Correction - BCE Emergis Announces Strong Second Quarter Results.Business Editors MONTREAL--(BUSINESS WIRE)--July 24, 2001 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 (IFM IFM Institut Français de la Mode (French Fashion Institute) IfM Institute for Micromanufacturing (Louisiana Tech University) IFM Interface Module IFM Instantaneous Frequency Measurement \TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). ) This release corrects and replaces the release sent out today July July: see month. 24, 2001 @ 0635 et. A correction CORRECTION,punishment. Chastisement by one having authority of a person who has committed some offence, for the purpose of bringing him to legal subjection. 2. It is chiefly exercised in a parental manner, by parents, or those who are placed in loco parentis. has been made to the month in the Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Earnings
- Revenue of $158.7 million hits top end of target range
- All three business units - eHealth, U.S. and Canada- drive
revenue growth
- Positive baseline earnings at $0.13 per share
- Milestone agreements confirm Emergis' market leadership
BCE Emergis Inc. (TSE:IFM), a leading provider of e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. services and exchanges, today announced strong second quarter financial results. Revenue for the second quarter of 2001 reached $158.7 million, up from $122.2 million in the corresponding quarter of 2000, which included revenue from divested activities. Baseline The horizontal line to which the bottoms of lowercase characters (without descenders) are aligned. See typeface. baseline - released version earnings* for the quarter were $12.5 million, or $0.13 per share, compared to $8.4 million, or $0.09 per share for the same period last year. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
"We are most satisfied with these quarterly results. Revenue grew strongly, reaching the high end of our target range, EBITDA hit a new high mark exceeding $30 million and we continued to generate positive baseline earnings. And, we accomplished all this while navigating (networking, hypertext) navigating - Finding your way around. Often used of the Internet, particularly the World-Wide Web. A browser is a tool for navigating hypertext documents. through an uncertain economic climate." stated Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. Edwards, Vice Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of BCE Emergis. "Furthermore, we expect many of the major accounts we signed up over the past few months to position us well as we move forward." Christian Christian flees the City of Destruction. [Br. Lit.: Pilgrim’s Progress] See : Escape Christian travels to Celestial City with cumbrous burden on back. [Br. Lit. Trudeau Tru·deau , Pierre Elliott 1919-2000. Canadian prime minister (1968-1979 and 1980-1984) whose administration was marked by efforts to contain the French separatist movement in Quebec and by the Constitution Act of 1982, which granted Canada full , President & COO (Cell Of Origin) See mobile positioning. further added, "As the past quarter illustrates, we have continued to grow our eHealth eHealth (also written e-health) is a relatively recent term for healthcare practice which is supported by electronic processes and communication. The term is inconsistently used: some would argue it is interchangeable with health care informatics, while others use it in the business and have made significant progress in expanding geographically our network of relationships with insurance companies and providers. Our e-invoicing technology is gaining traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. , as evidenced by our signing of an agreement with Equifax  This article is subject to manipulation attempts by the described entity using multiple user names. Please be critical of edits and discussion page entries.Equifax, Inc. . And, today, the strength of this technology has brought us to a new high point as we have entered into a partnership with Visa U.S.A. to integrate our electronic 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. product into its commercial payment solutions." Edwards also pointed to the addition of Ernie Eves Ernest Lawrence Eves (born June 17, 1946) was the twenty-third Premier of the province of Ontario, Canada, from April 15, 2002, to October 23, 2003. Beginnings Ernie Eves was born into a working class family in Windsor, Ontario, in 1946. to the Board, as well as the appointment of Jean Monty (programming, abuse) monty - /mon'tee/ Any program with a ludicrously complex user interface that performs a trivial task. An example would be a menu-driven, button clicking, pulldown, pop-up windows program for listing directories. to the position of Chairman, as highlights of the quarter: "With Jean Monty taking over the chairmanship duties, BCE reiterates its continued support and keen interest in our progress as a leading North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. e-commerce services provider." Business outlook For the third quarter 2001, the Company is targeting revenue between $160 million and $175 million. As noted in the previous quarter, the economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. , and its possible effect on the Company's business, is creating uncertainty and difficulty in predicting future results. Other financial highlights: For the 2nd quarter, revenue from each of the business units progressed solidly: - The eHealth sector remains the largest segment, registering $76.2 million in revenue for the quarter. This compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to $70.3 million in the first quarter of 2001 and $63.2 million in the second quarter of 2000. - The 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 revenue grew to $72.0 million from $66.0 million in the previous quarter and $53.0 million in the second quarter of 2000, the last of which included revenue from since divested assets. - Revenue from the U.S. business unit jumped to $10.5 million, up from $7.0 million in the previous quarter and $6.0 million in the second quarter of 2000, the last of which also included revenue from since divested assets. - Baseline earnings(1) per share, while remaining positive, were impacted by foreign exchange differences in the amount of $0.03 per share, as compared to last quarter. - EBITDA reached the $30.9 million mark for the quarter, up significantly from $20.1 million in the corresponding period last year. - The net loss of $90.6 million or $0.96 per share for the three-month period was greater than last year primarily as a result of increases in depreciation and amortization. - 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 came in at $20.7 million, ahead of the $19.3 million stated for the corresponding quarter in 2000. - The Company had $58.6 million of cash on June 30 2001, down from $86.5 million on June 30, 2000. Cash was used during the quarter for the acquisition of Associates for Health Care (AHC AHC Appalachian Hardwood Center AHC American Heritage Center (University of Wyoming, Laramie, WY) AHC American Horse Council AHC Association for History and Computing AHC Australian Heritage Commission AHC Assault Helicopter Company ), and for investments in capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) . - At the end of the quarter, Emergis had a working capital deficiency A shortage or insufficiency. The amount by which federal Income Tax due exceeds the amount reported by the taxpayer on his or her return; also, the amount owed by a taxpayer who has not filed a return. of $36.8 million primarily as a result of the $136 million 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. from BCE becoming a current liability due to the debenture maturing on June 30, 2002. Working capital stood at $133 million on December December: see month. 31, 2000. - 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 stood at 61 days outstanding at quarter end. The increase over the prior quarter was primarily due to timing of revenues. For the six-month period ending June 30, 2001: - Total revenue was $302.0 million, with the eHealth business unit accounting for $146.5 million, the Canadian business unit $138.0 million and the U.S. business unit $17.5 million. - Revenue sourced from the U.S. rose to 41.4%, pointing to the Company's growing success in penetrating penetrating breaching the tissues of the body. the U.S. market. - 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 for the six-month period remained within the targeted 80% to 85% range of total revenue. - EBITDA amounted to $57.2 million on June 30, 2001, compared to $25.1 million the previous year. - The net loss totaled $205.6 million or $2.19 per share for the six-month period in 2001, compared to a net loss of $123.2 million or $1.36 per share in 2000, reflecting increases in depreciation, amortization and the writedown writedown A reduction in the value of an asset carried on a firm's financial statements. For example, the firm's accountants, believing the inventory is overvalued, may decide to take a writedown by reducing inventory valuation. of marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. . - Cash flow from operations totaled $6.1 million up substantially from a shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. of $5.6 million for the corresponding period in 2000. Customer and operational highlights On the eHealth side of the business, Emergis continued to grow and expand its business and presence in this sector. Beyond geographic expansion, these agreements provide Emergis with increased opportunities for penetration of its eHealth solutions and services: - Emergis expanded its reach into the U.S. health insurance and service provider arena, through the acquisition of AHC, a leader in healthcare cost management in Wisconsin Wisconsin, state, United States Wisconsin (wĭskŏn`sən, –sĭn), upper midwestern state of the United States. It is bounded by Lake Superior and the Upper Peninsula of Michigan, from which it is divided by the Menominee . - The Company also implemented a recently signed agreement with Formost Inc., a specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. network provider headquartered in New Jersey, which further strengthens Emergis' American network American Network is cable/satellite television network. It broadcasts only American shows. Is part of Televisa Networks, as affiliate on Televisa. Programs broadcast by American Network Talk Shows
- During the period, Emergis terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: a royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. agreement with respect to retail access to its national network of physicians and hospitals, with a final one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. payment being recorded. - Emergis signed a three-year agreement with the State of North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. Teachers' and State Employees' Plan, and the North Carolina Health Choice Plan. This agreement furthers Emergis' efforts to increase its presence in state government programs, with the company already being involved in Texas, Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and , Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. and
Kentucky Kentucky, state, United StatesKentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. . The U.S. business unit continued to make inroads inroads Noun, pl make inroads into to start affecting or reducing: my gambling has made great inroads into my savings inroads npl to make inroads into [+ in the 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. sector: - A multi-year agreement for electronic invoicing was signed with Equifax, a leading provider of consumer and commercial credit information worldwide. Equifax will deploy Emergis(R) e-Invoicing to its clients in both the U.S. and 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 , and may extend the solution to its global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. in both Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. .The Canadian business unit continued to win major contracts: - As part of the BCE consortium that was awarded a $57 million contract to build and manage a state-of-the-art e-government (Electronic-GOVERNMENT) A generic term for Web-based services from agencies of local, state and federal governments. Such Web sites provide a wide variety of services to the public and have been extremely helpful in reducing internal paperwork. infrastructure for the Government of Canada The Government of Canada is the federal government of Canada. The powers and structure of the federal government are set out in the Constitution of Canada. In modern Canadian use, the term "government" (or "federal government") refers broadly to the cabinet of the day and , Emergis will provide security related e-Commerce services, including PKI (Public Key Infrastructure) A framework for creating a secure method for exchanging information based on public key cryptography. The foundation of a PKI is the certificate authority (CA), which issues digital certificates that authenticate the identity of (Public Key Infrastructure) as well as the financial settlement capability. - Through its wholly-owned subsidiary Can-Act Payment Services Inc., Emergis signed five-year agreements with Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. Treasury Branches, Laurentian Lau·ren·tian adj. 1. Of, relating to, or being in the vicinity of the St. Lawrence River. 2. Geology Of or relating to the Precambrian gneissic granite of the Lake Superior area. Bank and TD Bank Financial Group. The agreements allow them to offer their business customers the ability to electronically and securely file and pay taxes over the Web to a variety of provincial and federal department and agencies. - The company's e-lending Definitions of eLending interchange An interchange is a location where two things meet, usually perform some kind of exchange, and possibly go on their ways again. It is most commonly used in four contexts:
Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. and Quebec Quebec, city, Canada Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. . Software vendors for processing auto financing Oasis Auto Complete A feature in Web browsers and other software that lets you fill in the blanks faster when entering the same names and addresses you routinely use. Auto complete saves your text entries, and compares them with new entries. Systems, C.T. Soft and Novaciel have joined the Emergis(R) e-Lending Interchange providing dealership reach - especially in the Ontario and Greater Toronto area The Greater Toronto Area (widely abbreviated as the GTA) is the most populous metropolitan area in Canada. The GTA is a provincial planning area with a population of 5,555,912 at the 2006 Canadian Census. and links to close to half of Quebec auto dealerships. - Emergis and 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 won a contract from Thomas Cook For the company, see Thomas Cook AG. Thomas Cook (22 November 1808 – 18 July 1892) of Melbourne, Derbyshire, founded the travel agency that is now Thomas Cook AG. He was brought up as a strict Baptist and joined his local Temperance Society. Travel to provide a private, fully-managed, e-commerce-ready, wide area network (WAN). Operationally, Emergis made several important strides: - Celent Communications, a Boston-based research firm specializing in technology solutions for the financial institutions industry recognized the strength of Emergis(R) e-Invoicing as a tool for that industry, and ranked BCE Emergis first in this area. - Emergis announced the upcoming release of its Emergis(R) Enabled MarketPlace 2.0 an enhanced network-centric solution that provides customers the entire benefit of interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. with major eProcurement platforms, in addition to value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. services such as advanced order management, business document exchange (BDX BDX Bordeaux (France) BDX Becton-Dickinson and Company (stock symbol) BDX Business Document Exchange BDX Burst Detector X BDX Beacon Data Extractor ), e-Invoicing, and bank-sponsored payment. - To that end, Emergis signed an agreement with Clarus Clarus (Greek Klaros) in the territory of Colophon in the Ionian coast of Asia Minor was a much-revered, much-famed cult center described by Pausanias (vii. 3, 1). Corporation for its specialized mid-market enterprise procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. solution. Clarus will also incorporate Emergis' e-Invoicing, as well as its document exchange (BDX) product into 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 platform solution package. Both companies will jointly market and sell to the North American mid-sized enterprise market. - Emergis also recently acquired, subsequent to quarter-end, ProCure To cause something to happen; to find and obtain something or someone. Procure refers to commencing a proceeding; bringing about a result; persuading, inducing, or causing a person to do a particular act; obtaining possession or control over an item; or making a person .com's strong supplier-focused technology to further expand and enrich Emergis(R) Enabled Marketplace 2.0. ProCure.com's technology is core to collaborative col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. commerce on the supplier side. (1) Note: "Baseline earnings" is defined as reported net earnings before "Acquisition-related costs" (amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. 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. Additional financial information is available on the BCE Emergis web site at www.emergis.com. BCE Emergis is a premier 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 and payment, and enable companies to succeed in the web-centric Having to do with the Web. A Web-centric view of something means that the application or system has been designed for the Web. See Webified. , 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". . This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. which are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly. Factors which could cause actual results or events to differ materially from current expectations include, among other things: uncertainty as to whether BCE Emergis' strategies will yield the expected benefits and growth prospects, the current negative trends in North American economic conditions, BCE Emergis' ability to expand its operations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. particularly in the ehealth and financial sectors, the extent of its customers' use of its exchanges and services and the ability to integrate efficiently new acquisitions. For additional information with respect to certain of these and other factors, see the Annual Information Form of the Company filed with securities commissions. THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PRESS RELEASE REPRESENT BCE EMERGIS EXPECTATIONS AS AT JULY 24, 2001 AND, ACCORDINGLY, ARE SUBJECT TO CHANGE AFTER SUCH DATE. HOWEVER BCE EMERGIS DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. For more information: Sylvia Sylvia may refer to:
n. 1. (Chem.) A yellow crystalline substance ( fustic rodby> (Chlorophora tinctoria syn. Director, Corporate Communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. (514) 868-2358 Email: sylvia.morin@emergis.com John Gutpell Director, Investor Relations Investor relations The process by which the corporation communicates with its investors. (514) 868-2232 Email: john.gutpell@emergis.com
Consolidated Statements of Earnings
(millions of dollars, except loss per share and number of shares)
For the For the For the For the
three month three month six month six month
period period period period
ended ended ended ended
June 30, June 30, June 30 June 30,
2001, 2000 2001 2000
---------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue 158.7 122.2 302.0 194.9
Direct costs 35.8 25.5 67.9 47.3
----- ----- ----- -----
Gross margin 122.9 96.7 234.1 147.6
----- ----- ----- -----
Expenses
Operations 42.2 42.1 83.6 63.9
Sales and marketing 19.4 14.7 36.0 23.2
Research
and development 13.4 5.9 24.5 12.7
General
and administrative 17.0 13.9 32.8 22.7
---- ---- ----- -----
92.0 76.6 176.9 122.5
---- ---- ----- -----
Earnings before
under-noted items 30.9 20.1 57.2 25.1
Depreciation 10.8 6.0 20.1 11.8
Amortization
of intangibles 103.8 90.0 205.0 127.6
Interest income (1.2) (2.1) (2.8) (2.9)
Interest
on long-term debt 3.2 4.5 6.7 5.2
Accretion on
convertible
debenture due
to parent,
related to the
option 3.5 8.2 7.0 8.9
Writedown of
marketable
securities and other
assets (Note 3) 1.5 - 23.9 -
Other 0.8 0.4 (1.3) 0.8
------- ------- ------- -------
Net loss before
income taxes (91.5) (86.9) (201.4) (126.3)
Income taxes
Current 4.8 2.9 9.0 3.5
Future (5.7) (7.7) (4.8) (6.6)
------- ------- ------- -------
Net loss (90.6) (82.1) (205.6) (123.2)
====== ====== ======= =======
Basic loss
per share ($) (0.96) (0.88) (2.19) (1.36)
Weighted average number
of shares used
in computing
basic loss
per share 93,947,586 92,843,816 93,866,255 90,374,239
Fully diluted loss per share is not presented as it is anti-dilutive.
See Notes to Interim Consolidated Financial Statements.
Consolidated Statements of Deficit
---------------------------------------------------------------
For the six For the six
month period month period
ended ended
(millions of dollars) June 30, 2001 June 30, 2000
---------------------------------------------------------------
(unaudited) (unaudited)
Deficit - beginning of period (372.0) (124.1)
Adjustment related to the adoption of
new accounting recommendation - 31.4
Net loss (205.6) (123.2)
------- -------
Deficit - end of period (577.6) (215.9)
------- -------
Consolidated Balance Sheets
-----------------------------------------------------------------
As at As at
June 30, December 31,
(millions of dollars) 2001 2000
(unaudited) (audited)
ASSETS
Current
Cash and temporary cash investments 58.6 92.2
Marketable securities
(market value $29.7M as at June 30, 2001
and $67.9M as at December 31, 2000) 21.5 67.9
Accounts receivable 120.4 76.4
Future income taxes 7.5 7.5
Other 19.6 37.6
------- -------
227.6 281.6
Capital assets 138.4 152.3
Goodwill, net 620.8 737.8
Future income taxes 72.6 73.4
Other assets 81.5 71.2
------- -------
1,140.9 1,316.3
------- -------
LIABILITIES
Current
Accounts payable and accrued liabilities 80.0 99.9
Deferred revenue 16.0 17.4
Deferred credits 12.0 12.0
Long-term debt 20.4 19.3
Convertible debenture
due to parent (Note 4) 136.0 -
------- -------
264.4 148.6
Deferred credits 8.1 13.8
Long-term debt 33.7 29.9
Convertible debenture due to parent - 129.0
------- -------
306.2 321.3
------- -------
SHAREHOLDERS' EQUITY (Note 4)
Option on convertible
debenture due to parent 21.0 21.0
Capital stock 1,338.3 1,303.7
Contributed Surplus 25.2 25.2
Deficit (577.6) (372.0)
Foreign currency translation adjustment 27.8 17.1
------- -------
834.7 995.0
------- -------
1,140.9 1,316.3
------- -------
Consolidated Statements of Cash Flows
---------------------------------------------------------------
For the For the For the For the
three month three month six month six month
ended ended ended ended
(millions of
dollars) June 30, June 30, June 30, June 30,
2001 2000 2001 2000
---------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
Operating activities
Net loss (90.6) (82.1) (205.6) (123.2)
Depreciation
and amortization 114.6 96.0 225.1 139.4
Accretion
on convertible
debenture due
to parent,
related to the option 3.5 8.2 7.0 8.9
Writedown
of marketable
securities and
other assets 1.5 - 23.9 -
Future income taxes (5.7) (7.7) (4.8) (6.6)
Other 0.8 (0.3) 0.5 (0.3)
Changes in working
capital (3.4) 5.2 (40.0) (23.8)
------ ------ ------ ------
Cash flows from
(used for) operating
activities 20.7 19.3 6.1 (5.6)
------ ------ ----- -----
Investing activities
Additions to capital
assets (13.6) (8.6) (16.3) (19.6)
Acquisitions (26.3) - (27.8) (797.2)
Cash acquired on
acquisition of UP&UP - - - 46.3
Cash acquired on
acquisition of AHC
(Note 2) 0.8 - 0.8 -
Proceeds on sale of
marketable securities 11.5 - 11.5 -
Note receivable from
former majority
shareholder of UP&UP - - - (11.6)
Settlement of note
payable to former
majority
shareholder
of UP&UP - - (1.5) -
------ ------ ------ -------
Cash flows used for
investing
activities (27.6) (8.6) (33.3) (782.1)
------ ------ ------ -------
Financing activities
Repayment of
long-term debt (4.8) (1.5) (10.4) (3.5)
Issue of convertible
debenture
due to parent - - - 150.0
Issue
of common shares 1.4 0.9 4.4 654.3
------ ------ ------ ------
Cash flows from
(used for) financing
activities (3.4) (0.6) (6.0) 800.8
------ ------ ------ ------
Foreign exchange gain
on cash held in foreign
currencies (0.7) (2.7) (0.4) (2.7)
Cash and
cash equivalents
Increase (decrease) (11.0) 7.4 (33.6) 10.4
Balance, beginning
of period 69.6 79.1 92.2 76.1
------ ------ ------ ------
Balance,
end of period 58.6 86.5 58.6 86.5
------ ------ ------ ------
Supplemental disclosure
of cash flow information
Interest paid 5.6 0.5 6.6 0.9
Income taxes paid 1.9 2.8 3.8 3.7
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2001
(In millions of Canadian dollars except share data) (unaudited)
These interim consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles,
using the same accounting policies as were used for the consolidated
financial statements for the year ended December 31, 2000 except as
discussed below. These interim consolidated financial statements
should be read in conjunction with the consolidated financial
statements for the year ended December 31, 2000, as set out in the
2000 Annual Report.
1. Summary of Significant Accounting Policies
On January 1, 2001, the Company adopted the new recommendations issued
by the Canadian Institute of Chartered Accountants with respect to
earnings per share (Handbook section 3500). Under the revised section,
the treasury stock method is used instead of the current imputed
earnings approach for determining the dilutive effect of options and
warrants issued. In addition, this section requires that a
reconciliation of the numerator and denominator be disclosed.
For three-month period ended
---------------------------------------------------------------
June 30, 2001
---------------------------------------------------------------
$ Number of $
Net loss shares Per share
(numerator) (denominator) amount
---------------------------------------------------------------
Net loss available to
common shareholders (90.6) 93,947,586 (0.96)
---------------------------------------------------------------
For three-month period ended
---------------------------------------------------------------
June 30, 2000
---------------------------------------------------------------
$ Number of $
Net loss shares Per share
(numerator) (denominator) amount
---------------------------------------------------------------
Net loss available to
common shareholders (82.1) 92,843,816 (0.88)
---------------------------------------------------------------
For the six-month period ended
---------------------------------------------------------------
June 30, 2001
---------------------------------------------------------------
$ Number of $
Net loss shares Per share
(numerator) (denominator) amount
---------------------------------------------------------------
Net loss available to
common shareholders (205.6) 93,866,255 (2.19)
---------------------------------------------------------------
For the six-month period ended
---------------------------------------------------------------
June 30, 2000
---------------------------------------------------------------
$ Number of $
Net loss shares Per share
(numerator) (denominator) amount
---------------------------------------------------------------
Net loss available to
common shareholders (123.2) 90,374,239 (1.36)
---------------------------------------------------------------
1. Summary of Significant Accounting Policies (continued)
The following were not included in the computation of diluted earnings
per share because to do so would have been anti-dilutive for the
periods presented.
--------------------------------------------------------------------
For the three month For the six-month
period ended period ended
--------------------------------------------------------------------
June 30, 2001 June 30, 2000 June 30, 2001 June 30, 2000
--------------------------------------------------------------------
Number of Number of Number of Number of
Shares Shares Shares Shares
--------------------------------------------------------------------
Convertible
debenture due to
parent (a) 1,989,390 1,273,344 1,989,390 686,191
-------------------------------------------------------------------
Options (a) 4,039,034 2,972,117 3,797,442 2,834,427
-------------------------------------------------------------------
Warrants (a) 1,650,000 - 1,161,111 -
-------------------------------------------------------------------
Common shares to be issued
related to
acquisitions 770,987 - 761,223 -
-------------------------------------------------------------------
Common shares to
be issued
as contingent
consideration
related to
acquisitions 90,610 - 90,610 -
-------------------------------------------------------------------
(a) Incremental shares are assumed issued and weighted for the period
the convertible debenture, options or warrants were outstanding.
2. Acquisition
In June 2001, the Company acquired all of the outstanding shares of
Associates for Health Care, Inc. ("AHC"), a privately held company
involved in health care cost management in the state of Wisconsin in
the US for $45.5 million.
Pursuant to the Agreement and Plan of Merger, the Company paid $15.2
million at closing. The balance of the purchase price will be paid in
three equal installments on June 28, 2002, June 28, 2003, and June 28,
2004, by the issuance of shares with a value of $30.3 million. The
Company has the option to settle the balance of the purchase price
with cash payments in the amount of $10.1 million at each of the
above-mentioned dates.
The Company incurred transaction costs in the amount of approximately
$3.1 million in connection with the acquisition relating mostly to
professional fees. The transaction was accounted for using the
purchase method.
An amount of $1.9 million otherwise payable on June 28, 2002 will be
held to be applied against indemnification claims, if any, arising
within a defined period after closing.
The results of operations of AHC have been included in the Company's
results since June 28, 2001, the date of acquisition.
2. Acquisition (continued)
The total purchase price of the acquisition was $48.6 million and was
allocated as follows:
Current assets 4.8
Capital assets 0.7
Current liabilities (1.1)
Allocation of excess of purchase price over net assets:
Goodwill 44.2
48.6
3. Write down of marketable securities and other assets
During the first quarter of 2001, the market value of certain of our
marketable securities was $22.4 million below our carrying value. As a
result, a write-down of $22.4 million was recorded in our Consolidated
Statement of Earnings to reflect this unrealized loss in the market
value of The Descartes Systems Group Inc. for the six-month period
ended June 30, 2001. These securities were received as partial
consideration in 2000 for the disposal of our non-core assets related
to the delivery of logistics electronic messaging services in the
transportation industry.
During the three-month period ended June 30, 2001, a provision of
approximately $4.0 million was recorded on certain other current
assets due to reflect an impairment in their net realizable value.
We also recorded a gain on the disposal of some of our marketable
securities during the three-month period ended June 30, 2001.
4. Equity Components
The stated capital stock as at June 30, 2001 is detailed as follows:
Number $
Millions
-------------------------------
Balance beginning of year 93,651,603 1,303.7
Issue of common shares (a) 389,878 4.4
Share issue costs (0.1)
-------------------------------
94,041,481 1,308.0
Common shares to be issued (b) 30.3
-------
1,338.3
-------
Option on convertible debenture 21.0
-------
Contributed surplus 25.2
-------
(a) 389,878 stock options were exercised to purchase 389,878 common
shares for cash consideration of $4,400,685.
(b) The number of shares to be issued in connection with the AHC
acquisition as described in note 2 is not determinable at this time.
Debenture:
6.3%, Convertible debenture, convertible at the holder's option into
1,989,389 common shares at a conversion price of $75.40 per share up
to the maturity date
on June 30, 2002 $136.0 million
Stock option plans:
Stock option plans for common shares
at prices ranging from $0.66 to $172.80
per share and expiry dates up to 2010 4,127,339 options
5. Operating Segment Information
The Company focuses its activities in three business units (Canada,
U.S.A. and eHealth Solutions Group), 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
---------------------------------------------------------------
Canada USA
Business Unit Business Unit
---------------------------------------------------------------
$ June 30, June 30, June 30, June 30,
Millions 2001 2000 2001 2000
---------------------------------------------------------------
Revenues 72.0 53.0 10.5 6.0
---------------------------------------------------------------
Direct
Costs 22.6 15.9 0.6 0.5
---------------------------------------------------------------
Gross
Margin 49.4 37.1 9.9 5.5
---------------------------------------------------------------
For the three-month period ended
---------------------------------------------------------------
e-Health Solutions
Group
Business Unit Total
---------------------------------------------------------------
$ June 30, June 30, June 30, June 30,
Millions 2001 2000 2001 2000
---------------------------------------------------------------
Revenues 76.2 63.2 158.7 122.2
---------------------------------------------------------------
Direct
Costs 12.6 9.1 35.8 25.5
---------------------------------------------------------------
Gross
Margin 63.6 54.1 122.9 96.7
---------------------------------------------------------------
For the six-month period ended
---------------------------------------------------------------
Canada USA
Business Unit Business Unit
---------------------------------------------------------------
$ June 30, June 30, June 30, June 30,
Millions 2001 2000 2001 2000
---------------------------------------------------------------
Revenues 138.0 102.0 17.5 11.5
---------------------------------------------------------------
Direct
Costs 43.7 33.4 0.8 1.5
---------------------------------------------------------------
Gross
Margin 94.3 68.6 16.7 10.0
---------------------------------------------------------------
For the six-month period ended
---------------------------------------------------------------
e-Health Solutions
Group
Business Unit Total
---------------------------------------------------------------
$ June 30, June 30, June 30, June 30,
Millions 2001 2000 2001 2000
---------------------------------------------------------------
Revenues 146.5 81.4 302.0 194.9
---------------------------------------------------------------
Direct
Costs 23.4 12.4 67.9 47.3
---------------------------------------------------------------
Gross
Margin 123.1 69.0 234.1 147.6
---------------------------------------------------------------
Geographic information
The following table sets out certain geographical information relative
to the Company:
Revenue
$
Millions
For the three For the three For the six For the six
month period month period month period month period
ended ended ended ended
June 30, 2001 June 30, 200 June 30, 2001 June 30, 2000
-------------------------------------------------------------------
Canada 88.6 69.0 176.6 134.4
-------------------------------------------------------------------
United States 70.1 50.3 125.3 56.4
-------------------------------------------------------------------
Other - 2.9 0.1 4.1
-------------------------------------------------------------------
158.7 122.2 302.0 194.9
-------------------------------------------------------------------
6. 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:
$
Millions
For the three For the three
month period month period
ended ended
June 30, 2001 June 30, 2000
---------------------------------------------------------
Revenue (a) 40.6 26.9
---------------------------------------------------------
Direct costs and expenses 32.7 26.5
---------------------------------------------------------
Interest expense on convertible
debenture due to parent 2.4 2.6
---------------------------------------------------------
$
Millions
For the six For the six
month period month period
ended ended
June 30, 2001 June 30, 2000
--------------------------------------------------------
Revenue (a) 81.9 49.2
--------------------------------------------------------
Direct costs and expenses 62.0 61.5
--------------------------------------------------------
Interest expense on convertible
debenture due to parent
4.7 2.8
--------------------------------------------------------
(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:
$
Millions
As at As at
June 30, 2001 Dec. 31, 2000
----------------------------------------------------------
Cash and temporary cash
investments 15.0 15.0
----------------------------------------------------------
Accounts receivable 25.7 16.5
----------------------------------------------------------
Accounts payable and accrued
liabilities 10.9 4.2
----------------------------------------------------------
Convertible debenture due to
parent 136.0 129.0
----------------------------------------------------------
Option on convertible debenture
due to parent 21.0 21.0
----------------------------------------------------------
Long term debt 1.6 2.1
----------------------------------------------------------
7. Warrants
From time to time, the Company enters into formal business
arrangements for the use and distribution of certain technology
solutions with strategic partners. Under the terms of such
arrangements, the partners may acquire warrants to purchase shares of
the Company.
During the first quarter of 2001, warrants to purchase 1,000,000
common shares were acquired under such arrangements of which warrants
convertible into 250,000 common shares vested upon signature of the
agreements and are exercisable at $73.55 per common share. The
remaining balance will vest upon the attainment of certain contractual
arrangements and the exercise price will be determined at the time of
vesting. The warrants expire five years after vesting. No amount has
been recorded in the financial statements as a result of these
arrangements.
8. Contingency
On April 26, 1996, First Health Group Corporation ("First Health")
filed a civil complaint against BCE Emergis Corporation, a subsidiary
of the Company, seeking injunctive relief and damages of US $29
million to US $37 million based on claims of trademark infringement,
false advertising, deceptive trade practices, fraud, interference with
contract, interference with prospective economic relations and unfair
competition. First Health's principal contention is that
representatives of BCE Emergis Corporation made false and misleading
statements during contract negotiations with health care providers in
order to cause them to join the BCE Emergis Corporation provider
network.
On March 21, 2000, the U.S. District Court for the Northern District
of Illinois granted summary judgment in favor of BCE Emergis
Corporation on the false advertising claims and on April 10, 2000, the
Court granted summary judgment in favor of BCE Emergis Corporation 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 will not be material to its consolidated financial
statements.
9. Subsequent event
On July 6, 2001, the Company acquired the assets of ProCure.com, a
technology provider of supplier enablement applications in the
province of Ontario, Canada for a total cash consideration of $5.9
million. The acquisition will be accounted for using the purchase
method.
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