news yesterday. Care to comment?
Reports First Quarter Earnings For Fiscal 1999
TORONTO, Oct. 7 /CNW/ - Star Data Systems Inc. (STY - TSE) today
announced its financial results for the three months ended August 31, 1998.
Revenues for the quarter were $18.4 million, compared to $19.1 million for the
same period one year ago. Included in last year's total is $3.2 million in
revenue from businesses which were sold in the second quarter of the 1998
fiscal year. Excluding these revenues from divested product lines, total
revenue grew 16% quarter over quarter.
Revenue from our Information Systems totalled $9.3 million, compared to
$9.6 million one year ago, while Transaction Processing contributed revenue of
$9.1 million, compared to $9.5 million one year earlier. Excluding revenues
from divested product lines, revenue in Transaction Processing grew 44%.
Net earnings were $182,000 or $0.01 per share, compared to net earnings
of $1,703,000 or $0.10 per share for the prior year's period. Cash flow from
operations was $3.5 million or $0.21 per share, compared to $4.8 million or
$0.29 per share a year earlier.
''We are pleased to be ahead of our plan and break even after two
consecutive quarterly losses resulting from divestitures, infrastructure and
organizational changes'' said Alan Hutton, President and Chief Executive
Officer. He added: ''The company is benefiting from the increased investments
we have made over the past several months in our people, services,
infrastructure, and technology. Our moves to simplify our operations, and
sharpen our focus in Transaction Processing have been instrumental to growth
and cash flow.''
''Recent volatility in financial markets has underscored our clients'
need for value-added services that we are now equipped to provide'' said
Hutton. He continued: ''In the ultra-competitive world of financial services
and wealth management, investors are demanding not just information, but
real-time integration into their portfolio management and reporting systems to
provide decision makers with insight and clarity.''
''Although the past several months have presented us with many
challenges,'' Mr. Hutton added, ''our technological capabilities are being
further upgraded to withstand major data surges. Our Year 2000 implementation
program is also moving forward with the close co-operation of our clients and
vendors. We expect full readiness no later than the end of calendar 1998, with
a few exceptions where clients have asked us to delay implementation into 1999
to meet their own internal timetables.
Mr. Hutton concluded: ''Star Data considers its client relationships to
be vitally important. We believe that the steps we are taking and the scale of
services we are delivering positions us for continued strengthening of those
relationships and alliances. We are well-placed to profitably provide our
clients with the Mission Critical services they require into the coming
decade.''
Star Data is the leading supplier of online, real-time financial
information and transaction processing services to Canada's investment
community. Information services include stock market quotations across North
America, analytic support and corporate and financial news. Transaction
processing services include shareholder and portfolio management, and
real-time brokerage accounting systems.
Additionally, the Company provides customized system development services
for transaction processing clients, and computer processing outsourcing
services within, and outside, the financial services industry.
Star Data is based in Toronto, has offices in Vancouver, Calgary,
Winnipeg, London, Markham, Montreal, Halifax and London U.K., and employs more
than 350 people. Star Data is listed on the Toronto Stock Exchange under the
symbol STY. For more information on the Company's products and services visit
www.stardata.com.
<<
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Period Ended August 31, 1998
Three Months Three Months
Ended Ended
August 31, 1998 August 31, 1997
(thousands of dollars, except
for share data) $ $
-------------------------------- ---------------- ----------------
Revenue
Information services 9,333 9,575
Transaction processing services 9,067 9,480
-------------------------------- ---------------- ----------------
18,400 19,055
-------------------------------- ---------------- ----------------
Expenses
Salaries and benefits 4,450 6,568
Service delivery costs 3,934 3,043
Research and development 2,536 1,887
Premises and equipment 1,451 747
General and administrative 2,160 1,876
-------------------------------- ---------------- ----------------
14,531 14,121
-------------------------------- ---------------- ----------------
Income before the undernoted 3,869 4,934
Interest, net 333 157
-------------------------------- ---------------- ----------------
Income before amortization 3,536 4,777
Amortization 3,354 3,074
-------------------------------- ---------------- ----------------
Income before income taxes 182 1,703
Provision for income taxes - -
Net income for the period 182 1,703
-------------------------------- ---------------- ----------------
Income per share:
Basic 0.01 0.10
Fully diluted 0.01 0.10
-------------------------------- ---------------- ----------------
Weighted average number of shares:
Basic 16,792,044 16,484,388
Fully diluted 17,802,948 17,645,129
-------------------------------- ---------------- ----------------
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As at August 31, 1998
As at As at
August 31, 1998 August 31, 1997
(thousands of dollars) $ $
-------------------------------- ---------------- ----------------
ASSETS
Current assets
Cash 4,046 2,610
Accounts receivable 10,482 7,530
Other current assets 1,377 3,328
-------------------------------- ---------------- ----------------
Total current assets 15,905 13,468
-------------------------------- ---------------- ----------------
Capital assets 28,971 33,464
Other assets 32,543 38,606
-------------------------------- ---------------- ----------------
77,419 85,538
-------------------------------- ---------------- ----------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities 10,975 6,737
Current portion of obligations under 4,519 3,785
capital leases
Current portion of bank loans 1,500 -
Current portion of amounts owing on - 600
acquisitions
-------------------------------- ---------------- ----------------
Total current liabilities 16,994 11,122
-------------------------------- ---------------- ----------------
Amounts owing on acquisitions 2,373 -
Obligations under capital leases 3,752 6,620
Long term portion of bank loans 9,700 -
Tenant obligations and inducements 222 1,769
-------------------------------- ---------------- ----------------
Total liabilities 33,041 19,511
-------------------------------- ---------------- ----------------
Shareholders' equity
Capital stock 42,895 42,198
Retained earnings 1,483 23,829
-------------------------------- ---------------- ----------------
Total shareholders' equity 44,378 66,027
-------------------------------- ---------------- ----------------
77,419 85,538
-------------------------------- ---------------- ----------------
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION (UNAUDITED)
Period Ended August 31, 1998
Three Months Three Months
Ended Ended
August 31, 1998 August 31, 1997
(thousands of dollars, except $ $
for share data)
-------------------------------- ---------------- ----------------
OPERATING ACTIVITIES
Net income for the period 182 1,703
Add item not affecting cash
Amortization 3,354 3,074
-------------------------------- ---------------- ----------------
Cash flow from operations 3,536 4,777
Net change in non-cash working capital (1,919) (2,740)
balances relating to operations
-------------------------------- ---------------- ----------------
Cash provided by operating
activities 1,617 2,037
-------------------------------- ---------------- ----------------
FINANCING ACTIVITIES
Increase in bank loan 1,500 -
Increase in amounts owing
on acquisition 41 -
Repayment of capital lease obligations (895) (760)
Proceeds from issue of common
shares, net 59 751
-------------------------------- ---------------- ----------------
Cash provided by (used in) financing 705 (9)
activities
-------------------------------- ---------------- ----------------
INVESTING ACTIVITIES
Net purchases of capital and
other assets (3,760) (6,822)
-------------------------------- ---------------- ----------------
Cash used in investing activities (3,760) (6,822)
-------------------------------- ---------------- ----------------
Decrease in cash during the period (1,438) (4,794)
Cash and short term investments, 5,484 7,404
beginning of period
-------------------------------- ---------------- ----------------
Cash and short term investments, 4,046 2,610
end of period
-------------------------------- ---------------- ----------------
Cash flow per share from operations 0.21 0.29
-------------------------------- ---------------- ----------------
>>
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For further information: Alan Hutton, President and Chief Executive
Officer, Star Data Systems Inc. (905) 479-7827; Jane Widerman, Jane Widerman
Communications Inc. (416) 929-6253 |
