BCE Emergis Records Strong Fourth Quarter and 2000 Results.Business Editors MONTREAL, Quebec--(BUSINESS WIRE) BCE BCE abbr. 1. Bachelor of Chemical Engineering 2. Bachelor of Civil Engineering BCE Abbreviation for before the Common Era. EMERGIS INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . (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 reaches new levels: Q4 up 133%, year up 151% - Net earnings from operations at $0.10 per share for Q4 and $0.33 for year - All business units show solid progression - U.S. revenue climbs to 39% of total revenue 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 fourth quarter and year-end results. Revenue for the fourth quarter of 2000 reached $141.0 million, up 133% over the corresponding quarter in 1999, when revenue stood at $60.6 million. This revenue does not include approximately $2 million, which would have been recognized had the Company not divested some non-core business assets during the quarter. For the 37th consecutive quarter, the company increased its 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. Net earnings from operations for the quarter were $9.1 million, or $0.10 per share, compared to a loss of $2.2 million, or $0.03 per share for the same period in 1999. These earnings take into account approximately $4 million of additional operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. pursuant to the InvoiceLink acquisition last September. For fiscal 2000, revenue totaled $468.0 million compared to $186.7 million in 1999, 151% greater than the previous year. Net earnings from operations stood at an all-time high of $30.6 million or $0.33 per share, compared to a loss of $4.1 million and $0.05 per share in 1999. Cash and temporary investments at the end of the year totaled $92.2 million. "Our 4th quarter and year-end results are at never-before-seen levels for our company. They demonstrate the underlying success we experienced over the past year and point to the strength of the moves we made to further expand our business," stated Brian 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. "Financially, we have never been stronger and we reached new heights driven by upward momentum in our recurring transactional revenue stream and our earnings from operations. All business units recorded higher revenue, and our total U.S. revenue continued its upward trend. Operationally, we have also moved to a whole new level, progressing markedly on several fronts: we gained industry-leading customers and are the 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. engine behind key 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. exchanges; we added broad North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. reach to our e-commerce services by striking distribution agreements; we expanded our already extensive service portfolio with, among others, an innovative proprietary technology; we added focus, depth and experience to our organization as we accelerate our activities." Including acquisition-related amortization costs and future income tax benefits, BCE Emergis recorded a net loss of $72.8 million, or $0.78 per share for the fourth quarter ended December 31, 2000, compared to a loss of $26.3 million or $0.31 per share for the corresponding period in 1999. For fiscal 2000, the net loss totaled $279.3 million or $3.04 per share, compared to $66.0 million or $0.82 per share in fiscal 1999. Other financial highlights: - 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 reached the $24.0 million mark for the quarter, significantly up from $2.7 million the previous year. At the end of the 2000 fiscal period, EBITDA totaled $74.8 million, eclipsing the $3.8 million mark of 1999. - Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses generated over the fourth quarter totaled $47.3 million, compared to $36.4 in the corresponding quarter of 1999. - U.S activities accounted for 39% of revenue, compared to 3% in the same period last year. For the year, U.S. revenue stands at 36 % of the total $468 million. - The eHealth sector remains the largest segment, registering $65.5 million in revenue for the quarter and $209.9 million for the twelve-month period. - There was significant improvement in the company's asset management, including the 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 , which went from 75 days outstanding at year-end, 1999, to 48 days outstanding at December 31, 2000. Customer and operational highlights - A milestone agreement with J.P. Morgan Morgan, American family of financiers and philanthropists. Junius Spencer Morgan, 1813–90, b. West Springfield, Mass., prospered at investment banking. Chase who will implement e-Invoicing, Emergis' 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 (EIPP EIPP Electronic Invoice Payment and Presentment EIPP Electronic Invoice Presentment and Payment ) enablement solution for use with its treasury services Treasury services is a function of an investment bank which provides transaction, investment and information services for chief financial officers, treasurers. Treasury services concentrates and invests client money, and provides trade finance and logistics solutions as well as clients globally and as a service offering to its wholesale banking clients - including corporate, middle market, financial institution, and net marketplace - for use with their trading partners. - An agreement with the Canadian division of Sabre Inc. for a secure Internet-based network. The agreement, at the outset, provides a select group of Sabre Canadian travel agency customers with instantaneous in·stan·ta·ne·ous adj. 1. Occurring or completed without perceptible delay: Relief was instantaneous. 2. access to Sabre's Global Distribution System. Following testing in several customer segments, the network will be implemented for Sabre agencies across Canada Across Canada was an afternoon program that formerly aired on The Weather Network. The segment ran from early 1999 until mid 2002. The show ran from 3:00PM ET until 7:00 PM ET. . - Kodak retained BCE Emergis as provider for a managed on-line selling solution for its retail stores. - An agreement was signed with Grand & Toy, for the use of Emergis' e-Invoicing solution. - The launch of the webdoxs e-bill presentment service by e-route inc. Through webdoxs, which is powered by BCE Emergis' electronic billing presentment platform, consumers can do their banking on-line through any of the e-route consortium members - Canadian Imperial Bank of Commerce, Mouvement des caisses Desjardins, National Bank of Canada This article is about a commercial bank. For Canada's central bank, see Bank of Canada. National Bank of Canada (Banque Nationale du Canada) TSX: NA is the sixth largest bank in Canada, and so is one of the Big Six banks. , Royal Bank of Canada Bank of Canada Canada's central bank, established under the Bank of Canada Act (1934). It was founded during the Great Depression to regulate credit and currency. The Bank acts as the Canadian government's fiscal agent and has the sole right to issue paper money. , ScotiaBank and the TD Bank Financial Group including Canada Trust CT Financial Services Inc. was a financial services holding company that was founded in London, Ontario and later had its headquarters in Toronto, Ontario and operated in Canada through subsidiaries including Canada Trustco Mortgage Company and The Canada Trust Company . Laurentian Bank and the Credit Union Central of Canada Credit Union Central of Canada is the national trade association for credit unions in Canada, outside Quebec. The Toronto-based organization provides federal government relations, media relations, represents the industry in many associations and organizes several conferences each have also signed with e-route, and will soon begin offering services. - A further expansion of its provider relationship with 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 by signing a five-year multi-million dollar contract for a powerful 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 selling solution that includes Selectica technology. - A multi-faceted agreement with Descartes Systems Group, worth $25 million in cash and 1.388 million Descartes common shares, which includes the sale of its transportation logistics messaging business to Descartes. Also, Emergis will benefit from a strong distribution channel for its electronic invoice presentment and payment enabling solution and add Descartes' logistic lo·gis·tic also lo·gis·ti·cal adj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation services to its e-commerce service offerings. - Technology partnerships were signed with eAssist Global Solutions and Netegrity, both serving to add to Emergis' solutions capabilities and to its distribution coverage. Year 2000 highlights: In looking back on the year, Edwards pointed to numerous milestones: "We had an aggressive business plan that included top-line revenue growth, improving EBITDA, positive net earnings and cash flow from operations, and increased revenue from our U.S. operations. By any and all measures, we've succeeded in reaching these goals." He continued: "Acquisitions were also an important component of the business plan and, UP&UP and InvoiceLink have positioned Emergis to drive its eHealth leadership and dramatically accelerate its U.S. expansion in B2B 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. ." Customer gains, which drive increased and recurring revenue, both through the addition of new customers and the addition of new e-commerce services to existing customers, were also a highlight of the year both in Canada and the U.S. In Canada, BCE Emergis continued to drive core services The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. through the financial institutions, health insurance companies and Bell Canada. Operationally, implementation of e-route and Procuron, two major Canadian infrastructure projects, continued and marketplace adoption of e-route is progressing rapidly. In the U.S., BCE Emergis experienced a "start-up Start-up The earliest stage of a new business venture. " year, buoyed by acquisitions and breakthrough agreements with Microsoft Licensing and with J.P. Morgan Chase. A significant number of marketing and technology agreements finalized See finalization. in 2000 will continue to spur Emergis' U.S. growth, including agreements with HP, eAssist Global Solutions, Netegrity, and Descartes Systems Group. These agreements, coupled with the acquisitions and internal R&D, have contributed to Emergis further expanding its e-commerce services portfolio. Towards the end of the year, BCE Emergis also focused on organizational development: depth and expertise were added to the company, and in particular, business units were formed to specifically address the opportunities in eHealth across 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 in the B2B e-commerce marketplace in the U.S. It organized its operations around business units, with strong business drivers, to best accomplish future growth objectives. Finally, BCE Emergis fine-tuned its focus and positioning as it divested components that were deemed non-core and aligned with partners to better distribute its e-commerce services. 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 is a premier B2B e-commerce infrastructure provider, strategically focusing on market leadership in the transaction-intensive eHealth and financial services sectors. By layering technologically advanced e-commerce services on existing Internet-based platforms, Emergis offers its customers increasing value in their e-commerce adoption and ever-increasing levels of sophisticated services. These scalable solutions electronically transform business processes, such as buying, selling, 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. and payment, and enable companies to succeed in the web-centric, cost-driven, and highly competitive global Internet economy The Internet Economy refers to conducting business through markets whose infrastructure is based on the Internet and World-Wide Web. An Internet economy differs from a traditional economy in a number of ways, including: communication, market segmentation, distribution costs, and price. . BCE Emergis' customers include leading North American banks and insurance companies. The Company's 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". . Please visit BCE Emergis at www.emergis.com for more information on the Company. 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
For the For the For the For the
three-month three-month year year
(millions of period period ended ended
dollars, except ended ended
loss per share
and number of
shares) December 31, December 31, December 31, December 31,
2000 1999 2000 1999
(unaudited) (unaudited) (unaudited) (audited)
Revenue 141.0 60.6 468.0 186.7
Direct costs 26.8 14.5 96.5 52.7
-----------------------------------------------
Gross margin 114.2 46.1 371.5 134.0
-----------------------------------------------
Expenses
Operations 43.8 19.4 148.1 59.7
Sales and
marketing 16.9 6.3 53.7 19.0
Development and
integration
services 14.6 10.0 43.5 30.9
General and
administrative 14.9 7.7 51.4 20.6
-----------------------------------------------
90.2 43.4 296.7 130.2
-----------------------------------------------
Income before
under-noted items 24.0 2.7 74.8 3.8
Depreciation 10.3 5.3 28.0 9.5
Amortization of
intangibles 97.9 27.1 317.7 75.7
Interest income (0.5) (1.1) (5.6) (3.6)
Interest expense 2.2 0.5 10.8 1.1
Interest expense -
amortization of
option on convertible
debenture 8.1 - 25.2 -
Gain on exited
activities (16.2) (3.0) (16.2) (13.8)
Other expenses (1.0) 0.2 0.1 0.9
-----------------------------------------------
Net loss before
income taxes (76.8) (26.3) (285.2) (66.0)
==============================================
Income taxes
current 3.9 - 10.9 -
future (7.9) - (16.8) -
Net loss (72.8) (26.3) (279.3) (66.0)
Basic loss per
share ($) (0.78) (0.31) (3.04) (0.82)
Weighted average number
of shares used in
computing basic loss
per share 93,566,556 83,549,544 91,743,796 80,333,535
- Fully diluted loss per share is not presented as it is
anti-dilutive.
Consolidated Statement of Deficit
For the year For the year
ended ended
(millions of dollars) December 31, December 31,
2000 1999
(unaudited) (audited)
Deficit - beginning of period (124.1) (58.1)
Net loss (279.3) (66.0)
Adjustment for accounting change 31.4 -
---------------------------------------------------------------
Deficit - end of period (372.0) (124.1)
---------------------------------------------------------------
Consolidated Balance Sheet
As at As at
December 31, December 31,
(millions of dollars) 2000 1999
(unaudited) (audited)
ASSETS
Current
Cash and temporary cash investments 92.2 81.7
Marketable securities (market value
$64.7M and $15.9M as at December 31,
2000 and December 31, 1999) 67.9 3.0
Accounts receivable 76.4 47.2
Prepaid expenses 2.8 2.6
Other 28.5 4.1
Current portion of future income
tax asset 13.8 -
---------------------
281.6 138.6
Capital assets 152.3 126.1
Goodwill 737.8 242.8
Other assets 71.2 7.2
Future income tax asset 73.4 -
---------------------
1,316.3 514.7
---------------------
LIABILITIES
Current
Bank advances - 5.6
Accounts payable and accrued liabilities 99.9 76.8
Deferred revenue 17.4 5.6
Deferred credits 12.0 -
Long-term debt due within one year 19.3 7.6
---------------------
148.6 95.6
Deferred credits 13.8 2.2
Long-term debt 29.9 15.2
Convertible debenture due to parent 129.0 -
---------------------
321.3 113.0
---------------------
SHAREHOLDERS' EQUITY
Option on convertible debenture 21.0 -
Capital stock 1,303.7 525.8
Contributed Surplus 25.2 -
Deficit (372.0) (124.1)
Foreign currency translation adjustment 17.1 -
---------------------
995.0 401.7
---------------------
1,316.3 514.7
---------------------
Consolidated Statement of Cash Flows
for the for the For the For the
three-month three-month year year
period period ended ended
ended ended
(millions of
dollars) December December December December
31, 2000 31, 1999 31, 2000 31, 1999
(unaudited)(unaudited)(unaudited) (audited)
Operating activities
Net loss (72.8) (26.3) (279.3) (66.0)
Depreciation and
amortization 108.2 32.4 345.7 85.3
Amortization of option
on convertible
debenture 8.1 - 25.2 -
Income tax expense (3.8) - (9.4) -
Gain on sale of exited
activities (16.2) (3.0) (16.2) (13.8)
Other (0.2) - (0.1) 0.3
Changes in working
capital items 24.0 32.5 (19.0) 35.8
---------------------------------------
47.3 35.6 46.9 41.6
---------------------------------------
Investing activities
Acquisitions - (149.3) (810.6) (164.3)
Cash acquired on
acquisition of UP&UP - - 46.3 -
Cash acquired on acquisition
of InvoiceLink - - 1.1 -
Note receivable from former
majority
shareholder of UP&UP - - (11.6) -
Proceeds on exited activities
- net of
transaction costs 7.7 0.5 7.7 29.3
Advance to company under
common control - - (2.2) -
Additions to capital
assets (12.3) (17.8) (53.8) (26.4)
---------------------------------------
(4.6) (166.6) (823.1) (161.4)
---------------------------------------
Financing activities
Repayment of long-term
debt (3.9) (14.7) (16.3) (19.3)
Bank advances - 5.6 (5.6) 5.6
Issue of convertible
debenture due to
parent company 150.0 - 300.0 -
Repayment of convertible
debenture due to
parent company (150.0) - (150.0) -
Issue of common shares 2.3 126.9 657.8 180.3
---------------------------------------
(1.6) 117.8 785.9 166.6
---------------------------------------
Foreign exchange gain on
cash held in foreign
currencies 0.7 - 0.8 -
Cash position
Increase (decrease) 41.8 (13.2) 10.5 46.8
Balance, beginning of
period 50.4 94.9 81.7 34.9
---------------------------------------
Balance, end of period 92.2 81.7 92.2 81.7
---------------------------------------
Supplemental disclosure of
cash flow information
Amount of interest paid 0.8 0.3 4.9 1.1
Amount of income taxes
paid 1.5 - 3.5 -
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 As at December 31, 2000 These 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 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 On January 1, 2000, 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 a decrease in the opening deficit of $31.4 million. Exited Activities On December 21, 2000, in accordance with its plan to dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose its interests in non-core assets, BCE Emergis disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of certain assets related to the delivery of logistics electronic messaging See e-mail and messaging system. services in the transportation industry ("TSV TSV - tab-separated values "). In addition, on November 14, 2000, the Company disposed of its subsidiary operating in the document workflow The automatic routing of documents to the users responsible for working on them. Workflow is concerned with providing the information required to support each step of the business cycle. market. Gross proceeds for these transactions amounted to $28.0 million in cash and 1,388,000 shares of the Descartes Systems Group Inc. ("DSG DSG Direct Shift Gearbox (Audi) DSG Dosage DSG Deputy Secretary General DSG Dressing DSG Designate DSG Desmoglein DSG Duke Student Government (Duke University) ") valued at $54.0 million. Total assets and liabilities disposed of amounted to $22.1 million and $3.0 million respectively. As a result of the TSV disposition, $4.0 million worth of DSG shares will be held in escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. for a defined period after closing. This amount will be applied against post-closing 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, should any arise. The transaction with DSG included a number of reciprocal Bilateral; two-sided; mutual; interchanged. Reciprocal obligations are duties owed by one individual to another and vice versa. A reciprocal contract is one in which the parties enter into mutual agreements. strategic partnership alliances for the marketing and distribution of each other's product and service offerings. Included in the statement of earnings for the year ended December 31, 2000, are the following items related to the TSV and workflow activities.
$M
----
Revenue 15.3
Net earnings 4.6
Gain on sale 16.2
Convertible Debenture In December 2000, BCE Inc., the parent company, purchased $150.0 million of principal amount of a 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. convertible at the holder's option into 1,989,389 common shares at a conversion price of $75.40 per share. The debenture bears interest at 6.3% per annum Per annum Yearly. , and has a maturity date of June 30, 2002. The accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the of the debenture (equal to the value of the conversion option) is charged to earnings rateably to maturity. The fair value of the conversion option associated with the convertible debenture is $21.0 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. . Related Party Information The following transactions occurred in the normal course of operations with BCE, 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:
Three-month Twelve-month
period ended period ended
Dec.31/00 Dec.31/00
-----------------------------
$ $
Millions Millions
---------------------------------------------------------------
Revenue (a) 41.0 122.6
Direct costs and expenses 28.1 117.2
Interest on convertible debenture 2.6 7.9
---------------------------------------------------------------
(a) Includes services for resale to third parties and for
internal use.
The balance sheet includes the following balances with BCE, the
parent company, and other companies in the BCE group subject to common
control.
As at Dec.31/00 As at Dec. 31/99
-------------------------------
$ $
Millions Millions
---------------------------------------------------------------
Cash and temporary cash investments 15.0 30.0
Accounts receivable 16.5 18.1
Capital assets purchased 6.0 -
Accounts payable and accrued liabilities 4.2 19.4
Convertible debenture 129.0 -
Option on convertible debenture 21.0 -
---------------------------------------------------------------
Operating Segment Information
The Company focuses its activities in three business units
(Canadian, US, and eHealth), 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
Canadian US eHealth Total
Business Business Business
Unit Unit Unit
------------------------------------------------
($M) Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec.
31 31 31 31 31 31 31 31
2000 1999 2000 1999 2000 1999 2000 1999
------------------------------------------------
Revenue 68.1 46.7 7.4 3.5 65.5 10.4 141.0 60.6
Direct Costs 16.5 13.4 1.1 0.5 9.2 0.6 26.8 14.5
------------------------------------------------
Gross Margin 51.6 33.3 6.3 3.0 56.3 9.8 114.2 46.1
================================================
For the year ended
Canadian US eHealth Total
Business Business Business
Unit Unit Unit
-------------------------------------------------
($M) Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec.
31 31 31 31 31 31 31 31
2000 1999 2000 1999 2000 1999 2000 1999
-------------------------------------------------
Revenue 234.3 157.7 23.8 8.2 209.9 20.8 468.0 186.7
Direct Costs 64.5 48.4 2.9 0.8 29.1 3.5 96.5 52.7
-------------------------------------------------
Gross Margin 169.8 109.3 20.9 7.4 180.8 17.3 371.5 134.0
=================================================
Geographic information
The following table sets out certain geographical information
relative to the Company.
Revenue
($M) For the For the For the For the
three-month three month year ended year ended
period ended period ended
December 31, December 31, December 31, December 31,
2000 1999 2000 1999
-------------------------------------------------------
Canada 85.1 57.9 297.8 170.1
United States 55.4 2.7 168.3 7.8
Other 0.5 - 1.9 8.8
------------------------------------------------------
141.0 60.6 468.0 186.7
======================================================
Equity Components
The stated capital stock as at December 31, 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) 566,824 49.2
Issue of common shares (c) 150,000 1.7
Issue of common shares (d) 643,247 6.2
------------------------
93,651,603 1,232.9
Common shares to be issued (e) 56.3
Options issued in connection with the
InvoiceLink acquisition 14.5
------------------------
93,651,603 1,303.7
========================
Option on convertible debenture 21.0
========
Contributed surplus 25.2
========
(a) 5,517,827 common shares at $117.80 per share for a total cash
consideration of $650.0 million were issued by way of a private
placement to the parent company in connection with the UP&UP
acquisition.
(b) 566,824 common shares were issued for a total consideration of
$49.2 million in connection with the InvoiceLink acquisition.
(c) 150,000 common shares were issued for a total consideration of
$1.7 million in connection with the Newstar acquisition.
(d) 643,247 stock options were exercised to purchase 643,247 common
shares for total cash consideration of $6.2 million.
(e) The number of shares to be issued in connection with the
InvoiceLink acquisition is not determinable at this time.
Stock option plans: Stock option plans for common shares at prices ranging from $0.49 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 3,321,767 options Warrants In November 2000, the Company entered into certain business arrangements for the use and distribution of certain technology solutions with strategic partners. Under the terms of the agreements, warrants to purchase 650,000 common shares of the Company's common stock were issued. Warrants convertible into 300,000 common shares vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) upon signature of the agreements and are exercisable at $47.24 per common share. The remaining balance will vest upon the attainment of certain contractual objectives by the partners. The warrants 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. three years after vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: . No amount has been recorded on the financial statements as a result of these transactions. Contributed Surplus Contributed surplus as at December 31, 2000 represents the fair value of the unexercised conversion option on the convertible debenture issued in March 2000 and 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. in December 2000. 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 $29.0 million to $37.0 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 has been filed. 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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