Bright Station plc Q1 2001 Results Announcement.Business & Technology Editors LONDON--(BUSINESS WIRE)--May 31, 2001 Bright Station plc (LSE LSE - Language Sensitive Editor :BSN BSN abbr. Bachelor of Science in Nursing , NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BSTN) today announced its first quarter results for the three month period ending March 31, 2001, which follows on from the Board's recent statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Group's restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and today's announcement regarding additional funding for the Group. Consistent with the revised strategy outlined in the Board's announcement of April 30, 2001, the attached statement of results reflects the fact that the Company's eCommerce See e-commerce. businesses, comprising Sparza and officeshopper, will be either closed or sold, in order to reposition the Group as a pure play knowledge management company through its Smartlogik subsidiary. Today, the Company announced that it had secured placing commitments from institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. to raise approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. (pound)12 million (net of expenses) through the issue of 270,000,000 New Ordinary Shares at 5 pence pence n. Chiefly British A plural of penny. pence Noun a plural of penny USAGE: Since the decimalization of British currency and the introduction of the abbreviation p, each through a Placing and Open Offer. As a result, the Company expects to be in a position to fully implement the restructuring. As a consequence, these results now show the eCommerce operations as discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: . The results also include a significant level of overhead relating to corporate staff, currently being deployed to manage the funding and Group restructuring plans, which on completion will render (1) To make visible; to draw. The term comes from the graphics world where a rendering is an artist's drawing of what a new structure would look like. In computer-aided design (CAD), a rendering is a particular view of a 3D model that has been converted into a realistic image. the majority of these individuals redundant Repetitive. See redundancy. . In addition, the proposed restructuring has necessitated the restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of certain of the December December: see month. 31, 2000 results. Details of these restatements are included in note 2. Group revenues for continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the quarter of (pound)2.3 million reflected an 18% increase over Q4 2000 and a 108% increase over Q1 2000. Operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the quarter was (pound)6.1 million, of which (pound)4.4 million related to continuing operations. In addition, a (pound)0.2 million charge was written off against the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of investments. The increase in revenues was principally driven by Smartlogik which continues to leverage the sales and marketing infrastructure put in place towards the end of 2000. Smartlogik announced important strategic relationships with Intel Corporation (company) Intel Corporation - A US microelectronics manufacturer. They produced the Intel 4004, Intel 8080, Intel 8086, Intel 80186, Intel 80286, Intel 80386, Intel 486 and Pentium microprocessor families as well as many other integrated circuits and personal computer networking and Norcontrol during the quarter, and with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) since the quarter end. Smartlogik has continued to secure new customers, including Virgin Group, the Danish Foreign Ministry and others. Its client list now includes over 100 corporations and organizations. As of March 31, 2001, cash in the bank was (pound)7.4 million compared to a net current asset position of (pound)5.6 million. On May 2, 2001, the Board announced that cash balances at the end of April amounted to (pound)2.9 million and that the Board was taking radical action to significantly reduce the level of operational cash outflows for the remainder of the quarter. The rate of decline in cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. during April was in part attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to accelerated payments to settle creditor An individual to whom an obligation is owed because he or she has given something of value in exchange. One who may legally demand and receive money, either through the fulfillment of a contract or due to injury sustained as a result of another's Negligence liabilities coupled with slower than anticipated cash collection of receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed . Cash outflows in the month of April also included the final payment of (pound)450,000 in deferred consideration for Write Works Ltd, in addition to costs incurred in relation to the Group's reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. of its WebTop (1) Using a Web browser as the desktop interface in a client machine. (2) A specification from Sun, IBM and Oracle for a common interface for Java-based network computers. operations which were transferred to Smartlogik on May 8, 2001. On May 9, 2001, the Board announced that it had entered into a legally binding agreement regarding the sale of the name, customer list and debtor One who owes a debt or the performance of an obligation to another, who is called the creditor; one who may be compelled to pay a claim or demand; anyone liable on a claim, whether due or to become due. book of officeshopper, its online office supplies Office supplies is the generic term that refers to all supplies regularly used in offices by businesses and other organizations, from private citizens to governments, who works with the collection, refinement, and output of information (colloquially referred to as "paper work"). company, to Inkwell inkwell GI surgery A surgically constructed vagination-'intussusception' of a short sleeve of esophagus sewn into the stomach which, as intragastric pressure ↑, is compressed, forming a functional valve–eg, Nissen fundoplication. See Nissen procedure. Direct, a division of the Howarine Calvert Cal·vert Family of English colonists in America, including George (1580?-1632), First Baron Baltimore; his son Cecilius (1605-1675), Second Baron and recipient of the Maryland charter; another son, Leonard group of companies. The only non-core business remaining within the Group is Sparza, where the cost base has been reduced and plans made for its closure. During the past month corporate overheads have also been curtailed, and the corporate center is now focused exclusively on completing the restructuring for the ongoing business, Smartlogik. Allen Al·len , Edgar 1892-1943. American anatomist who is noted for his studies of hormones and for the discovery (1923) of estrogen. Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs , Chairman of Bright Station, said: "Smartlogik, the business around which the Company is currently being restructured, continues to trade satisfactorily, despite the disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. that the current process inevitably causes. "Today's funding announcement shows institutional endorsement A signature on a Commercial Paper or document. An endorsement on a negotiable instrument, such as a check or a promissory note, has the effect of transferring all the rights represented by the instrument to another individual. of the Smartlogik business and management and we are confident that Smartlogik will be able to deliver value to our shareholders under the revised corporate structure." This news announcement may contain 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. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are subject to the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " created by those sections. The forward-looking statements can be identified by terminology The terminology used in the computer and telecommunications field adds tremendous confusion not only for the lay person, but for the technicians themselves. What many do not realize is that terms are made up by anybody and everybody in a nonchalant, casual manner without any regard or such as "may," "will," "expect," "intend," "estimate,"anticipate," "inevitable," "believe" or "continue" or variations thereon there·on adv. 1. On or upon this, that, or it. 2. Archaic Following that immediately; thereupon. Adv. 1. thereon - on that; "text and commentary thereon" on it, on that , and include, among others, the launch dates of the Company's products noted above. The Company's actual results could differ materially from those discussed in the forward-looking statements as a result of certain factors, including, among others, those set forth under the caption "Risk Factors" in the Company's most recent Report on Form 20-F or generally in the Company's Reports on Form 6-K. The Company disclaims any obligation to update these forward-looking statements as a result of subsequent events.
Bright Station plc
Consolidated Profit and Loss Account (unaudited)
For the 3 months ended March 31, 2001
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
2001 2001 2001 2000 2000 2000
(pound) (pound) (pound) (pound) (pound) (pound)
'000 '000 '000 '000 '000 '000
Turnover 2,293 748 3,041 1,102 38,751 39,853
Cost of sales (262) (420) (682) (146) (17,377) (17,523)
------ ----- ----- ------ ------- --------
Gross profit 2,031 328 2,359 956 21,374 22,330
Distribution
costs (1,711) (175) (1,886) (210) (5,835) (6,045)
Administrative
expenses (4,685) (1,918) (6,603) (1,051) (15,755) (16,806)
------ ----- ----- ------ ------- --------
Operating
loss (4,365) (1,765) (6,130) (305) (216) (521)
Loss on
disposal
of ISD - - - - (106,045) (106,045)
------ ----- ----- ------ ------- --------
Loss on
ordinary
activities
after
exceptional
items (4,365) (1,765) (6,130) (305) (106,261) (106,566)
------ ----- ----- ------ ------- --------
Interest receivable 143 80
Amounts written
off investments (181) -
Interest payable (3) (4,695)
----- --------
Loss on
ordinary
activities
before taxation (6,171) (111,181)
Taxation on
loss on
ordinary activities - (282)
----- --------
Loss on ordinary
activities after taxation (6,171) (111,463)
Minority equity interests - (21)
----- --------
Retained loss (6,171) (111,484)
----- --------
Loss per share (pence) (3.6) (71.9)
Shares used in
computing loss per
share (thousands) 172,615 155,061
Bright Station plc
Consolidated Balance Sheet (unaudited)
As of March 31, 2001
March 31 December 31
2001 2000
(pound)'000 (pound)'000
FIXED ASSETS
Goodwill 2,335 2,364
Tangible assets 1,908 1,445
Investments 600 600
----------- ---------
4,843 4,409
----------- ---------
CURRENT FIXED ASSETS
Debtors 4,748 3,310
Cash at bank and in hand 7,414 16,334
----------- ---------
12,162 19,644
CREDITORS (amounts falling
due within one year) (6,537) (7,354)
----------- ---------
NET CURRENT ASSETS 5,625 12,290
----------- ---------
TOTAL ASSETS LESS
CURRENT LIABILITIES 10,468 16,699
CREDITORS (amounts falling
due after more than one year) (17) (17)
----------- ---------
10,451 16,682
=========== =========
CAPITAL AND RESERVES
Called up share capital 1,726 1,726
Share premium account 184,057 184,057
Shares to be issued 134 134
Profit and loss account (175,466) (169,235)
----------- ---------
Total equity shareholders' funds 10,451 16,682
=========== =========
Certain adjustments have been made to the carrying amount of
certain fixed assets in the balance sheet as at December 31, 2000 as
the result of the ongoing restructuring of the Group. These are
detailed in note 2.
Bright Station plc
Consolidated Cash Flow Statement (unaudited)
For the 3 months ended March 31, 2001
2001 2000
(pound)'000 (pound)'000
NET CASH (OUTFLOW)/INFLOW
FROM OPERATING ACTIVITIES (8,072) 2,770
-------- --------
RETURNS ON INVESTMENTS
AND SERVICING OF FINANCE
Interest received 172 64
Interest paid on bank
loans and overdrafts - (1,472)
Interest paid on finance leases - (5)
-------- --------
172 (1,413)
-------- --------
TAXATION PAID (61) (120)
-------- --------
CAPITAL EXPENDITURE
Payments to acquire
intangible assets - (2,008)
Payments to acquire
tangible fixed assets (775) (354)
Payments to acquire
fixed asset investments (175) -
-------- --------
(950) (2,362)
-------- --------
CASH OUTFLOW BEFORE THE USE
OF LIQUID RESOURCES AND FINANCING (8,911) (1,125)
-------- --------
FINANCING
Net proceeds on issue
of Ordinary share capital - 84
Debt due within one year
- Repayment of loans - (3,701)
- Repayment of capital element
of finance leases - (642)
- (4,259)
-------- --------
DECREASE IN CASH (8,911) (5,384)
======== ========
RECONCILIATION OF NET CASH
FLOW TO MOVEMENT IN
NET FUNDS/(DEBT)
Decrease in cash in the period (8,911) (5,384)
Cash used to decrease lease financing - 642
Cash used to repay loans - 3,701
-------- --------
Change in net debt from cash flows (8,911) (1,041)
Other non-cash changes - (249)
Effect of foreign exchange
rate changes - 520
-------- --------
Movement in net debt in period (8,911) (770)
Net funds/(debt) at beginning
of period 16,297 (154,126)
-------- --------
Net funds/(debt) at end of period 7,386 (154,896)
======== ========
Bright Station plc
For the 3 months ended March 31, 2001 (unaudited)
1. Analysis of Revenues
2000 2001
Qtr1 Qtr2 Qtr3 Qtr4 Total Qtr1
(pound) (pound) (pound) (pound) (pound) (pound)
'000 '000 '000 '000 '000 '000
Continuing Operations
Smartlogik 691 994 1,017 1,441 4,143 1,746
Other 411 419 476 498 1,804 547
------ ----- ------ ------ ------ ------
Total continuing
operations 1,102 1,413 1,493 1,939 5,947 2,293
Discontinued
operations 38,751 11,294 875 775 51,695 748
------ ------ ------ ------ ------ ------
Total revenues 39,853 12,707 2,368 2,714 57,642 3,041
====== ====== ====== ====== ====== ======
Bright Station plc
For the 3 months ended March 31, 2001 (unauditied)
2. Post December 31, 2000 balance sheet events
On February 28, 2001, the Company made its preliminary
announcement of its results for the year ended December 31, 2000. The
reported loss before tax for the year was (pound)128,944,000.
This loss has been adjusted as follows:
(pound)000
Original loss before tax
per preliminary announcement (128,944)
Impairment adjustment (see below) (2,249)
Reclassification of capital development
costs relating to ISD (501)
----------------------------------------------------------------------
Loss before tax (131,694)
----------------------------------------------------------------------
On April 31, 2001 the Group announced its intention to refocus its
business operations, with the resultant sale or closure of its
e-commerce activities, comprising officeshopper and Sparza, and
curtailment of head office activities.
The decision to refocus the activities of the business as
described above provided evidence of an impairment in value that had
occurred prior to the balance sheet data. An impairment review of the
carrying value of the fixed assets held in the balance sheet at
December 31, 2000 has been performed and an adjustment to the carrying
value was made as above.
The impairment of fixed assets was calculated as follows:
Carrying value
Original adjustments
2000 2000
(pound)'000 (pound)'000 (pound)'000
----------------------------------------------------------------------
FIXED ASSETS
Intangible assets 295 (295) -
Goodwill 2,621 (257) 2,364
Tangible assets 2,398 (953) 1,445
Investments 1,344 (744) 600
----------------------------------------------------------------------
6,658 (2,249) 4,409
----------------------------------------------------------------------
A change was also made to the exceptional loss on the disposal of
ISD as a result of reclassification of capital development costs. The
effect of this change has also been detailed above.
Bright Station plc
For the 3 months ended March 31, 2001 (unaudited)
3. Reconciliation of operating loss to net cash (outflow)/inflow from
operating activities
March 31 March 31
2001 2000
(pound)000 (pound)000
Operating loss (6,130) (521)
Depreciation charges 307 1,501
Amortisation of goodwill 32 -
Amortisation of
development costs - 2,878
Loss on disposal of intangible
fixed assets - (56)
Profit on disposal of fixed
asset investments - 93
Loss on disposal of tangible
fixed assets 3 1
Increase in debtors (1,719) (1,448)
(Decrease)/increase in
creditors (546) 6,420
Exchange variances (19) (4,257)
Cash cost of restructuring - (73)
Other working capital movements - (5)
Other adjustments for
non-cash items - (1,763)
-------------------------------
Net cash (outflow)/inflow from
operating activities (8,072) 2,770
===============================
Bright Station plc
For the 3 months ended March 31, 2001 (unaudited)
4. Discontinued activities
The quarterly financial statements for the 3 months ending March
31, 2001 have been restated to reflect the reclassification of the
eCommerce business, comprising Sparza and officeshopper, as
discontinued.
5. Administrative expenses
Administrative expenses for the quarter ending March 31, 2001
include non-recurring costs relating to the Group restructuring.
6. Post balance sheet events
Disposal of officeshopper assets
On May 9, 2001, the board announced that it had entered into a
legally binding agreement regarding the sale of the name, customer
list and debtor book of officeshopper, it's online office supplies
company, to Inkwell Direct, a division of the Howarine Calvert
group of companies for consideration of up to (pound)450,000,
payable in cash.
Placing and Open Offer
On May 31, 2001, the Group announced its proposed placing and open
offer of 270,000,000 new shares of 1p each subject to approval by
shareholders at an Extraordinary General Meeting of the Company.
The estimated proceeds of the placing and open offer of
approximately (pound)12 million net of expenses, are required for
the Group to be able to continue in operational existence for the
foreseeable future.
These results are unaudited and do not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985.
The financial statements for the year ended 31 December 1999 have been
reported on by PricewaterhouseCoopers, and delivered to the Registrar
of Companies. The audit report for the year ended December 31, 1999
was not qualified and neither did it contain any statements under
Section 237 (2) or (3) of the Companies Act 1985. The auditors expect
to issue an unqualified, but modified, opinion for the year ended
December 31, 2000. The modified opinion is expected to contain an
explanatory paragraph relating to a fundamental uncertainty concerning
the going concern basis of preparation for the financial statements
being dependent upon the successful completion of the Placing and Open
Offer.
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