BCE Emergis Announces Record Third Quarter Results.Business Editors MONTREAL--(BUSINESS WIRE)--Oct. 23, 2000 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 .) - Revenue tops $132 million - Net earnings from operations at $0.16 per share - 36th consecutive quarter of growth BCE Emergis Inc. a leading provider of B2B e-commerce (Business to Business Electronic-COMMERCE) Refers to one business selling to another business via the Web. See e-commerce. services and exchanges, today announced record results for the third fiscal quarter ended September September: see month. 30, 2000. Revenues for the third quarter reached $132.1 million, up 171% from the same quarter in the previous year when revenues stood at $48.8 million. Net earnings from operations for the quarter were $14.9 million, or $0.16 per share, compared to a profit of $0.7 million, or $0.01 per share for the same period in 1999. These earnings, on a per share basis are up 15 times over last year, and up 78% over the last quarter alone. "We achieved record revenue levels, with solid growth over the third quarter last year as well as over the second quarter this year. This revenue growth is supported by the high percentage of 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. transaction revenues, which continue to exceed 85% of total revenues, and includes U.S. revenues which continue to be an important component. In addition, our operational performance, as measured by net earnings from operations 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 , demonstrates very significant progress," 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 vice-chairman n → vicepresidente m vice-chairman vice irreg n → vice-président(e) vice-chairman vice- n 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. "Our focus on building valued exchanges, on establishing important business relationships, and on delivering best-of-breed The best product of its type. Organizations often purchase software from different vendors in order to obtain the best-of-breed for each application area; for example, a human resources package from one vendor and an accounting package from another. technology solutions through key industry channels, has resulted in a strong quarterly performance and the full impact of these moves will continue to be felt in the coming quarters," he added. Including acquisition-related amortization costs and future income tax benefits, BCE Emergis recorded a net loss of $83.3 million, or $0.90 per share for the third quarter ended September 30, 2000, compared to a net loss of $5.5 million or $0.07 per share for the corresponding period in 1999. Customer highlights During the quarter, BCE Emergis achieved the following: Canadian Business Canadian Business is the longest-publishing business magazine in Canada. It was founded in 1928 as The Commerce of the Nation, the organ of the Canadian Chamber of Commerce. The magazine was renamed Canadian Business in 1933. Unit - The launch of Procuron, one of the largest B2B (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G. B2B - business to business on-line marketplaces in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . Procuron will benefit from the substantial spending power The power of legislatures to tax and spend. Spending power is conferred to state and federal legislatures through their constitution. Judicial Review of legislative spending varies from state to state, but the law of federal spending informs courts in all states. of the other founding shareholders, which include CIBC CIBC Canadian Imperial Bank of Commerce CIBC Centres Interinstitutionnels de Bilan de Compétences CIBC Commonwealth Institute of Biological Control (Trinidad) CIBC Commercial International Brokerage Company , Scotiabank Scotiabank (Banque Scotia) (TSX: BNS NYSE: BNS), formally known as The Bank of Nova Scotia is one of Canada's Big Five banks. It is the third largest bank in Canada by assets (behind the Royal Bank of Canada and TD Bank Financial Group), and the second , Mouvement des caisses Desjardins Desjardins (French, of the gardens) is a common last name in French-speaking Canada and is the name of:
over half of the small and medium-sized Me´di`um-sized` a. 1. Having a medium size; as, a medium-sized man s>. Adj. 1. medium-sized - intermediate in size medium-size, moderate-size, moderate-sized businesses in Canada. - The initial roll-out of a significant e-procurement (Electronic-PROCUREMENT) Purchasing online. E-procurement systems are used to obtain materials and parts via the Web or using traditional EDI standards either for internal manufacturing (direct procurement) or office supplies and equipment (indirect procurement). solution with CN. This project encompasses over 100 buyers from CN being linked on-line to six major suppliers, including Xerox (Xerox Corporation, Stamford, CT, www.xerox.com) A major manufacturer of analog and digital copy machines, computer printers and document management systems. Corporate headquarters are in Stamford, CT, while manufacturing and marketing is in Rochester, NY. Canada, GE Capital, Motorola (Motorola, Inc., Schaumburg, IL, www.motorola.com) A leading manufacturer of semiconductor devices, electronics, telecommunications and satellite systems. Founded in Chicago in 1928 by Paul V. Canada and Grand & Toy Ltd. BCE Emergis provides CN with a fully-managed B2B e-commerce solution, delivered through the BCE Emergis(TM) marketplace. - An agreement with Aliant Inc. to provide a managed B2B corporate marketplace and e-procurement solution. This agreement will extend to all Aliant subsidiaries and approximately 400 of their major suppliers. Aliant expects to improve the management of its $800 million in annual purchases. U.S. Business Unit - A strategic alliance with Hewlett Packard to deliver a turnkey See turnkey system. version of the Emergis(TM) Buyer e-procurement solution to U.S. and Canadian companies This is a list of companies from Canada.
Directory: A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Current Companies . Through this agreement, mid-market corporate buying organizations will be able to connect over 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 with a multitude of suppliers, realizing significant cost savings for purchased goods, as well as reduced time in cost and processing cycles. - An expanded marketing relationship with Ariba, which could pave PAVE Cardiology A clinical trial–Post AV Node Ablation Evaluation the way for the integration and deployment of certain Emergis e-services, such as the Emergis Business Document Exchange, Advanced Order Management and Electronic Invoice An itemized statement or written account of goods sent to a purchaser or consignee by a vendor that indicates the quantity and price of each piece of merchandise shipped. A consular invoice is one used in foreign trade. Presentment presentment: see indictment. and Payment, that would add depth and transaction capabilities to the Ariba offerings. - A strategic alliance with FNC FNC - Federal Networking Council , Inc., of Oxford, Mississippi Oxford is the county seatGR6 of Lafayette County, Mississippi, United States. The population is currently about 19,000, due to a recent annexation of five square miles of Lafayette County in all directions. , to speed and enhance delivery of mortgage appraisal services to lenders in the U.S. and Canada. BCE Emergis will support the electronic delivery of FNC's AppraisalPort by providing and managing customer support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services , security and network management. AppraisalPort is operating or being installed for major lenders in the U.S., including Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. , Charter One Bank, and Dime Savings Bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. . - An agreement with Microsoft Licensing Inc., under which Microsoft will implement our electronic invoice presentment solution, for invoicing in·voice n. 1. A detailed list of goods shipped or services rendered, with an account of all costs; an itemized bill. 2. The goods or services itemized in an invoice. tr.v. requirements with its trading partners. The B2B solution will enable the on-line posting and viewing of invoice data via the Web. eHealth Solutions, North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. - In eHealth, BCE Emergis has continued to work on expanding its technology and services, by applying its Canadian business model in the U.S. marketplace. An example of the progress being made is the offering of its vision care application in the U.S. through Coordinated Vision Care (CVC See CSC. ), a UnitedHealth Group UnitedHealth Group Incorporated NYSE: UNH is a managed health care company. It is the parent of United Healthcare, one of the largest health insurers in the U.S. It was created in 1977, as UnitedHealthCare Corporation (it renamed itself in 1998), but traces its origin to a Company. The BCE Emergis electronic solution provides CVC with a virtually paperless administration for its electronic claims processing electronic claims processing Electronic billing The electronic–ie, by modem–submission of a bill to third-party payers, for physician services rendered . - BCE Emergis has combined the 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. and U.S. eHealth units into one integrated unit to better and more effectively serve the North American market. This business unit, now operating under the BCE Emergis name, will be headquartered in Rockville, Maryland Rockville is the county seat of Montgomery County, Maryland, United States. According to the 2006 census update, the city had a total population of 59,114, making it the second largest city in Maryland. . Acquisition highlight During the third quarter, BCE Emergis announced : - The acquisition of InvoiceLink Corporation of Greensboro, North Carolina. This transaction was closed on September 20, 2000, at a purchase price of US$88.3 million, in BCE Emergis shares and options. InvoiceLink brings leading-edge electronic invoice presentment and payment technology to BCE Emergis, as well as an experienced management team, and is an important strategic step in building a strong 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. presence in the U.S. B2B market. Other financial highlights This strong third quarter performance also translated into the following : - The healthcare sector remains the largest segment, registering $63.2 million in revenue, with the finance and telecom segments generating revenue of $32.0 million and $33.9 million, respectively. Revenue in the transportation sector was $3.0 million. - BCE Emergis generated 38% of its revenue in the U.S., compared to 3% in the same period last year. - EBITDA reached the $25 million mark, significantly up from $2.0 million in 1999. - Cash flow generated from operations during the third quarter totaled $5.1 million, compared to $9.3 million in 1999. Cash in the bank, at the end of the quarter stood at $50.4 million. For the first nine months: - the Company recorded $327.0 million in revenue, 159% higher than the $126.1 million for the same period last year. Net earnings from operations were $21.7 million or $0.24 per share, compared to a loss of $2.0 million or $0.03 per share for the nine-month period in 1999. Including acquisition-related amortization costs and future income tax benefits, BCE Emergis recorded a net loss of $206.5 million, or $2.26 per share for the nine months ended September 30, 2000, compared to a net loss of $39.5 million or $0.50 per share for the same period in 1999. Finally, given the prevailing market conditions, BCE Emergis will wait before proceeding with a public, marketed financing in the U.S. Additional financial information is available on the BCE Emergis web site at www.emergis.com. N.B. "Net earnings from operations" is defined as reported net earnings before "Acquisition-related costs" (amortization of intangibles and the option on convertible debenture Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. ) one-time gains and charges, and future income tax benefits. BCE Emergis delivers network-centric e-commerce services that significantly improve customer processes through secure B2B exchanges. Combining e-commerce, e-payment and security services Security services are state institutions for the provision of intelligence, primarily of a strategic nature, but also including protective security intelligence. Examples include the Security Service (MI5) and the Secret Intelligence Service (MI6) in the United Kingdom, and the , BCE Emergis offers clients in the healthcare, 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. , telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and transportation industries a full suite of core and vertical-specific services that are the essential building blocks and infrastructure required for e-commerce. BCE Emergis is one of the top e-commerce providers in North America and its shares are included in the TSE 100 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". . For more information, please refer to www.emergis.com. This news release contains certain 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. that reflect the current views and/or expectations of BCE Emergis with respect to its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly.
Consolidated Statement of Income
(millions of
dollars, For the For the For the For the
except three-month three-month nine-month nine-month
loss per share period period period period
and number ended ended ended ended
of shares) September September September September
30, 2000 30, 1999 30, 2000 30, 1999
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue 132.1 48.8 327.0 126.1
Direct costs 29.1 14.1 69.7 38.2
---------------------------------------------------------------
Gross margin 103.0 34.7 257.3 87.9
---------------------------------------------------------------
Expenses
Operations 40.4 15.9 104.3 40.4
Sales and marketing 13.6 4.2 36.8 12.7
Development and
integration services 9.5 7.9 28.9 20.7
General and
administrative 13.8 4.7 36.5 12.9
---------------------------------------------------------------
77.3 32.7 206.5 86.7
---------------------------------------------------------------
Income before
under-noted items 25.7 2.0 50.8 1.2
Depreciation 5.9 2.0 17.8 4.8
Amortization of
intangibles 92.3 17.0 220.0 47.9
Interest income (2.2) (0.8) (5.0) (2.5)
Interest expense 3.4 0.3 8.6 0.6
Interest expense -
amortization of
option on convertible
debenture 8.2 - 17.1 -
Gain on sale of
subsidiary - (10.8) - (10.8)
Other expenses 0.2 (0.2) 1.3 0.7
---------------------------------------------------------------
Net loss before tax (82.1) (5.5) (209.0) (39.5)
Income tax expense
- current 3.5 - 6.4 -
Future income tax
benefit (2.3) - (8.9) -
---------------------------------------------------------------
Net loss (83.3) (5.5) (206.5) (39.5)
===============================================================
Basic loss per
share ($) (0.90) (0.07) (2.26) (0.50)
Weighted average
number of shares
used in computing
basic loss per
share 93,033,751 80,291,466 91,187,759 78,232,714
* Fully diluted loss per share is not presented as it is
anti-dilutive.
Consolidated Statement of Deficit
As at As at As at
September December September
(millions of dollars) 30, 2000 31, 1999 30, 1999
(unaudited) (audited) (unaudited)
Deficit - beginning of period (124.1) (58.1) (58.1)
Net loss (206.5) (66.0) (39.5)
Adjustment for accounting change 31.4 - -
---------------------------------------------------------------
Deficit - end of period (299.2) (124.1) (97.6)
---------------------------------------------------------------
Consolidated Balance Sheet
As at As at As at
September December September
(millions of dollars) 30, 2000 31, 1999 30, 1999
(unaudited) (audited) (unaudited)
ASSETS
Current
Cash and temporary cash
investments 50.4 76.1 94.9
Marketable securities
(market value $30.8M and
$15.9M as at September 30,
2000 and December 31, 1999) 18.5 3.0 -
Accounts receivable 108.1 47.2 28.0
Prepaid expenses 21.4 2.6 0.8
Other 24.9 4.1 6.4
---------------------------------------------------------------
223.3 133.0 130.1
Capital assets 142.4 126.1 65.9
Goodwill 870.1 242.8 68.2
Other assets 64.5 7.2 4.6
Future income tax asset 37.7 - -
---------------------------------------------------------------
1,338.0 509.1 268.8
---------------------------------------------------------------
LIABILITIES
Current
Accounts payable and accrued
liabilities 120.4 76.8 29.5
Deferred revenue 6.1 5.6 3.7
Convertible debenture due
to parent 141.8 - -
Long-term debt due within one year 6.6 7.6 1.8
---------------------------------------------------------------
274.9 90.0 35.0
Deferred credits 2.2 2.2 -
Long-term debt 19.3 15.2 7.1
---------------------------------------------------------------
296.4 107.4 42.1
---------------------------------------------------------------
SHAREHOLDERS' EQUITY
Option on convertible debenture 25.2 - -
Capital stock 1,300.6 525.8 324.3
Foreign currency translation
adjustment 15.0 - -
Deficit (299.2) (124.1) (97.6)
---------------------------------------------------------------
1,041.6 401.7 226.7
---------------------------------------------------------------
1,338.0 509.1 268.8
---------------------------------------------------------------
Consolidated Statement of Cash Flows
For the For the For the For the
(millions of three-month three-month nine-month nine-month
dollars) period period period period
ended ended ended ended
September September September September 30, 2000 30,
1999 30, 2000 30, 1999
(unaudited) (unaudited) (unaudited) (unaudited)
Operating activities
Net loss (83.3) (5.5) (206.5) (39.5)
Depreciation and
amortization 98.2 19.0 237.7 52.7
Amortization of option
on convertible
debenture 8.2 0.0 17.1 0.0
Income tax expense 1.2 0.0 (5.4) 0.0
Gain on sale of
subsidiary 0.0 (10.8) 0.0 (10.8)
Other 0.0 0.0 (0.3) 0.4
Changes in working
capital items (19.2) 6.6 (43.0) 1.8
---------------------------------------------------------------
5.1 9.3 (0.4) 4.6
---------------------------------------------------------------
Investing activities
Acquisitions (8.6) (1.5) (805.8) (15.5)
Cash acquired on
acquisition of UP&UP 0.0 0.0 46.3 0.0
Cash acquired on
acquisition of
InvoiceLink 1.1 0.0 1.1 0.0
Note receivable from
former majority
shareholder of UP&UP 0.0 0.0 (11.6) 0.0
Proceeds on sale of
subsidiary - net of
transaction costs 0.0 29.2 0.0 29.2
Advance to company
under common
control (2.3) 0.0 (2.3) 0.0
Additions to capital
assets (21.8) (5.3) (41.5) (8.6)
---------------------------------------------------------------
(31.6) 22.4 (813.8) 5.1
---------------------------------------------------------------
Financing activities
Repayment of
long-term debt (8.9) (1.5) (12.4) (3.0)
Issue of convertible
debenture 0.0 0.0 150.0 0.0
Issue of common
shares 1.3 0.2 655.6 53.3
---------------------------------------------------------------
(7.6) (1.3) 793.2 50.3
---------------------------------------------------------------
Foreign exchange loss
on cash held in
foreign currencies (2.0) 0.0 (4.7) 0.0
Cash position
Increase (decrease) (36.1) 30.4 (25.7) 60.0
Beginning balance 86.5 64.5 76.1 34.9
---------------------------------------------------------------
Closing balance 50.4 94.9 50.4 94.9
---------------------------------------------------------------
Supplemental disclosure
of cash flow information
Amount of interest
paid 0.2 0.3 4.1 0.6
Amount of income
taxes paid 0.1 0.0 2.0 0.0
NOTES TO 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 As at September 30, 2000 These interim consolidated financial statements 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 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 , using the same accounting policies as were used for the consolidated financial statements for the year ended December 31, 1999. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 1999, as set out in the 1999 Annual Report. Accounting Change During the first quarter, BCE Emergis Inc., ("the Company") adopted on a retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a basis, the new recommendations issued by 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) with respect to accounting for income taxes. However, the Company did not restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state the financial statements for previous periods. The impact of adopting the new recommendations was an increase in net loss of $1.1 million and a decrease in the opening deficit of $31.4 million. Acquisition On September 15, 2000, the Company acquired all of the outstanding shares of InvoiceLink Corporation ("InvoiceLink"), a privately held company privately held company A firm whose shares are held within a relatively small circle of owners and are not traded publicly. involved in Web-based invoicing and payment solutions for business-to-business applications. Pursuant to the Agreement and Plan of Merger, the shares of InvoiceLink were converted into shares of Emergis as described below. In addition, the Company assumed the issued and outstanding options to purchase InvoiceLink shares which were converted into options to purchase Emergis shares. Pursuant to the acquisition, the Company has reserved for issuance 566,824 shares valued at $49.2 million and exchanged options to purchase 167,968 shares of Emergis valued at $14.5 million. The balance of the purchase price will be paid in three installments on September 15, 2001, September 15, 2002, and September 15, 2003 by the issuance of shares, subject to certain conditions, with a value of $65.2 million. A maximum of 20% of the purchase price may be settled with a cash payment at Emergis' option and is required to be settled in cash if certain criteria are met. The Company incurred transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). in the amount of approximately $1.4 million in connection with the acquisition relating mostly to professional fees. The transaction was accounted for using the purchase method. An amount of $8.8 million in common shares is contingent on Adj. 1. contingent on - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent upon, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent InvoiceLink delivering software to Emergis' satisfaction and entering into a definitive agreement with certain defined customer groups reasonably satisfactory to Emergis and has not been recorded as part of the acquisition cost since the outcome cannot be determined beyond a reasonable doubt. An amount of $26 million of the purchase price has been held, to be applied against indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from claims, if any, arising within a defined period after closing. The results of operations of InvoiceLink have been included in the Company's results since September 15, 2000, the date of acquisition. The total purchase price of the acquisition was $121.5 million and was allocated as follows:
Millions
$
--------
Current assets 1.5
Capital assets 1.2
Other assets 0.2
Current liabilities (14.7)
Deferred revenue (0.1)
Long-term debt (2.9)
Allocation of excess purchase price over net assets
Acquired technologies 3.2
Goodwill 133.1
--------
Cost of acquisition 121.5
--------
Acquired technologies and goodwill are amortized over a period of three years. The amortization for the period ended September 30, 2000 was $1.9 million. Convertible Debenture In order to provide the required financing for the acquisition of UP&UP, BCE Inc. (our parent company) purchased, by way of private placement, 5,517,827 common shares at a price per share of $117.80 (being the closing price of our common shares on the TSE on March 20, 2000) for a total cash consideration of $650 million. In addition, BCE Inc. advanced $150 million in the form of a convertible debenture bearing interest at a rate of 6.84% per annum Per annum Yearly. . The maturity date of the debenture debenture (dəbĕn`chər), document acknowledging indebtedness. In Great Britain a debenture is practically the same as a bond, and debenture stock is similar to preferred stock. is December 31, 2000 and it can be redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. by the Company at any time. The principal amount of the debenture is convertible into 1,273,345 common shares at a conversion price per share of $117.80. The fair value of the conversion option associated with the convertible debenture on the date of issuance was $25.2 million and is reflected as "option on convertible debenture" in shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. . This amount will be amortized over the term of the debenture (282 days). Related Party Information The following transactions occurred in the normal course of operations with companies in the BCE group, subject to common control, during the respective periods and were measured at the exchange value:
Three-month Nine-month
period ended period ended
Sept. 30/00 Sept. 30/00
$ $
Millions Millions
---------------------------------------------------------------
Revenues (a) 32.4 81.6
---------------------------------------------------------------
Direct costs and expenses 27.6 89.1
---------------------------------------------------------------
(a) Includes services for resale to third parties and for
internal use.
The balance sheet includes the following balances with companies
in the BCE group subject to common control.
As at Sept. 30/00 As at Dec. 31/99
---------------------------------------------------------------
$ $
Millions Millions
---------------------------------------------------------------
Cash and temporary cash investments 15.0 30.0
---------------------------------------------------------------
Accounts receivable 30.5 18.1
---------------------------------------------------------------
Capital assets purchased 6.0 -
---------------------------------------------------------------
Accounts payable and accrued liabilities 31.0 19.4
---------------------------------------------------------------
The convertible debenture of $142.1 million is owed to the parent company, with an option to convert valued at $25.2 million, which is included in shareholders' equity. Operating Segment Information The Company focuses its activities in four vertical markets (financial services, health care, telecommunications, and transportation), offering a full suite of products to companies in these markets. The following table shows the revenues derived from each of the four vertical markets:
For the three-month period ended
---------------------------------------------------------------
Finance Health Telecom
---------------------------------------------------------------
$ $ $
Millions Millions Millions
---------------------------------------------------------------
Sept.30 Sept.30 Sept.30 Sept.30 Sept.30 Sept.30
2000 1999 2000 1999 2000 1999
---------------------------------------------------------------
Revenue 32.0 11.5 63.2 3.6 33.9 24.9
---------------------------------------------------------------
Direct
Costs 7.1 1.5 9.8 1.0 11.7 8.4
---------------------------------------------------------------
Gross
Margin 24.9 10.0 53.4 2.6 22.2 16.5
---------------------------------------------------------------
Transport & Other Total
---------------------------------------------------------------
$ $
Millions Millions
---------------------------------------------------------------
Sept.30 Sept.30 Sept.30 Sept.30
2000 1999 2000 1999
---------------------------------------------------------------
Revenue 3.0 8.8 132.1 48.8
---------------------------------------------------------------
Direct
Costs 0.5 3.2 29.1 14.1
---------------------------------------------------------------
Gross
Margin 2.5 5.6 103.0 34.7
---------------------------------------------------------------
For the nine-month period ended
---------------------------------------------------------------
Finance Health Telecom
---------------------------------------------------------------
$ $ $
Millions Millions Millions
---------------------------------------------------------------
Sept.30 Sept.30 Sept.30 Sept.30 Sept.30 Sept.30
2000 1999 2000 1999 2000 1999
Revenue 73.6 29.4 144.6 10.3 99.4 66.4
---------------------------------------------------------------
Direct
Costs 15.3 3.7 19.9 2.9 33.2 23.0
---------------------------------------------------------------
Gross
Margin 58.3 25.7 124.7 7.4 66.2 43.4
---------------------------------------------------------------
Transport & Other Total
---------------------------------------------------------------
$ $
Millions Millions
---------------------------------------------------------------
Sept.30 Sept.30 Sept.30 Sept.30
2000 1999 2000 1999
---------------------------------------------------------------
Revenue 9.4 20.0 327.0 126.1
---------------------------------------------------------------
Direct
Costs 1.3 8.6 69.7 38.2
---------------------------------------------------------------
Gross
Margin 8.1 11.4 257.3 87.9
---------------------------------------------------------------
Capital Stock
The stated capital stock as at September 30, 2000 is detailed as
follows:
Number $
Millions
---------------------------------------------------------------
Balance beginning of year 86,773,705 525.8
Issue of common shares (a) 5,517,827 650.0
Issue of common shares (b) 616,109 4.8
Reserved for issuance (c) 566,824 49.2
---------------------------------------------------------------
93,474,465 1,229.8
Common shares to be issued (d) 56.3
Options issued in connection with the
InvoiceLink acquisition 14.5
---------------------------------------------------------------
93,474,465 1,300.6
===============================================================
Option on convertible debenture - UP&UP
acquisition 25.2
===============================================================
(a) 5,517,827 common shares at $117.80 per share for a total consideration of $650 million were issued by way of a private placement to the parent company in connection with the UP&UP acquisition. (b) 616,109 stock options were exercised to purchase 616,109 common shares for total cash consideration of $4.8 million. (c) 566,824 common shares are reserved for issuance for a total consideration of $49.2 million in connection with the InvoiceLink acquisition. (d) The number of shares to be issued in connection with the InvoiceLink acquisition as described under "Acquisition" is not determinable Liable to come to an end upon the happening of a certain contingency. Susceptible of being determined, found out, definitely decided upon, or settled. determinable adj. at this time. Debentures: 6.84%, Convertible debenture, convertible at the holder's option into common shares at a conversion price of $117.80 per share up to the maturity date on December 31, 2000 $124.8 million Stock option plans: Stock option plans for common shares at prices ranging from $0.44 to $172.80 per share and expiry dates expiry date expire n → date f d'expiration; (on label) → à utiliser avant ... expiry date expire n → Ablauftermin m up to 2010 3,456,083 options Contingency contingency n. an event that might not occur. On April 26, 1996, First Health Group Corporation ("First Health"), filed a civil complaint against United Payors & United Providers, Inc. ("UP&UP"), a subsidiary of the Company, seeking injunctive relief injunctive relief n. a court-ordered act or prohibition against an act or condition which has been requested, and sometimes granted, in a petition to the court for an injunction. and damages of $29 million to $37 million based on claims of trademark infringement Trademark infringement is a violation of the exclusive rights attaching to a trademark without the authorization of the trademark owner or any licensees (provided that such authorization was within the scope of the license). , false advertising, deceptive de·cep·tive adj. Deceptive or tending to deceive. de·cep  tive·ness n. trade practices, fraud, interference with contract,
interference with prospective economic relations and unfair competition.
First Health's principal contention is that representatives of
UP&UP made false and misleading statements during contract
negotiations with health care providers in order to cause them to join
the UP&UP provider network.
On March 21, 2000, the U.S. District Court for the Northern District of 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. granted summary judgment in favor of upon the side of; favorable to; for the advantage of. See also: favor UP&UP on the false advertising claims; and on April 10, 2000, the Court granted summary judgment in favor of UP&UP on the contractual interference and damages claims. An appeal of those court rulings is expected. The Company believes First Health's claims lack merit and that its potential liability, if any, arising from the 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. will not be material to its consolidated financial statements. |
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