Danka Reports Fiscal Year 2006 Fourth Quarter and Year End Operating Results.ST. PETERSBURG Petersburg, city (1990 pop. 38,386), politically independent and in no county, SE Va., on the Appomattox River; inc. 1850. A port of entry and an important tobacco market, it has industries producing chemicals, pharmaceuticals, furniture, structural steel, lumber, , Fla. -- Danka Business Systems PLC (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 : DANKY) today reported fiscal year 2006 and fourth quarter results. For the full year ended March 31, 2006: --Total revenue was $1.096 billion, down 6.1% over the prior year. 280 basis points of the decline was due to a negative movement in foreign exchange rates. --Margins were 31.9%, down 270 basis points from the prior year. --The Company's SG&A was $361.0 million, down 17.7% from the prior year. For the year, the Company reported an 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. of $24.7 million, versus a $116.1 million loss in fiscal year 2005. --On a non-operating basis, the Company incurred a $31.9 million loss in its first and second quarters from the sale of its 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 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. operations, largely due to the non-cash write off of currency translation adjustments. Interest expense was $31.7 million for the year and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. were $12.5 million for the year. Based on the above, the Company's net loss was $79.2 million for the year compared to a net loss of $133.1 million in fiscal year 2005. --Adjusted operating loss from 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 (excluding 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 impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges) was $12.2 million for the year, versus a $35.6 million loss in fiscal year 2005. "Notwithstanding this loss, we experienced a number of improvements during the fiscal year in several areas of our business," commented Danka Chief Financial Officer Ed Quibell. "For the year, retail equipment and related sales were up over the prior year. This is the first time we have seen an increase in this area in seven years. Additionally, our SG&A expense has declined by $77.8 million, or 17.7% over the last year, reflecting the success we have had in our cost reduction initiatives. Finally, we significantly improved our Sarbanes-Oxley compliance status. The improvement in our internal controls and discipline has resulted in the number of material weaknesses being reduced from eleven to one and we were able to reduce the cost of our compliance program by over 50% year on year." For the fourth quarter: --Total revenue was $271.2 million, 4.5% lower than the prior year quarter, but up 2.2% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . Retail equipment and related sales was $105.3 million for the quarter, down 4.6% from the prior year quarter, but up 5.1% sequentially. Retail service revenue was $122.3 million for the quarter, down 2.9% from the prior year quarter, but up 1.2% sequentially. --Consolidated gross margin for the fourth quarter was 29.3%, which was up from 27.4% in the prior year quarter, and down from 31.8% sequentially. --SG&A expenses were $88.3 million or 32.6% of revenue for the fourth quarter. These expenses were down 28.8%, or $35.7 million from the prior year quarter. The Company's fourth quarter operating loss was $14.6 million versus a $127.3 million loss in the prior year fourth quarter. --Adjusted operating loss from continuing operations (excluding restructuring and impairment charges) was $9.7 million for the quarter, versus a $45.0 million loss for the prior year fourth quarter. "We will be focusing much more attention on sales, marketing and customer service in the coming year," said A.D. Frazier Frazier, Joseph Known as "Joe." Born 1944. American prizefighter who won the Olympic heavyweight title (1964) and held the world professional heavyweight title from 1970 to 1973. , Danka's Chairman and Chief Executive Officer. "We have made major progress in the area of cost reduction during the year and while we have more to do, we will now focus on improving our margins and profitability. Danka's economics are fundamentally different at the start of 2007 than they were a year ago. Because of this, we intend to rebuild, with emphasis on our core business in this fiscal year." As required by Section 404 of the Sarbanes Oxley Oxley refers to several things: People
relating to relate prep → bezüglich +gen, mit Bezug auf +acc its revenue and billing processes. The Company will report that due to its successful remediation efforts during the year, it no longer has material weaknesses in internal controls related to its information technology general controls, inventory and rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. assets custody The care, possession, and control of a thing or person. The retention, inspection, guarding, maintenance, or security of a thing within the immediate care and control of the person to whom it is committed. The detention of a person by lawful authority or process. and tracking processes, its financial statement close processes and its income tax process. Finally, the Company reported that its U.S. President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. Wedge wedge, piece of wood or metal thick at one end and sloping to a thin edge at the other; an application of the inclined plane. It is employed in separating two objects from each other or in separating one part of a solid object from an adjoining part, as in splitting , will be leaving the Company effective the end of June June: see month. . "Michael played a prominent role in the Company's Vision 21 success and in providing the back office foundation necessary to significantly improve the Company's internal controls processes and we wish him all good fortune in the years ahead," said Frazier. The sales and service functions previously reporting to Mr. Wedge will now report directly to the Company's Chief Executive Officer. Conference Call and Webcast A conference call and Webcast to discuss Danka's fourth quarter results has been scheduled for today, June 7, 2006, at 10:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . To access the Webcast, please go to www.danka.com. To participate in the conference call, callers 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. and Canada (and some United Kingdom callers) can dial 800-309-1555. Other international callers should dial 706-643-7754. Reference conference ID #1108518 when prompted. A recording of the call will be available approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. two hours after it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have completed through 12:00 a.m. EDT on June 14, 2006. To access this recording, please call either 800-642-1687 or 706-645-9291 (conference ID #1108518), or visit Danka's website. About Danka Danka delivers value to clients worldwide by using its expert technical and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. to implement effective document information solutions. As one of the largest independent providers of enterprise imaging systems and services, the company enables choice, convenience, and continuity. Danka's vision is to empower empower verb To encourage or provide a person with the means or information to become involved in solving his/her own problems customers to benefit fully from the convergence convergence Mathematical property of infinite series, integrals on unbounded regions, and certain sequences of numbers. An infinite series is convergent if the sum of its terms is finite. of image and document technologies in a connected environment. This approach will strengthen the company's client relationships and expand its strategic value. For more information, visit Danka at www.danka.com. Certain statements contained herein, or otherwise made by our officers, including statements related to our future performance and our outlook for our businesses and respective markets, projections, statements of our plans or objectives, forecasts of market trends and other matters, are 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. , and contain information relating to us that is based on our beliefs as well as assumptions made by, and information currently available to us. The words "goal", "anticipate", "expect", "believe", "could", "should", "intend" and similar expressions as they relate to us are intended to identify forward-looking statements, although not all forward looking statements contain such identifying words. No assurance can be given that the results in any forward-looking statement will be achieved. For the forward-looking statements, we claim the protection of 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. for forward-looking statements provided for in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause such actual results to differ materially from those reflected in any forward-looking statements include, but are not limited to, the following: (i) any inability to successfully implement our strategy; (ii) any inability to successfully implement our cost restructuring plan to achieve and maintain cost savings; (iii) any material adverse change in financial markets, the economy or in our financial position; (iv) increased competition in our industry and the discounting of products by our competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; (v) new competition as the result of evolving technology; (vi) any inability by us to 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 , or any inability by us to continue to gain access to and successfully distribute new products, including digital products, color products, multi-function products and high-volume copiers, or to continue to bring current products to the marketplace at competitive costs and prices; (vii) any inability to arrange financing for our customers' purchases of equipment from us; (viii) any inability to successfully enhance, unify 1. (database, product) Unify - A relational database produced by Unify Corporation. 2. (algorithm) unify - To perform unification. and effectively utilize our management information systems; (ix) any inability to record and process key data due to ineffective implementation of business processes and policies; (x) any negative impact from the loss of a key vendor or customer; (xi) any negative impact from the loss of any of our senior or key management personnel; (xii) any change in economic conditions in domestic or international markets where we operate or have material investments which may affect demand for our products or services; (xiii) any negative impact from the international scope of our operations; (xiv) fluctuations in foreign currencies; (xv) any incurrence In`cur´rence n. 1. The act of incurring, bringing on, or subjecting one's self to (something troublesome or burdensome); as, the incurrence of guilt, debt, responsibility, etc. s> Noun 1. of tax liabilities or tax payments beyond our current expectations, which could adversely affect our liquidity; (xvi) any inability to comply with the financial or other covenants in our debt instruments; (xvii) any delayed or lost sales and other impacts related to the commercial and economic disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. caused by terrorist attacks, the related war on terrorism Terrorist acts and the threat of Terrorism have occupied the various law enforcement agencies in the U.S. government for many years. The Anti-Terrorism and Effective Death Penalty Act of 1996, as amended by the usa patriot act , and the fear of additional terrorist attacks; and (xviii) other risks including those risks identified in any of our filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our analysis only as of the date they are made. Except as required by applicable law, we undertake no obligation, and do not intend, to update these forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that arise after the date they are made. Furthermore, as a matter of policy, we do not generally make any specific projections as to future earnings, nor do we endorse To sign a paper or document, thereby making it possible for the rights represented therein to pass to another individual. Also spelled indorse. endorse (indorse) v. any projections regarding future performance, which may be made by others outside our company. United Kingdom Companies Act: The financial information contained in this announcement for the quarter and year ended March 31, 2006 is unaudited and does not constitute full statutory accounts within the meaning of Section 240 of the United Kingdom Companies Act 1985. This press release contains information regarding adjusted operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before (loss) that is computed as operating earnings before restructuring and impairment charges, free cash flow that is computed as net cash provided by (used in) operating activities less capital expenditures and purchases of subsidiaries plus proceeds from the sale of property and equipment and subsidiaries and net debt that is computed as current maturities of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and notes payable plus long-term debt and notes payable less cash and cash equivalents. These measures are non-GAAP financial measures, defined as numerical numerical expressed in numbers, i.e. Arabic numerals of 0 to 9 inclusive. numerical nomenclature a numerical code is used to indicate the words, or other alphabetical signals, intended. measures of our financial performance that exclude or include amounts so as to be different than the most directly comparable measure calculated and presented 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 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 , or GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). in our statement of operations See Income statement. , balance sheet or statement of cash flows. Pursuant to the requirements of Regulation G, we have provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures. Although adjusted operating earnings (loss), free cash flow and net debt represent non-GAAP financial measures, we consider these measures to be key operating metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. of our business. We use these measures in our planning and budgeting processes, to monitor and evaluate our financial and operating results and to measure performance of our separate divisions. We also believe that adjusted operating earnings (loss), free cash flow and net debt are useful to investors because they provide an analysis of financial and operating results using the same measures that we use in evaluating the company. We expect that such measures provide investors with the means to evaluate our financial and operating results against other companies within our industry. We believe that these measures are meaningful to investors in evaluating our ability to meet our future debt service requirements and to fund our capital expenditures and working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . Our calculation of adjusted operating earnings (loss), free cash flow and net debt may not be consistent with the calculation of these measures by other companies in our industry. Adjusted operating earnings (loss), free cash flow and net debt are not measurements of financial performance under GAAP and should not be considered as an alternative to net earnings (loss) as an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of our operating performance or cash flows from operating activities as a measure of liquidity or any other measures of performance derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. in accordance with GAAP. Danka is a registered trademark and Danka @ the Desktop and TechSource are trademarks of Danka Business Systems PLC. All other trademarks are the property of their respective owners.
Danka Business Systems PLC
Consolidated Statements of Operations for the Three Months Ended
March 31, 2006 and 2005
(In thousands, except per American Depository Share ("ADS") amounts)
(Unaudited)
For the Three Months
Ended
----------------------
March 31, March 31,
2006 2005
----------------------
Revenue:
Retail equipment and related sales $ 105,298 $ 110,348
Retail service 122,313 125,950
Retail supplies and rentals 18,597 23,060
Wholesale 24,988 24,762
---------- ----------
Total revenue 271,196 284,120
---------- ----------
Cost of sales:
Retail equipment and related sales costs 76,456 79,830
Retail service costs 81,873 89,820
Retail supplies and rental costs, including
depreciation on rental assets 12,652 16,268
Wholesale costs 20,702 20,246
---------- ----------
Total cost of sales 191,683 206,164
---------- ----------
Gross Profit 79,513 77,956
Operating expenses:
Selling, general and administrative expenses 88,346 124,081
Restructuring charges (credits) 4,924 11,437
Impairment charges -- 70,854
Other expense (income) 821 (1,149)
---------- ----------
Total operating expenses 94,091 205,223
---------- ----------
Operating earnings (loss) from continuing
operations (14,578) (127,267)
Interest expense (8,113) (8,697)
Interest income -- --
---------- ----------
Earnings (loss) from continuing
operations before income taxes (22,691) (135,964)
Provision for income taxes (5) (5,184)
---------- ----------
Earnings (loss) from continuing
operations (22,686) (130,780)
Earnings (loss) from discontinued operations,
net of tax 18 (5,333)
Gain (loss) on sale of operations, net of tax (268) -
---------- ----------
Net Earnings (loss) $ (22,936)$ (136,113)
========== ==========
Net earnings (loss) from continuing operations
available to common shareholders
Net earnings (loss) from continuing operations $ (22,686)$ (130,780)
Dividends and accretion on participating shares (5,521) (5,190)
---------- ----------
Net earnings (loss) from continuing operations
available to common shareholders $ (28,207)$ (135,970)
========== ==========
Basic and diluted net earnings (loss) available
to common shareholders per ADS:
Net earnings (loss) from continuing operations $ (0.44)$ (2.14)
Net earnings (loss) from discontinued operations (0.00) (0.08)
---------- ----------
Net earnings (loss) $ (0.44)$ (2.22)
========== ==========
Weighted average ADSs 64,130 63,519
========== ==========
Danka Business Systems PLC
Consolidated Statements of Operations for the Twelve Months Ended
March 31, 2006 and 2005
(In thousands, except per American Depository Share ("ADS") amounts)
(Unaudited)
For the Twelve Months
Ended
----------------------
March 31, March 31,
2006 2005
----------------------
Revenue:
Retail equipment and related sales $ 422,986 $ 422,273
Retail service 498,820 557,022
Retail supplies and rentals 80,686 92,675
Wholesale 93,478 94,781
---------- ----------
Total revenue 1,095,970 1,166,751
---------- ----------
Cost of sales:
Retail equipment and related sales costs 296,322 282,330
Retail service costs 322,167 344,566
Retail supplies and rental costs, including
depreciation on rental assets 51,031 57,823
Wholesale costs 77,214 78,123
---------- ----------
Total cost of sales 746,734 762,842
---------- ----------
Gross Profit 349,236 403,909
Operating expenses:
Selling, general and administrative expenses 360,972 438,798
Restructuring charges 12,502 9,691
Impairment charges -- 70,854
Other expense (income) 506 684
---------- ----------
Total operating expenses 373,980 520,027
---------- ----------
Operating earnings (loss) from continuing
operations (24,744) (116,118)
Interest expense (31,720) (31,506)
Interest income 60 5
---------- ----------
Earnings (loss) from continuing
operations before income taxes (56,404) (147,619)
Provision for income taxes (9,054) (21,890)
---------- ----------
Earnings (loss) from continuing
operations (47,350) (125,729)
Earnings (loss) from discontinued operations,
net of tax (1,288) (7,347)
Gain (loss) on sale of operations, net of tax (30,590) -
---------- ----------
Net Earnings (loss) $ (79,228)$ (133,076)
========== ==========
Net earnings (loss) from continuing operations
available to common shareholders
Net earnings (loss) from continuing operations $ (47,350)$ (125,729)
Dividends and accretion on participating shares (21,635) (20,298)
---------- ----------
Net earnings (loss) from continuing operations
available to common shareholders $ (68,985)$ (146,027)
========== ==========
Basic and diluted net earnings (loss) available
to common shareholders per ADS:
Net earnings (loss) from continuing operations $ (1.08)$ (2.31)
Net earnings (loss) from discontinued operations (0.50) (0.12)
---------- ----------
Net earnings (loss) $ (1.58)$ (2.43)
========== ==========
Weighted average ADSs 63,865 63,081
========== ==========
Danka Business Systems PLC
Consolidated Balance Sheets as of March 31, 2006 and 2005
(In Thousands)
March 31, March 31,
2006 2005
----------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 54,468 $ 76,969
Restricted cash 20,529 14,956
Accounts receivable, net of allowance for
doubtful accounts 189,354 211,415
Inventories 79,967 91,029
Assets held for sale - discontinued
operations -- 44,911
Prepaid expenses, deferred income taxes and
other current assets 8,251 14,514
---------- ----------
Total current assets 352,569 453,794
Equipment on operating leases, net 12,138 19,157
Property and equipment, net 37,098 49,225
Goodwill 206,174 213,531
Other intangible assets, net of accumulated
amortization 1,861 2,406
Deferred income taxes 87 7,388
Other assets 18,865 23,525
---------- ----------
Total assets $ 628,792 $ 769,026
========== ==========
Liabilities and shareholders' equity (deficit)
Current liabilities:
Current maturities of long-term debt and
notes payable $ 11,516 $ 2,308
Accounts payable 165,667 167,292
Accrued expenses and other current
liabilities 93,644 121,932
Taxes payable 21,247 36,249
Liabilities held for sale - discontinued
operations -- 16,461
Deferred revenue 33,027 37,772
---------- ----------
Total current liabilities 325,101 382,014
Long-term debt and notes payable, less current
maturities 238,081 239,406
Deferred income taxes and other long-term
liabilities 51,929 64,387
---------- ----------
Total liabilities 615,111 685,807
---------- ----------
6.5% senior convertible participating shares 321,541 299,906
Shareholders' equity (deficit):
Ordinary shares, 1.25 pence stated value 5,330 5,277
Additional paid-in capital 329,745 329,152
Accumulated deficit (596,823) (495,960)
Accumulated other comprehensive loss (46,112) (55,156)
---------- ----------
Total shareholders' equity (deficit) (307,860) (216,687)
---------- ----------
Total liabilities and shareholders' equity
(deficit) $ 628,792 $ 769,026
========== ==========
Danka Business Systems PLC
Consolidated Statements of Cash Flows for the Twelve Months Ended
March 31, 2006 and 2005
(In Thousands)
(Unaudited)
March 31, March 31,
2006 2005
----------------------
Operating activities:
Net earnings (loss) $ (79,228)$ (133,076)
Loss from discontinued operations (31,878) (7,347)
---------- ----------
Earnings (loss) from continuing operations (47,350) (125,729)
Adjustments to reconcile net earnings (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization 28,887 38,716
Deferred income taxes (217) (645)
Amortization of debt issuance costs 1,761 2,080
(Gain) loss on sale of property and equipment
and equipment on operating leases 2,519 919
Proceeds from sale of equipment on operating
leases 728 3,104
Impairment charges -- 70,854
Restructuring charges 12,502 9,691
Changes in net assets and liabilities:
Restricted cash (5,573) (5,123)
Accounts receivable, net 23,461 17,395
Inventories 11,063 (3,549)
Prepaid expenses and other current assets 5,842 969
Other non-current assets 8,200 (6,402)
Accounts payable (1,625) 40,258
Accrued expenses and other current
liabilities (57,435) (20,093)
Deferred revenue (4,744) (4,844)
Other long-term liabilities (15,730) (7,200)
---------- ----------
Net cash (used in) provided by continuing
operations (37,711) 10,401
Net cash (used in) provided by
discontinued operations 87 (5,385)
---------- ----------
Net cash (used in) provided by operating
activities (37,624) 5,016
---------- ----------
Investing activities:
Capital expenditures (13,085) (22,071)
Purchase of subsidiary, net of cash acquired -- (2,110)
Proceeds from sale of discontinued operations,
net of cash 16,924 209
Proceeds from the sale of property and
equipment 233 443
---------- ----------
Net cash provided by (used in) continuing
investing activities 4,072 (23,529)
Net cash used in discontinued investing
activities (456) (2,680)
---------- ----------
Net cash provided by (used in) investing
activities 3,616 (26,209)
---------- ----------
Financing activities:
Borrowings (payments) under line of credit
agreements, net 9,686 (1,129)
Net payments under capital lease arrangements (2,205) (1,277)
Restricted cash -- (5,000)
Proceeds from stock options exercised 627 1,165
---------- ----------
Net cash (used in) provided by continuing
financing activities 8,108 (6,241)
Net cash used in discontinued financing
activities (99) (361)
---------- ----------
Net cash (used in) provided by financing
activities 8,009 (6,602)
---------- ----------
Effect of exchange rates (2,693) 2,998
---------- ----------
Net decrease in cash and cash
equivalents (28,692) (24,797)
Cash and cash equivalents from continuing
operations, beginning of period 76,969 102,021
Cash and cash equivalents from discontinued
operations, beginning of period 6,191 5,936
Cash and cash equivalents from discontinued
operations, end of period -- (6,191)
---------- ----------
Cash and cash equivalents from continuing
operations, end of period $ 54,468 $ 76,969
========== ==========
Danka Business Systems PLC
Adjusted operating earnings (loss) from continuing operations for the
three and twelve months ended March 31, 2006 and 2005
(In Thousands)
(Unaudited)
For the Three Months For the Twelve Months
Ended Ended
March 31, March 31, March 31, March 31,
2006 2005 2006 2005
---------- ---------- ---------- ----------
Operating earnings (loss)
from continuing
operations $ (14,578) $(127,267) $ (24,744) $(116,118)
Restructuring charges 4,924 11,437 12,502 9,691
Impairment charges -- 70,854 -- 70,854
--------- --------- --------- ---------
Adjusted operating
earnings from continuing
operations $ (9,654) $ (44,976) $ (12,242) $ (35,573)
========= ========= ========= =========
Danka Business Systems PLC
Free cash flow for the three and twelve months ended March 31, 2006
and 2005
(In Thousands)
(Unaudited)
For the Three Months For the Twelve Months
Ended Ended
March 31, March 31, March 31, March 31,
2006 2005 2006 2005
---------- ---------- ---------- ----------
Net cash provided by
continuing operations $ 12,997 $ 20,218 $ (37,711) $ 10,401
Capital expenditures (4,880) (8,908) (13,085) (22,071)
Purchase of subsidiary - -- -- (2,110)
Proceeds from sale of
subsidiary - - 16,924 209
Proceeds from the sale of
property and equipment 25 130 233 443
--------- --------- --------- ---------
Free cash flow $ 8,142 $ 11,440 $ (33,639) $ (13,128)
========= ========= ========= =========
Danka Business Systems PLC
Net Debt as of March 31, 2006 and March 31, 2005
(In Thousands)
(Unaudited)
March 31, March 31,
2006 2005
---------- ----------
Current maturities of
long-term debt and notes
payable $ 11,516 $ 2,308
Long-term debt and notes
payable 238,081 239,406
Less: Cash and cash
equivalents and
restricted cash (74,997) (91,925)
--------- ---------
Net Debt $ 174,600 $ 149,789
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