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Technology Stocks : Q/Media Software Corp (QMS.T) -- Ignore unavailable to you. Want to Upgrade?

To: Serge Collins who wrote (390)	10/27/1998 5:03:00 PM
From: Gordo	Read Replies (1) \| Respond to of 568

Here's the news release - nothing we didn't know already, the company is simply re-stating financials over the past several years to reflect more commonly accepted accounting principles: Q-MEDIA RESTATES FINANCIALS TO REFLECT CAPITALIZING OF GOODWILL VANCOUVER, B.C.-- Q-Media Services Corporation today reported that, at the request of the Ontario Securities Commission and the British Columbia Securities Commission, the Company has restated its financial statements retroactive to fiscal 1995. The restatement reflects the requirement to capitalize and amortize, rather than expense, goodwill associated with both past and future acquisitions. In the future, the goodwill portion of the purchase price of acquisitions will be capitalized and amortized over a period of not more than 20 years. In the past, the Company had expensed goodwill at the time of acquisition. In addition, in accordance with the Company's financial instruments policy, the $10 million proceeds from the convertible debentures issued in December 1997 have been allocated $8.8 million to long term debt and $1.2 million to shareholders' equity. The following table summarizes the restatement adjustments recorded by the Company: 9 months ending April 30, 1998 1997 1996 1995 -------------------------------------------------------------- Increase in total assets $12.5 million $9.3 million $4.3 million $1.4 million Increase in shareholders' equity $3.6 million $9.3 million $4.3 million $1.4 million Increase in liabilities $8.9 million - - - Increase (Decrease) to net income $(0.5) million $5.1 million $2.8 million $1.4 million Decrease to deficit $8.9 million $9.3 million $4.3 million $1.4 million Following is a summary of Q-Media's restated financials from 1995. All per share results reflect the Company's one for five share consolidation. Fiscal 1998 Nine Months Results, for the period ending April 30, 1998 ---------------------------------------------------------------- * Revenues were unchanged at $31.0 million; * Cash flow before changes in non-cash working capital items was unchanged at $3.4 million; * Net loss was changed from $5.3 million to $5.8 million, including a non-cash write off of $7.8 million for goodwill related to the Digimedia acquisition; * Net loss per share was changed from $0.60 to $0.66 basic; * Assets were changed from $23.8 million to $36.3 million; * Liabilities were changed from $9.5 million to $18.4 million; * Shareholders' equity was changed from $14.3 million to $17.9 million; and * Retained earnings were changed from a deficit of $18.8 million to a deficit of $9.9 million. Fiscal 1998 Six Months Results, for the period ending January 31, 1998 ----------------------------------------------------------------- * Revenues were unchanged at $19.2 million; * Cash flow before changes in non-cash working capital items was unchanged at $1.9 million; * Net loss was changed from $6.4 million to $6.7 million, including a non-cash write off of $7.8 million for goodwill related to the Digimedia acquisition; * Net loss per share was changed from $0.80 to $0.84 basic; * Assets were changed from $23.5 million to $36.2 million; * Liabilities were changed from $10.3 million to $19 million; * Shareholders' equity was changed from $13.2 million to $17.1 million; and * Retained earnings were changed from a deficit of $19.9 million to a deficit of $10.8 million. The Company wrote off the goodwill of $7.8 million associated with the Digimedia, Inc. purchase, effective January 31, 1998, due to the pending sale of the major customer of this division. Without the continued revenue and earnings associated with this customer, management determined the continued revenue and earnings of this division were permanently impaired. On July 6, 1998, the Company subsequently purchased this customer (Hart Graphics' Supply Chain Management Business) and capitalized the goodwill associated with that purchase of $5.3 million. Fiscal 1998 Three Months Results, for the period ending October 31, 1998 ---------------------------------------------------------------- * Revenues were unchanged at $7.9 million; * Cash flow before changes in non-cash working capital items was unchanged at $900,000; * Net earnings were changed from $710,000 to $588,000; * Net earnings per share was unchanged at $0.10; * Assets were changed from $14.7 million to $23.9 million; * Liabilities were unchanged at $8.5 million; * Shareholders' equity was changed from $6.2 million to $15.4 million; and * Retained earnings were changed from a deficit of $12.8 million to a deficit of $3.6 million. Fiscal 1997 Results -------------------- * Revenues were unchanged at $28.7 million; * Cash flow before changes in non-cash working capital items was unchanged at $2.6 million; * Net earnings were changed from a loss of $4.4 million to net earnings of $651,000, including a non-cash write off of $1.1 million for goodwill related to the STAT acquisition; * Net earnings per share was changed from a net loss per share of $0.88 to net earnings per share of $0.13; * Assets were changed from $12.3 million to $21.6 million; * Liabilities were unchanged at $7.0 million; * Shareholders' equity was changed from $5.2 million to $14.6 million; and * Retained earnings were changed from a deficit of $13.5 million to a deficit of $4.1 million. The Company wrote off the goodwill of $1.1 million associated with the STAT/Turnkey purchase, effective July 31, 1997. Management determined the future revenue and earnings from this purchase were permanently impaired due to the erosion of the customer base. Fiscal 1996 Results ------------------- * Revenues were unchanged at $15.9 million; * Cash flow to operations before changes in non-cash working capital items was unchanged at $49,000; * Net loss was changed from $3.2 million to $387,000; * Net loss per share was changed from $0.76 to $0.09; * Assets were changed from $9.9 million to $14.2 million; * Liabilities were unchanged at $6.3 million; * Shareholders' equity was changed from $3.7 million to $7.9 million; and * Retained earnings were changed from a deficit of $9.0 million to a deficit of $4.8 million. Fiscal 1995 Results -------------------- * Revenues were unchanged at $7.2 million; * Cash flow to operations before changes in non-cash working capital items was unchanged at $1.0 million; * Net loss was changed from $3.1 million to $1.7 million; * Net loss per share was changed from $1.45 to $0.80; * Assets were changed from $7.9 million to $9.3 million; * Liabilities were unchanged at $3.1 million; * Shareholders' equity was changed from $4.8 million to $6.2 million; and * Retained earnings were changed from a deficit of $5.8 million to a deficit of $4.4 million. Q-Media Services Corporation is a leading outsourced service provider to the growing software industry. Its full range of services include software replication (CD-ROM and other media), packaging solutions, warehousing and inventory management and fulfillment. It operates regional manufacturing facilities in close proximity to customers in North America's software growth areas; Vancouver, B.C.; Seattle, Washington; San Jose and Irvine, California and Austin, Texas. Shares of Q-Media trade on the Toronto Stock Exchange under the symbol QMS. U.S. S.E.C. exemption: 12g3-2(b) 82-3761. FOR FURTHER INFORMATION PLEASE CONTACT: Marla Gale or Jon Kieran, Investor Relations (416)868-1079 Hume, Kieran Inc.