Thursday July 26, 6:45 am Eastern Time
Press Release
SOURCE: Basis100 Inc.
Basis100 Achieves Positive EBITDA for the First Time in Its History
Revenues increased by 48% to a record $7.0 million in the second quarter 2001
TORONTO, July 26 /CNW/ - Basis100 Inc. (TSE: BAS - news), a leading e-commerce technology solution provider for the financial services industry, today announced record results for the second quarter ended June 30, 2001. In a time when many technology companies are providing negative guidance and are not able to meet their target numbers, Basis100 has surpassed street expectations, exceeding the guidance the company gave in its "Path to Profitability" presentation earlier this year. A full quarter ahead of expectations, Basis100 announced positive EBITDA of $0.1 million, $0.6 million higher than the company's guidance. This pivotal milestone was reached through a combination of record revenues of $7.0 million and reduced operating expenses.
Revenues for the second quarter of 2001 were up 125 percent from the second quarter of fiscal year 2000, when revenues were $3.1 million. Gross margins remained strong at 92 percent of sales. Income from operations before other operating expenses(x) for the quarter was $0.1 million, or $0.00 per share, compared to a net loss from operations before other operating expenses of $(2.9) million, or a loss of $(0.12) per share for the same quarter, fiscal 2000. Basis100 had current assets of $12.6 million and a cash position of $7.0 million as of June 30, 2001.
The $0.1 million income from operations before other operating expenses(x) in the second quarter is a significant improvement from the net loss of $(2.0) million in the first quarter of 2001, due to significantly increased revenues coupled with continued tight expense controls. Basis100 was able to hold operating expenses at $6.3 million in the second quarter of this year compared to $6.4 million in the first quarter of 2001 even though revenues increased 48 percent.
U.S. operations had a strong demand for its automated valuation services with second quarter revenue increasing 24 percent from the first quarter of this year. This sales increase was driven by the addition of 338 customers in the quarter and additional U.S. interest rate cuts, which drove existing clients' volume higher. Canadian revenues increased 102 percent from the first quarter of this year. Growth in Canadian revenue continues to be attributed to increased mortgage activity and the fixed income initiative, CanDeal. Basis100, along with the six largest banks in Canada, are shareholders of CanDeal.
U.S. sales accounted for 58 percent of total sales, while Canadian sales accounted for 42 percent of total sales. This is in line with the guidance given at the end of the first quarter. Basis100 continues to expect Canadian revenues to hold relatively constant as a percentage of total sales over the remainder of the year, with increased revenue contribution from our fixed income business unit and the continued roll-out of BasisXpress(TM) in the Canadian market. The company is tracking ahead of its guidance as provided in the "Path to Profitability" presentation released in February 2001 (a copy is available at www.can.Basis100.com). Revenues are expected to continue to increase in 2001 by approximately 100 percent from fiscal 2000 and to generate positive EBITDA for the remainder of the year.
"Despite the uncertainty in the markets and a lowered level of confidence with a number of technology companies, we were able to book a record quarter and reach EBITDA profitability one quarter ahead of our plan," said Gary Bartholomew, Chairman & CEO of Basis100 Inc. "I believe this is a testament to the strength of our business model as we are able to consistently deliver value to our customers without requiring large upfront investments on their behalf."
After depreciation and ongoing amortization costs of $3.2 million, Basis100 recorded a net loss of $(3.1) million for the quarter or $(0.10) per share. This compares with a net loss of $(0.40) per share for the same quarter of last year.
As at June 30, 2001, Basis100 had current assets of $12.6 million, which included $7.0 million in cash and short-term investments. Current liabilities were $5.5 million and the company had no long-term debt with the exception of capital lease obligations of $0.3 million. During the quarter, Basis100 successfully secured a $4 million line of credit from a major Canadian financial institution to finance increased working capital needs.
The basic number of shares outstanding at June 30, 2001 was 29,560,676 and the fully diluted number of shares outstanding was 36,051,053.
Path to Profitability Investor Score Card -
Q2 Corporate Results Vs. Corporate Milestones
- Revenue - Planned $6.40 million in revenue. Actual: $7.0 million in
revenue, exceeding expectations by $0.6 million or 9.4 percent.
- EBITDA - Planned EBITDA loss of $(0.5) million. Actual: EBITDA income
of $0.1 million, beating expectations by $0.6 million.
- Product Commercialization - Planned launch and first live
transactions through our BasisXpress(TM) mortgage product. Completed:
first live transactions up and running with Bridgewater Financial
Services.
- Product Commercialization - Planned completion of BasisXchange(TM) QA
testing. The core components of BasisXchange entered QA testing in
Q2, with the CanDeal application now scheduled for QA in Q3.
- Lender Solutions Deal - Planned signing of one major Canadian
financial institution to our mortgage technology. Royal Bank signed
on to be the first user of HomeBASE(TM) technology for their mobile
mortgage sales force.
- U.S. Customers - Planned 750 customers using Solimar Technology.
Actual: 1068 customers as at the end of Q2.
- Fixed Income - Planned sale of first license for fixed income trading
technology, BasisXchange(TM). This was completed with the launching
of CanDeal, designed to serve the institutional market. Basis100 and
the six largest banks in Canada are shareholders in CanDeal.
- Overall Score Card Assessment: Basis100 exceeded all its key
objectives in Q2. The highlight was achieving positive EBITDA in the
quarter, one quarter ahead of expectations.
(x) Please see attached financial information. Interim Financial
Statements should be read in conjunction with the most recent annual
financial statements. Factors that may affect future results of
operations have not changed substantially.
Conference Call
Gary Bartholomew, CEO and Chairman, and David Campbell, CFO, of Basis100 Inc. will hold an open conference call to review the company's second quarter financial results and corporate activities on Thursday, July 26, 2001 at 11:00 a.m. (EST). All interested parties can access the conference call (listen only mode) over the Web by connecting through Basis100's Web site www.can.Basis100.com and clicking on "Investors/Conference Calls" to access the link or by calling in to the live call at 1-888-793-1753.
A telephone post-view will be available until 11:59 p.m. (EST) August 2, 2001 by dialing 1-800-558-5253. Please enter the reservation number 19341287 No. or a Webcast postview will be available by visiting the corporate Web site at www.Basis100.com and clicking on "Investors/Conference Calls". |
