Q-Media Reports Increased Revenues and EBITDA for Fiscal 2001; Takes $30 million write
down of goodwill
VANCOUVER, BRITISH COLUMBIA--Q-Media Services Corporation (TSE:QMS - news) today reported results for fiscal 2001.
Fiscal 2001 Highlights: (year ended July 31, 2001 compared with year ended July 31, 2000)
- Revenues were $179.5 million compared with $92.3 million
- EBITDA, before a restructuring provision, was $17.1 million compared with $9.2 million
- Net Loss, after one time restructuring and goodwill charges, was $31.8 million compared to earnings of $3.6 million
- Net Loss per Share before goodwill amortization and impairment was $.32 compared to earnings per share of $.39 basic and $.31 fully diluted
- Net Loss per Share was $2.73 compared to earnings per share of $.33 basic and $.27 fully diluted.
Fourth Quarter Highlights: (quarter ended July 31, 2001 compared with quarter ended July 31, 2000)
- Revenues were $41.8 million compared with $19.8 million
- EBITDA, before a restructuring provision, was $1.4 million compared with $1.8 million
- Net Loss, after one time restructuring and goodwill charges, was $32.2 million compared to earnings of $0.6 million
- Net Loss per Share before goodwill amortization and impairment was $.46 compared to earnings per share of $.07 basic and fully diluted.
- Net Loss per Share was $2.52 compared to earnings per share of $.05 basic and fully diluted.
The increase in revenue for the year was largely attributed to the acquisition of the Quebecor World's CD-ROM manufacturing facilities which
was completed at the beginning of the fiscal year. ``Despite the challenges of the current economy, the Company was able to maintain its key
historic operating margins for gross profit and EBITDA for fiscal 2001,'' said Q-Media's President Robert Lawrie. ``However, these results
continue to reflect the general slowdown being experienced in technology markets and reduced demand from our customers,'' added Lawrie.
During the year the Company initiated a number of changes in response to the economic conditions. These included a reduction of its workforce
by approximately 24% during the year, streamlined management structure and consolidation of its operations in Washington state. As part of this
effort the Company has taken a one-time, pre tax restructuring charge of $5.5 million. In addition, the Company has reviewed its goodwill and
taken a non-cash charge of $30 million pre-tax, related to impairment of goodwill.
The Company was also successful in securing new business with many of its major customers as well as adding new customers during the year.
Business development activities resulted in approximately 10% of revenue coming from customers which were not previously serviced by the
Company prior to fiscal 2001. This unprecedented addition of new business reflects the Company's strategic focus on growing market share
during this challenging period.
Subsequent to its year end, the Company successfully re-negotiated its relationship with Quebecor World which resulted in a cash payment, a
note receivable and a reduction in outstanding share capital by 18% on a fully diluted basis. In addition, its debt facilities were re-negotiated with
its major lenders. The new terms reflect the current reality of the Company's markets and its requirements to continue to deliver a high level of service to its customers.
Finally, during the year the Company was recognized by the 'Profit 100' as one of the fastest growing companies in Canada for the third year in a row. In addition, the Company was
awarded 'Entrepreneur of the Year, for Business to Business Services' for the Pacific Region. ``In retrospect we had a very challenging year with the sea change in the economy but
were successful in adjusting our operations quickly and effectively to meet these challenges while successfully enhancing our value proposition to our customer base,'' concluded
Lawrie.
The outlook for fiscal 2002 is consistent with fiscal 2001 and the Company, having completed its re-structuring activities, is focussed on developing new business and expanding
its level of business with its current client base.
About Q-Media Services Corporation
Q-Media Services Corporation operates six supply chain management facilities located in Vancouver, Canada; Fife, Washington; Irvine, California; Austin, Texas; Nashville,
Tennessee; and Westborough, Massachusetts. These facilities provide complete outsourced supply chain services for software and documentation kits to technology customers,
such as hardware manufacturers in the personal computer industry, content publishers, and software publishers.
The Company's services include planning and procurement of materials, production and assembly services, and fulfillment and inventory management. Shares of Q-Media Services
Corporation are traded on the Toronto Stock Exchange under the symbol (QMS) U.S. S.E.C. exemption: 12g3-2(b) 82-3761. Further information can be found at the web site:
www.qmediaservices.com
Forward-Looking Statements
Investors should take note that certain statements in this news release are forward-looking and may not give full weight to all of the potential risks and uncertainties.
These forward-looking statements include statements that are subject to risks and uncertainties. Forward-Looking statements are subject by their nature to risks and uncertainties,
and actual results, actions or events could differ materially from those set forth in the forward-looking statements. Any forward-looking statements speak only as of the date made.
The Company is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by the securities laws.
Q-Media Services Corporation Consolidated Income Statement
Expressed in CDN$000s
Fourth Fourth For the For the
Quarter Quarter year ended year ended
2001, 2000 July 31, July 31,
(ended July (ended July 2001 2000
31, 2001) 31, 2000)
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Revenue $ 41,817 $ 19,773 $179,508 $92,253
Gross margin $ 8,372 $ 5,031 $ 44,812 $24,070
Gross margin % 20.0% 25.4% 25.0% 26.1%
EBITDA $ 1,409 $ 1,803 $ 17,148 $ 9,178
Interest $ 1,864 $ 370 $ 8,125 $ 1,498
Amortization $ 1,857 $ 783 $ 7,189 $ 2,590
Restructuring
provision $ 5,500 $ - $ 5,500 $ -
Income before
Goodwill and
Income Taxes $ (7,812) $ 650 $ (3,666) $ 5,090
Income Taxes $ (2,255) $ (90) $ (1,085) $ 864
Income before
goodwill
amortization
and
impairment $ (5,557) $ 740 $ (2,581) 4,226
Goodwill
Impairment,
net of tax $ 25,827 $ - $ 25,827 $ -
Net income $(32,219) $ 563 $ (31,847) $ 3,593
Basic EPS
before
goodwill
amortization
and
impairment $ (0.46) $ 0.07 $ (0.32) $ 0.39
Fully diluted
EPS before
goodwill
amortization
and
impairment $ (0.46) $ 0.07 $ (0.32) $ 0.31
------------------------------------------------------------------------
------------------------------------------------------------------------
Basic EPS $ (2.52) $ 0.05 $ (2.73) $ 0.33
Fully Diluted $ (2.52) $ 0.05 $ (2.73) $ 0.27
Contact:
Q-MEDIA SERVICES CORP.
John Longley
Chief Financial Officer
Phone: (604) 232-5751
Email: shareholder@qmediaservices.com
Website: qmediaservices.com |
