we’re delighted with how quickly consumers are recognizing the value of the BLOCKBUSTER On Demand movie service,” said Jim Keyes, Blockbuster Chairman and CEO. “In a matter of a few weeks, we have already seen adoption for our digital services almost double following these initial device deployments, and we fully anticipate rates to continue to increase as more products are introduced by our device partners in the future. Additionally, by the end of the year we expect to add high definition content to our growing digital library. Through our multi-channel approach, we are the only entertainment provider that offers customers convenient access to media entertainment whenever and however they want it.”
With the BLOCKBUSTER On Demand service, consumers have access to the hottest new releases from Blockbuster to rent or purchase — whether it’s the latest comedies such as “Imagine That,” action-packed thrillers like “State of Play,” hot box office hits such as “Ghosts of Girlfriends Past” or award winners like “The Curious Case of Benjamin Button.” BLOCKBUSTER On Demand brings consumers titles as soon as they become available for digital download, typically within a couple of weeks after you can buy or rent them at your local BLOCKBUSTER store, and months or years before you can watch them on a streaming subscription services. Most rentals will range from $2.99 for classic hits to $3.99 for new releases.
About Blockbuster Inc.
Blockbuster Inc. is a leading global provider of rental and retail movie and game entertainment. The Company provides its customers with convenient access to media entertainment anywhere and any way they want it – whether in-store, by-mail, through vending and kiosks or digital download. With a highly recognized brand name and a library of over 125,000 movie and game titles, Blockbuster leverages its multi-channel presence to further build upon its leadership position in the media entertainment industry and to best serve the two million daily global customers and over 50 million annual global customers. The Company may be accessed worldwide at www.blockbuster.com.
About Sonic Solutions
Sonic Solutions® (NASDAQ: SNIC) is powering the digital media ecosystem through its complete range of Hollywood to Home(TM) applications, services, and technologies. Sonic’s Roxio® products enable consumers to easily manage and enjoy personal digital media content and, through Roxio CinemaNow(TM), access premium Hollywood entertainment on a broad range of connected devices. A wide array of leading technology firms, professionals, and developers rely on Sonic to bring innovative digital media functionality to next-generation devices and platforms. Sonic Solutions is headquartered in Marin County, California.
Forward-Looking Statements
This release may contain forward looking statements that are based upon current expectations, including the market acceptance and success of the alliance between Blockbuster and Sonic Solutions. Actual results could differ materially from those projected in the forward looking statements as a result of various risks and uncertainties. This press release should be read in conjunction with Blockbuster’s and Sonic Solutions’ most recent annual reports on Form 10-K, quarterly Forms 10-Q and other reports on file with the Securities and Exchange Commission, which contain a more detailed discussion of each company’s business including risks and uncertainties that may affect future results. Neither Blockbuster nor Sonic Solutions undertakes to update any forward looking statements.
Sonic, the Sonic logo, Sonic Solutions, Roxio, Roxio CinemaNow, and Hollywood to Home, are trademarks or registered trademarks owned by Sonic Solutions in the United States and/or other countries. All other company or product names are trademarks of their respective owners and, in some cases, are used by Sonic Solutions under license. Specifications, pricing and delivery schedules are subject to change without notice.
Amylin Pharmaceuticals (AMLN) and Eli Lilly and Company Statement on FDA’s BYETTA(R) (Exenatide) Injection Update
SAN DIEGO and INDIANAPOLIS, Nov. 2, 2009 /PRNewswire-FirstCall/ — Amylin Pharmaceuticals, Inc., (Nasdaq: AMLN) and Eli Lilly and Company (NYSE: LLY) today issued the following statement in response to the U.S. Food and Drug Administration (FDA) update on BYETTA® (exenatide) injection.
“The FDA update issued today aligns with the BYETTA label approved last week. The current label reflects our understanding of post-marketing reports of renal events and provides physicians with updated guidance about appropriate use in patients with renal conditions. There is no evidence from preclinical and clinical studies that BYETTA has any direct toxic effect on the kidney,” said Orville G. Kolterman, M.D., senior vice president of research and development, Amylin Pharmaceuticals. “Post-marketing reports of serious changes in renal function have been rare and usually complicated by other factors that could have contributed to the kidney problems. It is also important to note that diabetes is the leading cause of kidney failure. Information about use of BYETTA in patients with impaired renal function was included in the initial product label in 2005 and was updated in 2007. We remain committed to working closely with the FDA to ensure that physicians and patients are provided with accurate information about any potential risks associated with the use of our products.”
On October 30, the FDA approved an expanded indication for BYETTA as a stand-alone medication (monotherapy) along with diet and exercise to improve glycemic control in adults with type 2 diabetes. In addition to the monotherapy indication, the FDA approved changes to the BYETTA Prescribing Information to incorporate updated safety information. The new label expands upon existing language regarding use of BYETTA in patients with renal impairment, which Amylin and Lilly updated in September 2007 to include additional language regarding renal adverse events. It specifies that BYETTA should not be used in patients with severe renal impairment or end-stage renal disease and should be used with caution in patients with renal transplantation. It also specifies that because BYETTA may induce nausea and vomiting with transient hypovolemia (low blood volume), treatment may worsen renal function. This update was communicated to physicians via a “Dear Healthcare Professional” letter, which is available at www.BYETTA.com.
BYETTA has extensive post-marketing experience and a well-documented safety profile. BYETTA has been used by more than one million patients since market introduction in 2005. It has a proven history with more than 10 million prescriptions written and 6.5 years of clinical experience.
About Diabetes
Diabetes affects more than 24 million people in the United States and an estimated 246 million adults worldwide.(i, ii) Approximately 90-95 percent of those affected have type 2 diabetes. Diabetes is the fifth leading cause of death by disease in the United States and costs approximately $174 billion per year in direct and indirect medical expenses.(iii)
According to the Centers for Disease Control and Prevention’s National Health and Nutrition Examination Survey, approximately 60 percent of people with diabetes do not achieve their target blood sugar levels with their current treatment regimen.(iv)( )In addition, 85 percent of type 2 diabetes patients are overweight and 55 percent are considered obese.(v) Data indicate that weight loss (even a modest amount) supports patients in their efforts to achieve and sustain glycemic control.(vi, vii)
About BYETTA® (exenatide) injection
BYETTA is the first and only FDA-approved GLP-1 receptor agonist for the treatment of type 2 diabetes. BYETTA exhibits many of the same effects as the human incretin hormone glucagon-like peptide-1 (GLP-1). GLP-1 improves blood sugar after food intake through multiple effects that work in concert on the stomach, liver, pancreas and brain.
BYETTA is an injectable prescription medicine that may improve blood sugar (glucose) control in adults with type 2 diabetes mellitus, when used with a diet and exercise program. BYETTA is not insulin and should not be taken instead of insulin. BYETTA is not recommended to be taken with insulin. BYETTA is not for people with type 1 diabetes or people with diabetic ketoacidosis.
BYETTA provides sustained A1C control and low incidence of hypoglycemia when used alone or in combination with metformin or a thiazolidinedione, with potential weight loss. BYETTA is not a weight loss product. BYETTA was approved in April 2005 and has been used by more than one million patients since its introduction. For full prescribing information, visit www.BYETTA.com.
Important Safety Information for BYETTA® (exenatide) injection
Based on post-marketing data, BYETTA has been associated with acute pancreatitis, including fatal and non-fatal hemorrhagic or necrotizing pancreatitis. The risk for getting low blood sugar is higher if BYETTA is taken with another medicine that can cause low blood sugar, such as a sulfonylurea. BYETTA should not be used in people who have severe kidney problems, and should be used with caution in people who have had a kidney transplant. Patients should talk with their healthcare provider if they have severe problems with their stomach, such as delayed emptying of the stomach (gastroparesis) or problems with digesting food. Severe allergic reactions can happen with BYETTA.
The most common side effects with BYETTA include nausea, vomiting, diarrhea, dizziness, headache, feeling jittery, and acid stomach. Nausea most commonly happens when first starting BYETTA, but may become less over time.
These are not all the side effects from use of BYETTA. A healthcare provider should be consulted about any side effect that is bothersome or does not go away.
For Prescribing Information and Medication Guide, visit www.BYETTA.com.
About Amylin and Lilly
Amylin Pharmaceuticals is a biopharmaceutical company dedicated to improving lives of patients through the discovery, development and commercialization of innovative medicines. Amylin has developed and gained approval for two first-in-class medicines for diabetes, SYMLIN® (pramlintide acetate) injection and BYETTA® (exenatide) injection. Amylin’s research and development activities leverage the Company’s expertise in metabolism to develop potential therapies to treat diabetes and obesity. Amylin is headquartered in San Diego, California. Further information on Amylin Pharmaceuticals is available at www.amylin.com.
Through a long-standing commitment to diabetes care, Lilly seeks to provide patients with breakthrough treatments that enable them to live longer, healthier, and fuller lives. Since 1923, Lilly has been an industry leader in pioneering therapies to help healthcare professionals improve the lives of people with diabetes, and research continues on innovative medicines to address the unmet needs of patients. For more information about Lilly’s current diabetes products, visit www.lillydiabetes.com.
Lilly, a leading innovation-driven corporation, is developing a growing portfolio of pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers – through medicines and information – for some of the world’s most urgent medical needs. Additional information about Lilly is available at www.lilly.com.
This press release contains forward-looking statements about Amylin and Lilly. Actual results could differ materially from those discussed or implied in this press release due to a number of risks and uncertainties, including the risk that BYETTA and the revenues generated from BYETTA may be affected by competition; unexpected new data; safety and technical issues; clinical trials not confirming previous results; pre-clinical trials not predicting future results; label expansion requests not being submitted in a timely manner or receiving regulatory approval; approved label expansions not producing the results we expect, or manufacturing and supply issues. The potential for BYETTA may also be affected by government and commercial reimbursement and pricing decisions, the pace of market acceptance, or scientific, regulatory and other issues and risks inherent in the commercialization of pharmaceutical products. These and additional risks and uncertainties are described more fully in Amylin’s and Lilly’s most recent SEC filings including their Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. Amylin and Lilly undertake no duty to update these forward-looking statements.
Human Genome Sciences (HGSI) and GlaxoSmithKline Announce Positive Results in Second of Two Phase 3 Trials of BENLYSTA(TM)
ROCKVILLE, MD and LONDON — (Marketwire) — 11/02/09 — Human Genome Sciences, Inc. (NASDAQ: HGSI) and GlaxoSmithKline PLC (GSK) today announced that BENLYSTA(TM) (belimumab) met the primary endpoint in BLISS-76, the second of two pivotal Phase 3 trials in seropositive patients with systemic lupus erythematosus (SLE). BLISS-76 study results through 52 weeks showed that belimumab 10 mg/kg plus standard of care achieved a statistically significant improvement in patient response rate as measured by the SLE Responder Index at Week 52, compared with placebo plus standard of care. Study results also showed that belimumab was generally well tolerated, as demonstrated by a similar rate of discontinuations due to adverse events across treatment groups, with overall adverse event rates comparable between belimumab and placebo treatment groups.
“The BLISS-76 results confirm our view that BENLYSTA has the potential to become the first new approved drug in decades for people living with systemic lupus,” said H. Thomas Watkins, President and Chief Executive Officer, HGS. “We take great pride in the innovation and scientific rigor that has made it possible to bring BENLYSTA to this point. We plan to submit marketing applications in the first half of 2010, following discussions with regulatory authorities in the United States, Europe and other regions. We will continue to work with GSK to advance this drug to the market where it may benefit patients with significant need.”
Carlo Russo, M.D., Senior Vice President, Biopharm Development, GSK, said, “The results from this second pivotal Phase 3 trial reinforce our belief that belimumab could deliver a significant therapeutic option for patients with lupus who have had no new treatment in fifty years. We look forward to continuing our collaboration with HGS in order to bring this important medicine to patients.”
The data from the BLISS-76 study were analyzed after 52 weeks, in accord with the study protocol, in support of a potential Biologics License Application in the United States and Marketing Authorization Applications in Europe and other regions. However, the BLISS-76 study is ongoing and will continue for 24 more weeks. Additional data will be available following completion of the full 76-week study period. Belimumab is an investigational drug and the first in a new class of drugs called BLyS-specific inhibitors. Belimumab is being developed by HGS and GSK under a co-development and commercialization agreement entered into in August 2006.
Citizens South Banking Corp. (CSBC) Announces Withdrawal of $30 Million Offensive Common Stock Offering
GASTONIA, N.C., Oct. 28 /PRNewswire-FirstCall/ — Citizens South Banking Corporation (Nasdaq: CSBC), today announced that it has withdrawn its public offering of approximately $30 million in common stock due to unfavorable market conditions. As stated by President and CEO, Kim Price: “Over the course of the past few days there have been a series of negative industry announcements, which have adversely impacted the capital raising environment. Given the current market conditions, raising capital to take advantage of opportunities in our markets would have required unacceptable levels of dilution to current shareholders. We are focused on preserving and building shareholder value, and we believe raising capital in light of recent industry events this week would conflict with our goals.” Continued Price: “The Company is in the fortunate position of already exceeding all regulatory capital requirements, which enables us to continue to pursue our corporate objectives.”
About Citizens South Banking Corporation
Citizens South is the holding company for Citizens South Bank, which is headquartered in Gastonia, North Carolina. At September 30, 2009, Citizens South had approximately $820.6 million in assets with 16 full-service offices in the Charlotte region, including Gaston, Iredell, Rowan, Mecklenburg, and Union counties in North Carolina, and York County, South Carolina. For more information, visit www.citizenssouth.com.
Forward-Looking Statements
This press release contains forward-looking statements. Forward-looking statements are generally identified by the use of words “believe,” “expect,” “intend,” “anticipate,” “estimate,” and other similar expressions. These forward-looking statements involve certain risks and uncertainties. You should not place undue reliance on such statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, (1) adverse developments in the capital markets in general or in the markets for financial institutions stock in particular; (2) changes in legislation or regulatory requirements affecting financial institutions, including the current debate in Congress as to restructuring the financial services industry; (3) changes in the interest rate environment; and (4) adverse changes in general economic conditions.
Heidrick & Struggles (HSII) Reports 2009 Third Quarter Financial Results
CHICAGO, Oct. 27, 2009 (GLOBE NEWSWIRE) — Heidrick & Struggles International, Inc. (Nasdaq:HSII), a premier leadership advisory firm providing executive search and leadership consulting services worldwide, today announced financial results for the third quarter ended September 30, 2009.
Consolidated net revenue of $103.5 million declined 34.6 percent from $158.3 million in the 2008 third quarter, or approximately 32 percent on a constant currency basis. Net revenue declined 37.7 percent in the Americas, 36.9 percent in Europe (approximately 31 percent on a constant currency basis), and 20.7 percent in the Asia Pacific region (approximately 19 percent on a constant currency basis). Executive Search represented 92.8 percent of net revenue and Leadership Consulting Services represented 7.2 percent in the 2009 third quarter.
Operating income was $6.7 million and operating margin (measured as a percentage of net revenue) was 6.5 percent, compared to 2008 third quarter operating income of $20.9 million and operating margin of 13.2 percent.
The number of executive search confirmations in the quarter decreased 17 percent compared to the 2008 third quarter, but increased 17 percent compared to the 2009 second quarter. The number of consultants at September 30, 2009 was 365, compared to 416 at September 30, 2008, and 380 at June 30, 2009. Productivity, as measured by annualized net revenue per consultant, was $1.1 million compared to $1.5 million in the 2008 third quarter. The average revenue per executive search was $97,300 compared to $127,200 in last year’s third quarter.
Commenting on the third quarter results, Chief Executive Officer L. Kevin Kelly said, “Although year-over-year comparisons still reflect the impact of a worldwide economic downturn, there are increasing signs that we’ve seen the bottom of this historic recession. Net revenue increased for the second quarter in a row, confirmations increased 17 percent compared to the second quarter, and backlog increased for the first time in the past six quarters. All three regions realized sequential revenue growth compared to the second quarter, and all achieved higher operating income and operating margins compared to second quarter. We can now look forward to capitalizing on the strategic actions and cost savings initiatives we’ve made over the last year.”
Consolidated salaries and employee benefits declined 37.2 percent to $68.2 million, from $108.6 million in the comparable quarter of 2008. This decrease mostly reflects a reduction in bonus expense associated with the decline in revenue, and a decline in base salaries and payroll expense resulting from the company’s workforce reductions in January and May 2009. Salaries and employee benefits were 65.9 percent of net revenue for the quarter, compared to 68.6 percent in the 2008 third quarter.
Consolidated general and administrative expenses were $28.6 million, compared to $28.8 million in the 2008 third quarter. As a percentage of net revenue, consolidated general and administrative expenses were 27.6 percent, compared to 18.2 percent in the 2008 third quarter. In addition to the year-over-year decline in net revenue, this increase reflects higher fees paid for professional services, primarily related to an operations process improvement project, offset by continued cost savings initiatives.
Net income was $4.4 million and diluted earnings per share were $0.25, based upon an effective tax rate in the quarter of 39.2 percent. These results compare to net income in the 2008 third quarter of $14.0 million and diluted earnings per share of $0.80, which reflected an effective tax rate in the quarter of 38.0 percent.
Net cash generated by operating activities was $12.1 million in the 2009 third quarter, compared to net cash generated of $61.1 million in the 2008 third quarter. Cash and cash equivalents at September 30, 2009 were $75.3 million, compared to $183.0 million at September 30, 2008 and $64.6 million at June 30, 2009.
Regional Review
$ in millions 3Q 09 3Q 08 Change 3Q 09 2Q 09 Change
------------------------- -------------------------
Americas
--------
Net revenue $ 50.9 $ 81.8 $(30.9) $ 50.9 $ 48.3 $ 2.6
Operating
income $ 8.6 $ 14.0 $ (5.4) $ 8.6 $ 5.1 $ 3.5
Consultants 172 211 (39) 172 178 (6)
Europe
------
Net revenue $ 31.5 $ 49.9 $(18.4) $ 31.5 $ 27.5 $ 4.0
Operating
income $ 2.1 $ 7.9 $ (5.8) $ 2.1 $ 1.4 $ 0.7
Consultants 115 129 (14) 115 122 (7)
Asia Pacific
------------
Net revenue $ 21.1 $ 26.6 $ (5.5) $ 21.1 $ 17.3 $ 3.8
Operating
income $ 4.3 $ 5.4 $ (1.1) $ 4.3 $ 2.2 $ 2.1
Consultants 78 76 2 78 80 (2)
Corporate $ (8.3) $ (6.5) $ (1.8) $ (8.3) $ (8.2) $ (0.1)
Restructuring &
impairment
charges $ -- $ -- $ -- $ -- $(12.1) $ 12.1
------------------------- -------------------------
Operating
income (loss) $ 6.7 $ 20.9 $(14.1) $ 6.7 $(11.6) $ 18.3
------------------------- -------------------------
In the 2009 third quarter, all regions reported year-over-year declines in net revenue and operating income. All of the industry practice groups in each region experienced declines. Compared to the 2009 second quarter, the Americas region achieved an increase in net revenue driven by double digit increases in the Consumer, Financial Services, and Life Sciences practices. The sequential increase in Europe’s net revenue was driven by improvements in the Consumer, Financial Services, and Industrial practices, as well as Leadership Consulting Services. Asia Pacific saw good sequential improvement in net revenue from the Financial Services, Industrial and Technology practices, and from Leadership Consulting Services. All three regions achieved higher operating income and operating margins compared to the 2009 second quarter.
Nine Months Results
For the nine months ended September 30, 2009, consolidated net revenue of $285.8 million declined 40.6 percent from $481.0 million in the first nine months of 2008, or approximately 36 percent on a constant currency basis. The number of executive searches confirmed in the first nine months of 2009 declined 31 percent compared to the first nine months of 2008. The reported operating loss of $37.2 million compares to operating income of $50.4 million for the first nine months of 2008. The reported net loss for the first nine months of 2009 was $30.3 million and the net loss per share was $1.80, reflecting an effective tax benefit rate of 24.8 percent. Net income for the first nine months of 2008 was $33.8 million and diluted earnings per share were $1.89, which reflected an effective tax rate of 38.5 percent. Excluding restructuring and impairment charges of $25.4 million, which management believes more appropriately reflects core operations, the operating loss for the first nine months of 2009 was $11.8 million.
2009 Outlook
The company expects that fourth quarter net revenue will be between $103 million and $108 million, resulting in 2009 net revenue of between $389 million and $394 million. With the changes the company has made to improve its operating cost structure, and excluding restructuring and impairment charges, the company believes that breakeven operating income in 2009 is still achievable at the high end of its revenue guidance. Net income (loss) and earnings per share in 2009 are expected to reflect a full-year effective tax benefit rate between 23 percent and 26 percent but may be impacted by country-level results and by discrete items that require immediate recognition in a particular quarter.
Kelly added, “As difficult as 2009 has been, I am excited by the progress we have made in executing our strategy to become the world’s premier Leadership Advisory Firm, fully integrating our executive search and leadership consulting services. Many of our clients are already benefiting from Heidrick & Struggles’ leadership advisory capabilities. This progress, combined with the significant restructuring of our cost structure, make me very enthusiastic about the firm’s growth potential as the economy recovers. We have already seen the results of our initiatives in the third quarter and expect to see positive trends continue in the fourth quarter of 2009 and into 2010.”
Quarterly Conference Call
Executives of Heidrick & Struggles will host a conference call to review 2009 third quarter results today, October 27, at 9:00 am central time. Participants may access the company’s call and supporting slides through the internet at www.heidrick.com. For those unable to participate on the live call, a webcast and copy of the slides will be archived at www.heidrick.com and available for up to 30 days following the investor call.
About Heidrick & Struggles International, Inc.
Heidrick & Struggles International, Inc. is the world’s premier provider of senior-level executive search and leadership consulting services, including succession planning, executive assessment, talent retention management, executive development, transition consulting for newly appointed executives, and M&A human capital integration consulting. For more than 55 years, we have focused on quality service and built strong leadership teams through our relationships with clients and individuals worldwide. Today, Heidrick & Struggles leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. For more information about Heidrick & Struggles, please visit www.heidrick.com.
Non-GAAP Financial Measures
This earnings release contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flow of the company. Pursuant to the requirements of Regulation G, the Corporation has provided a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.
The non-GAAP financial measures used within this earnings release are: operating income (loss), net income (loss), and net income (loss) per share (i.e., EPS) to the extent presented as “excluding restructuring and impairment charges.” These measures are presented because management uses this information to monitor and evaluate financial results and trends. Management believes this information is also useful for investors.
Safe Harbor Statement
This press release contains forward-looking statements. The forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry in which we operate and management’s beliefs and assumptions. Forward-looking statements may be identified by the use of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “projects,” “forecasts,” and similar expressions. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, forecasted or implied in the forward-looking statements. Factors that may affect the outcome of the forward-looking statements include, among other things: our ability to attract and retain qualified executive search consultants; further declines in the global economy and our ability to execute successfully through business cycles; the timing, speed or robustness of any future economic recovery; social or political instability in markets where we operate; the impact of foreign currency exchange rate fluctuations; price competition; the ability to forecast, on a quarterly basis, variable compensation accruals that ultimately are determined based on the achievement of annual results; our ability to realize our tax loss carryforwards; the timing of the establishment or reversal of valuation allowance on deferred tax assets; the mix of profit and loss by country; an impairment of our goodwill and other intangible assets; delays in the development and/or implementation of new technology and systems; and the ability to meet and achieve the expected savings resulting from cost-reduction initiatives and restructuring activities. Our reports filed with the U.S. Securities and Exchange Commission also include information on factors that may affect the outcome of forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Heidrick & Struggles International, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
September 30,
---------------------
2009 2008 $ Change % Change
---------- ---------- ---------- --------
Revenue:
Revenue before
reimbursements
(net revenue) $ 103,523 $ 158,318 $ (54,795) -34.6%
Reimbursements 4,747 7,009 (2,262) -32.3%
---------- ---------- ----------
Total revenue 108,270 165,327 (57,057) -34.5%
Operating expenses:
Salaries and employee
benefits 68,184 108,611 (40,427) -37.2%
General and administrative
expenses 28,623 28,849 (226) -0.8%
Reimbursed expenses 4,747 7,009 (2,262) -32.3%
---------- ---------- ----------
Total operating expenses 101,554 144,469 (42,915) -29.7%
---------- ---------- ----------
Operating income 6,716 20,858 (14,142) -67.8%
Non-operating income:
Interest income, net 64 1,181
Other, net 470 499
---------- ----------
Net non-operating income 534 1,680
Income before income taxes 7,250 22,538
Provision for income taxes 2,842 8,559
----------
Net income $ 4,408 $ 13,979
========== ==========
Basic weighted average
common shares outstanding 17,030 16,455
Diluted weighted average
common shares outstanding 17,635 17,395
Basic earnings per common
share $ 0.26 $ 0.85
Diluted earnings per common
share $ 0.25 $ 0.80
Salaries and employee
benefits as a percentage of
net revenue 65.9% 68.6%
General and administrative
expense as a percentage of
net revenue 27.6% 18.2%
Operating income as a
percentage of net revenue 6.5% 13.2%
Effective tax rate 39.2% 38.0%
Heidrick & Struggles International, Inc.
Segment Information
(In thousands)
Three Months Ended September 30,
--------------------------------------------------------
2009 2008
2009 2008 $ Change % Change Margin * Margin *
--------- --------- --------- -------- -------- --------
Revenue:
Americas $ 50,949 $ 81,844 $ (30,895) -37.7%
Europe 31,513 49,906 (18,393) -36.9%
Asia Pacific 21,061 26,568 (5,507) -20.7%
--------- --------- ---------
Revenue
before
reimburse-
ments (net
revenue) 103,523 158,318 (54,795) -34.6%
Reimburse-
ments 4,747 7,009 (2,262) -32.3%
--------- --------- ---------
Total
revenue $ 108,270 $ 165,327 $ (57,057) -34.5%
========= ========= =========
Operating
income:
Americas $ 8,578 $ 13,989 $ (5,411) -38.7% 16.8% 17.1%
Europe 2,093 7,931 (5,838) -73.6% 6.6% 15.9%
Asia Pacific 4,303 5,443 (1,140) -20.9% 20.4% 20.5%
--------- --------- ---------
Total
regions 14,974 27,363 (12,389) -45.3% 14.5% 17.3%
Corporate (8,258) (6,505) (1,753) -26.9%
--------- --------- ---------
Operating
income $ 6,716 $ 20,858 $ (14,142) -67.8% 6.5% 13.2%
========= ========= =========
* Margin based on revenue before reimbursements (net revenue).
Heidrick & Struggles International, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Nine Months Ended
September 30,
---------------------
2009 2008 $ Change % Change
---------- ---------- ---------- --------
Revenue:
Revenue before
reimbursements (net
revenue) $ 285,779 $ 480,975 $(195,196) -40.6%
Reimbursements 13,812 22,108 (8,296) -37.5%
---------- ---------- ----------
Total revenue 299,591 503,083 (203,492) -40.4%
Operating expenses:
Salaries and employee
benefits 212,110 336,535 (124,425) -37.0%
General and administrative
expenses 85,447 94,039 (8,592) -9.1%
Reimbursed expenses 13,812 22,108 (8,296) -37.5%
Restructuring and
impairment charges 25,439 -- 25,439
---------- ---------- ----------
Total operating expenses 336,808 452,682 (115,874) -25.6%
---------- ---------- ----------
Operating income (loss) (37,217) 50,401 (87,618) -173.8%
Non-operating income
(expense):
Interest income, net 912 4,127
Other, net (3,974) 394
---------- ----------
Net non-operating income
(expense) (3,062) 4,521
Income (loss) before income
taxes (40,279) 54,922
Provision for (benefit from)
income taxes (9,993) 21,131
---------- ----------
Net income (loss) $ (30,286) $ 33,791
========== ==========
Basic weighted average
common shares outstanding 16,845 16,877
Diluted weighted average
common shares outstanding 16,845 17,841
Basic earnings (loss) per
common share $ (1.80) $ 2.00
Diluted earnings (loss) per
common share $ (1.80) $ 1.89
Salaries and employee
benefits as a percentage of
net revenue 74.2% 70.0%
General and administrative
expense as a percentage of
net revenue 29.9% 19.6%
Operating income (loss) as a
percentage of net revenue n/a 10.5%
Effective tax rate 24.8% 38.5%
Heidrick & Struggles International, Inc.
Segment Information
(In thousands)
Nine Months Ended September 30,
--------------------------------------------------------
2009 2008
2009 2008 $ Change % Change Margin * Margin *
--------- --------- --------- -------- -------- --------
Revenue:
Americas $ 145,669 $ 246,183 $(100,514) -40.8%
Europe 87,075 156,116 (69,041) -44.2%
Asia Pacific 53,035 78,676 (25,641) -32.6%
--------- --------- ---------
Revenue
before
reimburse-
ments (net
revenue) 285,779 480,975 (195,196) -40.6%
Reimburse-
ments 13,812 22,108 (8,296) -37.5%
--------- --------- ---------
Total
revenue $ 299,591 $ 503,083 $(203,492) -40.4%
========= ========= =========
Operating
income
(loss):
Americas $ 6,211 $ 38,271 $ (32,060) -83.8% 4.3% 15.5%
Europe 885 20,872 (19,987) -95.8% 1.0% 13.4%
Asia Pacific 5,453 14,784 (9,331) -63.1% 10.3% 18.8%
--------- --------- ---------
Total
regions 12,549 73,927 (61,378) -83.0% 4.4% 15.4%
Corporate (24,327) (23,526) (801) -3.4%
--------- --------- ---------
Operating
income
(loss)
before
restructu-
ring and
impairment
charges (11,778) 50,401 (62,179) -123.4% 10.5%
Restructuring
and
impairment
charges (25,439) -- (25,439)
--------- --------- ---------
Operating
income
(loss) $ (37,217)$ 50,401 $ (87,618) -173.8% 10.5%
========= ========= =========
* Margin based on revenue before reimbursements (net revenue).
Heidrick & Struggles International, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2009 2008
------------- -------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 75,294 $ 234,531
Restricted cash 6,043 --
Accounts receivable, net 76,736 68,233
Other receivables 7,409 8,586
Prepaid expenses 21,838 19,520
Other current assets 1,981 1,788
Income taxes recoverable, net 16,360 7,719
Deferred income taxes, net 13,474 13,893
------------- -------------
Total current assets 219,135 354,270
------------- -------------
Non-current assets:
Property and equipment, net 25,917 28,172
Restricted cash 4,171 9,655
Assets designated for retirement and
pension plans 26,150 24,973
Investmentsng income (loss) 10,275 12,594
Other non-current assets 5,621 7,203
Goodwill 109,182 101,234
Other intangible assets, net 9,251 13,543
Deferred income taxes, net 36,073 35,313
------------- -------------
Total non-current assets 226,640 232,687
------------- -------------
Total assets $ 445,775 $ 586,957
------------- -------------
Current liabilities:
Accounts payable $ 6,410 $ 11,977
Accrued salaries and employee benefits 62,355 163,695
Other current liabilities 35,986 49,443
Current portion of accrued restructuring
charges 3,491 2,280
------------- -------------
Total current liabilities 108,242 227,395
------------- -------------
Non-current liabilities:
Retirement and pension plans 30,113 27,503
Other non-current liabilities 26,352 25,755
------------- -------------
Total non-current liabilities 56,465 53,258
------------- -------------
Stockholders' equity 281,068 306,304
------------- -------------
Total liabilities and stockholders'
equity $ 445,775 $ 586,957
------------- -------------
Heidrick & Struggles International, Inc.
Consolidated Statements of Cash Flows
(In thousands)
Three Months Ended
September 30,
---------------------------
2009 2008
------------- -------------
(Unaudited)
Cash flows from operating activities:
Net income $ 4,408 $ 13,979
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 2,777 2,708
Write-off of software development
project 1,329 --
Deferred income taxes (2,495) 491
Net realized and unrealized (gains)
losses on investments 939 (525)
Stock-based compensation expense, net 4,357 6,198
Cash paid for restructuring charges (6,462) (716)
Changes in assets and liabilities, net
of effects of acquisitions:
Trade and other receivables (11,929) 4,649
Accounts payable 690 (674)
Accrued expenses 10,263 33,826
Income taxes payable, net 5,111 3,039
Prepayments 396 (122)
Other assets and liabilities, net 2,756 (1,712)
------------- -------------
Net cash provided by operating
activities 12,140 61,141
------------- -------------
Cash flows from investing activities:
Restricted cash (642) --
Acquisition of businesses, net of cash
acquired -- (3,610)
Capital expenditures (590) (2,760)
Proceeds from sales of equity securities -- 353
Payments to consultants related to sales
of equity securities (3) (60)
Other, net 5 --
------------- -------------
Net cash used in investing
activities (1,230) (6,077)
------------- -------------
Cash flows from financing activities:
Proceeds from stock options exercised -- 251
Purchases of treasury stock -- (5,051)
Cash dividends paid (2,231) (2,142)
Payment of employee tax withholdings on
equity transactions (52) (233)
------------- -------------
Net cash used in financing
activities (2,283) (7,175)
------------- -------------
Effect of exchange rate fluctuations on
cash and cash equivalents 2,039 (10,940)
------------- -------------
Net increase in cash and cash equivalents 10,666 36,949
Cash and cash equivalents at beginning of
period 64,628 146,074
------------- -------------
Cash and cash equivalents at end of
period $ 75,294 $ 183,023
============= =============
Supplemental schedule of noncash financing
activities:
Beginning of period - Accrued treasury
stock purchases $ -- $ 706
Treasury stock purchases -- 5,378
Cash paid for treasury stock purchases -- (5,051)
------------- -------------
Accrued treasury stock purchases $ -- $ 1,033
============= =============
Heidrick & Struggles International, Inc.
Consolidated Statements of Cash Flows
(In thousands)
Nine Months Ended
September 30,
---------------------------
2009 2008
------------- -------------
(Unaudited)
Cash flows from operating activities:
Net income (loss) $ (30,286) $ 33,791
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Depreciation and amortization 8,360 8,068
Write-off of investment 2,977 --
Write-off of software development
project 1,329 --
Deferred income taxes (6,214) 5,466
Net realized and unrealized (gains)
losses on investments 1,831 (910)
Stock-based compensation expense, net 15,027 18,767
Impairment charge 3,849 --
Restructuring charges 21,590 --
Cash paid for restructuring charges (23,439) (2,121)
Changes in assets and liabilities,
net of effects of acquisitions:
Trade and other receivables (4,350) (29,134)
Accounts payable (152) (313)
Accrued expenses (101,975) (34,508)
Income taxes recoverable, net (8,568) (4,054)
Prepayments (1,556) (6,094)
Other assets and liabilities, net 1,538 (3,224)
------------- -------------
Net cash used in operating
activities (120,039) (14,266)
------------- -------------
Cash flows from investing activities:
Restricted cash (483) 138
Acquisition of businesses, net of cash
acquired (15,453) (14,655)
Capital expenditures (10,053) (7,928)
Purchases of equity method investments (1,300) --
Proceeds from sales of equity securities 6 779
Payments to consultants related to sales
of equity securities (3) (229)
Proceeds from sales of short-term
investments -- 22,275
Proceeds from sale of a business -- 1,559
Other, net 15 8
------------- -------------
Net cash provided by (used in)
investing activities (27,271) 1,947
------------- -------------
Cash flows from financing activities:
Proceeds from stock options exercised 1,238 831
Purchases of treasury stock -- (47,038)
Cash dividends paid (7,063) (6,623)
Payment of employee tax withholdings on
equity transactions (3,117) (8,356)
------------- -------------
Net cash used in financing
activities (8,942) (61,186)
------------- -------------
Effect of exchange rate fluctuations on
cash and cash equivalents (2,985) (4,052)
------------- -------------
Net decrease in cash and cash equivalents (159,237) (77,557)
Cash and cash equivalents at beginning of
period 234,531 260,580
------------- -------------
Cash and cash equivalents at end of
period $ 75,294 $ 183,023
============= =============
Supplemental schedule of noncash financing
activities:
Beginning of period - Accrued treasury
stock purchases $ -- $ 1,605
Treasury stock purchases -- 46,466
Cash paid for treasury stock purchases -- (47,038)
------------- -------------
Accrued treasury stock purchases $ -- $ 1,033
============= =============
CONTACT: Heidrick & Struggles International, Inc.
Investors & Analysts:
Julie Creed, VP, Investor Relations
+1 312 496 1774
jcreed@heidrick.com
Hiland Partners, LP and Hiland Holdings GP, LP Announce Extension of Merger Agreements
ENID, Okla., Oct. 27 /PRNewswire-FirstCall/ — Hiland Partners, LP (Nasdaq: HLND) and Hiland Holdings GP, LP (Nasdaq: HPGP) announced today that each company will adjourn its special meeting of unitholders scheduled for this morning. The meetings are being adjourned to allow the boards of directors and conflicts committees additional time to consider the previously announced proposals made by Harold Hamm, on behalf of certain of his affiliates, to increase the merger consideration payable to each company’s common unitholders.
The Hiland Partners special meeting will be adjourned and the vote postponed until November 3, 2009 at 3:30 p.m., central time, and the Hiland Holdings special meeting will be adjourned and the vote postponed until November 3, 2009 at 4:30 p.m., central time. Each special meeting will be held at 302 N. Independence, Ball Room, Second Floor, Enid, Oklahoma 73701.
On October 26, 2009, in letters to the conflicts committees of the Hiland companies, Mr. Hamm proposed amending the merger agreements between certain of his affiliates and each Hiland company to increase the consideration payable to Hiland Partners common unitholders from $7.75 to $10.00 per common unit and to increase the consideration payable to Hiland Holdings common unitholders from $2.40 to $3.20 per common unit, respectively.
In connection with Mr. Hamm’s proposal and the adjournment of the Hiland Partners special meeting, Hiland Partners and Mr. Hamm have agreed to amend the merger agreement between Hiland Partners and affiliates of Mr. Hamm to extend its end date to November 6, 2009. Similarly, Hiland Holdings and Mr. Hamm have agreed to amend the merger agreement between Hiland Holdings and affiliates of Mr. Hamm to extend its end date to November 6, 2009. In his letter to each conflicts committee, Mr. Hamm indicated that, if his proposals are accepted, he expects that the end date under each merger agreement would be further extended as necessary to consummate the transactions.
The record date for determining unitholders eligible to vote at the special meetings will remain September 9, 2009. Valid proxies submitted by unitholders of Hiland Partners or Hiland Holdings prior to the adjourned October 27, 2009 special meetings will continue to be valid for purposes of the reconvened special meetings scheduled for November 3, 2009.
Common unitholders of Hiland Partners or Hiland Holdings as of September 9, 2009 who have not voted but wish to do so or who would like to change their vote should contact D.F. King at 1-800-967-4612.
About the Hiland Companies
Hiland Partners, LP is a publicly traded midstream energy partnership engaged in purchasing, gathering, compressing, dehydrating, treating, processing and marketing of natural gas, and fractionating, or separating, and marketing of natural gas liquids, or NGLs. Hiland Partners, LP also provides air compression and water injection services for use in oil and gas secondary recovery operations. Hiland Partners, LP’s operations are primarily located in the Mid-Continent and Rocky Mountain regions of the United States. Hiland Partners, LP’s midstream assets consist of fifteen natural gas gathering systems with approximately 2,147 miles of gathering pipelines, six natural gas processing plants, seven natural gas treating facilities and three NGL fractionation facilities. Hiland Partners, LP’s compression assets consist of two air compression facilities and a water injection plant.
Hiland Holdings GP, LP owns the two percent general partner interest, 2,321,471 common units and 3,060,000 subordinated units in Hiland Partners, LP, and the incentive distribution rights of Hiland Partners, LP.
Forward-Looking Statements
This press release includes certain statements concerning expectations for the future that are forward-looking statements, including statements about potential amendments to each of the merger agreements and statements about the intentions Mr. Hamm expressed in his proposal letters. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results are discussed in the definitive joint proxy statement filed by Hiland Partners and Hiland Holdings, in Hiland Partners’ and Hiland Holdings’ Annual Reports on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. Any such forward looking statements are made as of the date of this press release and neither Hiland Partners nor Hiland Holdings undertakes any obligation to update or revise any such forward-looking statements to reflect new information or events.
China Technology Development Group (CTDC) to Acquire Majority Interest in On-Grid Solar Power Station Business
HONG KONG, Oct. 27, 2009 (GLOBE NEWSWIRE) — China Technology Development Group Corporation (Nasdaq:CTDC) (“CTDC” or “the Company”), a growing integrated clean energy group based in China that provides solar energy products and solutions, today announced that the Company has entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with China Technology Solar Power Holdings Limited (“CTSPHL Group”) and its direct and indirect shareholders to acquire a 51% equity interest and become the major shareholder of CTSPHL Group.
CTSPHL Group, through its wholly-owned subsidiary, is developing a 100MW grid-connected solar power plant project located in Delingha City of Qaidam Basin in Qinghai Province, Northwestern China (the “Delingha 100MW Solar Project”). Upon closing of the acquisition, the Company and CTSPHL Group will jointly develop the Delingha 100MW Solar Project. CTDC believes that its co-development of the Delingha 100MW Solar Project will further its goal of becoming an integrated solar company with strong capabilities in designing, building and operating solar power plants.
CTSPHL Group has obtained a 25-year operating license from the Qinghai Provincial Development and Reform Commission for the first phase of the Delingha 100MW Solar Project, consisting of 10MW. Construction commenced on the first phase on 28th September 2009 and is expected to be completed by the end of 2010. Warm congratulations on the project commencement were received from Liaison Office of the Central People’s Government in Hong Kong S.A.R, and Mr. Shi Dinghuan, Counselor of State Council of the PRC and Director General of Chinese Renewable Energy Association. Mr. Shi commented, “China’s new energy industry is only at its beginning stage. We really welcome more overseas companies to work together with local PV companies to grow and strengthen the new energy sector.”
“We are very pleased to become a controlling shareholder of CTSPHL Group. This marks a significant step that CTDC has made to enter into the solar power station arena and become one of the first overseas listed Chinese companies to hold an operating license from the Chinese government to operate on-grid solar power stations in China,” commented by Mr. Alan Li, Chairman and CEO of the Company. “The Chinese government has been very supportive of the development of renewable energy. Chinese President Hu Jintao listened to our project briefing in March in Beijing with great interest. He highly praised our endeavor in solar plant development. On September 22, 2009, President Hu reiterated China’s goal of reaching 15% renewable energy by 2020 at the UN climate summit in New York.”
Mr. Li further commented, “In response to President Hu’s call for a greener and cleaner environment, we are greatly honoured to undertake the responsibility and looking forward to closely cooperating with CTSPHL Group and Qinghai local governments. We are committed to making the Qaidam Basin a leading solar power plant base in the world.”
About CTDC:
CTDC is a growing integrated clean energy group based in China to provide solar energy products and solutions. CTDC’s major shareholders include China Merchants Group (http://www.cmhk.com), a state-owned conglomerate in China, and Beijing Holdings Limited, the largest offshore subsidiary established by Beijing Municipal Government.
For more information, please visit our website at http://www.chinactdc.com.
Forward-Looking Statement Disclosure:
Certain statements herein which are not historical facts, including, without limitation, those regarding: A) the timing of product, service and solution deliveries; B) our ability to develop, implement and commercialize new products, services, solutions and technologies; C) expectations regarding market growth, developments and structural changes; D) expectations regarding our product volume growth, market share, prices and margins; E) expectations and targets for our results of operations; F) the outcome of pending and threatened litigation; G) expectations regarding the successful completion of contemplated acquisitions on a timely basis and our ability to achieve the set targets upon the completion of such acquisitions; and H) statements preceded by “believe,” “expect,” “anticipate,” “foresee,” “target,” “estimate,” “designed,” “plans,” “will” or similar expressions are forward-looking statements. These statements are based on management’s assumptions and beliefs in light of the information currently available to it. Because these forward-looking statements involve risks and uncertainties, actual results may differ materially from the results that we currently expect. Factors that could cause these differences include the risk factors specified on our annual report on Form 20-F for the year ended December 31, 2008 under “Item 3.D Risk Factors.” Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. CTDC does not undertake any obligation to update publicly or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
Elron (ELRN) Announces Receipt of Non-Binding Indication of Interest to Acquire Medingo
Oct. 26, 2009 (Business Wire) — Elron Electronic Industries Ltd. (NASDAQ:ELRN)(TASE:ELRN) today announced that a non-binding indication of interest (the “Indication”) of a third party regarding a potential acquisition of Medingo Ltd. (“Medingo”), an Elron subsidiary, has been received.
The Indication relates to an acquisition of Medingo’s entire share capital for a cash consideration ranging from $150 million to $170 million and a contingent additional cash consideration conditional upon one or more milestone(s) to be mutually agreed, which may bring total consideration up to between $185 million and $213 million. The transaction would be subject mainly to (i) the parties entering into a mutually agreed definitive agreement; (ii) satisfactory completion of a full due diligence by the third party; and (iii) the parties obtaining applicable corporate and regulatory approvals.
In the event of consummation of such transaction, Elron would be expected to record a net gain initially estimated at this stage to be between approximately $54 million and approximately $80 million. This gain includes Elron’s share in the net gain expected to be recorded by RDC Rafael Development Corporation Ltd. (“RDC”), through which Elron owns part of its holding in Medingo.
There is no assurance of the occurrence, timing or terms of any such transaction.
Medingo is 92% held by Elron (including 83% held by RDC, Elron’s 50.1% subsidiary). Medingo is engaged in the development and commercialization of a miniature insulin dispensing patch pump for the needs of insulin-dependent diabetic patients. For more information concerning Medingo, see Item 4 of our annual report on Form 20-F for 2008 which is available on the SEC’s website at www.sec.gov.
Elron Electronic Industries Ltd. (TASE & NASDAQ: ELRN), a member of the IDB Holding group, is a high-technology holding company traded in the Nasdaq and in the Tel-Aviv Stock Exchange. Elron’s group companies currently comprise a diverse range of publicly-traded and privately held companies primarily in the fields of medical devices, information & communications technology, clean technology and semiconductors. Included in our group companies are well established companies which are leaders in their fields, such as Given Imaging and 013 NetVision, together with innovative start-up s who possess growth potential in Israel and the rest of the world. For further information, please visit www.elron.com.
Magnum Hunter Resources Corp. (MHR) Announces New $150 Million Senior Secured Revolving Credit Facility
HOUSTON, TX — (Marketwire) — 10/26/09 — Magnum Hunter Resources Corporation (NYSE Amex: MHR) (the “Company”) announced today that the Company has received a commitment for a new $150 million three-year term senior secured revolving credit facility (“the new bank facility”) provided by the Bank of Montreal (“BMO”). The new bank facility will be used for general corporate purposes, including the acquisition of crude oil and natural gas properties.
The new bank facility will be governed by a semi-annually redetermined borrowing base value assigned to the Company’s proved crude oil and natural gas reserves. An initial borrowing base of $25 million has been established. Based on values assigned to crude oil and natural gas properties which may be either acquired or discovered over time, the Company’s borrowing base may be increased up to a maximum of $150 million commitment level.
All other terms and conditions are those usual and customary for this type of commercial bank borrowing facility. The applicable interest rate margin for this new bank facility will range from LIBOR plus 2.50% to LIBOR plus 3.50% depending on the actual level of outstanding borrowings. The final agreement which includes the specific terms and covenants governing the Company’s new bank facility will be filed with the Securities and Exchange Commission at closing.
BMO will act as Lead Arranger, Book Runner and Administrative Agent for the Company’s new bank facility. It is anticipated that the final closing of this new bank facility will occur by November 15, 2009.
Management Comments
Mr. Ronald D. Ormand, Executive Vice President and Chief Financial Officer of the Company, commented, “As part of our strategy to position the Company for future growth, we are pleased to have received this new $150 million revolving credit facility. We appreciate the work performed by the senior credit officers at the Bank of Montreal to put this new lending facility into place during a difficult period in the overall financial markets. Having one of the premier lenders to the North American energy industry approving a $150 million facility is a testament to senior management’s track record with the banking industry, as well as our relationship with BMO in particular. The new credit facility will allow the Company to make accretive oil and gas property acquisitions to enhance shareholder value. Magnum Hunter now has increased financial capabilities, allowing the Company to continue moving forward on the growth and acquisition efforts we initiated several months ago.”
About Magnum Hunter Resources
Magnum Hunter Resources Corporation and subsidiaries are a Houston, Texas based independent exploration and production company engaged in the acquisition of exploratory leases and producing properties, secondary enhanced oil recovery projects, exploratory drilling, and production of oil and natural gas in the United States.
For more information, please view our website at www.magnumhunterresources.com
Forward-looking Statements
The statements contained in this press release that are not historical are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements, without limitation, regarding the Company’s expectations, beliefs, intentions or strategies regarding the future. Such forward-looking statements may relate to, among other things: (1) the Company’s proposed exploration and drilling operations on its various properties, (2) the expected production and revenue from its various properties, (3) the Company’s proposed redirection as an operator of certain properties and (4) estimates regarding the reserve potential of its various properties. These statements are qualified by important factors that could cause the Company’s actual results to differ materially from those reflected by the forward-looking statements. Such factors include but are not limited to: (1) the Company’s ability to finance the continued exploration, drilling and operation of its various properties, (2) positive confirmation of the reserves, production and operating expenses associated with its various properties; and (3) the general risks associated with oil and gas exploration, development and operation, including those risks and factors described from time to time in the Company’s reports and registration statements filed with the Securities and Exchange Commission, including but not limited to the Company’s Annual Report on Form 10-K, Form 10-K/A and Form10-K/A for the year ended December 31, 2008 filed with the Securities and Exchange Commission on March 31, 2009, April 29, 2009 and September 11, 2009, respectively, and the Company’s Quarterly Reports on Form 10-Q for the quarters ending March 31, 2009 and June 30, 2009, filed on My 11, 2009 and August 14, 2009, respectively. The Company cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims any obligation, to update or revise such statements to reflect new circumstances or unanticipated events as they occur.
Collectors Universe (CLCT) Resumes Payment of Cash Dividends
NEWPORT BEACH, Calif., Oct. 26 /PRNewswire-FirstCall/ — Collectors Universe, Inc. (Nasdaq: CLCT), a leading provider of value-added authentication and grading services to dealers and collectors of high-value collectibles, today announced that its Board of Directors has approved a cash dividend policy that calls for the payment of $0.25 per share per quarter. The first of the quarterly cash dividends of $0.25 per share under the new dividend policy will be paid on November 24, 2009 to Stockholders of Record as of November 10, 2009.
The declaration of cash dividends in the future, pursuant to the Company’s dividend policy, is subject to final determination each quarter by the Board of Directors based on a number of factors, including the Company’s financial performance and its available cash resources, its cash requirements and alternative uses of cash that the Board may conclude would represent an opportunity to generate a greater return on investment for the Company. For these reasons, as well as others, there can be no assurance that dividends in the future will be equal or similar in amount to the amounts described in this press release or that the Board of Directors will not decide to suspend or discontinue the payment of cash dividends in the future.
About Collectors Universe
Collectors Universe, Inc. is a leading provider of value added services to the high-value collectibles markets. The Company authenticates and grades collectible coins, trading cards, autographs and stamps. The Company also compiles and publishes authoritative information about United States and world coins, collectible trading cards and sports memorabilia and collectible stamps and operates its CCE dealer-to-dealer Internet bid-ask market for certified coins and its Expos trade show and conventions business. This information is accessible to collectors and dealers at the Company’s web site, http://www.collectors.com, and is also published in print.
ParkerVision (PRKR) Announces Sample Phones Tested and Accepted by Its Commercial Chipset Customer
JACKSONVILLE, Fla., Oct. 26, 2009 (GLOBE NEWSWIRE) — ParkerVision, Inc. (Nasdaq:PRKR) (“ParkerVision”) announced today that it has successfully delivered sample 3G mobile handsets incorporating its d2p radio frequency integrated circuits to its commercial chipset customer. The performance of these sample handsets was tested, verified and accepted by the chipset customer, a licensee of ParkerVision’s d2p and d2d(TM) technologies. The sample handsets were assembled for the purpose of verifying the d2p technology in working mobile handset implementations, testing the technology in actual network operation, and creating sales samples for handset OEM/ODMs who purchase chipsets from ParkerVision’s licensee.
The handsets met all relevant industry standards and passed a series of tests that verify operational performance of the hardware when deployed on mobile phone networks. The customer verified that the d2p transmit chain achieved power consumption savings at all points along the RF transmit power curve when compared against the mass produced transmit chain that d2p replaced in the mobile phone reference design. The customer also determined that the power savings achieved by the sample handsets incorporating the d2p technology exceeded their own internal expectations for the initial mass production run of d2p chips.
ParkerVision’s commercial chipset customer is a global supplier of chipsets that support 2G, 2.5G and 3G mobile standards with engineering design and sales locations in both North America and Asia. This customer designs and supplies chipsets and related handset reference designs, predominantly to ODMs, for incorporation into mobile handsets and reported three of the top five handset manufacturers among its customer base. The name of ParkerVision’s chipset customer remains confidential in accordance with the terms of their licensing agreement.
About ParkerVision
ParkerVision, Inc. is in the business of designing, developing and selling its proprietary radio frequency technologies and products for use in semiconductor circuits for wireless communication products. ParkerVision is headquartered in Jacksonville, Florida. For more information please visit www.parkervision.com. (PRKR-G)
Safe Harbor Statement
This press release contains forward-looking information. Readers are cautioned not to place undue reliance on any such forward-looking statements, each of which speaks only as of the date made. Such statements are subject to certain risks and uncertainties which are disclosed in the Company’s SEC reports, including the Form 10K/A for the year ended December 31, 2008 and the Forms 10Q for the quarters ended March 31, 2009 and June 30, 2009. These risks and uncertainties could cause actual results to differ materially from those currently anticipated or projected.
012 Smile.Communications to Acquire a Controlling Interest in Bezeq The Israel Telecommunication Corp.
PETACH TIKVA, Israel, Oct. 25 /PRNewswire-FirstCall/ — 012 Smile.Communications Ltd. (Nasdaq Global Market and TASE: SMLC), an Israeli telecommunications service provider, today announced that it has entered into a definitive share purchase agreement under which it will acquire a controlling interest of approximately 30.6% in Bezeq The Israel Telecommunication Corp., Israel’s largest telecommunications provider (TASE: BZEQ) from Ap.Sb.Ar. Holdings Ltd. (the Apax Partners-Saban Capital Group Inc.-Arkin consortium), in a cash transaction currently valued at approximately NIS 6.5 billion, or NIS 8.00 per share, representing a 7.0% discount on the shares of Bezeq based on Bezeq’s closing share price prior to the announcement (as of October 22, 2009). 012 Smile will be entitled to receive all dividends payable by Bezeq to Ap.Sb.Ar. prior to closing. The transaction, which was approved by the Board of Directors of 012 Smile, is subject to the receipt of necessary regulatory approvals, including approvals from the Israeli Ministry of Communications, the Israeli Antitrust Commissioner and from the Prime Minister and the Minister of Communications of the State of Israel.
Stella Handler, Chief Executive Officer of 012 Smile, said: “This transaction is in line with our strategy to become, through selective investments, the leading integrated player in Israel’s telecom marketplace. Given its unique competitive positioning and strong cash flow generation, Bezeq represents an attractive investment for 012 Smile.”
As the largest telecom operator in Israel, Bezeq provides wired and wireless telephone and other communications services to consumer and business subscribers throughout Israel. Bezeq, which has over 2.5 million access lines and about 1 million broadband ASL lines, also provides mobile services through its cellular phone subsidiary, Pelephone Communications, to approximately 2,700,000 accounts. Bezeq serves approximately 560,000 satellite television viewers with its YES brand through its DBS Satellite subsidiary. Additionally, Bezeq International is an ISP and data service provider and an international long distance service provider in Israel.
The transaction will be financed through a combination of cash, debt and stock. 012 Smile has agreed to sell its current telecommunications assets in order to obtain anti-trust approval, which proceeds will also be used to finance the transaction. 012 Smile will announce the composition of its financing package in the near future.
The company expects that the transaction will close in approximately six months, subject to receipt of all requisite regulatory approvals.
J.P. Morgan plc acted as exclusive financial adviser and Fischer Behar Chen Well Orion & Co. as legal adviser to 012 Smile in connection with the transaction.
About 012 Smile.Communications
012 Smile.Communications is a growth-oriented communication services provider in Israel with a leading market position, offering a wide range of broadband and traditional voice services. Its broadband services include broadband Internet access with a suite of value-added services, specialized data services and server hosting, as well as new innovative services such as local telephony via voice over broadband and a WiFi network of hotspots across Israel. Traditional voice services include outgoing and incoming international telephony, hubbing, roaming and signaling and calling card services. 012 Smile.Communications services residential and business customers, as well as Israeli cellular operators and international communication services providers through its integrated multipurpose network, which allows it to provide services to almost all of the homes and businesses in Israel.
012 Smile is a 75.3 % owned subsidiary of Internet Gold – Golden Lines Ltd. (Nasdaq: IGLD) one of Israel’s leading communications groups with a major presence across all Internet-related sectors. In addition to 012 Smile, its 100% owned Smile.Media subsidiary manages a growing portfolio of Internet portals and e-Commerce sites. Internet Gold and 012 Smile are part of the Eurocom Communications Group. 012 Smile’s shares trade on the Nasdaq Global Market and on the Tel Aviv Stock Exchange.
For additional information about 012 Smile.Communications Ltd., please visit the Company’s investors’ site at http://www.012.net.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in 012 Smile.Communications’ filings with the Securities Exchange Commission. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.
RightNow Technologies (RNOW) Announces Third Quarter 2009 Financial Results
Oct. 22, 2009 (Business Wire) — RightNow® Technologies, Inc. (NASDAQ:RNOW) today announced results for the third quarter ended September 30, 2009. Total revenue in the third quarter of 2009 was $38.7 million, compared to $36.2 million in the third quarter of 2008. Recurring revenue in the third quarter of 2009 increased 15% to $29.7 million from $25.9 million in the third quarter of 2008. Net income in the third quarter of 2009 was $2.0 million, or $0.06 per share, compared to a net loss of $(1.4) million, or $(0.04) per share, in the third quarter of 2008. Non-GAAP net income in the third quarter of 2009, which excludes stock-based compensation charges of $1.8 million, was $3.8 million, or $0.12 per share, compared to non-GAAP net income of $85,000, or $0.00 per share, in the third quarter of 2008.
Revenue for the nine months ended September 30, 2009 was $111.1 million, compared to $104.4 million for the comparable period in 2008. Net income for the nine months ended September 30, 2009 was $3.3 million, or $0.10 per share, compared to a net loss of $(8.0) million, or $(0.24) per share, for the comparable period in 2008. Non-GAAP net income for the nine months ended September 30, 2009, which excludes stock-based compensation charges of $6.1 million, was $9.4 million, or $0.29 per share, compared to non-GAAP net loss of $(3.3) million, or $(0.10) per share, for the comparable period in 2008.
New, renewed and expanded customer relationships during the third quarter of 2009 included Epson, FICO, iRobot, Lucent-Alcatel, The Men’s Wearhouse, Nike, Photobox, TiVo, U.S. Air Force and Virgin Mobile.
“Our focus on delivering meaningful business results for large consumer organizations translated into another great quarter, both in terms of our financial results and our overall business,” stated Greg Gianforte, CEO and Founder. “As we head into our Annual Summit next week, we are excited to share our customers’ success, and demonstrate our vision to combine the social experience with our existing customer experience solutions.”
“We are pleased to report revenue and earnings ahead of guidance, which was driven by recurring revenue growth,” said Jeff Davison, CFO. “During the third quarter recurring revenue grew $2.3 million, or 9% sequentially over the second quarter of 2009. Through three quarters, we have generated $0.29 non-GAAP earnings per share, well ahead of our guidance.”
Guidance
- For the fourth quarter of 2009, revenue is expected to be in the range of approximately $39 to $40 million. Fourth quarter net income (loss) per share is expected to be in the range of $(0.01) to $0.01. Non-GAAP net income per share, which excludes stock-based compensation, is expected to be in the range of $0.04 to $0.06. This would equate to full year revenue of approximately $150 to $151 million, net income per share of $0.09 to $0.11 and non-GAAP net income per share of $0.33 to $0.35
Quarterly Conference Call
RightNow Technologies will discuss its quarterly results today via teleconference at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time.) To access the call, please dial 877-627-6585, or outside the U.S. 719-325-4805, at least five minutes prior to the 2:30 p.m. MT start time. A live webcast of the call will also be available at http://investor.rightnow.com/index.cfm under the Investor Webcasts menu. An audio replay will be available between 5:30 p.m. MT October 22, 2009 and 9:59 p.m. MT November 5, 2009 by calling 888-203-1112 or 719-457-0820, with passcode 3459047. The replay will also be available on our website at http://investor.rightnow.com.
About RightNow Technologies
RightNow (NASDAQ:RNOW) delivers the high-impact technology solutions and services organizations need to cost-efficiently deliver a consistently superior customer experience across their frontline service, sales and marketing touch-points. Approximately 1,900 corporations and government agencies worldwide depend on RightNow to achieve their strategic objectives and better meet the needs of those they serve. RightNow is headquartered in Bozeman, Montana. For more information, please visit www.rightnow.com.
RightNow is a registered trademark of RightNow Technologies, Inc. NASDAQ is a registered trademark of The NASDAQ Stock Market LLC.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words and include, but are not limited to, statements regarding projected results of operations and management’s future strategic plans. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
The risks and uncertainties referred to above include, but are not limited to, risks associated with general economic conditions; fluctuations in foreign currency exchange; our business model; our ability to develop or acquire, and gain market acceptance for, new products in a cost-effective and timely manner; the success of our efforts to integrate HiveLive’s people and processes, following our recent acquisition of that company; the risk of asset impairment associated with the acquisition of HiveLive; the gain or loss of key customers; competitive pressures; our ability to expand or contract operations and to grow profitability; fluctuations in our earnings as a result of the impact of stock-based compensation expense; interruptions or delays in our hosting operations; breaches of our security measures; our ability to protect our intellectual property from infringement, and to avoid infringing on the intellectual property rights of third parties; our ability to manage and expand our partner relationships; any unanticipated ambiguities in fair value accounting standards; and our ability to expand, retain and motivate our employees. Further information on potential factors that could affect our financial results is included in our most recent Annual Report on Form 10-K and quarterly reports of Form 10-Q, and in other filings with the Securities and Exchange Commission. The forward-looking statements in this release speak only as of the date they are made. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.
FRNOW
| RightNow Technologies, Inc.
Consolidated Balance Sheets (In thousands) (Unaudited) |
||||||||
| September 30, | Dec 31, | |||||||
| 2009 | 2008 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 32,388 | $ | 51,405 | ||||
| Short-term investments | 60,634 | 34,412 | ||||||
| Accounts receivable | 31,034 | 36,770 | ||||||
| Term receivables, current | 3,011 | 5,752 | ||||||
| Allowance for doubtful accounts | (1,701 | ) | (2,277 | ) | ||||
| Net receivables | 32,344 | 40,245 | ||||||
| Deferred commissions | 5,822 | 5,381 | ||||||
| Prepaid and other current assets | 2,867 | 2,150 | ||||||
| Total current assets | 134,055 | 133,593 | ||||||
| Long-term investments | — | 4,963 | ||||||
| Property and equipment, net | 9,781 | 10,141 | ||||||
| Term receivables, non-current | 1,447 | 3,547 | ||||||
| Intangible assets, net | 11,222 | 6,399 | ||||||
| Deferred commissions, non-current | 2,828 | 2,840 | ||||||
| Other | 941 | 854 | ||||||
| Total Assets | $ | 160,274 | $ | 162,337 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Accounts payable | $ | 4,593 | $ | 5,058 | ||||
| Commissions and bonuses payable | 4,838 | 5,665 | ||||||
| Other accrued liabilities | 12,008 | 11,165 | ||||||
| Current portion of long-term debt | 34 | 46 | ||||||
| Current portion of deferred revenue | 75,643 | 77,584 | ||||||
| Total current liabilities | 97,116 | 99,518 | ||||||
| Long-term debt, less current portion | — | 22 | ||||||
| Deferred revenue, net of current portion | 28,298 | 35,614 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 34 | 34 | ||||||
| Additional paid-in capital | 109,394 | 102,662 | ||||||
| Treasury stock, at cost | (15,007 | ) | (13,209 | ) | ||||
| Accumulated other comprehensive income | 1,395 | 1,916 | ||||||
| Accumulated deficit | (60,956 | ) | (64,220 | ) | ||||
| Total stockholders’ equity | 34,860 | 27,183 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 160,274 | $ | 162,337 | ||||
| RightNow Technologies, Inc.
Consolidated Operating Statements (In thousands, except per share amounts) (Unaudited) |
||||||||||||||||||
| Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||||
| Revenue: | ||||||||||||||||||
| Software, hosting and support | $ | 29,754 | $ | 25,956 | $ | 83,223 | $ | 76,085 | ||||||||||
| Professional services | 8,977 | 10,281 | 27,885 | 28,271 | ||||||||||||||
| Total revenue | 38,731 | 36,237 | 111,108 | 104,356 | ||||||||||||||
| Cost of revenue: | ||||||||||||||||||
| Software, hosting and support | 5,232 | 5,305 | 15,135 | 15,383 | ||||||||||||||
| Professional services | 6,365 | 8,133 | 19,719 | 23,228 | ||||||||||||||
| Total cost of revenue | 11,597 | 13,438 | 34,854 | 38,611 | ||||||||||||||
| Gross profit | 27,134 | 22,799 | 76,254 | 65,745 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Sales and marketing | 16,175 | 16,889 | 47,046 | 51,334 | ||||||||||||||
| Research and development | 5,100 | 4,671 | 14,907 | 13,664 | ||||||||||||||
| General and administrative | 4,018 | 3,215 | 11,671 | 10,621 | ||||||||||||||
| Total operating expenses | 25,293 | 24,775 | 73,624 | 75,619 | ||||||||||||||
| Income (loss) from operations | 1,841 | (1,976 | ) | 2,630 | (9,874 | ) | ||||||||||||
| Interest and other income, net | 342 | 552 | 1,094 | 2,009 | ||||||||||||||
| Income (loss) before income taxes | 2,183 | (1,424 | ) | 3,724 | (7,865 | ) | ||||||||||||
| Benefit (provision) for income taxes | (218 | ) | (23 | ) | (460 | ) | (110 | ) | ||||||||||
| Net income (loss) | $ | 1,965 | $ | (1,447 | ) | $ | 3,264 | $ | (7,975 | ) | ||||||||
| Net income (loss) per share: | ||||||||||||||||||
| Basic | $ | 0.06 | $ | (0.04 | ) | $ | 0.10 | $ | (0.24 | ) | ||||||||
| Diluted | $ | 0.06 | $ | (0.04 | ) | $ | 0.10 | $ | (0.24 | ) | ||||||||
| Shares used in the computation: | ||||||||||||||||||
| Basic | 31,733 | 33,640 | 31,731 | 33,585 | ||||||||||||||
| Diluted | 32,424 | 33,640 | 32,249 | 33,585 | ||||||||||||||
| Supplemental information of stock-based compensation expense included in: | ||||||||||||||||||
| Cost of software, hosting and support | $ | 120 | $ | 87 | $ | 358 | $ | 243 | ||||||||||
| Cost of professional services | 138 | 158 | 480 | 476 | ||||||||||||||
| Sales and marketing | 761 | 738 | 2,335 | 1,871 | ||||||||||||||
| Research and development | 285 | 252 | 924 | 729 | ||||||||||||||
| General and administrative | 548 | 297 | 2,007 | 1,376 | ||||||||||||||
| Total stock-based compensation | $ | 1,852 | $ | 1,532 | $ | 6,104 | $ | 4,695 | ||||||||||
| RightNow Technologies, Inc.
Consolidated Statements of Cash Flow (In thousands) (Unaudited) |
||||||||||||||||
| Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Operating activities: | ||||||||||||||||
| Net income (loss) | $ | 1,965 | $ | (1,447 | ) | $ | 3,264 | $ | (7,975 | ) | ||||||
| Non-cash adjustments: | ||||||||||||||||
| Depreciation and amortization | 1,797 | 1,956 | 5,410 | 5,866 | ||||||||||||
| Stock-based compensation | 1,852 | 1,532 | 6,104 | 4,695 | ||||||||||||
| Provision for losses on accounts receivable | 30 | 64 | 117 | 179 | ||||||||||||
| Changes in operating accounts: | ||||||||||||||||
| Receivables | 2,333 | 1,143 | 10,731 | 12,652 | ||||||||||||
| Prepaid expenses | (628 | ) | (211 | ) | (735 | ) | (654 | ) | ||||||||
| Deferred commissions | (65 | ) | (957 | ) | (142 | ) | (2,170 | ) | ||||||||
| Accounts payable | (1,397 | ) | (523 | ) | (567 | ) | 1,061 | |||||||||
| Commissions and bonuses payable | (132 | ) | 166 | (941 | ) | (615 | ) | |||||||||
| Other accrued liabilities | (30 | ) | 565 | 415 | 1,016 | |||||||||||
| Deferred revenue | (569 | ) | (3,566 | ) | (12,036 | ) | (2,999 | ) | ||||||||
| Other | (247 | ) | (52 | ) | 256 | (142 | ) | |||||||||
| Cash provided (used) by operating activities | 4,909 | (1,330 | ) | 11,876 | 10,914 | |||||||||||
| Investing activities: | ||||||||||||||||
| Net change in short-term investments | (13,081 | ) | 2,218 | (21,391 | ) | 996 | ||||||||||
| Acquisition of property and equipment | (1,243 | ) | (1,311 | ) | (3,673 | ) | (4,344 | ) | ||||||||
| Intangible asset additions | (144 | ) | — | (244 | ) | — | ||||||||||
| Business acquisitions | (5,906 | ) | — | (5,906 | ) | — | ||||||||||
| Other | 3 | 2 | 8 | (25 | ) | |||||||||||
| Cash provided (used) by investing activities | (20,371 | ) | 909 | (31,206 | ) | (3,373 | ) | |||||||||
| Financing activities: | ||||||||||||||||
| Proceeds from issuance of common stock | 167 | 618 | 396 | 1,266 | ||||||||||||
| Excess tax benefit of stock options exercised | 95 | — | 232 | — | ||||||||||||
| Common stock repurchased | — | — | (1,798 | ) | — | |||||||||||
| Payments on long-term debt | (12 | ) | (11 | ) | (35 | ) | (33 | ) | ||||||||
| Cash provided (used) by financing activities | 250 | 607 | (1,205 | ) | 1,233 | |||||||||||
| Effect of foreign exchange rates on cash and cash equivalents | 613 | (1,822 | ) | 1,518 | (1,310 | ) | ||||||||||
| Increase (decrease) in cash and cash equivalents | (14,599 | ) | (1,636 | ) | (19,017 | ) | 7,464 | |||||||||
| Cash and cash equivalents at beginning of period | 46,987 | 52,781 | 51,405 | 43,681 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 32,388 | $ | 51,145 | $ | 32,388 | $ | 51,145 | ||||||||
| RightNow Technologies, Inc.
Reconciliation of Non-GAAP Measurements (Amounts in thousands, except per share amounts) (Unaudited) Diluted Earnings Per Share Reconciliation |
||||||||||||||
| Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||
| Net income (loss) as reported | $ | 1,965 | $ | (1,447 | ) | $ | 3,264 | $ | (7,975 | ) | ||||
| Add stock-based compensation (“SBC”) | 1,852 | 1,532 | 6,104 | 4,695 | ||||||||||
| Net income (loss) before SBC | $ | 3,817 | $ | 85 | $ | 9,368 | $ | (3,280 | ) | |||||
| Net income (loss) per share, as reported (basic and diluted) | $ | 0.06 | $ | (0.04 | ) | $ | 0.10 | $ | (0.24 | ) | ||||
| Net income (loss) per share, before SBC (basic) | $ | 0.12 | $ | 0.00 | $ | 0.30 | $ | (0.10 | ) | |||||
| Net income (loss) per share, before SBC (diluted) | $ | 0.12 | $ | 0.00 | $ | 0.29 | $ | (0.10 | ) | |||||
| Shares outstanding (basic), as reported | 31,733 | 33,640 | 31,731 | 33,585 | ||||||||||
| Shares outstanding (diluted), as reported | 32,424 | 34,432 | 32,249 | 33,585 | ||||||||||
| Forward-Looking Guidance Reconciliation | ||||||||||||||||
| GAAP Guidance | Non-GAAP Guidance | |||||||||||||||
| From | To | Adjustment | From | To | ||||||||||||
| Fourth quarter ending December 31, 2009 | ||||||||||||||||
| Net income | $ | (400 | ) | $ | 300 | $ | 1,800 | [a] | $ | 1,400 | $ | 2,100 | ||||
| Net income (loss) per share | $ | (0.01 | ) | $ | 0.01 | $ | 0.04 | $ | 0.06 | |||||||
| Shares (diluted) | 32,000 | 32,500 | 32,500 | 32,500 | ||||||||||||
| Year ending December 31, 2009 | ||||||||||||||||
| Net income | $ | 2,864 | $ | 3,564 | $ | 7,904 | [a] | $ | 10,768 | $ | 11,468 | |||||
| Net income per share | $ | 0.09 | $ | 0.11 | $ | 0.33 | $ | 0.35 | ||||||||
| Shares (diluted) | 32,500 | 32,500 | 32,500 | 32,500 | ||||||||||||
[a] Estimated stock-based compensation expense to be recorded for the periods indicated in accordance with FASB Accounting Standards Codification, Topic 718, Compensation-Stock Compensation, which is effective for periods beginning January 1, 2006.
Healthways (HWAY) Reports Third-Quarter Earnings of $0.26 Per Diluted Share
Oct. 22, 2009 (Business Wire) — Healthways, Inc. (NASDAQ: HWAY) today announced financial results for the third quarter and nine months ended September 30, 2009. Total revenues for the quarter were $181.6 million compared with revenues of $187.4 million for the three months ended September 30, 2008. Net income for the third quarter of 2009 was $8.8 million, or $0.26 per diluted share, which was two cents above the Company’s earnings guidance range. Net income for the third quarter of 2008 was $15.6 million, or $0.45 per diluted share.
| COMPARISON OF COMPONENTS OF NET INCOME PER DILUTED SHARE | ||||||||||||
| Three Months Ended September 30, | ||||||||||||
| 2009 | 2009 | 2008 | ||||||||||
| Actual | Guidance | Actual | ||||||||||
| Domestic | $ | 0.29 | $ | 0.22 – 0.25 | $ | 0.47 | ||||||
| International | (0.03 | ) | (0.02)-(0.01 | ) | (0.02 | ) | ||||||
| Net income per diluted share | $ | 0.26 | $ | 0.20 – 0.24 | $ | 0.45 | ||||||
Ben R. Leedle, Jr., chief executive officer of Healthways, commented, “The performance of our domestic operations once again enabled us to exceed our revenue and earnings expectations for the quarter. These better than expected results for the third quarter were driven primarily by the timing of performance-based revenue recognition, as certain performance targets were measured and achieved earlier than forecast, and by higher than projected billed lives. The strong earnings performance by our domestic operations was slightly offset by higher than anticipated net costs in our international operations, primarily related to the start-up of the Australian contract with Hospitals Contribution Fund.
“The Company’s cash flow from operations was a strong $42.1 million for the third quarter. In addition to investing approximately $13.4 million in capital expenditures during the quarter, we also reduced our debt by $34.1 million. This reduction contributed to a debt to EBITDA ratio as calculated under our credit agreement of 2.0 at the end of the quarter, which is the low end of the forecasted range for 2009. Combined with our debt reduction during the first six months of the year, our total debt to capitalization has improved 410 basis points to 42.1% at the end of the third quarter from 46.2% at December 31, 2008.
“Since the beginning of the third quarter, we have signed new, expanded or extended contracts that reflect demand across the breadth of our solutions from new and existing Healthways customers, representing regional Blue Cross Blue Shield health plans, state governments, and Fortune 100 employers. Under these agreements, we will provide our chronic condition management, Silver Sneakers®, QuitNet® comprehensive smoking cessation, lifestyle health coaching, and/or WholeHealth solutions.
“Among these customers, we are pleased to report today a significant new agreement that expands our long-term relationship with Health Care Service Corporation (HCSC), one of the nation’s largest health plans. Under the terms of this multi-year agreement, Healthways will make its national fitness center network available to approximately 6.7 million of HCSC’s commercial members. With this unique business model and related services, we have created a new consumer solution designed to support healthy behaviors for individuals in a commercial population. This agreement is a further example of how our extensive infrastructure allows for the rapid creation of innovative solutions that differentiate Healthways competitively in the commercial market, just as Silver Sneakers has done in the Medicare Advantage market.”
Financial Guidance
Based on the performance of the Company’s domestic operations for the first nine months of 2009, Healthways today increased its guidance for 2009 revenues to a range of $708 million to $717 million from the previous range of $685 million to $700 million. This revision includes a new range for revenues from domestic operations of $691 million to $697 million, up from $668 million to $680 million previously. Guidance for 2009 revenues from international operations remains unchanged in a range of $17 million to $20 million.
| COMPARISON OF COMPONENTS OF REVENUES FOR THE YEAR ENDING
DECEMBER 31, 2009 (GUIDANCE) AND THE YEAR ENDED DECEMBER 31, 2008 |
||||||
| (Dollars in millions) | ||||||
| Twelve Months | ||||||
| Ending | Ended | |||||
| Dec. 31, 2009 | Dec. 31, 2008 | |||||
| (Guidance) | (Actual) | |||||
| Domestic | $ | 691.0 – 697.0 | $ | 731.3 | ||
| International | 17.0 – 20.0 | 15.4 | ||||
| Total Company | $ | 708.0 – 717.0 | $ | 746.7 | ||
Due to the anticipated increase in 2009 revenues, Healthways also revised its guidance for 2009 adjusted net income per diluted share, which excludes previously announced lawsuit settlement costs of $0.73 per diluted share, to a range of $1.01 to $1.05 compared with the previous range of $0.97 to $1.05. This new earnings guidance also reflects the expected $0.02 per diluted share net cost impact of the HealthHonors acquisition announced last week. Guidance for 2009 adjusted net income per diluted share includes a new range for domestic operations of $1.13 to $1.15 compared with $1.07 to $1.13 previously, while the net cost impact from international operations has increased to a range of $0.10 to $0.12 from the previous range of $0.08 to $0.10.
The Company’s guidance for net income per diluted share for the fourth quarter of 2009 is in a range of $0.19 to $0.23. Domestic operations are expected to produce net income per diluted share of $0.20 to $0.22, including the effect of the HealthHonors acquisition. Fourth-quarter 2009 results from international operations are expected to be in a range of $0.01 net cost per diluted share to $0.01 net income per diluted share.
| COMPARISON OF COMPONENTS OF NET INCOME PER DILUTED SHARE | ||||||||||||
| See page 8 for a reconciliation of GAAP and non-GAAP results | ||||||||||||
| Twelve Months | Three Months | |||||||||||
| Ending | Ended | Ending | ||||||||||
| Dec. 31, 2009 | Dec. 31, 2008 | Dec. 31, 2009 | ||||||||||
| (Guidance) | (Actual) | (Guidance) | ||||||||||
| Domestic, excluding lawsuit settlement costs | $ | 1.13 – 1.15 | $ | 1.20 | $ | 0.20 – 0.22 | ||||||
| International | (0.12)-(0.10 | ) | (0.10 | ) | (0.01)- 0.01 | |||||||
| Adjusted net income per diluted share | 1.01 – 1.05 | 1.10 | 0.19 – 0.23 | |||||||||
| Lawsuit settlement costs | (0.73 | ) | – | – | ||||||||
| Net income per diluted share | $ | 0.28 – 0.32 | $ | 1.10 | $ | 0.19 – 0.23 | ||||||
Summary
Mr. Leedle concluded, “We are pleased by the better than expected financial performance of our domestic operations for the third quarter and throughout 2009 and by our continued contracting momentum. We are also building our potential for future growth through the expansion of our value proposition as evidenced by our recently announced third-quarter WholeHealth contract with a Fortune 100 company and our new contract with HCSC.
“While encouraged by the Company’s progress, we remain cautious in our near-term outlook because of uncertainty about the economic environment and the possible impact of both the high domestic unemployment rate and potential healthcare reform on our customers. Given today’s economic environment, we believe the timeframe for sustained and significant improvement in the rate of unemployment is still unclear and that the possibility remains for further attrition. Despite our caution, we believe we are well positioned to continue managing through the current environment, with substantial cash flow from operations, a strengthening financial position and ample liquidity.
“Longer-term, we remain confident of the Company’s prospects for further substantial growth. In both the U.S and internationally, health plans, employers and governments are increasingly focused on the potential for reducing the future growth of healthcare costs by reducing health risks and preventing or delaying disease onset and progression. Healthways has been a leading pioneer in the development and application of these strategies with a proven record that healthier people cost less. With solutions demonstrated to be the most comprehensive, integrated and scalable in the market, we are well positioned to leverage this increased focus to expand the populations we serve and, through successful performance, to create further shareholder value.”
Conference Call
Healthways will hold a conference call to discuss this release today at 5:00 p.m. Eastern Time. Investors will have the opportunity to listen to the conference call live over the Internet by going to www.healthways.com and clicking Investor Relations, or by going to www.earnings.com, at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a telephonic replay will be available for one week at 719-457-0820, code 5006460, and the replay will also be available on the Company’s web site for the next 12 months.
Safe Harbor Provisions
This press release contains forward-looking statements, including our guidance and financial expectations for future periods, which are based upon current expectations and involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical statements of fact and those regarding the intent, belief or expectations of the Company, including, without limitation, all statements regarding the Company’s future earnings and results of operations. In order for the Company to utilize the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, investors are hereby cautioned that the following important factors, among others, may affect these forward-looking statements. Consequently, actual operations and results may differ materially from those expressed in these forward-looking statements. The important factors include but are not limited to:
- the Company’s ability to sign and implement new contracts;
- the Company’s ability to accurately forecast performance in order to provide forward-looking guidance;
- the Company’s ability to reach mutual agreement with the Centers for Medicare and Medicaid Services (CMS) with respect to the Company’s results under Phase I of Medicare Health Support;
- the Company’s ability to accurately forecast the costs necessary to establish a presence in international markets;
- the risks associated with foreign currency exchange rate fluctuations;
- the Company’s ability to achieve estimated annualized revenue in backlog;
- the ability of the Company’s customers to provide timely and accurate data that is essential to the operation and measurement of the Company’s performance;
- the risks associated with changes in macroeconomic conditions;
- the Company’s ability to integrate acquired businesses or technologies into the Company’s business;
- the Company’s ability to renew and/or maintain contracts with its customers under existing terms or restructure these contracts on terms that would not have a material negative impact on the Company’s results of operations;
- the Company’s ability to obtain adequate financing to provide the capital that may be necessary to support the Company’s operations and to support or guarantee the Company’s performance under new contracts;
- the impact of litigation involving the Company and/or its subsidiaries;
- the impact of future state, federal, and international health care and other applicable legislation and regulations, including health care reform, on the Company’s ability to deliver its services and on the financial health of the Company’s customers and their willingness to purchase the Company’s services; and
- other risks detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2008, Item 1A of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, and other filings with the Securities and Exchange Commission.
The Company undertakes no obligation to update or revise any such forward-looking statements.
About Healthways
Healthways is the leading provider of specialized, comprehensive solutions to help millions of people maintain or improve their health and well-being and, as a result, reduce overall costs. Healthways’ solutions are designed to help healthy individuals stay healthy, mitigate and slow the progression of disease associated with family or lifestyle risk factors and promote the best possible health for those already affected by disease. Our proven, evidence-based programs provide highly specific and personalized interventions for each individual in a population, irrespective of age or health status, and are delivered to consumers by phone, mail, internet and face-to-face interactions, both domestically and internationally. Healthways also provides a national, fully accredited complementary and alternative Health Provider Network and a national Fitness Center Network, offering convenient access to individuals who seek health services outside of, and in conjunction with, the traditional healthcare system. For more information, please visit www.healthways.com.
| HEALTHWAYS, INC. | |||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
| (Unaudited) | |||||||||||||
| (In thousands, except per share data) | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||
| Revenues | $ | 181,642 | $ | 187,448 | $ | 542,214 | $ | 561,432 | |||||
| Cost of services (exclusive of depreciation and amortization of $8,517, $9,316, $25,843, and $27,116, respectively, included below) | 132,498 | 125,628 | 393,097 | 381,884 | |||||||||
| Selling, general & administrative expenses | 17,816 | 17,493 | 55,050 | 55,156 | |||||||||
| Depreciation and amortization | 11,956 | 12,949 | 36,155 | 37,813 | |||||||||
| Operating income | 19,372 | 31,378 | 57,912 | 86,579 | |||||||||
| Gain on sale of investment | — | — | (2,581 | ) | — | ||||||||
| Interest expense | 3,888 | 5,366 | 12,091 | 15,529 | |||||||||
| Legal settlement and related costs | — | — | 39,956 | — | |||||||||
| Income before income taxes | 15,484 | 26,012 | 8,446 | 71,050 | |||||||||
| Income tax expense | 6,682 | 10,389 | 5,582 | 28,900 | |||||||||
| Net income | $ | 8,802 | $ | 15,623 | $ | 2,864 | $ | 42,150 | |||||
| Earnings per share: | |||||||||||||
| Basic | $ | 0.26 | $ | 0.46 | $ | 0.08 | $ | 1.22 | |||||
| Diluted | $ | 0.26 | $ | 0.45 | $ | 0.08 | $ | 1.17 | |||||
| Weighted average common shares and equivalents: | |||||||||||||
| Basic | 33,745 | 33,599 | 33,701 | 34,474 | |||||||||
| Diluted | 34,481 | 34,567 | 34,232 | 35,891 | |||||||||
| Healthways, Inc. | ||||
| Statistical Information | ||||
| (Unaudited) | ||||
| September 30, | September 30, | |||
| 2009 | 2008 | |||
| Operating Statistics | ||||
| Domestic commercial available lives | 196,100,000 | 192,500,000 | ||
| Domestic commercial billed lives | 35,900,000 | 31,700,000 | ||
| Healthways, Inc. | |||||
| Reconciliation of Non-GAAP Measures to GAAP Measures | |||||
| (Unaudited) | |||||
| Reconciliation of Domestic EPS Guidance Excluding Lawsuit Settlement Costs and
Reconciliation of Adjusted EPS Guidance to EPS Guidance, GAAP Basis |
|||||
| Twelve Months Ending | |||||
| December 31, 2009 | |||||
| Domestic EPS guidance excluding lawsuit settlement costs (1) | $ | 1.13 – 1.15 | |||
| International EPS (loss) guidance | (0.12) – (0.10 | ) | |||
| Adjusted EPS guidance (2) | $ | 1.01– 1.05 | |||
| EPS (loss) attributable to lawsuit settlement costs (3) | (0.73 | ) | |||
| EPS guidance, GAAP basis | $ | 0.28 – 0.32 | |||
(1) Domestic EPS guidance excluding lawsuit settlement costs is a non-GAAP financial measure. The Company excludes EPS (loss) attributable to lawsuit settlement costs from this measure because of its comparability to the Company’s historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider Domestic EPS guidance excluding lawsuit settlement costs in isolation or as a substitute for EPS guidance determined in accordance with accounting principles generally accepted in the United States.
(2) Adjusted EPS guidance is a non-GAAP financial measure. The Company excludes EPS (loss) attributable to lawsuit settlement costs from this measure because of its comparability to the Company’s historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider Adjusted EPS guidance in isolation or as a substitute for EPS guidance determined in accordance with accounting principles generally accepted in the United States.
(3) EPS (loss) attributable to lawsuit settlement costs consists of pre-tax charges of $40.0 million related to the Company’s settlement of a qui tam lawsuit.
| HEALTHWAYS, INC. | |||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||
| (Unaudited) | |||||||||
| (In thousands) | |||||||||
| ASSETS | |||||||||
| September 30, | December 31, | ||||||||
| 2009 | 2008 | ||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 2,309 | $ | 5,157 | |||||
| Accounts receivable, net | 121,924 | 115,108 | |||||||
| Prepaid expenses | 11,325 | 13,479 | |||||||
| Other current assets | 5,618 | 3,810 | |||||||
| Income taxes receivable | 8,415 | — | |||||||
| Deferred tax asset | 26,404 | 30,488 | |||||||
| Total current assets | 175,995 | 168,042 | |||||||
| Property and equipment: | |||||||||
| Leasehold improvements | 41,270 | 34,635 | |||||||
| Computer equipment and related software | 148,212 | 138,369 | |||||||
| Furniture and office equipment | 29,006 | 29,610 | |||||||
| Capital projects in process | 32,577 | 17,462 | |||||||
| 251,065 | 220,076 | ||||||||
| Less accumulated depreciation | (132,841 | ) | (108,635 | ) | |||||
| 118,224 | 111,441 | ||||||||
| Other assets | 7,063 | 18,089 | |||||||
| Customer contracts, net | 28,652 | 32,715 | |||||||
| Other intangible assets, net | 66,563 | 68,207 | |||||||
| Goodwill, net | 484,584 | 484,596 | |||||||
| Total assets | $ | 881,081 | $ | 883,090 | |||||
| HEALTHWAYS, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands, except share and per share data) | ||||||||
| (Unaudited) | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| September 30, | December 31, | |||||||
| 2009 | 2008 | |||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 22,399 | $ | 21,633 | ||||
| Accrued salaries and benefits | 65,168 | 33,161 | ||||||
| Accrued liabilities | 26,873 | 26,294 | ||||||
| Deferred revenue | 5,060 | 6,904 | ||||||
| Contract billings in excess of earned revenue | 75,099 | 71,406 | ||||||
| Income taxes payable | — | 8,034 | ||||||
| Current portion of long-term debt | 2,657 | 2,035 | ||||||
| Current portion of long-term liabilities | 4,371 | 4,609 | ||||||
| Total current liabilities | 201,627 | 174,076 | ||||||
| Long-term debt | 263,852 | 304,372 | ||||||
| Long-term deferred tax liability | 10,898 | 8,073 | ||||||
| Other long-term liabilities | 38,181 | 39,533 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock | ||||||||
| $.001 par value, 5,000,000 shares authorized, none outstanding | — | — | ||||||
| Common stock | ||||||||
| $.001 par value, 120,000,000 shares authorized, 33,790,729 and 33,648,976 shares outstanding | 34 | 34 | ||||||
| Additional paid-in capital | 220,060 | 213,461 | ||||||
| Retained earnings | 151,370 | 148,506 | ||||||
| Accumulated other comprehensive loss | (4,941 | ) | (4,965 | ) | ||||
| Total stockholders’ equity | 366,523 | 357,036 | ||||||
| Total liabilities and stockholders’ equity | $ | 881,081 | $ | 883,090 | ||||
| HEALTHWAYS, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| (In thousands) | ||||||||
| Nine Months EndedSeptember 30, | ||||||||
| 2009 | 2008 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 2,864 | $ | 42,150 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities, net of business acquisitions: | ||||||||
| Depreciation and amortization | 36,155 | 37,813 | ||||||
| Amortization of deferred loan costs | 1,128 | 881 | ||||||
| Gain on sale of investment | (2,581 | ) | — | |||||
| Loss on disposal of property and equipment | 955 | 1,346 | ||||||
| Share-based employee compensation expense | 7,863 | 12,714 | ||||||
| Excess tax benefits from share-based payment arrangements | (162 | ) | (3,487 | ) | ||||
| Increase in accounts receivable, net | (6,776 | ) | (19,049 | ) | ||||
| (Increase) decrease in other current assets | (5,490 | ) | 1,926 | |||||
| Increase in accounts payable | 4,462 | 2,968 | ||||||
| Increase in accrued salaries and benefits | 31,965 | 15,640 | ||||||
| (Decrease) increase in other current liabilities | (3,667 | ) | 2,341 | |||||
| Deferred income taxes | 5,339 | (7,727 | ) | |||||
| Other | 3,479 | 8,002 | ||||||
| Increase in other assets | (454 | ) | (1,581 | ) | ||||
| Payments on other long-term liabilities | (2,935 | ) | (2,156 | ) | ||||
| Net cash flows provided by operating activities | 72,145 | 91,781 | ||||||
| Cash flows from investing activities: | ||||||||
| Acquisition of property and equipment | (35,638 | ) | (62,026 | ) | ||||
| Sale of investment | 11,626 | — | ||||||
| Change in restricted cash | (538 | ) | — | |||||
| Other | (3,655 | ) | (4,543 | ) | ||||
| Net cash flows used in investing activities | (28,205 | ) | (66,569 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of long-term debt | 283,900 | 87,287 | ||||||
| Payments of long-term debt | (325,826 | ) | (42,965 | ) | ||||
| Deferred loan costs | (784 | ) | — | |||||
| Exercise of stock options | 265 | 3,668 | ||||||
| Excess tax benefits from share-based payment arrangements | 162 | 3,487 | ||||||
| Repurchases of common stock | — | (94,208 | ) | |||||
| Repurchase of stock options | (736 | ) | — | |||||
| Change in outstanding checks and other | (3,982 | ) | — | |||||
| Net cash flows used in financing activities | (47,001 | ) | (42,731 | ) | ||||
| Effect of exchange rate changes on cash | 213 | (76 | ) | |||||
| Net decrease in cash and cash equivalents | (2,848 | ) | (17,595 | ) | ||||
| Cash and cash equivalents, beginning of period | 5,157 | 40,515 | ||||||
| Cash and cash equivalents, end of period | $ | 2,309 | $ | 22,920 | ||||
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