So Frank, what does it all mean:
datamirror.com
DataMirror has year-end loss
DataMirror Corp DMC
Shares issued 10,360,060 Mar 10 close $5.60
Thu 11 Mar 99 News Release
Mr. Nigel Stokes reports:
DataMirror Corporation (TSE: DMC), a leading provider of interconnected
data solutions, today announced its results for the year and quarter ended
Jan. 31, 1999.
"During the year, the company made a transition to become Internet
oriented. Our investments in DataBahn, Inc., our e-commerce strategy and
new interconnected data products for resiliency, web caching and web
publishing clearly demonstrate the future of the company" said Nigel
Stokes, chairman, chief executive officer and president of DataMirror.
"While our shift in strategy caused some decrease in profitability, revenue
growth continued at an aggressive pace with near break-even results and
stronger cash flow from operations. We also reduced our days sales
outstanding in accounts receivable to a level lower than comparable
U.S.-based software companies.
"During the quarter, revenue growth in the Americas and the United Kingdom
was affected by customer procurement delays and diversions of IT resources.
This made it more difficult to bring some of our sales opportunities to a
close during the quarterly reporting period. In addition, during the fourth
quarter we completed the relocation of our direct sales and related support
activities into designated U.S. sales territories. This action was taken to
sharpen our sales focus and improve our responsiveness to customers," added
Mr. Stokes.
During the year, the company changed its fiscal year-end from Dec. 31 to
Jan. 31. The fiscal year just completed is for the 12-month period from
Feb. 1, 1998 to Jan. 31, 1999. Historical financial statements have been
restated to present comparative financial information for the 12-month
period ended Jan. 31, 1998.
Revenue for the year ended Jan. 31, 1999 was $33,593,000 compared with
$21,837,000 for 1998, an increase of 54 per cent. For 1999, the company
reported a net loss of $460,000 or four cents per share compared with net
income of $170,000 or two cents per share for the prior year. Earnings
(loss) per share for 1999 reflects an increase of 14 per cent in the
weighted average number of shares outstanding from the previous year.
Revenue for the quarter ended Jan. 31, 1999 of $10,046,000 is the highest
quarterly revenue ever reported by DataMirror. The fourth quarter loss was
$994,000 or 10 cents per share compared with net income of $372,000 or four
cents per share for the same period in fiscal 1998. The weighted average
number of common shares outstanding for the quarter was 10,279,000 as
compared with 10,281,000 for the same period in fiscal 1998.
At Jan. 31, 1999, the company had $15,807,000 in cash and short-term
investments compared with $19,852,000 at Jan. 31, 1998. During the year,
cash and short-term investments decreased primarily from fixed asset
additions, the acquisition of a German software distributor, and
investments in DataBahn, Inc, net of cash provided from operations and
financings. For the year ended Jan. 31, 1999, cash flow from operations was
$3,123,000, an increase of $5,863,000 from the use of cash experienced in
1998 of $2,740,000. This increase was mainly due to improvements in the
collection of accounts receivable.
Cash flow from operations during the fourth quarter was $3,682,000, an
increase from the cash flow from operations of $1,538,000 for the three
months ended Jan. 31, 1998. This increase was primarily the result of
improved accounts receivable collections. The primary use of cash during
the quarter was for fixed asset additions.
New Technology
During the quarter, DataMirror expanded its family of data connectivity
products by introducing the following:
High Availability Suite for IBM AS/400, an integrated full-featured suite
of applications for IBM AS/400 high systems availability comprised of
dbMirror for data mirroring, ObjectMirror for critical AS/400 objects,
SwitchOver System for operational switching in the event of a system outage
and StatusMonitor for process monitoring. High Availability Suite assists
customers to ensure uninterrupted access to corporate data and applications
during planned downtime or unexpected system outages;
Transformation Server for DB2/MVS, a source replication product that is
capable of sharing IBM S/390 data with native AS/400, Oracle, Sybase,
Informix and Microsoft SQL Server data bases. This product empowers
customers to select, filter, extract, transport and transform mainframe
data. Transformation Server for DB2/MVS is suitable for loading and
replenishing data marts and warehouses, sharing data with other corporate
data stores, and distributing AS/390-based data to Internet applications
for mobile access, e-business and Enterprise Information Portals; and
SQL Pump Version 3.0, an enhanced software product that enables
bi-directional replication, transformation and synchronization of data
between Lotus Notes data bases and more than 32 ODBC compliant data bases
including Oracle, Sybase, Informix, DB/2 and Microsoft SQL Server and
Access.
Growing the Business
DataMirror's sales and development teams were strengthened during the
quarter. Of a total staff complement of 222 at year-end, 138 were in sales,
marketing and support; 53 in research and development; and 31 in general
and administration roles. Of the net increase for the quarter of 24, sales,
marketing and support accounted for 13 and research and development for 11.
The company's staff count is 51 per cent higher than staff levels at Jan.
31, 1998.
DataMirror recently participated in a venture capital financing for
DataBahn, Inc., along with two Silicon Valley venture capital firms, Aspen
Ventures and AVI Management. DataBahn, a San Mateo data base developer, has
developed a beta version of an embedded dynamic footprint relational data
base written completely in Java. As a result of this financing, DataMirror
now holds the largest investment position in DataBahn. Accordingly, the
company will change its basis of accounting, effective the first quarter of
our new year, from the cost basis to the equity method of accounting. By
adopting this policy, DataMirror will report its pro rata share of
DataBahn's operating results going forward. The effect of this change is
likely to be dilutive to earnings
Some of the company's new customers during the quarter were Arcadia
Financial, Copart, HB Group Insurance Management, Hettich-Beschlage,
Ferrero, Gullivers Travel Agency, Jet Services, Landsiminn, McLane
Information Technology, Novartis, Olde Discount, Partylite, Premier Brands,
Prince Sports Group, Staubli Faverges, Wherehouse Entertainment, Williamson
Dickie, Williams-Sonoma and Wunderman Cato Jonson.
DataMirror's new distributor agreement with Business Partner Solutions
provides the channel capacity to introduce the company's data connectivity
software to many new customers. Business Partner Solutions is the leading
value-added distributor for IBM with a network of more than 700 business
partners throughout the Americas.
Outlook
As part of the company's Internet strategy, development activities will be
focused on providing e-business solutions for our customers. New software
products will provide resiliency for web servers and transformation server
functionality over the Internet to and from web servers. A pure Java
replication product is being developed for DataBahn data bases.
A major initiative on the sales front is to establish the DataMirror
website, datamirror.com, as a sales channel and customer service centre. By
extending the ability to download and purchase software directly from our
website, providing on-line demonstrations and access to product information
and on-line chat pages with our users, we expect to be able to reduce the
company's product sales cycle. Existing customers will also benefit from
our e-business initiative. Customers will see a variety of enhancements
designed to increase the value of their relationship with DataMirror as
well as being able to download upgrades and interim product releases. We
also plan to increase our on-line lead generation activities.
Other facets of the company's product development program include the
further development of a desktop replication product and the extension of
our MVS mainframe product to provide support for DB/2 UDB data bases and
targets such as Lotus Notes. DataMirror expects to work closely with IBM to
provide support for their AS/400 logical partitioning (LPAR) and clustered
environment initiatives. In addition, the company will continue to make
enhancements to its transformation server and high availability suite
products.
STATEMENT OF INCOME
Three months ended Jan. 31
(thousands of dollars)
1999 1998
Revenue $10,046 $7,773
Direct costs 396 943
------- ------
Gross margin 9,650 6,830
------- ------
Operating expenses
Selling and marketing 6,776 3,728
Research and
development 1,074 825
General and
administration 3,200 2,040
Amortization of
intangibles 286 83
------- ------
11,336 6,676
------- ------
Operating income (1,686) 154
Investment income 692 218
------- ------
Income (loss) before
income taxes (994) 372
Income tax expense - -
------- ------
Net income (loss) $(994) $372
======= =======
Basic earnings
(loss) per share (10 cents) 4 cents
STATEMENT OF INCOME
Year ended Jan. 31
(thousands of dollars)
1999 1998
Revenue $33,593 $21,837
Direct costs 1,161 1,645
------- ------
Gross margin 32,432 20,192
------- ------
Operating expenses
Selling and marketing 20,657 11,600
Research and
development 3,685 2,681
General and
administration 8,506 5,892
Amortization of
intangibles 975 165
------- ------
33,823 20,338
------- ------
Operating income (1,391) (146)
Investment income 1,186 316
------- ------
Income (loss) before
income taxes (205) 170
Income tax expense 255 -
------- ------
Net income (loss) $(460) $170
======= =======
Basic earnings
(loss) per share (4 cents) 2 cents
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