Geac Announces Improved
Third Quarter Performance
Toronto, ON
(March 13, 2001)
Geac FlashNEWS: Mobile
Copy And Picture
Transmission With a PDA
Tampa, FL
(March 9, 2001)
Arrangement With Banking
Syndicate Extended to April
4th
Toronto, ON
(March 8, 2001)
Geac Announces Improved Third Quarter Performance
Operating profitability increases post-restructuring
Adjusted EPS from continuing operations reaches $0.50 per fully diluted share
Carrying value of investment in certain subsidiaries is written down
TORONTO, Ontario – March 13, 2001 – Geac Computer Corporation Limited (TSE: GAC) announced today
the results for the three months ended January 31, 2001. Revenues from continuing operations were
$218.0 million during the third quarter compared with $278.3 million during the third quarter last year, and
$203.8 million in the second quarter of the current fiscal year. For the nine months ended January 31, 2001
revenues from continuing operations were $634.2 million compared with $708.2 million in the same period
in fiscal 2000. Revenues in both periods exclude sales made from the Banking Systems business that was
sold on July 13, 2000.
Adjusted net income from continuing operations (net loss excluding the amortization and reduction in
carrying value of intangible assets) for the third quarter was $33.5 million, or $0.50 per fully diluted share,
compared to adjusted net income from continuing operations of $39.5 million, or $0.61 per fully diluted
share during the same quarter of the preceding year and adjusted net loss from continuing operations of
$16.8 million, or $0.27 per share (after unusual items amounting to $0.32 per share net of tax) during the
second quarter. Included in the third quarter’s adjusted net income from continuing operations is a net
amount of $3.6 million (or $0.05 per fully diluted share) resulting from the favourable settlement of a dispute
with a third party.
"Last quarter, we committed to improve operational and financial performance and to strengthen our cash
position," said John E. Caldwell, President and Chief Executive Officer. "The restructuring and cost control
initiatives implemented over the past months contributed to measurably improved results. Going forward,
further initiatives will be implemented in a number of our businesses to further focus on our customers and
to improve our profitability."
"Not only has adjusted net income from continuing operations significantly increased compared with the
second quarter, we also generated $38.6 million in cash flow from operations. At the end of the third quarter,
the Company had a cash balance of $73.3 million. Since the end of the quarter, $35 million has been used
to repay bank indebtedness. In aggregate, since mid-December, our bank indebtedness has been reduced
from approximately $99 million to approximately $56 million," added Mr. Caldwell. "Operationally, the
Company performed well. We successfully completed and launched SmartStream 6.5 as well as a number
of new products. It was also a strong quarter for customer renewal of maintenance support contracts."
Following a review of the carrying value of each of its businesses, Geac wrote down the value of acquired
software and goodwill associated with certain past acquisitions. A net charge of $211.4 million, or $3.41 per
share net of income taxes, was recorded in the third quarter for this purpose. This reduction in carrying value
relates primarily to the 1999 purchase of JBA Holdings plc. Including this adjustment to carrying value, the
net loss for the quarter was $218.9 million, or $3.53 per share, compared with net income of $0.9 million, or
$0.01 per fully diluted share during the same period last year.
For the first nine months of the current year, adjusted net income from continuing operations was $1.66 per
fully diluted share compared with $1.89 in the same period of the preceding year. The current year results
include a gain of $1.40 per fully diluted share net of income taxes resulting from the sale of Geac’s Banking
Systems business during the first quarter.
The process to review strategic alternatives to enhance shareholder value is continuing, whereby Geac will
give consideration to potential transactions involving part or all of its business. "While this process is taking
longer than originally anticipated, we expect to update shareholders during the fourth quarter," Mr. Caldwell
added.
The Company’s 364-day revolving credit facility expired on December 22, 2000. Since that time, Geac and its
banking syndicate have been in discussions, which have been extended to April 4th. "Over the next several
months, our principal objective is to conclude a definitive arrangement with our banks for the repayment of
the indebtedness and to obtain alternate financing," commented Mr. Caldwell.
"Geac will increasingly focus on the industry sectors where its market presence and portfolio of solutions
can most rapidly generate profits and deliver the best value to our customers," Mr. Caldwell continued. "We
will apply our efforts to improving our performance, with an emphasis on the higher margin enterprise
software marketplace, and to build upon the exciting opportunities in the real estate software sector through
our Interealty division."
Financial Highlights (unaudited financial statements follow)
Three Months
Ended Jan. 31
Nine Months Ended
Jan. 31
2001
2000
2001
2000
(millions, except per share amounts)
Sales
$218.0
$278.3
$634.2
$708.2
(Loss) Income from Continuing Operations
Before Unusual Items and Income Taxes
($3.5)
$4.1
($84.3)
$78.1
- on a fully diluted per share basis
($0.06)
$0.06
($1.36)
$1.17
Adjusted Income from Continuing Operations
$33.5
$39.5
$13.9
$120.5
- on a fully diluted per share basis
$0.50
$0.61
$0.22
$1.86
Net (Loss) Income from Continuing Operations
($222.1)
$1.4
($321.8)
$57.1
- on a fully diluted per share basis
($3.58)
$0.02
($5.18)
$0.91
Included above are:
Unusual Items
$215.7
$246.1
Income Taxes Recovery
$4.6
$15.4
- net of income taxes recovery, on a fully diluted per share
basis
($3.41)
($3.72)
Gain on Divestiture of Discontinued Operations, net of Income
Taxes
$3.1
$96.0
- net of income taxes, on a fully diluted per share basis
$0.05
$1.40
Revenue Segmentation (unaudited)
(millions)
Three Months Ended
January 31
Nine Months Ended
January 31
2001
2000
2001
2000
EAS
License
$23
$28
$47
$58
Professional Services and Maintenance
$119
$160
$361
$388
Other
$18
$21
$43
$40
$160
$209
$451
$486
ISA
License
$5
$9
$17
$36
Professional Services and Maintenance
$41
$38
$126
$120
Other
$12
$22
$40
$66
$58
$69
$183
$222
Total
$218
$278
$634
$708
Geographic
Americas
$121
$154
$360
$442
Asia
$16
$24
$52
$75
Europe
$81
$100
$222
$191
Total
$218
$278
$634
$708
*EAS – Enterprise Applications Solutions
*ISA – Industry Specific Applications
Please click here to view the Geac Third Quarter 2001 Financials
Geac Computer Corporation Limited (TSE: GAC) is a provider of mission critical software and systems
solutions to corporations around the world. Geac solutions include cross-industry enterprise business
applications for financial administration and human resources functions, and enterprise resource planning
applications for manufacturing, distribution, and supply chain management. Geac also provides industry
applications to the hospitality, property, construction and publishing marketplaces, as well as a wide range
of applications for libraries, government administration and public safety agencies. Headquartered in
Toronto, Canada, Geac ranks as one of the world’s largest software companies. Further information is
available on the World Wide Web at geac.com, or through e-mail at info@geac.com.
This press release contains forward-looking statements based on current expectations. These
forward-looking statements entail various risks and uncertainties that could cause actual results to differ
materially from those reflected in these forward-looking statements. Risks and uncertainties about the
Company’s business are more fully discussed in Management Discussion and Analysis published in the
Company’s annual report.
- 30 -
For more information, please contact:
Michel Gélinas, Vice President, Investor Relations
Tel: (416) 642-1960
Fax: (416) 642-8454
Email: m.gelinas@geac.com
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