20-20 Technologies reports results for fiscal 2009
LAVAL, QC,
FISCAL 2009 HIGHLIGHTS
- Revenues stood at $63.1 million compared to $78.6 million in 2008
- Recurring revenues remained stable on a constant dollar basis
- EBITDA increased to $9.3 million from $4.3 million in 2008
- Net earnings of $2.6 million, or $0.14 per share, compared to a loss of
$2.3 million, or 0.12 per share in 2008
- Cash position at year-end increased to $23.2 million from $15.1 million
last year
YEAR-END RESULTS
Revenues declined by 19.7% to
Revenues from license sales decreased by 34.3% or
Operating income was
This improvement reflects the restructuring and cost reduction plans implemented in 2008 and 2009 by management in response to economic conditions. On a year-over-year basis, these measures generated cost reductions and savings of
The Company generated net earnings of
The balance sheet improved during the year with cash, cash equivalents and short-term investments totalling
"While the interior design business was severely impacted by the recession throughout 2009, 20-20 Technologies remained a leading supplier to the industry in all principal markets. By reducing overhead, selectively downsizing and bringing costs in line with revenues, we considerably improved our profitability," said Jean-François Grou, Chief Executive Officer. "The lean efficiency we established has positioned us to benefit considerably as the market recovers. Incremental volumes will not require our current cost structure to increase commensurate to rising revenues."
FOURTH QUARTER RESULTS
Revenues in the fourth quarter decreased by 17.3% to
Revenues from
In the fourth quarter, license sales decreased by 33.2%, or
Operating income was
For the fourth quarter, net income was
SUSTAINED INNOVATION
In our fourth quarter we pursued our investments in research and development rigorously aimed at improvements meeting our current customer requirements. Our portfolio has evolved to make client innovations viable as we adapted existing solutions to support diversification into adjacent markets of many of our customers at both the point-of-sale and in furniture manufacturing.
OUTLOOK
In 2009, 20-20 began work on a new strategic plan featuring a single software platform and a more open business model. It will allow us to accelerate our growth while increasing our profitability by better leveraging all of our assets including our partnerships. We will continue to provide integrated solutions to all the interior design and furniture industry participants including consumers, retailers, designers, manufacturers and their suppliers. "20-20 has the market position and knowledge to deliver this platform, which addresses the widely acknowledged needs of the industry, making it the indisputable 'industry standard,'" said Jean Mignault, Executive Chairman and Chief of Strategic Direction.
"Work on our new business platform is laying the foundation for our future progress on behalf of our shareholders for years to come, and it signals our determination to maintain and further strengthen 20-20's pre-eminence in the industry," concluded
"Although conditions will likely remain challenging through 2010, pent-up demand is building, and 20-20 is powerfully positioned to benefit from a resumption of growth in the interior design industry," said Jean-François Grou. "We will continue to deliver, with our existing and new products, greater efficiency and business generation potential to our customers. That in turn, we are confident, will create significant new value for 20-20's shareholders."
CONFERENCE CALL INFORMATION
20-20 will host a conference call to discuss the fourth quarter results
Please note that 20-20 Technologies' full financials and MD&A are available on SEDAR as well as on the Company's web site, www.2020technologies.com.
ABOUT 20-20 TECHNOLOGIES INC.
20-20 Technologies is the world's leading provider of computer-aided design, business and software solutions tailored for the interior design and furniture industries. Dealers and retailers use its desktop and Web-based products and solutions for the residential and commercial markets. 20-20 offers a unique proprietary end-to-end solution, integrating the entire breadth of functions in interior design. It provides a bridge for data communication from the point-of-sale to manufacturing and world-leading enterprise resource planning (ERP) systems, including computer-aided engineering and plant floor automation software. Operating in twelve countries with more than 500 employees, 20-20 is a publicly traded company (TWT) on the
NON-GAAP MEASURES
References in this press release to the term "EBITDA" are related to cash earnings. EBITDA is defined for these purposes as Operating Income before restructuring charges plus amortization and depreciation expenses. EBITDA is not a recognized measure under GAAP in
FORWARD-LOOKING STATEMENTS
Certain statements contained in this news release constitute forward-looking information within the meaning of securities laws.
Implicit in this information, particularly in respect of future operating results and economic performance of the Company are assumptions regarding projected revenue and expenses. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual future operating results and economic performance of the Company are subject to a number of risks and uncertainties, including general economic, market and business conditions and could differ materially from what is currently expected.
For more exhaustive information on these risks and uncertainties, please refer to our most recently filed annual information form, available at www.sedar.com. Forward-looking information contained in this report is based on management's current estimates, expectations and projections, which management believes are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to do so, we are under no obligation and do not undertake to update this information at any particular time unless required by applicable securities law.
20-20 Technologies Inc.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of U.S. dollars)
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October 31,
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2009 2008
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$ $
ASSETS
Current assets
Cash and cash equivalents 23,221 13,487
Short-term investments - 1,644
Accounts receivable 18,910 17,538
Income taxes receivable 24 585
Contracts in progress 253 267
Prepaid expenses 1,243 1,244
Future income taxes 421 598
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44,072 35,363
Property and equipment 2,322 2,894
Intangibles 9,099 10,417
Goodwill 58,161 52,367
Future income taxes 3,131 1,500
Other assets 451 519
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117,236 103,060
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LIABILITIES
Current liabilities
Bank loan 149 -
Accounts payable 11,040 12,665
Income taxes payable 1,674 1,465
Deferred revenue 14,665 12,481
Installment on long-term debt 3,024 3,805
Future income taxes 903 -
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31,455 30,416
Long-term debt 14,645 11,824
Leasehold inducements 343 364
Non-controlling interest 37 33
Future income taxes 3,853 3,756
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50,333 46,393
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SHAREHOLDERS' EQUITY
Capital stock 58,582 58,647
Common stock options and warrants 1,279 1,145
Contributed surplus 1,015 961
Deficit (4,268) (6,883)
Accumulated other comprehensive income 10,295 2,797
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6,027 (4,086)
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66,903 56,667
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117,236 103,060
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20-20 Technologies Inc.
CONSOLIDATED EARNINGS
(Amounts in thousands of U.S. dollars, except per-share data)
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Years ended October 31,
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2009 2008
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$ $
Revenues
License sales 17,341 26,392
Maintenance and other recurring revenues 33,300 35,368
Professional services 12,466 16,842
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63,107 78,602
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Cost of revenues
License sales 2,169 2,854
Maintenance and services 13,934 18,756
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16,103 21,610
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Gross margin 47,004 56,992
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Operating expenses
Sales and marketing 16,587 26,015
Research and development 12,015 16,945
General and administrative 12,764 14,420
Stock-based compensation 250 (27)
Restructuring costs (228) 2,329
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41,388 59,682
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Operating Income (loss) 5,616 (2,690)
Financial expenses 1,836 971
Non-controlling interest 4 28
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Earnings (loss) before income taxes 3,776 (3,689)
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Income taxes
Current 1,894 735
Future (699) (2,127)
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1,195 (1,392)
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Net earnings (loss) 2,581 (2,297)
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Earnings (loss) per share
Basic and diluted 0.14 (0.12)
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20-20 Technologies Inc.
CONSOLIDATED CASH FLOWS
(Amounts in thousands of U.S. dollars)
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Years ended October 31,
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2009 2008
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$ $
OPERATING ACTIVITIES
Net earnings (loss) 2,581 (2,297)
Non-cash items
Amortization 3,961 4,687
Leasehold inducements (63) 53
Stock-based compensation 233 (115)
Capitalized interest on long-term debt 29 27
Non-controlling interest 4 28
Future income taxes (699) (2,127)
Unrealized loss (gain) on foreign exchange (1,497) 3,215
Unrealized loss (gain) on forward exchange
contracts and currency options 80 461
Changes in working capital items (29) 685
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Cash flows from operating activities 4,600 4,617
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INVESTING ACTIVITIES
Business acquisitions (31) (40,765)
Short-term investments (1,719) (24,790)
Short-term investments dispositions 3,421 39,998
Property and equipment (520) (1,103)
Other assets (3) (124)
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Cash flows from investing activities 1,148 (26,784)
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FINANCING ACTIVITIES
Long-term debt 6,985 15,000
Repayment of long-term debt (4,807) (203)
Options exercised - 118
Common shares buyback (31) (280)
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Cash flows from financing activities 2,147 14,635
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Effect of changes in exchange rate on cash held
in foreign currencies 1,839 (4,261)
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Net increase (decrease) in cash and cash
equivalents 9,734 (11,793)
Cash and cash equivalents, beginning of year 13,487 25,280
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Cash and cash equivalents, end of year 23,221 13,487
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For further information: Media Relations: MaisonBrison: Rick Leckner, (514) 731-0000
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