Danka Reports Fourth Quarter and Fiscal Year End Results.Business Editors 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.--(BUSINESS WIRE)--June 8, 2001 Danka Business Systems PLC (Nasdaq:DANKY) today announced results for its fourth quarter and twelve months ended March 31, 2001 (fiscal year 2001). The Company reported a loss from operations of $105.3 million for the fourth quarter as compared to earnings of $1.3 million in the fourth quarter of fiscal year 2000. During the fourth quarter, the Company's cost of sales and earnings from operations were negatively impacted by a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta , non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $53.9 million related to the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of excess, obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. and non-recoverable equipment, parts and accessories. The Company recorded $40.2 million of this write-off in cost of retail equipment sales and $13.7 million of the write-off in cost of retail service, supplies and rentals. The Company's SG&A expenses were negatively impacted by a pre-tax, non-cash charge of $28.6 million, of which $15.3 million related to the Company's facilities and $8.0 million related to additional trade receivable reserves. The Company also wrote-off goodwill attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to one of its U.S. subsidiaries resulting in a charge of $6.9 million. The Company incurred a net loss of $127.4 million in the fourth quarter compared to a net loss of $18.6 million in the fourth quarter of fiscal year 2000. Danka's Chief Executive Officer, Lang Lang language LANG Louisiana Army National Guard Lang Langobardian (linguistics) LANG Los Angeles Newspaper Guild Lowrey, commented, "The year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. and fourth quarter performance was significantly impacted by asset write-offs and charges, which include the write-off of most of our remaining analog assets and charges related to our non-strategic facilities. Overall, these charges are consistent with our plan to substantially exit the analog business and position Danka as a preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae provider of digital equipment, services and solutions to its customers." Total revenue for the fourth quarter declined by $118.8 million or 19.3% to $496.3 million from $615.1 million in the fourth quarter of fiscal year 2000. Foreign currency movements negatively impacted the Company's total revenue during the fourth quarter by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $14.9 million. Sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen , total revenues declined slightly after excluding the positive impact of foreign currency movements of approximately $8.0 million. The Company's combined gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. was 18.7% for the fourth quarter compared to 31.4% sequentially and 31.2% for the fourth quarter a year ago. The sequential One after the other in some consecutive order such as by name or number. decrease in gross profit margin was primarily due to the write-off of excess, obsolete and non-recoverable equipment, parts and accessories noted above. The fourth quarter retail equipment margin was -4.7% as compared to 24.0% sequentially. Excluding the write-off of excess, obsolete and non-recoverable equipment, the retail equipment margin was 22.4%. The fourth quarter retail service, supplies and rentals margin was 29.6% as compared to 36.1% sequentially. Excluding the write-off of excess and obsolete 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. equipment, parts and accessories, the retail service, supplies and rentals margin was 33.8%. SG&A expenses increased by $1.9 million to $189.1 million in the fourth quarter, from $187.2 million in the fourth quarter of fiscal year 2000. Sequentially, SG&A expenses increased by $32.4 million, primarily as a result of the charges related to certain facilities and increased provisions for trade receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed discussed above. Excluding these charges, SG&A expenses increased sequentially by 2.4%. Interest expense decreased by $10.2 million to $18.2 million for the fourth quarter of fiscal year 2001 from $28.4 million in the fourth quarter of fiscal year 2000. The decrease is related to a $5.9 million reduction in the amount of bank waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. fees expensed during these periods under the Company's current credit facility and a $4.3 million reduction in interest expense due to lower debt outstanding in fiscal year 2001. Lowrey commented: "Our disappointing fourth quarter results are due in large part to a decline in margins, which is a result of decreased sales productivity, competitive conditions and the industry's transition from analog to digital products. In addition, we have failed to reduce SG&A expenses in line with margin declines. We are continuing to actively take steps to reposition our business from analog to digital, address sales productivity and reduce SG&A expenses to a level commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with our margins, including continuing to implement the 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). measures commenced in the third quarter of fiscal year 2001." The Company reported a loss from operations before 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. of $153.5 million for fiscal year 2001 compared to earnings of $113.0 million for fiscal year 2000, also before restructuring charges. Including the effect of restructuring charges, the Company incurred losses from operations of $169.2 million for fiscal year 2001 and earnings of $117.1 million for fiscal year 2000. Total revenues decreased by 17.3% to $2.1 billion in fiscal year 2001 from $2.5 billion in fiscal year 2000. The retail equipment margin decreased to 15.7% from 29.4% in fiscal 2000. This was primarily due to a $62.6 million write-off of excess, obsolete and non-recoverable equipment. The retail service, supplies and rentals margin decreased to 34.1% from 38.4% in fiscal 2000. SG&A expenses declined by $61.3 million to $677.0 million for fiscal year 2001 from $738.3 million in fiscal year 2000. The decline in SG&A expenses over these periods was primarily due to currency fluctuations and lower employment costs. Due to decreased revenue, SG&A expenses as a percentage of revenue increased to 32.8% in fiscal year 2001 from 29.6% in fiscal year 2000. The Company incurred a net loss of $220.6 million for fiscal year 2001 compared to net earnings of $10.3 million for fiscal year 2000. After allowing for payment-in-kind dividends on the Company's participating shares, the Company incurred a net loss of $2.12 and $3.91 per American Depositary Share American Depositary Share (ADS) Foreign stock issued in the US and registered in the ADR system. ("ADS") in the fourth quarter and twelve months ended March 31, 2001, respectively, compared to a net loss of $0.39 and net earnings of $0.10 per ADS in the corresponding periods ended March 31, 2000. Agreement on Terms for New Credit Facility Danka also announced today that it has reached an agreement with the Steering Committee steer·ing committee n. A committee that sets agendas and schedules of business, as for a legislative body or other assemblage. steering committee Noun of its existing consortium of banks on the principal terms of a new Credit Facility which will consist of revolver revolver: see small arms. revolver Pistol with a revolving cylinder that provides multishot action. Some early versions, known as pepperboxes, had several barrels, but as early as the 17th century pistols were being made with a revolving chamber to , term loan and letter of credit commitments. The Credit Facility is subject to approval by 100% of the Company's existing banks, finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of definitive documentation, the completion of the sale of Danka Services International ("DSI (Dynamic Systems Initiative) An umbrella term for a suite of Microsoft products that help manage the Windows environment in large enterprises. DSI was introduced in 2003. "), and the tender of the requisite amount of notes under the Company's exchange offer for its outstanding 6.75% convertible subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes due April 1, 2002. The new Credit Facility will mature on the earlier of the third anniversary of its closing or the date which is one day in advance of the maturity of the senior subordinated notes being offered pursuant to the exchange offer, which is expected to be March 31, 2004. Danka's Chief Executive Officer, Lang Lowrey, commented, "We are pleased that our banks have so strongly endorsed the ongoing restructuring and operating efforts of the Company. This new facility will provide the necessary financing for the Company's strategic initiatives and will allow Danka to emerge from the difficult credit environment it has been operating under during the past two and a half years. Debt reduction continues to be a principal focus of the Company and we will continue to review all opportunities for additional debt reduction." The full bank group will meet on June June: see month. 13, 2001 to discuss approval of the Credit Facility and the Company expects that the new Credit Facility will be executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. by all parties by the end of June. Sale of DSI On April 9, 2001, the Company entered into an agreement to sell its outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. business, DSI, to Pitney Bowes  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . Inc. for a cash consideration of $290.0 million, subject to adjustment depending on the value of DSI's net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. at closing. Completion of the sale is contingent upon Adj. 1. contingent upon - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent the approval of the Company's shareholders, consent of its senior lenders, clearance CLEARANCE, com. law. The name of a certificate given by the collector of a port, in which is stated the master or commander (naming him) of a ship or vessel named and described, bound for a port, named, and having on board goods described, has entered and cleared his ship or vessel by UK competition authorities and the satisfaction of other conditions customary to a transaction of this nature. The sale has been cleared by U.S. and German competition authorities. The Company will hold a shareholder meeting for the purpose of approving the sale of DSI in June 2001 and intends to close the sale on or about June 29, 2001. Cash Flow and Financing On February February: see month. 20, 2001, the Company announced an integrated three-part plan to reduce and refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. its debt. First is the sale of DSI described above, with net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to be used primarily to repay a substantial portion of its existing senior credit facility. Second is an exchange offer for all $200.0 million of the Company's outstanding 6.75% convertible subordinated notes due April 1, 2002. Third is the refinancing Refinancing An extension and/or increase in amount of existing debt. of Danka's indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. under its existing senior credit facility, which is due for repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan in full on March 31, 2002. The Company anticipates that it will close the exchange offer, the refinancing of its senior credit facility and the sale of DSI on or about June 29, 2001. The Company is implementing the refinancing plan because it does not believe that it would otherwise be in a position to repay in full its indebtedness under its senior credit facility and the subordinated notes when they become due for payment in 2002. If the Company fails to complete its refinancing plan, it will be required to consider other alternatives to refinance its debt. The report of the Company's independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. on the Company's U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the year ended March 31, 2001 contains an explanatory ex·plan·a·to·ry adj. Serving or intended to explain: an explanatory paragraph. ex·plan paragraph stating that there is substantial doubt about the Company's ability to continue as a going concern as a result of the uncertainty regarding the Company's ability to repay its indebtedness under the existing senior credit facility and the outstanding subordinated notes when they become due for repayment on March 31, 2002 and April 1, 2002, respectively. As discussed above, the Company is in the process of implementing a plan to reduce and refinance its existing indebtedness which, if successful, will result in the Company's indebtedness under the senior credit facility and the subordinated notes being refinanced in advance of their stated maturities Stated maturity For the CMO tranche, the date the last payment would occur at zero CPR. . As a result of the magnitude magnitude, in astronomy, measure of the brightness of a star or other celestial object. The stars cataloged by Ptolemy (2d cent. A.D.), all visible with the unaided eye, were ranked on a brightness scale such that the brightest stars were of 1st magnitude and the of the write-offs and charges taken in the fourth quarter of fiscal year 2001 and the explanatory paragraph contained in the report of the independent auditors on the financial statements for the year ended March 31, 2001, the Company was in non-compliance with all of the financial covenants in its existing senior credit facility. This non-compliance was cured by an amendment to the senior credit facility excluding certain of the fourth quarter charges and write-offs from the calculation of the financial covenants and waiving the requirement that the Company's independent auditor's report Auditor's Report Recorded in the annual report, the auditor's report tests to see that a corporation's financial statements comply with GAAP. This is sometimes referred to as the clean opinion. Notes: Most auditor's reports consist of three paragraphs. must not contain such an explanatory statement. The Company continues to operate under modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. financial covenants through July July: see month. 16, 2001 pursuant to the amendment. If the Company's indebtedness under the senior credit facility is not refinanced by that time, the Company expects that it will require an additional amendment to, or waiver of, the financial covenants that will be in effect from that date. In the absence of an additional amendment or waiver, lenders owning a majority of the outstanding indebtedness could declare TO DECLARE. To make known or publish. By tho constitution of the United States, congress have power to declare war. In this sense the word, declare, signifies, not merely to make it known that war exists, but also to make war and to carry it on. 4 Dall. 37; 1 Story, Const. Sec. all amounts outstanding under the senior credit facility immediately due. Lowrey added: "We are in the final stages of our restructuring plan and are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that it will be concluded as planned by the end of June. The DSI sale, exchange offer and the announcement today of the agreement of principal terms of a new Credit Facility constitute the three elements of our plan, and each is progressing to conclusion. While we understand the U.S. GAAP requirements which necessitate ne·ces·si·tate tr.v. ne·ces·si·tat·ed, ne·ces·si·tat·ing, ne·ces·si·tates 1. To make necessary or unavoidable. 2. To require or compel. the going concern paragraph, we believe that once these restructuring transactions are concluded, Danka will be in position to solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. its future as a major player in the digital solutions market." The Company generated 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 of $56.2 million and $146.5 million in the fourth quarter and twelve months ended March 31, 2001, respectively, compared to $62.7 million and $180.6 million in the corresponding periods of the prior year, respectively. For the three months ended March 31, 2001, the Company reported negative EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $62.1 million, or -12.5% of revenue, compared to positive EBITDA of $43.1 million, or 7% of revenue, for the quarter ended March 31, 2000. For fiscal 2001, the Company generated $3.3 million of EBITDA, or .2% of revenue, compared to $279.7 million, or 11.2% of revenue, in the prior fiscal year. At March 31, 2001, the Company had approximately $515.0 million in debt outstanding under its senior credit facility, which represented a reduction of over $80.0 million since March 31, 2000. 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. Certain statements contained in this press release, or otherwise made by officers of the Company, including statements related to the Company's future performance and outlook for its businesses and respective markets, projections, statements of management's plans or objectives, forecasts of market trends, the sale of DSI, the exchange offer, the refinancing of the Company's indebtedness and other matters, are forward-looking statements, and contain information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company that is based on the beliefs of management as well as assumptions made by, and information currently available to, management. The words "goal", "anticipate", "expect", "intends", "believe" and similar expressions as they relate to the Company or the Company's management, are intended to identify forward-looking statements. No assurance can be given that the results in any forward-looking statement will be achieved. For the forward-looking statements, the Company claims 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. Such statements reflect the current views of the Company 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 differences include, but are not limited to (i) failure of the Company to complete any or all of the parts of the refinancing plan, including the closing of the sale of DSI, the completion of the exchange offer, closing of the new credit facility and the refinancing of the Company's indebtedness under its credit agreement, whether within the anticipated timeframe or at all, (ii) failure of the lenders under the Company's senior credit facility to agree an amendment to, or waiver of, the financial covenants applicable on and after July 17, 2001, (iii) any material adverse change in financial markets or Danka, (iv) any inability to achieve or maintain cost savings, (v) increased competition from other high-volume and digital copier distributors and the discounting of such copiers by 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. , (vi) any inability by the Company 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 the Company to continue to gain access to and successfully distribute new products, including digital products and high-volume copiers, or to continue to bring current products to the marketplace at competitive costs and prices, (vii) any negative impact from the loss of any of the Company's key upper management personnel, (viii) the ultimate outcome and impact of pending lawsuits, (ix) the ultimate outcome of pending tax audits, (x) any inability to achieve minimum equipment leasing Equipment Leasing is a financing option to lease equipment for a certain amount of time. Leasing Benefits
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 such statements are made. Furthermore, as a matter of policy, the Company does not generally make any specific projections as to future earnings nor does it 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 the Company.
DANKA BUSINESS SYSTEMS PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per American Depositary Share ("ADS") amounts)
For the three months ended
March 31, March 31,
2001 2000
----------------------
Revenue:
Retail equipment sales $148,299 $209,119
Retail service, supplies and rentals 323,601 381,017
Wholesale 24,411 25,013
--------- -------
Total revenue 496,311 615,149
--------- -------
Costs and operating expenses:
Cost of retail equipment sales 155,337 151,378
Retail service, supplies and rental costs 227,878 250,899
Wholesale costs of revenue 20,182 21,020
Selling, general and administrative expenses 189,065 187,224
Amortization of intangible assets 2,832 3,553
Write-off of goodwill 6,859 --
Restructuring charges (credits) (3,605) (4,148)
Other expense 3,081 3,894
--------- -------
Total costs and operating expenses 601,629 613,820
--------- -------
(Loss) earnings from operations (105,318) 1,329
Interest expense 18,240 28,369
Interest income 474 1,270
--------- -------
(Loss) earnings before income taxes (123,084) (25,770)
Provision (benefit) for income taxes 4,300 (7,215)
--------- -------
Net (loss) earnings $(127,384) $(18,555)
--------- -------
Basic (loss) earnings available to common shareholders per ADS:
Net (loss) earnings per ADS $ (2.12) $ (0.39)
Weighted average ADSs 61,893 58,529
Diluted (loss) earnings available to common shareholders per ADS:
Net (loss) earnings per ADS $ (2.12) $ (0.39)
Weighted average ADSs 61,893 58,529
Note: Certain prior year amounts have been reclassified to conform
with the current year presentation
DANKA BUSINESS SYSTEMS PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per American Depositary Share ("ADS") amounts)
For the twelve months ended
March 31, March 31,
2001 2000
----------------------
Revenue:
Retail equipment sales $ 626,717 $ 742,084
Retail service, supplies and rentals 1,339,415 1,648,069
Wholesale 97,128 105,469
---------- ----------
Total revenue 2,063,260 2,495,622
---------- ----------
Costs and operating expenses:
Cost of retail equipment sales 528,287 523,993
Retail service, supplies and rental costs 882,125 1,014,401
Wholesale costs of revenue 80,922 86,815
Selling, general and administrative expenses 676,953 738,319
Amortization of intangible assets 13,252 14,258
Write-off of goodwill 25,577 --
Restructuring charges (credits) 15,705 (4,148)
Other expense 9,622 4,879
---------- ----------
Total costs and operating expenses 2,232,443 2,378,517
---------- ----------
(Loss) earnings from operations (169,183) 117,105
Interest expense 82,639 105,060
Interest income 3,163 4,369
Loss on sale of business -- 2,061
---------- ----------
(Loss) earnings before income taxes (248,659) 14,353
Provision (benefit) for income taxes (28,099) 4,019
---------- ----------
Net (loss) earnings $(220,560) $ 10,334
---------- ----------
Basic (loss) earnings available to common shareholders per ADS:
Net (loss) earnings per ADS $ (3.91) $ 0.10
Weighted average ADSs 60,438 57,624
Diluted (loss) earnings available to common shareholders per ADS:
Net (loss) earnings per ADS $ (3.91) $ 0.10
Weighted average ADSs 60,438 58,525
Note: Certain prior year amounts have been reclassified to conform
with the current year presentation
DANKA BUSINESS SYSTEMS PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, March 31,
2001 2000
Assets
Current assets:
Cash and cash equivalents $ 69,085 $ 64,861
Accounts receivable, net 395,849 527,793
Inventories 201,645 328,290
Prepaid expenses, deferred
income taxes and other
current assets 83,229 81,837
------- -------
Total current assets 749,808 1,002,781
Equipment on operating leases, net 134,434 199,551
Property and equipment, net 77,716 92,614
Intangible assets, net 252,699 306,906
Other assets 68,286 65,845
------- -------
Total assets $ 1,282,943 $ 1,667,697
--------- ---------
Liabilities and shareholders'
equity (deficit)
Current liabilities:
Current maturities of long-term
debt and notes payable $ 517,447 $ 86,776
Accounts payable 153,392 178,870
Accrued expenses and other
current liabilities 194,509 229,472
Deferred revenue 35,158 40,045
------- -------
Total current liabilities 900,506 535,163
Convertible subordinated notes 200,000 200,000
Long-term debt and notes payable,
less current maturities 1,731 515,406
Deferred income taxes and
other long-term liabilities 29,343 32,536
------- -------
Total liabilities 1,131,580 1,283,105
--------- ---------
6.50% convertible participating
shares, redeemable,
$1.00 stated value 223,713 207,878
------- -------
Shareholders' equity (deficit):
Ordinary shares, 1.25 pence
stated value 5,130 4,892
Additional paid-in capital 325,399 317,056
Retained earnings (deficit) (302,619) (66,226)
Accumulated other comprehensive
(loss) income (100,260) (79,008)
------- ------
Total shareholders' equity (deficit) (72,350) 176,714
------- -------
Total liabilities and
shareholders' equity (deficit) $ 1,282,943 $ 1,667,697
--------- ---------
DANKA BUSINESS SYSTEMS PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the twelve months ended
---------------------------
March 31, March 31,
2001 2000
---------------------------
Operating activities
Net (loss) earnings $(220,560) $ 10,334
Adjustments to reconcile net (loss)
earnings to net cash
Provided by operating activities:
Depreciation and amortization 169,270 160,292
Amortization of debt issuance costs 1,912 4,101
Deferred income taxes (32,831) (10,904)
Loss on sale of property and
equipment and equipment on
operating leases 17,771 17,524
Proceeds from sale of equipment on
operating leases 7,971 16,921
Restructuring charges (credits) 15,705 (4,148)
Loss on sale of Omnifax business -- 2,061
Changes in assets and liabilities:
Accounts receivable 109,020 23,828
Inventories 121,398 14,693
Prepaid expenses and other
current assets (3,805) (6,040)
Other non-current assets 19,597 24,509
Accounts payable (20,924) 38,313
Accrued expenses and other
current liabilities (30,691) (99,095)
Deferred revenue (3,702) (11,165)
Other long-term liabilities (3,652) (665)
---------------------------
Net cash provided by operating activities 146,479 180,559
---------------------------
Investing activities
Capital expenditures (88,419) (126,879)
Proceeds from sale of property and
equipment 6,108 3,960
Proceeds from sale of Omnifax business -- 45,000
Payment for purchase of subsidiaries -- (733)
Payment for purchase of noncompete
agreements -- (178)
---------------------------
Net cash used in investing activities (82,311) (78,830)
---------------------------
Financing activities
Net payments under line of credit
agreements (67,685) (307,383)
Principal borrowings (payments) on
other long-term debt 45 (4,004)
Proceeds from stock options exercised -- 87
Capital contributions -- 205,223
---------------------------
Net cash used in financing activities (67,640) (106,077)
---------------------------
Effect of exchange rates 7,696 3,114
---------------------------
Net increase (decrease) in cash and
cash equivalents 4,224 (1,234)
Cash and cash equivalents, beginning of
period 64,861 66,095
---------------------------
Cash and cash equivalents, end of
period $ 69,085 $ 64,861
---------------------------
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