Teklogix Reports Third Quarter Results
MISSISSAUGA, ON, Jan. 26 /CNW/ - Led by strong revenue growth in major
markets, Teklogix International Inc. today announced its third successive
quarter of record sales and earnings. Revenues for the third quarter ended
December 31, 1998 were $47 million, a 46% gain, compared with the same quarter
a year ago; and earnings were $4.4 million or $0.32 per share, compared with a
loss on continuing operations of $1.8 million or $0.13 per share in the third
quarter last year.
For the first nine months of fiscal 1999, Teklogix recorded revenues of
$124.2 million and net earnings of $10.6 million, or $0.77 per share. This
compares with revenues of $88.7 million and a net loss of $2.5 million, or
$0.18 per share, for the same period last year.
''Teklogix is continuing to produce strong quarterly results'', said Ian
McElroy, President and Chief Executive Officer. ''Our growth reflects
increased demand in all major geographic markets and progress on new
initiatives such as integration services, including SAP middleware.''
For the third quarter, revenues from markets outside of North America
increased 76% as compared with the same quarter last year, due mainly to
significantly higher sales in France, Germany and the U.K. North American
sales were 25% higher than a year ago. Much of the growth was accounted for by
new customers, such as Molson Breweries, Nestle, Téfal and Hewlett Packard,
which purchased the company's integration software and services, as well as
wireless data communication systems.
Gross margins improved to 57.5% from 50.8% in the same quarter a year
ago, and expenses declined as a percentage of revenues to 42.1%, from 57.8%.
Cash flow from operations was $9.9 million for the quarter compared with
usage of $3.7 million for the same quarter last year. The company had a net
cash position of $10.4 million at December 31, 1998, excluding $4.1 million in
term debt used to finance capital assets. The company's current cash position
and available bank lines of credit are sufficient to support current growth
objectives.
Shareholders' equity improved to $61.3 million at December 31, 1998.
The company has restated its quarterly financial statements for fiscal
years ended March 31, 1998 and 1997, which previously had included the results
of its discontinued mobile computer division. Accordingly, these financial
statements reflect the company's continuing operations. The restated financial
statements and corresponding per share earnings accompany the consolidated
financial statements for the quarter ended December 31, 1998.
Teklogix is a global leader in wireless data communications and enabling
software for supply chain and inventory management. The company designs,
manufactures, markets, and supports large-scale systems and products for
corporations with a mobile workforce and a need for real-time interactive data
communications. The company's systems are typically used by large-scale
organizations in the manufacturing, retail, transportation and service
industries. An estimated 5,000 Teklogix systems are installed in more than 45
countries worldwide. The company has 34 sales and support offices and 26
independent distributors throughout North America, Europe, Asia, Australia,
and South & Latin America.
TEKLOGIX INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31
(unaudited)
(expressed in thousands of dollars) 1998 1997
-------- --------
(see note (x))
ASSETS
Current
Cash $10,358 $2,934
Accounts receivable 37,051 37,206
Inventories 21,940 17,473
Income taxes recoverable -- 2,242
Prepaid expenses and deposits 1,387 2,450
Shareholder loans receivable 35 35
Deferred income taxes 4,283 2,416
Discontinued operations 1,381 3,848
-------- --------
Total current assets 76,435 68,604
Capital assets, net 23,311 22,474
Shareholder loans receivable 425 581
Intellectual property, net 515 936
Discontinued operations -- 709
-------- --------
$100,686 $93,304
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Bank indebtedness $ -- $7,929
Accounts payable and accrued liabilities 27,795 21,116
Income taxes payable 412 --
Deferred service revenue 6,672 4,363
Current portion of long-term debt 1,470 1,053
Discontinued operations 458 1,344
-------- --------
Total current liabilities 36,807 35,805
Long-term debt 2,613 3,674
-------- --------
Total liabilities 39,420 39,479
-------- --------
Shareholders' equity
Share capital 33,823 33,487
Retained earnings 27,443 20,338
-------- --------
Total shareholders' equity 61,266 53,825
-------- --------
$100,686 $93,304
-------- --------
-------- --------
(x) The assets and liabilities of the mobile computer division are
presented separately as discontinued operations for both
December 31, 1998 and December 31, 1997.
TEKLOGIX INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31
(unaudited)
Three Months Ended Nine Months Ended
December 31 December 31
----------------------- (expressed in thousands -----------------------
1998 1997 of dollars, except share 1998 1997
----------- ----------- and per share amounts) ----------- -----------
(see note (x)) (see note (x))
$46,973 $32,161 Revenues $124,203 $88,711
19,963 15,835 Cost of sales 53,448 43,723
----------- ----------- ----------- -----------
27,010 16,326 Gross profit 70,755 44,988
----------- ----------- ----------- -----------
Expenses
3,146 2,611 Research and development 8,626 7,436
14,420 11,396 Selling and marketing 38,055 30,648
2,193 4,569 General and administrative 6,462 8,680
----------- ----------- ----------- -----------
19,759 18,576 53,143 46,764
----------- ----------- ----------- -----------
Income (loss) from
continuing operations
7,251 (2,250) before income taxes 17,612 (1,776)
Provision for (recovery
2,827 (446) of) income taxes 6,971 750
----------- ----------- ----------- -----------
Net income (loss) from
4,424 (1,804) continuing operations 10,641 (2,526)
Net loss from
-- (1,103) discontinued operations -- (2,176)
----------- ----------- ----------- -----------
Net income (loss) for
$4,424 ($2,907) the period $10,641 ($4,702)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average number
13,883,473 13,934,462 of shares 13,886,740 13,957,627
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Basic earnings (loss)
per share from
$0.32 ($0.13) continuing operations $0.77 ($0.18)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Basic earnings (loss)
$0.32 ($0.21) per share $0.77 ($0.34)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
(x) The results of the mobile computer division are presented separately
as discontinued operations for the three month and nine month
periods ending December 31, 1998 and December 31, 1997.
TEKLOGIX INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31
(unaudited)
Three Months Ended Nine Months Ended
December 31 December 31
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
(see note (x)) (see note (x))
100.0% 100.0% Revenues 100.0% 100.0%
42.5% 49.2% Cost of sales 43.0% 49.3%
-------- -------- -------- --------
57.5% 50.8% Gross profit 57.0% 50.7%
-------- -------- -------- --------
Expenses
6.7% 8.1% Research and development 6.9% 8.4%
30.7% 35.4% Selling and marketing 30.6% 34.5%
4.7% 14.2% General and administrative 5.2% 9.8%
-------- -------- -------- --------
42.1% 57.8% 42.8% 52.7%
-------- -------- -------- --------
Income (loss) from continuing
15.4% (7.0%) operations before income taxes 14.2% (2.0%)
Provision for (recovery of)
6.0% (1.4%) income taxes 5.6% 0.8%
-------- -------- -------- --------
Net income (loss) from continuing
9.4% (5.6%) operations 8.6% (2.8%)
-- (3.4%) Net loss from discontinued operations -- (2.5%)
-------- -------- -------- --------
9.4% (9.0%) Net income (loss) for the period 8.6% (5.3%)
-------- -------- -------- --------
-------- -------- -------- --------
(x) The results of the mobile computer division are presented separately
as discontinued operations for the three month and nine month
periods ending December 31, 1998 and December 31, 1997.
TEKLOGIX INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
FOR THE PERIOD ENDED DECEMBER 31
(unaudited)
Three Months Ended Nine Months Ended
December 31 December 31
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
(see note (x)) (expressed in thousands of dollars) (see note (x))
OPERATING ACTIVITIES
Net income (loss) from continuing
$4,424 ($1,804) operations for the period $10,641 ($2,526)
Add/(deduct) items not affecting
cash
80 (1,002) Deferred income taxes 206 (876)
Loss/(gain) on disposal of
(36) 1 capital assets (36) 39
1,170 1,070 Depreciation and amortization 3,351 2,959
-------- -------- -------- --------
5,638 (1,735) 14,162 (404)
Net change in non-cash working
capital balances related to
4,225 (1,972) continuing operations 2,674 (6,851)
-------- -------- -------- --------
Cash provided by (used in)
9,863 (3,707) operating activities 16,836 (7,255)
-------- -------- -------- --------
INVESTING ACTIVITIES
-- -- Purchase of land -- (425)
(2,002) (696) Purchase of other capital assets (4,204) (3,515)
-- -- Purchase of intellectual property -- (1,055)
Decrease in shareholder loans
92 2 receivable 152 36
-------- -------- -------- --------
(1,910) (694) Cash used in investing activities (4,052) (4,959)
-------- -------- -------- --------
FINANCING ACTIVITIES
Increase (decrease) in
(264) 276 long-term debt (1,128) 4,526
Proceeds from (repurchase of)
276 (3) common shares 334 (3)
-------- -------- -------- --------
Cash provided by (used in)
12 273 financing activities (794) 4,523
-------- -------- -------- --------
Net increase (decrease) in cash
7,965 (4,128) Continuing operations 11,990 (7,691)
-- (2,051) Discontinued operations (792) 1,007
-------- -------- -------- --------
Net increase (decrease) in cash
7,965 (6,179) during the period 11,198 (6,684)
2,393 1,184 Cash position, beginning of period (840) 1,689
-------- -------- -------- --------
$10,358 ($4,995) Cash position, end of period $10,358 ($4,995)
-------- -------- -------- --------
-------- -------- -------- --------
(x) The results of the mobile computer division are presented separately
as discontinued operations for the three month and nine month
periods ending December 31, 1998 and December 31, 1997.
TEKLOGIX INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1998
(expressed in thousands, except per share amounts)
Q1 Q2 Q3 Q4 FY98
-------- -------- -------- -------- --------
(results restated(x))
Revenues $25,720 $30,830 $32,161 $38,902 $127,613
Cost of sales 12,307 15,581 15,675 17,585 61,148
-------- -------- -------- -------- --------
Gross profit 13,413 15,249 16,486 21,317 66,465
-------- -------- -------- -------- --------
Operating expenses
Research and development 2,177 2,648 2,611 2,625 10,061
Selling and marketing 9,188 10,064 11,556 11,962 42,770
General and administrative 1,684 2,427 4,569 3,420 12,100
-------- -------- -------- -------- --------
13,049 15,139 18,736 18,007 64,931
-------- -------- -------- -------- --------
Operating income (loss) before
restructuring charges 364 110 (2,250) 3,310 1,534
Restructuring charges -- -- -- 1,484 1,484
-------- -------- -------- -------- --------
Income (loss) from continuing
operations before income
taxes 364 110 (2,250) 1,826 50
Provision for income taxes 144 1,052 (446) 197 947
-------- -------- -------- -------- --------
Net income (loss) from
continuing operations 220 (942) (1,804) 1,629 (897)
Net loss from discontinued
operations (40) (1,033) (1,103) (5,165) (7,341)
-------- -------- -------- -------- --------
Net income (loss) for
the period $180 ($1,975) ($2,907) ($3,536) ($8,238)
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Weighted average number
of shares 13,987 13,951 13,935 13,924 13,949
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Basic earnings (loss) per share
from continuing operations $0.02 ($0.07) ($0.13) $0.12 ($0.06)
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Basic earnings (loss)
per share $0.01 ($0.14) ($0.21) ($0.25) ($0.59)
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
(x) The results of the mobile computer division are presented separately
as discontinued operations.
TEKLOGIX INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
(expressed in thousands, except per share amounts)
Q1 Q2 Q3 Q4 FY97
-------- -------- -------- -------- --------
(results restated(x))
Revenues $25,834 $26,772 $27,233 $31,325 $111,164
Cost of sales 10,741 11,146 11,113 14,095 47,095
-------- -------- -------- -------- --------
Gross profit 15,093 15,626 16,120 17,230 64,069
-------- -------- -------- -------- --------
Operating expenses
Research and development 2,070 1,817 1,964 2,309 8,160
Selling and marketing 7,989 7,723 8,092 9,099 32,903
General and administrative 1,857 1,107 1,243 1,486 5,693
-------- -------- -------- -------- --------
11,916 10,647 11,299 12,894 46,756
-------- -------- -------- -------- --------
Operating income before
restructuring charges 3,177 4,979 4,821 4,336 17,313
Restructuring charges -- -- -- -- --
-------- -------- -------- -------- --------
Income from continuing
operations before income
taxes 3,177 4,979 4,821 4,336 17,313
Provision for income taxes 1,179 1,845 1,816 1,695 6,535
-------- -------- -------- -------- --------
Net income from continuing
operations 1,998 3,134 3,005 2,641 10,778
Net loss from discontinued
operations (393) (670) (230) (900) (2,193)
-------- -------- -------- -------- --------
Net income for the period $1,605 $2,464 $2,775 $1,741 $8,585
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Weighted average number
of shares 13,882 13,929 13,980 13,978 13,942
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Basic earnings per share
from continuing operations $0.14 $0.22 $0.21 $0.19 $0.77
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Basic earnings per share $0.12 $0.18 $0.20 $0.12 $0.62
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
(x) The results of the mobile computer division are presented
separately as discontinued operations.
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