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DANKA BUSINESS SYSTEMS PLC REPORTS RECORD EARNINGS

 ST. PETERSBURG, Fla., May 13 /PRNewswire/ -- Danka Business Systems PLC ("Danka") (NASDAQ-NMS: DANKY; LSE), the second-largest independent distributor of office equipment in the United States, reported record revenues and earnings for its fiscal year ended March 31, 1993.
 On a UK GAAP accounting basis, revenues for the fiscal year increased 59 percent to $315 million (186 million pounds) while operating profits increased 39.6 percent to $31.8 million (18.8 million pounds). Earnings per ordinary share were $.72 (42.4p), a 58 percent increase over the previous year. On a U.S. GAAP accounting basis, earnings per American Depository Receipt ("ADR") were $1.03.
 In view of the substantial increase in Danka's share price and to enhance the marketability of its ordinary shares, Danka's directors will propose to the shareholders at the forthcoming Annual General Meeting a four-to-one split of the ordinary shares. The ratio of ordinary shares to each ADR will be changed from the current two ordinary shares for each ADR to eight ordinary shares for each ADR. The percentage ownership of Danka's share capital represented by ADRs will not be affected.
 "This has been an outstanding year for Danka," commented Dan Doyle, president and chief executive officer. "The continuing emphasis an investment in training our sales and service representatives and in developing our management team is reflected in our year end results. We achieved solid growth in our base group of branches. New equipment placements have remained strong which should ensure our future profitability through increased service and supply revenues."
 David Snell, vice president of finance and chief financial officer, added, "Our cash flow remains very strong. Danka has continued its acquisition program with a relatively minor increase in debt. Additionally, leverage ratios have improved significantly since September 30, 1992 and interest coverage is a healthy 14 times."
 Doyle went on to say, "We are optimistic about the future. The high level of new equipment sales is continuing and the acquisitions which we completed in the late summer and early fall of 1992 are beginning to positively impact profitability. In addition, there are numerous attractive acquisition candidates available. We fully expect to sustain our aggressive pursuit of these opportunities and expand our markets and territories in the United States and internationally."
 Danka Business Systems PLC is headquartered in St. Petersburg, Fla. Danka's ordinary shares trade on the London Stock Exchange and its ADRs are traded on the NASDAQ, NMS. The sponsored ADR commenced trading on Dec. 17, 1992, and in excess of 41 percent of Danka Business Systems PLC's ownership is presently held through ADRs. For the benefit of both UK and U.S. based shareholders, Danka has provided selected financial data for the fiscal year ended March 31, 1993, on both a UK and U.S. GAAP accounting basis.
 DANKA BUSINESS SYSTEMS PLC
 CONSOLIDATED STATEMENTS OF EARNINGS -- IN U.S. GAAP FORMAT
 in thousands of U.S. dollars (except for per share data)
 Year ended March 31,
 1993 1992
 ($000) ($000)
 (Unaudited)
 Revenue:
 Retail equipment sales 111,924 64,184
 Retail service, supplies and rental 149,552 99,475
 Wholesale 53,887 35,906
 Total Revenues 315,363 199,565
 Costs and operating expenses:
 Cost of retail equipment sales 68,405 38,345
 Retail service, supplies
 and rentals costs 75,508 50,395
 Wholesale costs of revenues 44,604 30,593
 Selling, general and
 administrative expenses 96,528 62,094
 Amortization of intangible assets 1,729 10,027
 Total costs and operating expenses 286,774 191,454
 Earnings from operations 28,589 8,111
 Interest, net (2,233) (2,657)
 Earnings before income taxes 26,356 5,454
 Provision for income taxes (5,900) (1,368)
 Net earnings 20,456 4,086
 Earnings per Ordinary Share $.51 $.10
 Earnings per American Depositary Receipt $1.03 $.21
 CONSOLIDATED BALANCE SHEET -- IN U.S. GAAP FORMAT
 in thousands of U.S. dollars
 March 31,
 1993 1992
 ($000) ($000)
 (Unaudited)
 ASSETS
 Current Assets:
 Cash 4,994 4,906
 Accounts receivable, net 40,036 24,340
 Inventories 44,244 32,592
 Current portion of unguaranteed
 residual values 742 419
 Prepaid expenses and
 other current assets 2,002 1,609
 Income tax refund receivable, net 63 351
 Total current assets 92,081 64,217
 Equipment on operating leases, net 12,358 9,136
 Property and equipment, net 10,550 7,856
 Unguaranteed residual values,
 less current portion 1,485 836
 Intangible assets, net:
 Excess cost over net
 assets acquired, net 25,196 21,147
 Noncompete agreements, net 3,713 1,976
 Other assets 2,600 1,105
 Total assets 147,983 106,273
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Current maturities of long-term debt 18,922 9,034
 Accounts payable 16,981 17,268
 Accrued expenses and other 13,083 8,896
 Deferred revenue 16,512 10,251
 Total current liabilities 65,498 45,449
 Long-term debt, less current maturities 19,379 20,322
 Deferred income taxes 4,758 1,199
 Total liabilities 89,635 66,970
 Shareholders' equity:
 Ordinary shares, 5 pence stated value 3,389 3,283
 Additional paid-in capital 2,884 1,726
 Retained earnings 51,779 33,898
 Currency translation adjustment 296 396
 Total shareholders' equity 58,348 39,303
 Total liabilities and
 shareholders' equity 147,983 106,273
 SUMMARY OF DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP")
 The U.S. GAAP financial information differs in certain significant respects from the UK GAAP financial statements. The significant differences which related to the company and the effects of the adjustments on net income and shareholders' equity are set out below:
 (a) Goodwill and Other Intangibles
 Under United States GAAP, intangible assets are capitalized and amortized over their estimated useful lives. The company amortized goodwill over 30 years and covenants not to compete over the applicable contract periods, which generally range from 3 to 6 years, and favorable lease rights over the term of the lease (5 years). Under UK GAAP, the company would write off certain intangible assets, which include goodwill, covenants not to compete and favorable lease rights, directly to retained earnings in the year of acquisition.
 (b) Acquisition Costs
 Under United States GAAP, acquisition costs are charged to the statement of earnings as incurred. Examples of such items include certain costs related to the closure of facilities which will not be operated and severance of individuals terminated. Under United Kingdom GAAP, these acquisition related costs may be immediately charged to retained earnings and as such, would not flow through the statement of earnings.
 (c) Deferred Taxation
 United States GAAP requires provision for deferred taxation to be made for all differences between the tax basis and book basis of assets and liabilities. United Kingdom GAAP allows for no provision for deferred taxation to be made if there is reasonable evidence that such taxation will not be payable in the foreseeable future.
 (d) Earnings Per Ordinary Share
 Under United Kingdom GAAP basic earnings per ordinary share is computed using the weighted average number of ordinary shares in issue during the year. United States GAAP also includes in the computation for primary earnings per ordinary share the dilutive effect of all outstanding share options and common share equivalents under the treasury stock method.
 (e) Ordinary Dividends
 Under United States GAAP such dividends are deducted from shareholders' equity at the date of declaration of the dividend. Under United Kingdom GAAP the proposed dividends on ordinary shares, as recommended by the directors, would be deducted from shareholders' equity and shown as a liability in the balance sheet.
 DANKA BUSINESS SYSTEMS PLC AND SUBSIDIARIES
 RECONCILIATION OF UK GAAP TO U.S. GAAP
 Effect on net earnings of differences between United Kingdom and United States GAAP:
 Year ended March 31,
 1993 1992
 ($000) ($000)
 Net earnings per UK GAAP 27,349 17,617
 Adjustment in respect of net earnings
 Intangible amortization (1,729) (10,027)
 Acquisition costs (1,317) (2,934)
 Favorable lease rights (247) (246)
 Deferred income tax provision (3,600) (324)
 Net earnings per U.S. GAAP 20,456 4,086
 Primary earnings per Ordinary Share
 in accordance with U.S. GAAP:
 Net earnings $0.51 $0.10
 Primary earnings per American
 Depositary Receipt:
 Net earnings $1.03 $0.21
 Average Exchange Rate $1.693 $1.735
 Fully diluted earnings per share are not disclosed as in all years presented they are not materially different from primary earnings per Ordinary Share.
 Cumulative effect on shareholders' equity of differences between United Kingdom and United States GAAP.
 Year ended March 31,
 1993 1992
 ($000) ($000)
 Shareholders' equity per UK GAAP 32,022 15,030
 Goodwill and other intangibles 28,909 23,123
 Favorable lease rights 126 391
 Deferred income taxes (4,485) (885)
 Dividends 1,776 1,644
 Shareholders' equity per U.S. GAAP 58,348 39,303
 End of year exchange rate $1.51 $1.737
 -0- 5/13/93
 /CONTACT: William T. Freeman of Danka Business Systems PLC, 813-576-6003, or Paul G. Dumond of Danka Business Systems PLC, 011 44 71 935 4650 (London)/
 (DANKY)


CO: Danka Business Systems PLC ST: Florida IN: SU: ERN

AW-JB -- FL001 -- 7964 05/13/93 09:33 EDT
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