NURUN's Q2 Revenues up 179.1 %, Quarter-to-Quarter Growth
Stands at 36.4 %
MONTREAL, QUEBEC--JULY 28, 2000-- NURUN Inc., a subsidiary of the Quebecor Inc.
group, today released its financial results for the six months
ended June 30, 2000. Revenues for the period were $53.2 million,
an increase of 154.5 % over 1999. EBITDA stood at 5.9 % of total
revenues compared to 4.7 % in 1999, while earnings per share
before amortization of goodwill remained the same at $0.04.
For the three months ended June 30, 2000, revenues were $30.7
million, representing an increase of 179.1 % over the same period
last year and of 36.4 % over last quarter's revenues of $22.5
million.
The six-month figures include results from EntreVision (Toronto
and Boston), but only partial results from digIT Interactive
(Ottawa), Cythere (Paris and New York), Flow Systems Corporation
(Chicago) and Beltron Technologies (Montreal-acquired through
Mindready, a NURUN subsidiary). They exclude results from the
company's latest acquisitions, Quam SRL (Milan, Italy), Imagix
Multimedia Inc. (Quebec City) and Andrew Duncan Associated Ltd.
(Paignton, U.K.-acquired through Mindready).
"These results show that we are still on target with our 2000
plan," said Jacques Malo, President and CEO of NURUN Inc. "The
integration of the acquired companies is proceeding normally.
We're now focusing on building our clientele in the U.S. through
our association with Quebecor World and making sure that our
benefits per share before amortization of goodwill remains
positive, despite our investments in sales and marketing,
particularly in the U.S."
Recent Developments
During the second quarter of 2000, NURUN entered into a strategic
alliance with Quebecor World, the world's largest commercial
printer, that aims to help better serve Quebecor World's
international clients. The three principle elements of the
agreement include joint marketing initiatives, a preferred
supplier arrangement, and the development of a corporate
e-commerce and IT strategy for Quebecor World. NURUN received a
cash injection of $20 million as a result of this agreement.
Nortel, which supplies the optical networking equipment on which
75 % of North America's Internet traffic flows, recently entered
into a five-year service agreement with NURUN's subsidiary
Mindready. Mindready will provide test engineering services,
including in-circuit testing, functional test software
development, and test-set replication for Nortel. Concurrent to
this agreement, Nortel invested $10 million in Mindready to assist
them in becoming a world-class provider of engineering solutions
for the microelectronics and telecommunications industries.
NURUN also entered into a strategic partnership with Antartica
Group, a Chilean printing, publishing and retailing group
operating in Latin America. The two companies aim to develop an
aggressive growth-by-acquisition plan that will position the
companies as leaders in Latin America's e-commerce, Internet
development and Web integration markets. In principle, NURUN will
obtain control of all acquired companies.
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Other important developments in the second quarter of 2000 include:
* Acquisition of the Italian new media agency Quam SRL and its two
subsidiaries Quam Production and Quam Idea.
* Acquisition of Imagix Multimedia, a major multimedia player in the
Quebec City region.
* Acquisition of MSM Interactive, an e-commerce and Web integration
company based in Santiago, Chile. This acquisition was the result
of the strategic alliance with Antartica Group.
* A major contract with RONA, the leading distributor and retailer of
hardware products, home renovation and building materials and
gardening supplies in eastern Canada. NURUN will define the
overall e-business strategy and provide the end-to-end technology
solutions needed for Rona to become a leader in e-business. The
total project is valued at $50 million over the next five years.
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"With $40 million in cash and $20 million to be received from
Quebecor World at the end of July, we intend to pursue our growth
strategy for the remainder of the year," said Alexandre Taillefer,
Chief Strategy Officer of NURUN Inc. "We will work very closely
with industry leading partners like Quebecor World and Nortel to
expand NURUN's reach internationally and to achieve our growth
objectives."
NURUN Inc.
NURUN Inc. (TSE: IFN), a subsidiary of the Quebecor Inc. group, is
a company providing e-commerce, Web integration and automated
publishing solutions for corporate and public sector clients in
North America, Europe and select locations around the world.
NURUN employs more than 1,200 professionals in its various offices
in Montreal, Quebec City, Toronto, Ottawa, Seattle, New York,
Boston, Chicago, Paris, Milan, Santiago and Paignton.
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Consolidated Balance Sheets
(in thousands of dollars)
(Unaudited)
June 30 May 31
2000 1999
ASSETS
Current assets
Cash and cash equivalents $5,745 $53
Short-term investments 35,003 25,397
Accounts receivable 29,732 11,070
Tax credits receivable 3,099 459
Work in process 13,085 869
Prepaid expenses 1,469 267
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88,133 38,115
Fixed assets 10,673 2,103
Future income taxes 1,723 873
Goodwill 217,591 11,004
Other Assets 813 -
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$318,933 $52,095
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank indebtedness $1,478 $0
Accounts payable and accrued liabilities 17,111 4,459
Income taxes payable 1,375 -
Future income taxes 608 171
Deferred revenues 819 470
Current portion of long-term debt 4,583 696
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25,974 5,796
Long-term debt 5,747 824
Future income taxes 87 -
Non-controlling interest 10,750 -
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42,558 6,620
Shareholders' Equity
Capital stock 281,341 42,857
Retained earnings (deficit) (4,425) 2,858
Translation adjustment (541) (240)
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276,375 45,475
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$318,933 $52,095
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Consolidated Statements of Income
(in thousands of dollars, except earnings per share)
(Unaudited)
Three month period Six month period
ended ended
June 30, May 31, June 30, May 31,
2000 1999 2000 1999
Revenues $30,721 $11,030 $53,223 $20,936
Operating Expenses
Cost of revenues 18,408 6,469 30,962 12,685
Selling and marketing 7,146 2,149 12,440 4,145
General and administrative 2,992 1,059 5,893 2,041
Reseach and development 356 485 783 1,078
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28,902 10,162 50,078 19,949
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Earnings before depreciation,
amortization, interest
income, exchange loss
and income taxes 1,819 868 3,145 987
Depreciation of fixed assets 1,009 229 1,622 442
Net interest income (533) (321) (1,204) (671)
Exchange loss (170) 129 111 192
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Earnings before income taxes
and goodwill amortization 1,513 831 2,616 1,024
Income taxes 841 351 1,261 434
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Earnings before goodwill
amortization 672 480 1,355 590
Goodwill amortization 5,610 137 9,555 243
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Net income (loss) ($4,938) $343 ($8,200) $347
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Earnings per share before
goodwill amortization
-Basic and fully diluted $0.02 $0.03 $0.04 $0.04
Earnings (loss) per share
- Basic ($0.15) $0.03 ($0.26) $0.03
Earnings (loss) per share
- Fully diluted ($0.15) $0.02 ($0.26) $0.02
Weighted average of shares
outstanding (in thousands) 32,702 13,536 31,166 13,512
Weighted average of fully
diluted shares outstanding
(in thousands) 33,909 14,069 32,374 14,045
Consolidated Statements of Cash Flows
(in thousands of dollars)
(Unaudited)
June 30 May 31
2000 1999
OPERATING ACTIVITIES
Net income (loss) ($8,200) $347
Items not affecting cash and cash equivalents
Depreciation of fixed assets 1,622 442
Goodwill amortization 9,555 243
Others 43 13
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Funds from operations 3,020 1,045
Changes in non-cash balances
related to operations
Accounts receivable (4,245) (33)
Work in process (7,667) (157)
Tax credits receivable (846) (111)
Accounts payable and accrued liabilities (2,937) 56
Deferred revenues (485) 393
Others (816) (1,147)
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Cash flows from operating activities (13,976) 46
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FINANCING ACTIVITIES
Issuance of common stock 50,059 -
Increase in non-controlling interest 10,000 -
Repayment of long-term debt (6,548) (61)
Decrease in bank indebtedness (8) -
Issuance of long-term debt - 1,275
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Cash flows from financing activities 53,503 1,214
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INVESTING ACTIVITIES
Business acquisitions, net of cash and
cash equivalents acquired (54,120) (7,424)
Additions to fixed assets (3,303) (437)
Translation adjustment (289) (190)
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Cash flows from investing activities (57,712) (8,051)
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Decrease in cash and cash equivalents (18,185) (6,791)
Cash and cash equivalents, beginning of period 58,933 32,241
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Cash and cash equivalents, end of period $40,748 $25,450
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