BCE Emergis Announces First Quarter Results; In Line With Previously Announced Targets.Business Editors MONTREAL--(BUSINESS WIRE)--April 23, 2002 BCE BCE abbr. 1. Bachelor of Chemical Engineering 2. Bachelor of Civil Engineering BCE Abbreviation for before the Common Era. Emergis Emergis Incorporated (TSX: EME) is a Canadian e-Business company dealing with interactions between companies and electronic commerce. The company is linked to the merger of Bell Canada's Electronic Business Solutions and MPACT Immedia Inc.(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :IFM IFM Institut Français de la Mode (French Fashion Institute) IfM Institute for Micromanufacturing (Louisiana Tech University) IFM Interface Module IFM Instantaneous Frequency Measurement ), a leading provider of e-Business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. services, today announced its results for the first quarter of fiscal 2002. Revenue for the first quarter ended March 31, 2002 totaled $132.0 million, compared to $143.3 million for the corresponding quarter of 2001. 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 (i) loss amounted to $20.5 million for the quarter, compared to a positive EBITDA(i) of $26.3 million a year earlier. Net loss for the quarter came in at $27.9 million, or $0.28 per share, compared to a loss of $115.0 million, or $1.23 per share for the same period last year. The prior year's quarter net loss figure includes goodwill amortization of $90.3 million, no goodwill amortization was recorded in the first quarter of this year, due to new accounting standards. Cash and temporary cash investments at the end of the quarter totaled $145.2 million. "These results are in line with the guidance issued last month. We are focusing on key initiatives that we feel have significant revenue growth and earnings potential and have undertaken broad cost-reduction measures that will strengthen the Company as we move forward. I am confident that, excluding the effect of the cost-reductions, we will be EBITDA and net earnings positive by the end of the second quarter," said Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. Edwards, Vice Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of BCE Emergis. Additional financial information For the first quarter ended March 31, 2002: - Recurring revenue for the quarter stood at $122.1 million or 92% of total revenue, compared to 81% and 75% in the first and fourth quarters last year, respectively. All business units contributed to the $5.9 million increase in recurring revenue over the previous quarter. - Non-recurring revenue fell to $9.9 million, compared to $27.1 million in the first quarter last year and $44.9 million in the fourth quarter of 2001. This decline was due to uncertain business conditions, merger activities, and the reluctance of customers to commit to large projects. - The business units recorded revenue as follows: -- The eHealth business unit registered $67.3 million, compared to $70.3 million in the 1st quarter of 2001. This was primarily due to a decrease in non-recurring professional services revenue. In the fourth quarter of 2001, recorded revenue was $83.0 million -- The Canadian business unit reached $60.2 million, compared to $66.0 million in the 1st quarter of 2001. This was largely due to reduced levels of non-recurring revenue from license fees and professional services. Revenue in the fourth quarter of last year was $82.7 million. -- The U.S. business unit came in at $4.5 million, compared to $7.0 million in the previous year. This reduced level stems from lower initial license fees recorded in the most recent quarter. Revenue in the last quarter of 2001 totaled $15.7 million. - U.S.-sourced revenue was $53.7 million compared to $55.2 million and $70.6 million in the first and fourth quarters of last year. From a percentage perspective, revenue from the U.S. increased from 39% for both quarters in 2001 to 41% in the first three months of 2002. - Related party revenue stood at $38.9 million, compared to $41.3 million in the corresponding quarter last year and $76.6 million in the fourth quarter last year. - Gross margin was at the 75.4 % level, compared to 77.6% and 77.0% in the first and fourth quarters of 2001, respectively. The decline was directly due a lower level of non-recurring revenue. - The major improvement in net loss over the corresponding quarter of 2001 is attributable to the fact that last year's first quarter loss included goodwill amortization in the amount of $90.3 million, an amount not included in this year's results, owing to new accounting standards. - Operations used cash flow of $29.1 million, compared to the $14.6 million used in the corresponding quarter in 2001. In the last quarter of 2001, operations generated $62.9 million in cash. - Accounts receivable, on a trailing 12-month average, stood at 54 days outstanding for the quarter, compared to the 48 days at year-end and 53 days at the end of the first quarter in 2001. Subsequent events BCE Emergis acquired Admar Corporation's Preferred Provider Organisation network (MedNetwork) and its utilization management Utilization management is the evaluation of the appropriateness, medical need and efficiency of health care services procedures and facilities according to established criteria or guidelines and under the provisions of an applicable health benefits plan. services (Health Watch) from the Principal Life Insurance Company on April 1, 2002. The purchase price was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. US$3.0 million, US$1.25 million of which was paid at closing and the balance to be paid on December December: see month. 31, 2002, subject to certain conditions. Among other things, this acquisition affords Emergis broader provider network reach in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). , Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). , Texas, Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. and Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). . Also, the Company acquired the bill presentment See EBPP. initiative called e-route from its six financial institution shareholders. The acquisition amounted to $6.9 million in cash and $19.5 million in assumed liabilities owed to Emergis for a total consideration of $26.4 million. The bill presentment service will benefit from a more focused effort to build the biller bill·er n. One that bills, as: a. A clerk who prepares bills. b. A machine used in preparing bills. community, the financial institutions' commitment to drive adoption among their customers and simplified governance Governance makes decisions that define expectations, grant power, or verify performance. It consists either of a separate process or of a specific part of management or leadership processes. Sometimes people set up a government to administer these processes and systems. . Update on the cost-reduction plan As announced on April 5, 2002, the Company undertook a cost reduction plan, several items of which have already been completed. - In terms of headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. , 176 employees and 22 consultants have left the Company; 358 people are scheduled to leave in the coming months as customer project milestones are met; 191 people remain with business services that are targeted for divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). or closure. Business outlook For the second quarter the Company is targeting between $135 million and $145 million in total revenue; between $9 million and $16 million in EBITDA; and between $0.00 and $0.04 in net earnings per share before restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges. Divestitures are not expected to have a material impact in the second quarter. The previously-issued guidance for 2002 and corporate objectives for 2003 remain in place. Edwards stated, "As we rapidly move to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. our expenses with our recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenue base, there will be far less volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in our future results. Our challenge is to seize seize v. To exhibit symptoms of seizure activity, usually with convulsions. the opportunity afforded us by our key initiatives in presentment presentment: see indictment. , payment and claims processing and to increase our recurring base through our strong banking and health insurance customers and distribution partners. By having the individual business units focusing solely on our existing clients and a new business development group on signing and adding new major clients to our base, I believe we will accomplish both our short and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. targets." The Company is also reviewing its goodwill in light of the new accounting standards. Any impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. which could stem from the adoption of these new standards will be charged to opening retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. in the second quarter, thereby having no effect on either EBITDA or net earnings. Additional financial information, as well as the Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of the financial results, are available on the BCE Emergis web site at www.emergis.com. N.B: (i)EBITDA used in this press release does not have a meaning under Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and therefore may not be comparable to similar measures presented by other publicly traded companies publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. . It is defined as earnings before depreciation, amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. , interest, write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of assets, gains on sale of exited activities and other expenses. No reconciliation is provided in the Interim Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statement of Earnings. BCE Emergis is a premier e-Business service provider, strategically focusing on market leadership in the transaction-intensive eHealth eHealth (also written e-health) is a relatively recent term for healthcare practice which is supported by electronic processes and communication. The term is inconsistently used: some would argue it is interchangeable with health care informatics, while others use it in the and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. sectors. By layering technologically advanced e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. services on existing Internet-based platforms, Emergis offers its customers increasing value in their e-commerce adoption and ever-increasing levels of sophisticated services. BCE Emergis' customers include leading North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. banks and insurance companies. The Company's shares (TSE: IFM) are included in the TSE 300 composite index Composite Index A grouping of equities, indexes or other factors combined in a standardized way, providing a useful statistical measure of overall market or sector performance over time. Also known simply as a "composite". . This news release contains 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. , which are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly. Factors which could cause actual results or events to differ materially from current expectations include, among other things: uncertainty as to whether BCE Emergis' strategies will yield the expected benefits and growth prospects, the current uncertainly in North American economic conditions, competitive conditions, the fluctuation Fluctuation A price or interest rate change. in the currency exchange rates between the Canadian and U.S. dollar, BCE Emergis' ability to drive recurring revenue and expand its operations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. particularly in the ehealth and financial sectors, the extent of eCommerce See e-commerce. adoption as well as the adoption rate by its customers of its services and the ability to integrate efficiently new acquisitions. For additional information with respect to certain of these and other factors, see the Annual Information Form and Annual Report (Management Discussion and Analysis) of the Company filed with Canadian securities commissions. THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PRESS RELEASE REPRESENT BCE EMERGIS EXPECTATIONS AS AT APRIL 23, 2002 AND, ACCORDINGLY, ARE SUBJECT TO CHANGE AFTER SUCH DATE. HOWEVER BCE EMERGIS DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE
Consolidated Statements of Earnings
For the three For the three
(millions of dollars, month period month period
except loss per share ended ended
and number of shares) March 31, 2002 March 31, 2001
(unaudited) (unaudited)
Revenue 132.0 143.3
Direct costs 32.5 32.1
-------------- -------------
Gross margin 99.5 111.2
-------------- -------------
Expenses
Operations 50.9 41.4
Sales and marketing 22.0 16.6
Research and development 27.4 11.1
General and administrative 19.7 15.8
-------------- -------------
120.0 84.9
-------------- -------------
Earnings (loss) before
under-noted items (20.5) 26.3
Depreciation 15.5 9.3
Amortization of intangibles (note 1) 7.3 101.2
Interest income (0.8) (1.6)
Interest on long-term debt 1.1 3.5
Accretion on convertible debenture
due to parent,
related to the option - 3.5
Writedown of marketable securities
and other assets - 22.4
Other 0.3 (2.1)
-------------- -------------
Net loss before income taxes (43.9) (109.9)
Income taxes
Current 2.8 4.2
Future (18.8) 0.9
-------------- -------------
Net Loss (27.9) (115.0)
============== =============
Basic and diluted loss per share
($) (note 2) (0.28) (1.23)
Weighted average number of shares
outstanding used in computing
basic and diluted loss per share 101,341,474 93,785,174
The accompanying notes are an integral part of the Interim
Consolidated Financial Statements.
Consolidated Statements of Deficit
As at As at
(millions of dollars) March 31, 2002 March 31, 2001
(unaudited) (unaudited)
Deficit - beginning of period (786.4) (372.0)
Net loss (27.9) (115.0)
-------------- -------------
Deficit - end of period (814.3) (487.0)
-------------- -------------
The accompanying notes are an integral part of the Interim
Consolidated Financial Statements.
Consolidated Balance Sheets
As at As at
March 31, December 31,
(millions of dollars) 2002 2001
(unaudited) (audited)
ASSETS
Current
Cash and temporary cash investments 145.2 183.3
Marketable securities
(market value $0.8M as at
March 31, 2002 and $3.1M as at
December 31, 2001) 0.7 1.9
Accounts receivable 96.4 98.6
Future income taxes 5.6 5.6
Other 13.6 9.6
-------------- -------------
261.5 299.0
Capital assets 156.2 172.1
Goodwill, net 477.0 477.2
Future income taxes 89.7 68.7
Other assets 87.1 89.9
-------------- -------------
1,071.5 1,106.9
-------------- -------------
LIABILITIES
Current
Accounts payable and accrued
liabilities 98.6 100.2
Deferred revenue 11.7 12.3
Deferred credits 9.0 12.0
Long-term debt 28.5 28.7
-------------- -------------
147.8 153.2
Deferred credits 1.8 1.9
Long-term debt 34.3 36.9
-------------- -------------
183.9 192.0
-------------- -------------
SHAREHOLDERS' EQUITY (Note 3)
Capital stock 1,596.4 1,596.0
Contributed surplus 46.2 46.2
Deficit (814.3) (786.4)
Foreign currency translation
adjustment 59.3 59.1
-------------- -------------
887.6 914.9
-------------- -------------
1,071.5 1,106.9
-------------- -------------
The accompanying notes are an integral part of the Interim
Consolidated Financial Statements.
Consolidated Statements of Cash Flows
For the three For the three
month period ended month period ended
(millions of dollars) March 31, 2002 March 31, 2001
(unaudited) (unaudited)
Operating activities
Net loss (27.9) (115.0)
Depreciation and amortization 22.8 110.5
Accretion on convertible
debenture due to parent,
related to the option - 3.5
Writedown of marketable
securities and other assets - 22.4
Future income taxes (18.8) 0.9
Other 0.8 (0.3)
Changes in working capital (6.0) (36.6)
-------------- -------------
Cash flows used from operating
activities (29.1) (14.6)
-------------- -------------
Investing activities
Additions to capital assets (5.1) (2.7)
Acquisitions (0.7) (1.5)
Proceeds on sale of marketable
securities 2.1 -
Loan receivable 0.3 -
Settlement of note payable to former
majority shareholder of UP&UP - (1.5)
-------------- -------------
Cash flows used for investing
activities (3.4) (5.7)
-------------- -------------
Financing activities
Repayment of long-term debt (6.0) (5.6)
Issue of common shares 0.4 3.0
-------------- -------------
Cash flows used for financing
activities (5.6) (2.6)
-------------- -------------
Foreign exchange gain on cash
held in foreign currencies - 0.3
Cash and cash equivalents
Decrease (38.1) (22.6)
Balance, beginning of period 183.3 92.2
-------------- -------------
Balance, end of period 145.2 69.6
-------------- -------------
Supplemental disclosure of cash
flow information
Interest paid 1.1 1.0
Income taxes paid 4.3 1.9
The accompanying notes are an integral part of the Interim
Consolidated Financial Statements.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2002
(In millions of Canadian dollars except share data) (unaudited)
These interim consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian generally accepted accounting principles, using the same accounting policies as were used for the consolidated financial statements for the year ended December 31, 2001 except as discussed below. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2001, as set out in the 2001 Annual Report.
1. Summary of Significant Accounting Policies
Business Combinations/Goodwill and Other Intangible Assets
The CICA issued new Handbook Sections 1581, Business Combinations,
and 3062, Goodwill and Other Intangible Assets. Effective January 1,
2002, goodwill and intangible assets with an indefinite life will no
longer be amortized to earnings and will be assessed for impairment on
an annual basis in accordance with the new standards, including a
transitional impairment test whereby any resulting impairment will be
charged to opening retained earnings. Management is currently
evaluating the impact of the adoption of the new standards, which
could result in an impairment charge, and will have completed the
assessment of the quantitative impact on its financial statements by
June 30, 2002.
This section also requires that a reconciliation of net loss excluding
the impact of goodwill amortization be disclosed.
For the three month period ended
---------------------------------
March 31, March 31,
2002 2001
=================================================================
Net loss, as reported (27.9) (115.0)
Goodwill amortization expense,
net of tax - 90.3
Net loss, adjusted (27.9) (24.7)
=================================================================
Adjusted basic and diluted
loss per share ($) (0.28) (0.26)
-----------------------------------------------------------------
Foreign Currency Translation
The CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) issued amendments to Handbook
This article is about reference works. For the subnotebook computer, see .
Assets and liabilities with contractual payoffs. , such as long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , which were previously deferred and amortized on a straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. basis over the remaining lives of the related items. These amendments are required to be applied retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin with restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of prior periods. The adoption of the amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. standard had no significant impact on the financial statements. Stock-based Compensation The Company also adopted the new recommendations of CICA Handbook Section 3870, Stock-based compensation and other stock-based payments, effective January 1, 2002. This Section establishes standards for the recognition, measurement and disclosure of stock-based compensation and other stock-based payments made in exchange for goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. and applies to transactions, including non-reciprocal transactions, in which an enterprise grants shares of common stock, stock options, or other equity instruments, or incurs liabilities based on the price of common stock or other equity instruments. This Section sets out a fair value based method of accounting and is required for certain stock-based transactions and applied to awards granted on or after January 1, 2002. The Company, as permitted by Handbook Section 3870, has elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. to continue to account for employee stock options by measuring compensation cost for these options as the excess, if any, of the quoted market price of the Company's commons shares at the date of grant over the amount an employee must pay to acquire the common shares. Had compensation cost for the Company's stock-based employee compensation plans been determined under the fair value based method of accounting for awards granted on or after January 1, 2002, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss, and basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share would have amounted to $ 28.3 million, and $0.28, respectively for the three month period ended March 31, 2002. These pro forma amounts include a compensation cost based on a weighted-average grant date fair value of $33.98 per stock option for the 247,500 stock options granted during 2002, as calculated using the Black-Scholes option pricing model option pricing model A mathematical formula for determining the price at which an option should trade. The model expresses the value of an option as a function of the value of the underlying asset, length of time until maturity, exercise price, yields on assuming a risk-free rate Risk-free rate The rate earned on a riskless asset. of 4.35%, a dividend yield of 0%, an expected volatility of 92.1% and expected lives of the stock options of 4 years. The pro forma disclosure omits the effect of awards granted before January 1, 2002.
2. Net loss per share
For the three month period ended
March 31, 2002
-----------------------------------------------------------------
$ Number of $
Net loss shares Per share
(numerator) (denominator) amount
=================================================================
Net loss attributable
to common shareholders (27.9) 101,341,474 (0.28)
-----------------------------------------------------------------
2. Net loss per share (continued)
For the three month period ended
March 31, 2001
=================================================================
$ Number of $
Net loss shares Per share
(numerator) (denominator) amount
-----------------------------------------------------------------
Net loss attributable
to common shareholders (115.0) 93,785,174 (1.23)
-----------------------------------------------------------------
For the above-mentioned periods, the Company had securities
outstanding which could potentially dilute basic earnings per share in
the future, but were excluded from the computation of dilutive net
loss per share in the periods presented, as their effect would have
been antidilutive. Such outstanding securities consist of the
following:
For the three month period ended
----------------------------------
March 31, March 31,
2002 2001
-------------------------
Number of Number of
Shares Shares
-------------------------
Convertible debenture due to parent - 1,989,389
Options 4,968,426 3,977,376
Warrants 1,650,000 1,650,000
Common shares to be issued
related to acquisitions 6,201,480 2,137,353
-----------------------------------------------------------------
3. Equity Components
The stated capital stock as at March 31, 2002 is detailed as follows:
$
Number Millions
-------------------------
Balance beginning of period 101,308,517 1,596.0
Issue of common shares (a) 67,873 0.7
Share issue costs - (0.3)
-------------------------
101,376,390 1596.4
=========================
Contributed Surplus 46.2
===========
(a) 67,873 stock options were exercised to purchase 67,873 common
shares for cash consideration of $ 665,086.
Stock option plans:
Stock option plans for common
shares at prices ranging from
$0.44 to $172.80 per share and
expiry dates up to 2010. 4,968,426 options
4. Operating Segment Information
The Company focuses its activities in three business units
(eHealth Solutions Group, BCE Emergis - Canada, and BCE-Emergis
U.S.A.), offering a full suite of products to companies in
transaction-intensive, eHealth and financial services sectors. The
following table shows the activities of each of the three business
units:
For the three-month period ended
-----------------------------------------------------------------
e-Health Solutions BCE Emergis -
Group Business Unit Canada Business
Unit
-----------------------------------------------------------------
$ Mar. 31, Mar. 31, Mar. 31, Mar. 31,
Millions 2002 2001 2002 2001
-----------------------------------------------------------------
Revenues 67.3 70.3 60.2 66.0
-----------------------------------------------------------------
Direct
Costs 8.8 10.8 22.7 21.1
=================================================================
Gross
Margin 58.5 59.5 37.5 44.9
-----------------------------------------------------------------
4. Operating Segment Information (continued)
BCE Emergis -
U.S.A Business Unit Total
-----------------------------------------------------------------
$ Mar. 31, Mar. 31, Mar. 31, Mar. 31,
Millions 2002 2001 2002 2001
-----------------------------------------------------------------
Revenues 4.5 7.0 132.0 143.3
-----------------------------------------------------------------
Direct
Costs 1.0 0.2 32.5 32.1
=================================================================
Gross
Margin 3.5 6.8 99.5 111.2
-----------------------------------------------------------------
There are no inter-segment transactions or significant differences between segment and corporate accounting policies. All of the Company's business units share in the use of its capital asset infrastructure. As a result, the Company does not disclose a measure of total assets by business unit. In addition, the asset allocation Asset Allocation The process of dividing a portfolio among major asset categories such as bonds, stocks or cash. The purpose of asset allocation is to reduce risk by diversifying the portfolio. is not used by the Company in its management reporting for decision making purposes. Geographic information The following table sets out certain geographical information relative to the Company which differs from the business units of the Company:
Revenue For the three For the three
$ month period ended month period ended
Millions March 31, 2002 March 31, 2001
-----------------------------------------------------------------
Canada 78.3 88.0
United States 53.7 55.2
Other - 0.1
=================================================================
132.0 143.3
-----------------------------------------------------------------
5. Related Party Information
The following transactions occurred in the normal course of
operations with BCE Inc., the parent company, and other companies in
the BCE group subject to common control during the respective periods
and were measured at the exchange value, which is the amount
established and agreed to by the related parties:
For the three For the three
$ month period ended month period ended
Millions March 31, 2002 March 31, 2001
-----------------------------------------------------------------
Revenue (a) 38.9 41.3
Direct costs 23.5 12.4
Expenses 15.2 16.9
Interest expense on convertible
debenture due to parent - 2.3
-----------------------------------------------------------------
(a) Includes services for resale to third parties and for internal
use.
The balance sheet includes the following balances with BCE Inc.,
the parent company, and other companies in the BCE group subject to
common control:
-----------------------------------------------------------------
$ As at As at
Millions March 31, 2002 Dec. 31, 2001
-----------------------------------------------------------------
Accounts receivable 27.7 23.0
Accounts payable and
accrued liabilities 32.6 17.8
Long term debt 0.8 1.1
-----------------------------------------------------------------
6. Warrants
From time to time, the Company enters into formal business
arrangements for the use and distribution of certain technology
solutions with strategic partners. Under the terms of such
arrangements, the partners may acquire warrants to purchase shares of
the Company.
The following table summarizes warrant activity:
March 31, 2002
Number of Number of Exercise
Warrants Warrants price of
Outstanding Exercisable Warrants
(1) (1) Exercisable
-----------------------------------------------------------------
($)
Outstanding - beginning of
Period 1,650,000 550,000 $59.20
Warrants (2) - 11,675 $25.50
-----------------------------------------------------------------
Outstanding -
end of period 1,650,000 561,675 $58.49
-----------------------------------------------------------------
(1) Warrants are convertible into common shares of the Company on a 1:1 basis. (2) The warrants that became exercisable in the period were granted to a company in which BCE Emergis has an investment accounted for as a portfolio investment. The non-exercised warrants will become exercisable upon the attainment of certain contractual arrangements and the exercise price will be determined at this time and expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. five years thereafter. No amount has been recorded in the financial statements as a result of these arrangements. 7. Subsequent Events Business realignment plan The realignment plan (Hebrew: תוכנית ההתכנסות and cost reduction program In April 2002, the Company announced its plan to focus on key growth areas, drive recurring revenue growth, and streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. its service offerings and operating costs operating costs npl → gastos mpl operacionales . The plan included the identification of non-core services which the Company plans to exit and an overall reduction of personnel. As a result of this plan, the Company will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. during the three month period ending June June: see month. 30, 2002. The Company is currently evaluating the financial impact of this plan. Acquisition of Admar In April, 2002, the Company acquired the outstanding common shares of Admar Group Inc.(Admar), a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of the Principal Financial Group Inc. for $3.0 million USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. . The acquisition was for Admar's preferred provider organization pre·ferred provider organization n. Abbr. PPO A medical insurance plan in which members receive more coverage if they choose health care providers approved by or affiliated with the plan. network services and utilization management services. Pursuant to the Stock Purchase Agreement, $1.25 million USD was paid at closing and the balance will be paid on December 31, 2002 subject to certain conditions. Acquisition of e-route In April, 2002, the Company acquired the outstanding common shares of e-route inc. for $26.4 million; $6.9 million in cash and $19.5 million in assumed liabilities owed to the Company. e-route was owned by six of Canada's leading financial institutions and is involved in the creation of new services for their on-line banking customers. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion