Star Data increases nine-month cash flow
Star Data Systems Inc STY
Shares issued 16,798,437 2000-04-04 close $3.56
Wednesday Apr 5 2000
Mr. Alan Hutton reports
Financial results for the third quarter and the first nine months of fiscal 2000 ended Feb. 29, 2000, were as follows:
Third quarter net income for fiscal 2000 at $1.3-million or eight cents per share, showed a substantial improvement over the $0.2-million loss (one cent per share) reported in fiscal 1999. Nine-month net income for the current year was $3.5-million, or 21 cents per share, significantly higher than the $0.1-million (one cent per share) for the same period last year. Third quarter EBITDA (earnings before interest, taxes, depreciation and amortization) was up 26 per cent to $4.5-million, against $3.6-million reported for the same quarter in fiscal 1999. For the nine-month period EBITDA increased 21 per cent to $13.6-million, compared with $11.3-million for the prior year.
Revenues for the third quarter were $19.3-million, compared with $19.0-million in the third quarter of fiscal 1999. Revenues for the first nine months were $59.8-million, a 7-per-cent improvement over the nine-month revenues of $55.9-million from a year earlier.
Third quarter cash flow from operations was $4.4-million, or 26 cents per share, up 34 per cent from $3.3-million, or 19 cents per share, in the 1999 quarter. Nine-month cash flow from operations was $13.1-million, or 78 cents per share, 26 per cent over the $10.4-million, or 62 cents per share, for the same period last year. Consistent with this strong cash flow, long-term debt was reduced 45 per cent during the year, to $7.2-million at Feb. 29, 2000.
Information services posted a revenue gain of 3 per cent to $9.8-million for the third quarter for fiscal 2000. For the year-to-date these revenues increased by 3 per cent to $28.5-million on strengthening sales of StarQuote PRO and an 18-per-cent increase in the number of subscribers. At Feb. 29, 2000, there were approximately 16,900 StarQuote users.
Wealth management solutions third quarter revenues of $9.5-million were level with the same period last year. On a year-to-date basis, revenues increased by 11 per cent to $31.2-million as increased revenues from transaction processing were offset partially by lower custom development activity in the second and third quarters, in large part due to the company's customers preparations relating to year 2000.
"This quarter's results provide compelling evidence that our financial performance continues to improve. We are particularly pleased with the earnings and cash flow growth, both of which are important for the continued expansion of our businesses," said Alan Hutton, Star Data's president, and chief executive officer. "In addition, we have demonstrated the commitment and the ability to manage our balance sheet to ensure that we have the capital to fuel further growth through new strategic initiatives."
"I am also pleased to announce two recent additions to our management team. Paul Schultz recently joined Star Data as senior vice-president, e-settlement planning and development.
"Most recently he was director of sales and marketing at a prominent computing services firm. Also joining our management ranks is Daniel Dixon, director of business development. Daniel will assist us in pursuing acquisition and alliance opportunities intended to build on the significant operations momentum we have gained this fiscal year. These two individuals are a tremendous addition to Star Data's management team."
Star Data continues to expand its processing capacity. During the quarter, additional capacity was added to the tickerplant and the company's transaction processing platforms. Star Data recently launched its advanced wide area network (WAN) using CISCO technology to provide a new delivery infrastructure across Canada to 380 sites.
During the quarter, Yorkton Securities Inc. was engaged by management and the board of directors to comment on Star Data's Internet strategic plans. The new network and expanded processing capacity paves the way for Internet delivery of real-time financial and e-settlement services. The Internet strategy greatly expands opportunities for additional revenue streams.
On March 9, 2000, Star Data announced in Stockwatch that the Toronto Stock Exchange had approved its notice of intention to make a normal course issuer bid for its common shares through the facilities of the Toronto Stock Exchange as appropriate opportunities arise from time to time. Under the bid, Star Data may purchase for cancellation up to 837,916 common shares (representing 5 per cent of the issued and outstanding common shares as of the date of the notice) over the 12-month period commencing on March 13, 2000, and ending on March 12, 2001. Star Data will finance any purchases of common shares out of available cash. The board of directors of Star Data believes that, on occasion, common shares may become available at prices which make their purchase an attractive investment and an appropriate use of the company's funds. As of April 4, 2000, no common shares had been purchased under the bid.
CONSOLIDATED STATEMENT OF INCOME
(thousands of dollars)
Three months Three months
ended ended
02/29/00 02/28/99
Revenue
Information
services $ 9,759 $ 9,450
Wealth management
solutions 9,513 9,552
---------- ----------
19,272 19,002
---------- ----------
Expenses
Salaries and
benefits 4,886 4,546
Service delivery
costs 4,110 4,173
Research and
development 3,234 2,799
General and
administrative 2,573 3,934
---------- ----------
14,803 15,452
---------- ----------
Income before
the undernoted 4,469 3,550
Interest, net 107 284
Amortization 3,076 3,465
---------- ----------
Income (loss)
before income
taxes 1,286 (199)
Provision for
income taxes - -
---------- ----------
Net income
(loss) for
the period $ 1,286 $ (199)
========== ==========
Income (loss)
per share 0.08 (0.01)
CONSOLIDATED STATEMENT OF INCOME
(thousands of dollars)
Nine months Nine months
ended ended
02/29/00 02/28/99
Revenue
Information
services $ 8,533 $ 27,779
Wealth management
solutions 31,221 28,086
---------- ----------
59,754 55,865
---------- ----------
Expenses
Salaries and
benefits 14,343 13,250
Service delivery
costs 12,904 12,501
Research and
development 9,906 7,883
General and
administrative 8,997 10,952
---------- ----------
46,150 44,586
---------- ----------
Income before
the undernoted 13,604 11,279
Interest, net 472 894
Amortization 9,644 10,294
---------- ----------
Income (loss)
before income
taxes 3,488 91
Provision for
income taxes - -
---------- ----------
Net income
(loss) for
the period $ 3,488 $ 91
========== ==========
Income (loss)
per share 0.21 0.01
WARNING: The company relies upon litigation protection for "forward-looking" statements.
(c) Copyright 2000 Canjex Publishing Ltd. canada-stockwatch.com
old url (better for printing) |
