BCE Emergis Posts Record First Quarter Revenues.Business Editors MONTREAL--(BUSINESS WIRE)--April 19, 2000 Sharply Higher Revenue Growth 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 BCE BCE abbr. 1. Bachelor of Chemical Engineering 2. Bachelor of Civil Engineering BCE Abbreviation for before the Common Era. Emergis 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 ) (ME:IFM) today announced its results for the first quarter 2000. Revenues for the quarter were $72.7 million, up 96% from $37.0 million in Q1 1999. EBITDA profit was $5.0 million compared to $0.1 million. The Company recorded a net loss of $41.1 million or $0.43 per share, including $37.8 million of amortization of acquired technologies and goodwill, as compared to $16.1 million or $0.21 per share in the first quarter of 1999. The Company had cash in the bank of $79.1 million. "We have achieved very significant year-over-year and quarter-over-quarter revenue growth," said Brian Edwards, President 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. "At the same time, our EBITDA has increased in both absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute , from $2.7 million in the fourth quarter of last year to $5.0 million this quarter and, in relative terms, from 4.5% of revenues to 6.9% of revenues. We are on an accelerating growth path with a real capacity to increase revenues and generate positive EBITDA. BCE Emergis has made an exceptionally strong start to the year 2000." Edwards went on to comment that the increase in revenues from first quarter 1999 was generated by strong growth in its 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. and telecom verticals. The current quarter's results were marked by higher 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. revenues both from new customers and from new solutions added to its 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 exchanges. EBITDA improved as a result of the high operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. the Company enjoys and the overall revenue increases. Near the end of the quarter, BCE Emergis announced that it had concluded its acquisition of United Payors and United Providers, Inc., of 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. ("UP & UP"), which services a claims and payment network for insurance companies and healthcare providers. This transaction, valued at US$552 million, was financed through the issue to BCE Inc. of CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $650 million of BCE Emergis common shares at a price of $117.80 per share and a CDN$150 million 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. . UP & UP's national healthcare network supports over US $3 billion of annual medical claims volume and positions BCE Emergis with the required channels to offer its e-commerce services in the US healthcare market. As a result of this acquisition and that of Assure Health last year, the Company now has both a comprehensive suite of electronic healthcare solutions and an experienced management team to lead its North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. healthcare initiatives. During the quarter, the Company also announced major contracts and initiatives with clients in all of its vertical markets. In financial services, it signed a five-year agreement with e-Scotia.com, a new subsidiary of Scotiabank. BCE Emergis will provide the facilities, operating platform, management and support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services for e-Scotia.com to distribute digital certificates - the electronic passports that permit secure e-commerce transactions and electronic communications over the Internet. BCE Emergis is also making significant progress in its electronic bill presentment See EBPP. project with the e-route consortium. Rollout is scheduled for later in the second quarter. With Coordinated Vision Care Inc., a division of United Healthcare Group, BCE Emergis announced that it is cooperatively developing and implementing a virtually paperless administration system to manage vision-related health insurance claims in the US. The Internet-based system will allow CVC's healthcare providers to verify patient eligibility and submit claims via web-enabled technology, and allow members to order frames and lenses, review their benefits, check eligibility for claims and locate a doctor by keying in a zip code zip code System of postal-zone codes (zip stands for “zone improvement plan”) introduced in the U.S. in 1963 to improve mail delivery and exploit electronic reading and sorting capabilities. . For the transportation vertical, BCE Emergis announced it will be working with Canadian National Railway Canadian National Railway, rail system in Canada and the United States, extending from coast to coast in Canada with many branch lines in each province and in the United States. , using Ariba, Inc., to streamline the purchase process between CNR See riser card. CNR - Communication and Network Riser and its suppliers through a complete set of e-commerce services, including online ordering, processing, dynamic pricing, auctioning and electronic payments. In its telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. vertical, Bell Canada Bell Canada Enterprises (TSX: BCE, NYSE: BCE), legally BCE Inc., is a major Canadian telecommunications company. Through its subsidiaries including Bell Canada, Bell Aliant, Northwestel, Télébec, and NorthernTel, it is the incumbent local exchange carrier for , a major distributor of BCE Emergis services, has announced that it is investing $40 million over four years to commercialize BCE Emergis solutions for its customers. This investment will bring to BCE Emergis a market reach of over one half million Canadian enterprises in the small, medium and large business markets. 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, telecommunications 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 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. 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. For information: John Gutpell Director, Investor Relations Investor relations The process by which the corporation communicates with its investors. (514) 868-2232 e-mail: john.gutpell@emergis.com
Consolidated Statement of Income
For the three-month For the three-month
period ended period ended
(millions of dollars, March 31, 2000 March 31, 1999
except loss per share) (unaudited) (unaudited)
----------- -----------
Revenue 72.7 37.0
Direct costs 20.0 12.0
----------------------------
Gross margin 52.7 25.0
----------------------------
Expenses
Operations 20.4 8.7
Sales and marketing 8.5 5.1
Development and integration services 10.0 6.9
General and administrative 8.8 4.2
----------------------------
47.7 24.9
----------------------------
Operating income before undernoted
items 5.0 0.1
Depreciation and amortization 43.4 16.4
Interest income (0.8) (0.9)
Interest expense 1.4 0.2
Gain on sale of subsidiaries - -
Other expenses 1.0 0.5
----------------------------
Net loss before tax (40.0) (16.1)
Income tax expense 1.1 -
----------------------------
Net loss (41.1) (16.1)
============================
Loss per share ($) (0.43) (0.21)
Consolidated Balance Sheet
As at As at As at
March 31, December 31, March 31,
(millions of dollars) 2000 1999 1999
(unaudited) (audited) (unaudited)
----------- --------- -----------
ASSETS
Current
Cash and temporary cash
investments 79.1 76.1 75.3
Cash held in trust - - 6.3
Accounts receivable 87.7 47.2 35.6
Other 65.9 9.7 6.9
--------------------------------------
232.7 133.0 124.1
Capital assets 132.7 126.1 54.1
Other assets 971.1 250.0 105.5
--------------------------------------
1,336.5 509.1 283.7
--------------------------------------
LIABILITIES
Current
Accounts payable and
accrued liabilities 109.7 76.8 32.1
Deferred revenue 4.6 5.6 4.9
Convertible debenture 125.5 - -
Long-term debt due within
one year 6.8 7.6 2.6
--------------------------------------
246.6 90.0 39.6
Deferred credits 2.9 2.2 -
Long-term debt 16.8 15.2 4.3
--------------------------------------
266.3 107.4 43.9
--------------------------------------
SHAREHOLDERS' EQUITY
Option on convertible
debenture 25.2 - -
Capital stock 1,179.2 525.8 314.0
Foreign currency translation
adjustment (0.4) - -
Deficit (133.8) (124.1) (74.2)
--------------------------------------
1,070.2 401.7 239.8
--------------------------------------
1,336.5 509.1 283.7
--------------------------------------
Consolidated Statement of Cash Flows
for the for the for the
three-month three month three month
period ended period ended period ended
(millions of dollars) March 31, December 31, March 31,
2000 1999 1999
---- ---- ----
(unaudited) (unaudited) (unaudited)
Operating activities
Net loss (41.1) (26.3) (16.1)
Depreciation and amortization 43.4 32.4 16.4
Amortization of option on
convertible debenture 0.7 - -
Income tax expense 1.1 - -
Loss on sale of equipment - - 0.5
Gain on sale of subsidiaries - (3.0) -
Changes in working capital
items (29.0) 33.6 (2.2)
--------------------------------------
(24.9) 36.7 (1.4)
--------------------------------------
Investing activities
Acquisitions (797.2) (149.3) (0.3)
Proceeds on sale of
subsidiaries and investments - 0.5 -
Cash acquired on acquisition
of UP&UP 46.3 - -
Note receivable from former
majority shareholder
of UP&UP (11.6) - -
Additions to fixed assets (11.0) (17.8) (1.6)
--------------------------------------
(773.5) (166.6) (1.9)
--------------------------------------
Financing activities
Repayment of long-term debt (2.0) (15.8) (0.8)
Issue of convertible debenture 150.0 - -
Issue of common shares 653.4 126.9 50.7
--------------------------------------
801.4 111.1 49.9
--------------------------------------
Cash position
Increase (decrease) 3.0 (18.8) 46.6
Beginning balance 76.1 94.9 34.9
--------------------------------------
Closing balance 79.1 76.1 81.5
--------------------------------------
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 Accounting changes ------------------ During the first quarter, 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 the 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 March 24, 2000, the Company acquired all of the outstanding shares of United Payors and United Providers, Inc. (UP&UP), a provider of health claims processing services 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. for $824.3 million in cash (including transaction and integration costs). The transaction was accounted for using the purchase method: Purchase price allocation ($ 000): Current assets 96,446 Capital assets 6,913 Advances to contracting providers, net 56,208 Other assets 19,423 Current liabilities (22,718) Long-term lease liability (386) Attribution of excess of purchase price over net assets Investment securities (net of related deferred income taxes) 3,952 Goodwill 664,483 --------------------------------------------------------------- Cost of acquisition 824,321 --------------------------------------------------------------- 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 $650,000,000. In addition, BCE Inc. advanced $150,000,000 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 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 $25,236,000 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 ------------------------- Revenues include $22.4 million, for the three month period ended March 31, 2000, from normal course sales to entities controlled by the Company's parent, either for their own use or for resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. to third parties. Cash and temporary cash investments includes $35.0 million ($30.0 million at December 31, 1999) invested on a short-term basis with an entity controlled by the Company's parent. Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying include $30.1 million ($18.1 million at December 31, 1999) due from entities controlled by the Company's parent. Accounts payable and accrued liabilities Accrued liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. include $10.3 million ($19.4 million at December 31, 1999) due to entities controlled by the Company's parent. The convertible debenture of $125.5 million is owed to the Company's parent, with an option to convert valued at $25.2 million which is included in shareholder's equity. Operating Segment Information ----------------------------- The Company focuses its activities on four vertical markets (financial services, health care, telecommunications, and transportation), offering a full suite of products to companies in these markets. The following table shows the revenues derived from each of the four vertical markets: ($ M) Finance Health Telecom Transport Total Q1 00 20.4 18.2 30.6 3.5 72.7 Q1 99 6.5 3.1 23.7 3.7 37.0 |
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