Official 3m & 4m results out today - market liked them
BCE EMERGIS POST RESULTS FOR FOUR-MONTH FISCAL PERIOD
MONTREAL, QUEBEC--
Streamlines cost structure and positions itself for 1999
BCE Emergis, a leading international electronic commerce service
provider, announced today its unaudited results for the quarter
ended November 30, 1998 as well as its audited results for the
four-month fiscal period ended December 31, 1998.
As previously announced, BCE Emergis has changed its year-end
from August 31st to December 31st to align with the BCE and Bell
Canada family. As a result, the Company is reporting the
three-month quarter ended November 30, 1998 and a four-month
period ended December 31, 1998. The Company began a new fiscal
year on January 1st and will report results for each of the
calendar quarters in 1999.
BCE Emergis announced revenues of $25.0 million for the quarter
ended November 30, 1998, $11.2 million for the month of December,
and $36.2 million for the four-month period ended December 31,
1998.
The Company had an operating loss of $2.5 million for the
quarter, $0.2 million for the month of December, and $2.7 million
for the four-month period. In all cases the operating losses
exclude a one-time merger rationalization charge of $11.1 million
and are before interest, depreciation and amortization.
The Company posted a net loss of $52.5 million for the quarter
($0.76 per share), $5.6 million ($0.08 per share) for the month
of December, and $58.1 million ($0.82 per share) for the
four-month period. These net losses include the one-time merger
rationalization charge of $11.1 million, a non-cash write-off in
November of $25.0 million, and $20.2 million of depreciation and
amortization. This write-off relates to the capitalized software
development costs and in-process research and development arising
from the merger with Bell Canada's EBS division and the
acquisition of the business and undertakings of Immedia
Telematics.
After giving effect to this write-off, the Company shows on its
December 31st balance sheet $163 million of goodwill, acquired
technologies, and in-process research and development relating to
the EBS transaction and the acquisition of the e-finance division
of Newstar Technologies. These amounts will be amortized over 36
months.
In order to highlight ongoing operating performance, the Company
has calculated a baseline net loss that excludes the one-time
charges and the non-cash amortization of goodwill, acquired
technologies, and in-process research and development. Baseline
net loss was $2.6 million for the quarter, $0.6 million for the
month of December, and $3.2 million for the four-month period.
These results include the results of the recently acquired
e-finance division of Newstar Technologies for November and
December. Comparative figures are not presented as they are not
meaningful due to the reverse takeover accounting for the EBS
transaction.
"This has been an exciting period for the Company. We have
restructured the business, focused on network-centric electronic
commerce solutions, spent considerable time and effort in
rationalizing product lines and vertical channels, combined the
two workforces, and integrated facilities", said Brian Edwards,
President and CEO of BCE Emergis. "At the same time, we have
continued to focus on growing the business and reducing costs, as
evidenced by the results for December as compared with the
results for the quarter. We are extremely pleased with these
trends."
The Company recorded several notable achievements during this
quarter, in particular the acquisition of Newstar Technologies'
e-Finance division. This transaction positions BCE Emergis as the
top electronic commerce service provider to Canadian banks.
The Company also concluded significant business agreements. On
September 1st, BCE Emergis and its breakthrough extranet solution
for the Automotive Network Exchange (ANX) became the first
service provider in Canada to be certified by the Automotive
Industry Action Group (AIGA) The Company also signed an agreement
with Speedy Title and Appraisal Review Services, a subsidiary of
Cendant Corporation, to provide e-commerce services to Cendant
Mortgage, one of the largest providers of mortgage funds in the
United States.
In addition, BCE Emergis signed a key partnership with Entrust to
provide Entrust-based Certification Authority (CA) services
worldwide through our OnWatch(tm) Service, and a strategic
alliance withTele-Direct to utilize our @Commerce Solution for
Yellow Pages(tm) e-commerce initiatives.
BCE Emergis delivers network-centric e-commerce business
solutions that enable organizations to better compete in the
global marketplace. Combining e-commerce services, network
infrastructure, security services, and payments solutions through
industry vertical applications, BCE Emergis offers a full suite
of core technologies that are the essential building blocks for
electronic commerce. BCE Emergis, a subsidiary of Bell Canada,
the largest Canadian telecommunications operating company, is one
of the top tier electronic commerce providers in the world. BCE
Emergis, is now part of the TSE 300 Composite Index. For more
information, please refer to www.emergis.com.
This news release contains certain forward-looking statements
that reflect the current views and/or expectations of BCE Emergis
with respect to its performance, business and future events. Such
statements are subject to a number of risks, uncertainties and
assumptions. Actual results and events may vary significantly.
- end -
For more information:
Anne Belliveau
General Manager, Corporate Communications
BCE Emergis
(514) 868-2232
Email: abelliveau@emergis.com
Consolidated Balance Sheet
as at as at
(thousands of dollars) November 30, December 31
1998 1998
(unaudited) (audited)
ASSETS
Current
Cash and temporary investments 65,103 26,258
Cash held in trust 8,555 8,657
Accounts receivable 23,697 30,153
Other 4,150 3,668
----------------------
101,505 68,736
Capital assets 176,857 171,438
----------------------
278,362 240,174
----------------------
LIABILITIES
Current
Accounts payable and accrued liabilities 58,508 25,875
Deferred revenue 4,249 4,596
Obligations under capital leases 2,956 2,647
----------------------
65,713 33,118
Obligations under capital leases 1,972 1,917
----------------------
67,685 35,035
----------------------
SHAREHOLDERS' EQUITY
Capital stock 263,176 263,197
Deficit (52,499) (58,058)
----------------------
210,677 205,139
----------------------
Total liabilities and shareholders' equity 278,362 240,174
----------------------
Consolidated Statement of Cash Flow
for the for the for the
three months month four months
ended ended ended
(thousands of dollars) November December December
30, 1998 31, 1998 31, 1998
(unaudited)(unaudited) (audited)
Cash flow from operations
Net loss (52,499) (5,559) (58,058)
Depreciation and amortization 39,573 5,615 45,188
Changes in working capital items 38,896 (38,262) 634
------------------------------
Source (use) from operations 25,970 (38,206) (12,236)
------------------------------
Cash flow from investing
Business combination 19,273 19,273
Newstar acquisition (33,500) - (33,500)
Additions to fixed assets (584) (114) (698)
------------------------------
Use for investing (14,811) (114) (14,925)
------------------------------
Cash flow from financing
Installments on capital leases (531) (445) (976)
Issue of common shares 63,030 22 63,052
------------------------------
Source (use) from financing 62,499 (423) 62,076
------------------------------
Net source (use) of cash 73,658 (38,743) 34,915
Beginning cash balance - 73,658 -
------------------------------
Closing cash balance 73,658 34,915 34,915
------------------------------
Cash position
Cash and temporary investments 65,103 26,258 26,258
Cash held in trust 8,555 8,657 8,657
------------------------------
73,658 34,915 34,915
------------------------------
Consolidated Statement of Income
for the for the for the
three months month four months
ended ended ended
(thousands of dollars) November December December
30, 1998 31, 1998 31, 1998
(unaudited)(unaudited) (audited)
Revenue 24,967 11,272 36,239
Direct costs 8,725 3,569 12,294
------------------------------
Gross margin 16,242 7,703 23,945
------------------------------
SG&A
Operations 6,778 2,035 8,813
Sales and marketing 3,917 3,080 6,997
Development and
integration services 4,869 1,095 5,964
General and administrative 3,129 1,690 4,819
------------------------------
18,693 7,900 26,593
Operating (loss) before merger
rationalization charge (2,451) (197) (2,648)
Merger rationalization charge 11,116 - 11,116
------------------------------
Operating (loss) (13,567) (197) (13,764)
Depreciation and amortization 14,587 5,615 20,202
Write-off of capital assets 24,986 - 24,986
Interest income (993) (277) (1,270)
Interest expenses 120 10 130
Interest on capital leases 167 15 182
Other expenses 65 (1) 64
------------------------------
Net loss (52,499) (5,559) (58,058)
------------------------------
Loss per share ($) (0.76) (0.08) (0.82)
Baseline net loss * (2,647) (554) (3,201)
Baseline loss per share * (0.04) (0.01) (0.05)
* Excludes merger rationalization charge, write-off of capital
assets, and amortization of in-process R&D
and goodwill
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