News release
Microforum continues record performance with 44% third quarter revenue increase over prior year
TORONTO, Jan. 12 /CNW-PRN/ - Microforum Inc. (TSE:MCF - news) reported revenues of $13,079,417 for its third fiscal quarter (FY2000) ended November 30, 1999, representing an increase of 44% from the same period of the previous year and a 20% increase over the second quarter ended August 31, 1999. The Company attributed 8% of the quarter over quarter revenue growth to the acquisition of Frameworks Communications Inc. and Two Door Communications Inc. Professional services gross margins from the Company's Internet and Multimedia segments were 70%, versus 71% in the second quarter, 58% in the first quarter and 39% in the same period last year. The Company's EBITDA for the third quarter of $1,233,529 increased 453% over the preceding quarter and improved significantly from a loss of ($2,727,534) in the same period of the previous year. The Company reported net income of $98,729 during the third quarter compared to a net loss per share of ($3,082,568) for the same period last year.
Third Quarter November 30
1999 1998
Revenue $13,079,417 $9,059,212
EBITDA $1,233,529 ($2,727,534)
Net income (loss) $98,729 ($3,082,568)
Basic EPS $0.01 ($0.18)
Nine Months to November 30
1999 1998
Revenue $33,677,860 $22,374,449
EBITDA $1,634,262 ($2,706,976)
Net loss ($249,432) ($3,390,257)
Basic EPS ($0.01) ($0.20)
Issued and outstanding shares 33,994,050 17,733,996
During the third quarter, total headcount grew to 301 employees, up from 264 at the end of second fiscal quarter and up significantly from 227 at the end of the same period a year ago. Headcount for the Internet and Multimedia segment grew to 139 employees, up from 116 at the end of the second fiscal quarter and up significantly from 55 at the end of the equivalent nine month period of the previous year. These figures include the recent acquisitions of Frameworks Communications Inc. and Two Door Communications Inc. both of which were completed in December 1999, which contributed an additional 30 employees, 18 of which were in the Internet and Multimedia segment.
On November 8, 1999, the Company's registration statement with the Securities and Exchange Commission (SEC) in the United States was declared effective. On November 9, 1999, the Company opened a production office in San Francisco, CA to initially serve its existing client Petopia.com and as base to expand its sales efforts in the U.S. As a result of the acquisition of Frameworks Communications Inc., the Company also has a sales office located in Chicago, IL.
Subsequent to the end of the third quarter, the Company announced the acquisitions of Frameworks Communications Inc. on December 8, 1999 and Two Door Communications Inc. on December 20, 1999. On December 8, 1999, the Company announced that it has entered into a letter of intent to acquire Relational Solutions Incorporated.
During the third quarter, Microforum secured new contracts with clients such as Petopia.com, Dumex Medical, Micro Modelling Associates (MMA), ValueVision as well as a digital interactive CD-ROM based production contract with Bombardier. Subsequent to the end of the third quarter, the Company announced an e-commerce contract with Chapters Online.
``We are pleased with this quarter's results and in particular the increase in revenue and EBITDA figures,' said Howard Pearl, President and CEO of Microforum. ``We are continuing to execute according to our business plan by increasing our revenues through strategic acquisitions and internal growth. Additionally, we are seeing our Internet based revenues contribute an increasing percentage of overall revenues as we move forward.'
About Microforum
Microforum Inc. (www.microforum.com) is a leading North American professional services firm providing a broad range of electronic commerce, Internet strategy and database services. Microforum is publicly traded on the Toronto Stock Exchange under the symbol ``MCF' and is headquartered in Toronto, with offices in San Francisco, CA and Chicago, IL.
Microforum Inc.
Interim Consolidated Balance Sheets
As at November 30, 1999 and 1998
1999 1998
$ $
Assets
Current assets
Marketable Securities 18,110,662 -
Accounts receivable 12,126,481 4,843,985
Work-in-progress 3,714,006 987,801
Assets of discontinued software and
hardware operations (note 3(a)) - 150,000
Current portion of note receivable on sale
of Microforum Italia s.r.l. (note 3(b)) 100,000 100,000
Prepaid expenses and other assets 481,906 329,053
-----------------------------
34,533,055 6,410,839
Capital assets (note 5) 3,694,583 3,247,389
Investment in Quartet Service Corporation 300,000 -
Goodwill (note 2) 14,946,029 6,346,071
Due from related parties (note 13) 519,124 519,124
-----------------------------
53,992,791 16,523,423
-----------------------------
Liabilities
Current liabilities
Bank indebtedness (note 6) 539,307 1,284,804
Accounts payable and accrued liabilities 8,287,366 6,751,469
Accrued acquisition costs (note 2) 6,838,000 -
Deferred revenue 104,026 313,954
Liabilities of discontinued software and
hardware operations (note 3(a)) 31,714 559,821
Due to shareholder (note 13) 252,500 45,798
Current portion of long-term debt (note 7) 674,712 696,017
-----------------------------
16,727,625 9,651,863
Long-term debt (note 7) - 625,706
Due to shareholder (note 13) 419,124 771,624
-----------------------------
17,146,749 11,049,193
-----------------------------
Shareholders' Equity
Capital stock (note 8) 56,967,540 27,363,987
Contributed Surplus 113,900 -
Loans to officers (note 4) - (1,364,002)
Deficit (20,235,398) (20,525,755)
-----------------------------
36,846,042 5,474,230
-----------------------------
53,992,791 16,523,423
-----------------------------
Microforum Inc.
Interim Consolidated Statements of Operations and Deficit
For the nine months ended November 30, 1999 and 1998
-----------------------------------------------------------------------
1999 1998
$ $
Sales (note 11) 33,677,860 22,374,449
Cost of sales 20,950,223 14,978,711
-----------------------------
Gross profit 12,727,637 7,395,738
-----------------------------
Operating expenses
General and administration 8,513,889 6,393,080
Sales and marketing 2,579,486 2,238,967
Interest on long-term debt 67,879 129,995
-----------------------------
11,161,254 8,762,042
-----------------------------
Income (loss) from continuing operations,
before undernoted items 1,566,383 (1,366,304)
Amortization (1,895,815) (1,201,286)
-----------------------------
Loss from continuing operations (329,432) (2,567,590)
Recovery from discontinued software
and hardware operations (note 3(a)) 80,000 648,000
Cost of shares issued on renegotiation of
acquisition of PPL Marketing Services Inc.
(note 4) - (1,104,000)
Provision for writedown of shares pledged for
loans to officers (note 4) - (366,667)
-----------------------------
Net loss for the period (249,432) (3,390,257)
Deficit - beginning of period (19,985,966) (17,135,498)
-----------------------------
Deficit - end of period (20,235,398) (20,525,755)
-----------------------------
Basic earnings (loss) per share (note 8(b))
From continuing operations (0.01) (0.24)
From discontinued operations and discontinued
subsidiary - 0.04
-----------------------------
(0.01) (0.20)
-----------------------------
Microforum Inc.
Interim Consolidated Statements of Cash Flows
For the nine months ended November 30, 1999 and 1998
-----------------------------------------------------------------------
1999 1998
$ $
Cash provided by (used in):
Operating activities
Loss from continuing operations (329,432) (4,038,257)
Items not affecting cash
Amortization of capital assets 779,816 984,062
Amortization of goodwill 1,115,999 217,224
Provision for shares issued on
renegotiation of acquisition of PPL
Marketing Services Inc. - 1,104,000
Provision for write-down of shares
pledged for loans to officers - 366,667
Changes in non-cash working capital items (3,806,887) 2,699,903
-----------------------------
(2,240,504) 1,333,599
-----------------------------
Financing activities
Proceeds on issue of common shares - net 1,423,475 1,060,924
Proceeds on sale of treasury stock 213,900 -
Proceeds on issue of Special Warrants 23,606,996 -
Long-term debt - net of repayments (594,273) (584,952)
Shares issued as director compensation 10,217 12,250
Due to related parties - (316,145)
Proceeds from officer loan repayment 512,167 (1,150,003)
-----------------------------
25,172,482 (977,926)
-----------------------------
Investing activities
Purchase of marketable securities (18,110,662) -
Acquisition of capital assets - net (478,081) (101,323)
Acquisition of subsidiaries (3,189,842) (3,885,361)
Acquisition of interest in Quartet Service
Corporation (300,000) -
-----------------------------
(22,078,585) (3,986,684)
-----------------------------
Increase (decrease) in cash attributable to
continuing operations 853,393 (3,631,011)
Increase (decrease) in cash attributable
to discontinued software and hardware
operations (38,146) 123,821
-----------------------------
815,247 (3,507,190)
Cash (bank indebtedness), beginning
of year (1,354,554) 2,222,386
-----------------------------
Bank indebtedness, end of period (539,307) (1,284,804)
-----------------------------
INVESTOR INFORMATION CORPORATE INFORMATION
The Investor Relations Group Howard Pearl
1-800-444-9214, (604) 689-5255 CEO and President
microforum@invrel.com Microforum Inc.
www.invrel.com (905) 670-8000
hpearl@mf.com |
