Applied Digital Solutions Announces First Quarter Results for the Three Months Ended March 31, 2001.Business Editors/High Tech Writers PALM BEACH, Fla.--(BUSINESS WIRE)--May 15, 2001 Revenues and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the increased by $24.6 million or 107% and $500,000 or 23%, respectively; SG&A costs, as a percentage of revenue, decreased by 24% over same period 2000 Applied Digital Solutions, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ADSX ADSX Applied Digital Solutions, Inc. (stock symbol) ), a leader in information technology and solutions, today announced the first quarter results from continuing operations for the three months ended March 31, 2001. Applied Digital Solutions posted a loss of $(11.39) million, or $(.13) per share, on revenues of $47.4 versus a loss of $(3.2) million or $(.06) per share, on revenues of $22.8 million for the same period 2000. Continuing operations recorded an EBITDA of $(1.7) million versus $(2.2) million, an improvement of $500,000 or 23% over the same period 2000. In a statement, Mercedes Mercedes (mĕrsā`thēs), city (1996 pop. 39,139), capital of Soriano dept., SW Uruguay, a port on the Río Negro. An agricultural and livestock center, the city has a shipyard and several fine beaches and resorts. Walton, President and COO (Cell Of Origin) See mobile positioning. of Applied Digital Solutions, commented on the results: "The first quarter of 2001 was an extremely intense and exciting time for us. Translating 90 days worth of business into just a few words is difficult, at best. In addition to an aggressive focus on the day-to-day day-to-day adj. 1. Occurring on a routine or daily basis: the day-to-day movements of the stock market. 2. business of Applied Digital, we have been moving ahead with strategic directions charted out at the end of 2000 to create sustained value. One quarter into the year, we are pleased to share our early successes and optimism Optimism See also Hope. Bontemps, Roger personification of cheery contentment. [Fr. Lit.: “Roger Bontemps” in Walsh Modern, 66] Candide beset by inconceivable misfortunes, hero indifferently shrugs them off. [Fr. for the remainder of the year." Ms. Walton expanded on various key points. Financial Performance: "Although the overall economic environment, particularly in the retail and technology sectors, had an effect on sales during the first quarter, the fiscal vigilance VIGILANCE. Proper attention in proper time. 2. The law requires a man who has a claim to enforce it in proper time, while the adverse party has it in his power to defend himself; and if by his neglect to do so, he cannot afterwards establish such claim, the that has become the model of our enterprise resulted in EBITDA numbers that were on target with our internal budget projections. In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite our first quarter loss, Applied Digital remains in full compliance with the covenants of our credit facility. The 24% decrease in our SG&A as a percentage of revenue positions us for improved margins going forward. Moreover, we saw a trend toward stronger sales in the latter half of the first quarter. Applied Digital is on target to return to positive EBITDA by the fourth quarter of 2001." Digital Angel: "The first quarter of 2001 witnessed a number of very positive developments for Digital Angel and the Advanced Wireless Group. We are very proud of our Best of Show designation DESIGNATION, wills. The expression used by a testator, instead of the name of the person or the thing he is desirous to name; for example, a legacy to. the eldest son of such a person, would be a designation of the legatee. Vide 1 Rop. Leg. ch. 2. 2. at the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the World Wireless Show in February February: see month. . The registration website has yielded great amounts of information regarding desired features and functions for Digital Angel's first delivery run. Additionally, we are actively negotiating partnerships for investment, distribution, R&D and manufacturing in preparation for our October October: see month. , 2001 delivery of the first Digital Angel products." Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. : "Of the seven companies identified as 'discontinued operations', three have been sold or have transactions pending that should close prior to the end of June June: see month. . Each of these transactions will have been at a premium to their value after the write-downs of fourth quarter 2000. We are encouraged by these early successes and are actively pursuing opportunities to sell the remaining companies. The largest of the discontinued operations, Intellesale, currently has several prospective buyers due to its refocused business model and return to financial viability." Ms. Walton concluded: "We are encouraged by the results from the first quarter, but we remain steadfast in our commitment to accelerate shareholder value. The increased revenue and EBITDA, demonstrated cost reductions and the variety of negotiations to which Digital Angel is a party are all important first steps, but we will not be satisfied until stellar results are achieved." About Applied Digital Solutions, Inc. Applied Digital Solutions is an information technology and solutions company operating on the I3 Services Platform - Intelligent Integrated Information Services See Information Systems. . Through our core business units (Applications, Services and Advanced Wireless), Applied Digital Solutions offers - products and services for the collection, organization, analysis, warehousing and dissemination dissemination Medtalk The spread of a pernicious process–eg, CA, acute infection Oncology Metastasis, see there of information for a wide variety of end users including commercial operations, government agencies and consumers. For more information, visit the company's website at http://www.adsx.com . Statements about the Company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995. The Company intends that such forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. involve risks and uncertainties and are subject to change at any time, and the Company's actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
Applied Digital Solutions, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except par value)
Assets
(Unaudited)
March 31, December 31,
2001 2000
Current Assets
Cash and cash equivalents $ 6,393 $ 8,039
Accounts receivable and unbilled receivables
(net of allowance for doubtful accounts of
$903 in 2001 and $1,681 in 2000) 41,358 43,890
Inventories 12,187 12,311
Notes receivable 3,828 5,711
Current deferred tax asset 10,001 10,001
Other current assets 5,908 6,040
Total Current Assets 79,675 85,992
Net Assets Of Discontinued Operations 10,550 8,076
Property And Equipment, net 32,131 21,368
Notes Receivable 12,928 12,898
Goodwill, net 160,653 166,024
Investment In Affiliate 7,949 --
Other Assets 18,116 25,093
$ 322,002 $ 319,451
======================================================================
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable $ 615 $ 657
Current maturities of long-term debt 4,529 4,571
Accounts payable 14,749 16,945
Accrued expenses 18,563 16,361
Due to sellers of acquired subsidiary 9,465 9,465
Earnout and put accruals 3,884 18,245
Total Current Liabilities 51,805 66,244
Long-Term Debt And Notes Payable 69,741 69,146
Total Liabilities 121,546 135,390
Commitments And Contingencies
Minority Interest 4,930 4,879
Redeemable Preferred Stock - Series C 12,027 13,440
Redeemable Preferred Stock Options - Series C 5,180 5,180
Preferred Stock, Common Stock and Other
Stockholders' Equity
Preferred shares: Authorized 5,000 shares in
2001 and 2000 of $10 par value; special voting,
no shares issued or outstanding in 2001 and
2000, Class B voting, no shares issued or
outstanding in 2001 and 2000
Common shares: Authorized 245,000 shares in 2001
and 2000, of $.001 par value; 127,753 shares
issued and 123,862 shares outstanding in 2001
and 103,063 shares issued and 101,847 shares
outstanding in 2000 128 103
Common and preferred additional paid-in
capital 310,097 266,573
Accumulated deficit (110,658) (99,478)
Common stock warrants 1,406 1,406
Treasury stock (carried at cost, 3,891 shares
in 2001 and 1,216 shares in 2000) (7,403) (2,803)
Accumulated other comprehensive loss (1,741) (729)
Notes received for shares issued (13,510) (4,510)
Total Preferred Stock, Common Stock, and Other
Stockholders' Equity 178,319 160,562
$ 322,002 $ 319,451
======================================================================
APPLIED DIGITAL SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For The Three Months
Ended March 31,
2001 2000
Product revenue $ 34,383 $ 15,888
Service revenue 13,026 6,913
Total revenue 47,409 22,801
Cost of products sold 23,844 9,627
Cost of services sold 6,217 3,375
Gross profit 17,348 9,799
Selling, general and
administrative expenses (19,058) (12,011)
Depreciation and amortization (6,739) (1,060)
Interest income 487 197
Interest expense (1,845) (1,067)
Loss from continuing operations
before provision (benefit) for income
taxes, minority interest and equity in
net loss of affiliate (9,807) (4,142)
Provision (benefit) for income taxes 1,548 (932)
Loss from continuing operations before
minority interest and equity in net
loss of affiliate (11,355) (3,210)
Minority interest (93) (30)
Equity in net loss of affiliate 131 --
Loss from continuing operations (11,393) (3,180)
Income from discontinued operations,
net of income taxes of $51 in 2001 and
$334 in 2000 213 2,008
Net loss (11,180) (1,172)
Preferred stock dividends 238 --
Accretion of beneficial conversion
feature of redeemable preferred stock
- series C 2,451 --
Net loss available to common stockholders $(13,869) $ (1,172)
Earnings per common share - basic
Loss from continuing operations $ (.13) $ (.06)
Income from discontinued operations -- .04
Net loss per common share - basic $ (.13) $ (.02)
Earnings per common share - diluted
Loss from continuing operations $ (.13) $ (.06)
Income from discontinued operations -- .04
Net loss per common share - diluted $ (.13) $ (.02)
Weighted average number of common shares
outstanding - basic 103,602 49,012
Weighted average number of common shares
outstanding - diluted 103,602 49,012
APPLIED DIGITAL SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF PREFERRED STOCK,
COMMON STOCK AND OTHER STOCKHOLDERS' EQUITY
For The Three Month Period Ended March 31, 2001
(In thousands)
(Unaudited)
Preferred Common Additional
Stock Stock Paid-In
Number Amount Number Amount Capital
Balance - December 31, -- $-- $103,063 $ 103 $266,573
2000
Net loss -- -- -- -- --
Comprehensive loss -
Foreign currency
translation -- -- -- -- --
Total comprehensive loss -- -- -- -- --
Conversion of redeemable
preferred shares to
common shares -- -- 800 1 2,237
Accretion of beneficial
conversion feature of
redeemable preferred
shares -- -- -- -- (2,451)
Dividends accrued on
redeemable preferred
stock -- -- -- -- (238)
Beneficial conversion
feature of redeemable
preferred stock -- -- -- -- 2,451
Penalty paid by issuance
of redeemable preferred
stock -- -- -- -- (612)
Issuance of common shares -- -- 469 1 526
Issuance of common
shares for software
license purchase -- -- 6,278 6 10,195
Issuance of common shares
for investment -- -- 3,322 3 8,070
Issuance of common shares
for settlement of put
agreements -- -- 8,283 8 14,352
Common shares repurchased -- -- -- -- --
Notes receivable for -- -- 5,538 6 8,994
shares issued
Balance - March 31, 2001 -- -- $127,753 $ 128 $310,097
APPLIED DIGITAL SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF PREFERRED STOCK,
COMMON STOCK AND OTHER STOCKHOLDERS' EQUITY
For The Three Month Period Ended March 31, 2001
(In thousands)
(Unaudited)
Common
Accumulated Stock Treasury
Deficit Warrants Stock
Balance-December 31, 2000 $(99,478) 1,406 $ (2,803)
Net loss (11,180) -- --
Comprehensive loss -
Foreign currency translation -- -- --
Total comprehensive loss (11,180) -- --
Conversion of redeemable
preferred shares to common
shares -- -- --
Accretion of beneficial
conversion feature of
redeemable preferred shares -- -- --
Dividends accrued on redeemable
preferred stock -- -- --
Beneficial conversion feature of
redeemable preferred stock -- -- --
Penalty paid by issuance of
redeemable preferred stock -- -- --
Issuance of common shares -- -- --
Issuance of common shares for
software license purchase -- -- --
Issuance of common shares for
investment -- -- --
Issuance of common shares for
settlement of put agreements -- -- --
Common shares repurchased -- -- (4,600)
Notes receivable for shares issued -- -- --
Balance - March 31, 2001 $(110,658) $1,406 $(7,403)
APPLIED DIGITAL SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF PREFERRED STOCK,
COMMON STOCK AND OTHER STOCKHOLDERS' EQUITY
For The Three Month Period Ended March 31, 2001
(In thousands)
(Unaudited)
Accumu-
lated
Accumulated
Other Notes Total
Compre- Received Stock-
hensive For Shares holders'
Loss Issued Equity
Balance - December 31, 2000 $ (729) $ (4,510) $ 160,562
Net loss -- -- (11,180)
Comprehensive loss -
Foreign currency
translation (1,012) -- (1,012)
Total comprehensive loss (1,741) -- (12,192)
Conversion of redeemable
preferred shares to common
shares -- -- 2,238
Accretion of beneficial
conversion feature of
redeemable preferred shares -- -- (2,451)
Dividends accrued on redeemable
preferred stock -- -- (238)
Beneficial conversion feature of
redeemable preferred stock -- -- 2,451
Penalty paid by issuance of
redeemable preferred stock -- -- (612)
Issuance of common shares -- -- 527
Issuance of common shares for
software license purchase -- -- 10,201
Issuance of common shares for
investment -- -- 8,073
Issuance of common shares
for settlement of put agreements -- -- 14,360
Common shares repurchased -- -- (4,600)
Notes receivable for shares issued -- (9,000) --
Balance - March 31, 2001 $(1,741) $(13,510) $ 178,319
======================================================================
APPLIED DIGITAL SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For The Three Months
Ended March 31,
2001 2000
Cash flows from operating activities
Net loss $(11,180) $(1,172)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Income from discontinued
operations (213) (2,008)
Depreciation and amortization 6,739 1,060
Deferred income taxes 2,299 126
Minority interest (93) (30)
Equity in net loss of affiliate 131 --
Loss (gain) on sale of equipment 85 (10)
Change in assets and liabilities:
Decrease in accounts receivable 2,531 1,261
Decrease (increase) in inventories 125 (518)
Decrease (increase) in other
current assets 578 (1,204)
Decrease in accounts payable and
accrued expenses (720) (11,645)
Net cash (used in) provided by
discontinued operations (520) 1,115
Net cash used in operating activities (238) (13,025)
Cash flows from investing activities
Decrease in due from buyer of divested
subsidiary -- 31,302
Decrease (increase) in notes receivable 1,854 (956)
Increase in other assets (485) (580)
Proceeds from sale of property and
equipment -- 32
Payments for property and equipment (1,879) (2,688)
Payments for costs of asset and business
acquisitions (net of cash balance acquired) -- (6,636)
Net cash (used in) provided by discontinued
operations (1,359) 490
Net cash (used in) provided by investing
activities (1,869) 20,964
Cash flows from financing activities
Net amounts borrowed (paid) on notes
payable 1,600 (14,506)
Proceeds from long-term debt -- 4,566
Payments on long-term debt (1,089) (2,273)
Other financing costs (25) --
Issuance of common shares 15 5,008
Proceeds from subsidiary issuance of
common stock 126 --
Net cash (used in) provided by
discontinued operations (166) 153
Net cash provided by (used in)
financing activities 461 (7,052)
Net (decrease) increase in cash and cash
equivalents (1,646) 887
Cash and cash equivalents - beginning
of period 8,039 2,181
Cash and cash equivalents - end of period $ 6,393 $ 3,068
======================================================================
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