Star Data reports record revenues for both 4th quarter and fiscal 1999 year end
TORONTO, Aug. 4 /CNW/ - Star Data Systems Inc. (STY/TSE) today announced
results for the fourth quarter and the year ended May 31, 1999.
Record revenues were achieved during the fourth quarter and for the full
year of fiscal 1999. Revenue in the fourth quarter increased by 10% to $19.4
million compared to $17.7 million for the same period in 1998. Fiscal 1999
revenue of $75.3 million represents a 12% increase over fiscal 1998 revenue of
$67.5 million from continuing businesses. Total revenue for fiscal 1998 was
$73.3 million.
Fourth quarter cash flow from operations increased sharply by 82% to $4.1
million, or $0.24 per share over the $2.3 million, or $0.14 per share in last
year's corresponding quarter. Cash flow from operations showed continued
growth in fiscal 1999, increasing 1% to $14.5 million, or $0.86 per share,
compared to $14.3 million, or $0.86 per share in fiscal 1998. Strong cash flow
from operations allowed for a reduction in long-term debt by 16% during the
year to $13.2 million, and increased cash and short-term investments on hand
to $6.3 million, 15.0% higher than at the beginning of the year.
Net income for the fourth quarter was $0.8 million, or $0.05 per share,
compared to a net loss of $1.3 million, or a loss of $0.08 per share for the
fourth quarter of fiscal 1998. Net income for the year was $0.9 million, or
$0.05 per share, and reflected a turnaround from a net loss of $20.8 million,
or a loss of $1.25 per share reported for fiscal 1998. The increased earnings
in fiscal 1999 reflects the Company's consistent increase of consolidated
revenues in each quarter during the year.
''We are very pleased to end the year on a positive note with increased
profitability and a year of record revenues,'' commented Alan Hutton, Star
Data's President, Chief Executive Officer. ''This revenue level was the result
of a 33% growth in revenues from our continuing Transaction Processing
business which was achieved by adding new clients and stronger demand for
custom development and outsourcing services. Increases in this segment of the
business more than compensated for the 5% decline in Information Service
revenues caused by the industry volatility and contraction earlier in the
year. In the fourth quarter the contracted base of StarQuote users resumed its
traditional growth and increased to 15,500 users, a new high for the Company.
This past year we have focused on introducing new product offerings and
investing in the resources and infrastructure to provide a stable foundation
for more rapid growth and improved financial performance.''
In March 1999 the Company announced the results of a comprehensive
independent assessment of its Multipath Brokerage System. The DMR Consulting
Group found Multipath to be a strong, fundamentally sound platform on which to
build Star Data's Wealth Management Services. Multipath provides real-time
book ofr record processing to the investment industry. This assessment
represents a critical step forward in validating Multipath as the platform for
our growth strategy, to be a leading provider of wealth management solutions.
In May 1999 the Company introduced StarQuote PRO, a new and flexible
version of the Company's highly successful real-time securities quote and
information service. StarQuote PRO provides ready access to quotes, news,
charts and analysis tools in a highly flexible Windows format that can be
quickly and easily changed by financial professionals to meet their individual
needs. The service will be available via the Company's recently implemented
extranet or through the Internet.
During the 4th quarter, Star Data's Year 2000 Readiness Project
progressed in accordance with the schedule outlined in the 1998 Annual Report
and in subsequent quarterly reports. As at December 31, 1998, the Company's
products and services have been validated as being Year 2000 Ready. In certain
instances, implementation of Year 2000 Ready services has been delayed to
accommodate client timetables. The Company is fully participating in the
financial services industry ''street wide'' Year 2000 demonstrations, in
addition to its on-going program of internal and client-specific testing. Due
to the interdependencies inherent in the Year 2000 issue and the Company's
extensive reliance on technology, the Company continues to closely monitor the
Year 2000 Readiness of its key suppliers and customers. The Company is
completing its contingency plans to mitigate against possible Year 2000
failures within its business, including failures by its suppliers and
customers. The Company's Year 2000 costs established for fiscal 1999 were
expensed as incurred. Based on its current assessment, Star Data believes that
the Year 2000 issue will not have a material adverse impact on the services to
our customers, operations or our financial condition. However, there can be no
assurance that the Year 2000 uncertainties will not be materially adverse to
the Company.
Star Data provides real-time information services and transaction
processing services to the Canadian financial services industry. Star Data is
based in Toronto, with offices in Vancouver, Calgary, Winnipeg, London,
Markham, Montreal, Halifax and London, UK. The Company employs more than 400
people and is listed on the Toronto Stock Exchange under the symbol STY. For
more information on the Company's products and services, visit our website at
www.stardata.com.
The Company cautions that certain statements in this press release may
contain forward looking information based on current expectations that are
subject to risks and uncertainties. Actual results may differ due to factors
such as customer demand, impact of competitive products and pricing, and
changes in market conditions. Additional information identifying risks and
uncertainties is contained in the Company's filings with various securities
commissions.
StarQuote, StarQuote PRO, Multipath, Star Data and the Star Data logo are
trademarks of Star Data Systems Inc. Unauthorized use of Star Data's
trademarks is strictly prohibited.
<<
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Period Ended May 31, 1999
Three Three Year Ended Year Ended
Months Months
Ended Ended
(thousands of dollars, May 31, May 31, May 31, May 31,
except for share data) 1999 1998 1999 1998
------------------------- ----------- ----------- ----------- -----------
Revenue
Information services $ 8,935 $ 9,533 $ 37,005 $ 38,758
Transaction processing
services 10,480 8,156 38,275 34,588
------------------------- ----------- ----------- ----------- -----------
19,415 17,689 75,280 73,346
------------------------- ----------- ----------- ----------- -----------
Expenses
Salaries and benefits 4,760 6,091 18,010 25,260
Service delivery costs 4,446 3,905 16,947 13,576
General and Administrative 2,844 3,574 13,796 12,036
Research and development 2,866 1,514 10,749 7,261
Loss related to divestitures
and restructuring - - - 21,396
------------------------- ----------- ----------- ----------- -----------
14,916 15,084 59,502 79,529
------------------------- ----------- ----------- ----------- -----------
Income (loss) before the
undernoted 4,499 2,605 15,778 (6,183)
Interest expense 380 343 1,274 881
Amortization 3,298 3,561 13,592 13,761
------------------------- ----------- ----------- ----------- -----------
Income (loss) before
income taxes 821 (1,299) 912 (20,825)
Provision for income taxes - - - -
Net income (loss) for the
period 821 ($1,299) $ 912 ($20,825)
------------------------- ----------- ----------- ----------- -----------
Income (loss) per share:
Basic $ 0.05 $ (0.08) $ 0.05 $ (1.25)
Fully diluted $ 0.05 $ (0.08) $ 0.05 $ (1.25)
------------------------- ----------- ----------- ----------- -----------
Weighted average
number of shares:
Basic 16,885,157 16,732,256 16,846,386 16,629,360
Fully diluted 18,080,104 17,627,524 18,009,713 17,638,952
------------------------- ----------- ----------- ----------- -----------
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
As at May 31, 1999
As at As at
May 31, 1999 May 31, 1998
(thousands of dollars)
-------------------------------------------------------------------------
ASSETS
Current
Cash and short-term investments $ 6,306 $ 5,484
Accounts receivable 8,642 8,581
Other current assets 1,086 2,724
-------------------------------------------------------------------------
Total current assets 16,034 16,789
-------------------------------------------------------------------------
Capital assets 26,338 28,193
Other assets 31,137 31,586
Deferred income taxes 1,276 1,276
-------------------------------------------------------------------------
$ 74,785 $ 77,844
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 10,467 $ 12,509
Bank loans 2,000 1,000
Obligations under capital leases 3,663 4,442
-------------------------------------------------------------------------
Total current liabilities 16,130 17,951
-------------------------------------------------------------------------
Long term portion of bank loans 11,200 8,700
Obligations under capital leases 1,988 4,724
Amounts owing on acquisition - 2,332
-------------------------------------------------------------------------
Total liabilities 29,318 33,707
-------------------------------------------------------------------------
Shareholders' equity
Capital stock 43,254 42,836
Retained earnings 2,213 1,301
-------------------------------------------------------------------------
Total shareholders' equity 45,467 44,137
-------------------------------------------------------------------------
$ 74,785 $ 77,844
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION (UNAUDITED)
Period Ended May 31, 1999
Three Three Year Year
Months Months Ended Ended
Ended Ended
(thousands of dollars, May 31, May 31, May 31, May 31,
except for share data) 1999 1998 1999 1998
------------------------- ----------- ----------- ----------- -----------
OPERATING ACTIVITIES
Net income (loss) for the
period $ 821 $ (1,299) $ 912 $ (20,825)
Add items not affecting cash
Amortization 3,298 3,561 13,592 13,761
Loss related to
divestitures and
restructuring - - - 21,396
------------------------- ----------- ----------- ----------- -----------
Cash flow from operations 4,119 2,262 14,504 14,332
Net change in non-cash
working capital balances
related to operations 4,318 3,356 (465) (702)
------------------------- ----------- ----------- ----------- -----------
Cash provided by operating
activities 8,437 5,618 14,039 13,630
------------------------- ----------- ----------- ----------- -----------
FINANCING ACTIVITIES
Increase in bank loans, net 2,500 9,700 3,500 9,700
Increase in (repayment of)
amounts owing on acquisition (2,456) (5,268) (2,332) 1,732
Repayments of capital lease
obligations, net (1,014) (1,209) (3,515) (1,961)
Proceeds from issue of
common shares, net - 493 418 1,389
------------------------- ----------- ----------- ----------- -----------
Cash provided by (used in)
financing activities (970) 3,716 (1,929) 10,860
------------------------- ----------- ----------- ----------- -----------
INVESTING ACTIVITIES
Proceeds on divestitures
and restructuring - - - 2,044
Net purchases of capital
and other assets (1,355) (4,344) (11,288) (28,454)
------------------------- ----------- ----------- ----------- -----------
Cash used in investing
activities (1,355) (4,344) (11,288) (26,410)
------------------------- ----------- ----------- ----------- -----------
Increase (decrease) in
cash during the period 6,112 4,990 822 (1,920)
Cash and short term
investments, beginning
of period 194 494 5,484 7,404
------------------------- ----------- ----------- ----------- -----------
Cash and short term
investments, end of
period $ 6,306 $ 5,484 $ 6,306 $ 5,484
------------------------- ----------- ----------- ----------- -----------
Cash flow per share from
operations:
Basic $ 0.24 $ 0.14 $ 0.86 $ 0.86
Fully Diluted $ 0.23 $ 0.13 $ 0.81 $ 0.81
------------------------- ----------- ----------- ----------- -----------
>>
-30-
For further information: Alan Hutton, President, CEO, Star Data Systems
Inc. (416) 363-7827 ext. 6300; James Newell, Senior Vice President, CFO, Star
Data Systems Inc. (416) 363-7827 ext. 6203
STAR DATA SYSTEMS INC. has 39 releases in this database.
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