DataMirror Reports First Quarter Results For Fiscal 2000
Revenue increases 46 percent over Q1 1999
TORONTO, CANADA--DataMirror Corporation (TSE: DMC - news), a leading provider of enterprise data integration, today
announced its results for the quarter ended April 30, 1999.
Revenue for the quarter was $8,086,000, 46 percent higher than revenue for the quarter ended April 30, 1998. The net loss for the
quarter was $2,849,000 or $(0.28) per share compared to a net loss of $207,000 or $(0.02) per share for the same period in fiscal
1999. Without the PointBase equity loss, the Company would have reported a net loss for the quarter of $2,174,000 or $(0.21) per
share. The weighted average number of common shares outstanding for the quarter was 10,248,000 as compared to 10,332,000 for
the same period in fiscal 1999.
''The results for this quarter were in line with our expectations'' said Nigel Stokes, Chairman, CEO and President of DataMirror. ''Our
revenue growth of 46 percent for the quarter shows promise for the rest of the year. Our new revenue models are starting to have a
positive impact on lead generation and sales. Our first quarter revenues have historically been the lowest of any quarter in the fiscal
year.'' The first quarter contributed 16.5 percent and 16.3 percent to the Company's annual revenue totals in fiscal 1999 and 1998,
respectively.
''During the quarter, we successfully streamlined our sales model to have country managers in Europe report directly to Toronto''
continued Mr. Stokes. ''This focused our sales activities and brought senior management attention to resolve operating and resource
management issues. The implementation of this model promoted teamwork and gave our regional managers and their staffs more
direct responsibility for the Company's sales efforts. In fact, revenue from our European operations grew at 63 percent over the
comparable quarter last year. Germany, France and our Benelux operations contributed strongly to this result.''
''A similar streamlining of the North American sales operations is ongoing. In the fourth quarter of fiscal 1999, we completed a
migration of sales and support staff to particular territories in the US market. We made this move to sharpen our sales focus and to
improve our responsiveness to our growing US install base. This move has resulted in a cost structure that is higher than our previous
model which provided much of our sales and support services directly from our head office in Toronto. Many of our US sales reps
are still on a learning curve. As our sales capability matures and our streamlining initiative comes on-line, we believe that the additional
costs of doing business directly in the US market will be more than justified by higher sales levels. In the first quarter, revenue from
North American operations increased by 30 percent over the comparable quarter last year'' added Mr. Stokes.
At April 30, 1999, the Company had $11,692,000 in cash and short-term investments compared to $15,807,000 at January 31, 1999.
Cash and short-term investments decreased primarily from cash applied to operating activities of $898,000 and a further investment in
PointBase, Inc. amounting to $1,800,000.
Of a total staff complement of 224 at April 30, 1999, 133 were in sales, marketing and support; 60 in research and development; and
31 in general and administration roles. At quarter-end, the Company's staff count was 47 percent higher than staff levels at April 30,
1998.
New Technology
During the quarter, our technology activities were directed on the following:
- Internet Ready Transformation Server Version 4.2 for Microsoft SQL Server was released to provide transformation and integration
of SQL Server databases with new target databases such as Microsoft FoxPro, dBase, Paradox, Lotus Notes and Oracle Lite. This
new version also provides full support for Microsoft SQL Server 7.0 integration with DB2, Oracle and Sybase across OS/390, OS/400
and Unix platforms. Performance and ease of use enhancements such as commitment control, column manipulation for Y2K
compliance, and flexible command line support were also added.
- IBM AS/400 Cluster Management, an initiative with IBM to develop intuitive cluster management capabilities for high availability
applications for e-business and other business critical applications. Customers will be able to manage all systems in an AS/400 cluster
and monitor all critical data and applications from a single workstation. High Availability Suite is being engineered to provide an intuitive
graphical interface to manage IBM AS/400 clusters as well to provide increased levels of data and application resiliency.
- Internet Fulfillment for DataMirror Software, to provide the ability to download and license DataMirror software over the Internet.
- iDeliver software for data replication between TS platforms and Windows platform applications was released in Beta form. This
product, to be officially released in the next quarter, provides the ability to replicate data from any existing TS platform directly into
applications running on Windows client systems.
- TS for PointBase, a joint initiative with PointBase to develop a Transformation Server product for the PointBase database. This new
product, written solely in Java, will allow for replication between any existing TS platform and any Java platform supporting the
PointBase database.
Other facets of the Company's product development program included a new version of SQL Pump for transformation and integration
of Lotus Notes databases and enhancements to Transformation Server and High Availability Suite.
Growing the Business
During the quarter, the Company participated in a venture capital financing for PointBase, Inc., along with two Silicon Valley venture
capital firms, Aspen Ventures and AVI Management. PointBase, formerly DataBahn, Inc., a San Mateo database software developer,
has developed a beta version of an embedded dynamic footprint relational database written completely in Java. As a result of this
financing, DataMirror now holds the largest single investment position in PointBase. Accordingly, the Company changed its basis of
accounting for its investment in PointBase from the cost basis to the equity method of accounting, effective February 18, 1999, the
date of the latest financing round. By adopting this policy, DataMirror reported its pro rata share of PointBase's net loss together with
goodwill amortization. The equity loss reported of $675,000 is not tax deductible nor does it involve an outlay of cash resources of
DataMirror.
Some of the Company's new customers during the quarter were Dalkia, DePuy International, Enterprise Rent-A-Car, Lasalle Partners,
Mobel Walther, Mullen Trucking, Premenos - A Harbinger Corporation, Rutronic, Tioga County, UCI Logistics, Wadsworth
Electronics, Waterloo Industries Inc. and Western International Media.
DataMirror's new distributor agreement with Business Partner Solutions was announced during the quarter. Business Partner Solutions
is a leading value-added distributor for IBM with a network of more than 700 business partners throughout the Americas. This
agreement together with higher channel activity in Europe increased indirect sales to 28 percent of license revenue compared to 23
percent for all of last year. More focus will be directed at increasing channel activity in all the Company's markets throughout the
remainder of the year.
About DataMirror Corporation
DataMirror Corporation is a leading provider of enterprise data integration for the Internet Era. The Company's software keeps
corporate data connected and integrated throughout the enterprise and across the Internet. DataMirror software gives companies the
ability to ensure that data is distributed, available, effectively managed and accessible anywhere in the world in real-time. It is the
industry leader in rapidly and seamlessly integrating data among multiple databases including DB2, Microsoft SQL Server, Oracle and
Sybase across OS/390, OS/400, Unix and Windows NT platforms. DataMirror Transformation Server has received numerous industry
awards over the years including Midrange Systems Buyers Choice Awards and a position in the DM Review Data Warehouse 100.
DataMirror's more than 700 customers include Harley-Davidson, Oshkosh B'Gosh, Duracell, GE Capital, Toys ''R'' Us and Sony.
DataMirror is a Microsoft Certified Solution Provider and a member of Microsoft's Data War! ehousing Alliance.
Founded in 1993, DataMirror is a worldwide company with distribution in more than 30 countries. DataMirror has corporate
headquarters in Toronto, Canada and offices throughout North America and Europe. DataMirror is a publicly traded company listed on
the Toronto Stock Exchange (symbol: DMC). For more information, visit the company's web site at www.datamirror.com.
Attachments:
- Consolidated income statements, balance sheets and statements of changes in financial position for quarters ended April 30, 1999 and
1998 and accompanying notes thereto.
Copyright 1999 DataMirror Corporation. All rights reserved. DataMirror, Transformation Server, High Availability Suite, dbMirror,
ObjectMirror, SwitchOver System, StatusMonitor, iDeliver and SQL Pump are registered trademarks or trademarks of DataMirror
Corporation. All other brand or product names are trademarks or registered trademarks of their respective companies.
DataMirror Corporation
Consolidated Statements of Loss
(Thousands of CDN$, except per share data - unaudited)
Three Months Ended
April 30,
------------------
1999 1998
-------- --------
Revenue
Licence $5,004 $4,182
Maintenance 1,689 771
Other 1,393 603
-------- --------
8,086 5,556
Direct costs 361 113
-------- --------
Gross margin 7,725 5,443
-------- --------
Operating expenses
Selling and marketing 6,277 3,368
Research and development 1,392 757
General and administration 2,343 1,390
Amortization of intangibles 276 194
-------- --------
10,288 5,709
Operating loss (2,563) (266)
Interest income 107 177
Equity loss (675)
-------- --------
Loss before income taxes (3,131) (89)
Income tax expense (recovery) (282) 118
-------- --------
Net loss ($2,849) ($207)
-------- --------
-------- --------
Basic earnings (loss) per share ($0.28) ($0.02)
Weighted average number
of shares outstanding (000's) 10,248 10,332
(See accompanying notes)
DataMirror Corporation
Consolidated Balance Sheets
(Thousands of CDN$ - unaudited)
April 30, January 31,
1999 1999
-------- --------
Assets
Current assets
Cash and short-term investments $11,692 $15,807
Accounts receivable 9,457 11,216
Investment tax credits receivable 670 670
Prepaid expenses 1,068 1,472
-------- --------
22,887 29,165
Fixed assets 4,241 4,242
Investment tax credits recoverable 1,837 1,412
Investments 4,035 2,910
Intangibles 5,291 5,562
-------- --------
$38,291 $43,291
-------- --------
-------- --------
Liabilities
Current liabilities
Accounts payable and accrued
liabilities $2,688 $3,890
Deferred revenue 5,929 5,787
Current portion of long-term
liabilities 1,017 1,123
Current portion of capital lease
obligations 936 1,037
-------- --------
10,570 11,837
Long-term liabilities 958 1,082
Capital lease obligations 587 769
-------- --------
12,115 13,688
-------- --------
Shareholders' Equity
Share capital 30,581 30,891
Cumulative translation adjustment (498) (498)
Deficit (3,907) (790)
-------- --------
26,176 29,603
-------- --------
$38,291 $43,291
-------- --------
-------- --------
(See accompanying notes)
DataMirror Corporation
Consolidated Statements Of Changes In Financial Position
(Thousands of CDN$ - unaudited)
Three Months Ended
April 30,
1999 1998
-------- --------
Cash provided by (used in)
Operating activities
Net loss ($2,849) ($207)
Add (deduct) items not affecting cash:
Depreciation of fixed assets 328 217
Amortization of intangibles 276 194
Equity loss 675
Deferred income taxes (282) 118
-------- --------
(1,852) 322
Changes in non-cash working capital
balances 954 (833)
-------- --------
(898) (511)
-------- --------
Investing activities
Fixed assets additions (326) (248)
Purchase of investments (1,800) (1,479)
-------- --------
(2,126) (1,727)
-------- --------
Financing activities
Net decrease in long-term liabilities (230) (24)
Net decrease in capital lease
obligations (282) (104)
Repurchase of share capital (579) 136
-------- --------
(1,091) 8
-------- --------
Decrease in cash and short-term
investments (4,115) (2,230)
Cash and short-term investments
Beginning of period 15,807 19,852
-------- --------
End of period $11,692 $17,622
-------- --------
-------- --------
(See accompanying notes)
DataMirror Corporation
Notes to Consolidated Financial Statements
Quarter ended April 30, 1999
1. Foreign currency translation
The Company has changed its method of accounting for its foreign operations, effective February 1, 1999, from self-sustaining to
integrated to reflect changes in its European management structure and operations. This change has been accounted for prospectively
and does not have a material effect on the consolidated financial statements of the Company for the quarter ended April 30, 1999.
2. Investments
The Company has changed its method of accounting for its investment in PointBase, Inc. (formerly DataBahn, Inc.) from the cost
method to the equity method, effective February 18, 1999, to reflect its increased ownership position in PointBase as a result of a
financing completed on that date. This change has been accounted for prospectively and had the effect of increasing the net loss for
the quarter ended April 30, 1999 by $675,000. |
