Danka Reports Second-Quarter Operating Results; Results Reflect Year-Over-Year Improvement in Operating Earnings and Solid Cash Generation.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 announced second-quarter results for the period ended September September: see month. 30, 2004 that include 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 of $6.0 million, an increase over the $1.0 million from the second quarter a year ago and a 10% year-over-year decrease in selling, general and administrative expenses ("SG&A"). Total revenue was $308.7 million, a decline of 4% from the second quarter a year ago. Gross margins were 36.3%, 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 was $27.6 million and free cash flow was $21.9 million. Net loss was $1.8 million for the quarter compared to a net loss of $17.3 million in the year-ago quarter. The year-ago quarter included $20.6 million of pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta expense for 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 debt issuance costs. Including the impact of dividends on participating shares, basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. was a loss of $0.11 per share compared to a loss of $0.35 per share in the year-ago period. "Our overall performance in the second quarter was highlighted by the year-over-year improvement in operating earnings," stated Danka Chief Executive Officer Todd Todd , Sir Alexander Robertus 1907-1997. British chemist. He won a 1957 Nobel Prize for his study of nucleic acids and nucleotide structures. Mavis. "SG&A was also down approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $12 million over the year-ago quarter which further demonstrates that we are delivering on promised cost savings, even as we make growth-oriented investments in our product offerings, our sales force and our infrastructure. Our efforts remain focused on the creation of value across the enterprise and the second quarter results were validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. that we are on the right track." "In the quarter, we successfully 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. on key initiatives to increase equipment sales and cash generation over last quarter," continued Mavis. "Equipment and related revenue increased 15% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen and free cash flow was $21.9 million. As expected, we did see a sequential One after the other in some consecutive order such as by name or number. decline in service revenue largely due to the seasonality of our business." Key second-quarter financial 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. : --Total second-quarter revenue was $308.7 million, a 4% decline from the year-ago quarter but essentially flat with the first quarter. Adjusting for currency exchange, total revenue declined 8% year-over-year. Most of the decline was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to service revenue which declined by 6% year-over-year. The retail supplies and rentals business also declined, as expected, because of the de-emphasis of rentals, as well as the declining need for supplies related to the heritage Kodak (company) Kodak - The photographic company responsible for Photo CD. http://kodak.com/. analog equipment base. --The digital portion of Danka's equipment base increased to 60% and digital output now represents 75% of total volume, both of which are key elements in the stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders and ultimate growth of service revenues. --Consolidated gross margins were 36.3% of revenue compared to 37.2% in the same quarter last year. The primary reason for the decline was a 250 basis point decrease in equipment and related sales margins. Service margins were stable at 40.5%. --SG&A was $107.6 million, 10% lower than the year-ago quarter, and 3% lower than the first quarter. As a percentage of revenue, SG&A was 34.9% in the second quarter, 200 basis points lower than the year-ago period, and 100 basis points lower than the first quarter. --Operating earnings were $6.0 million compared to $1.0 million in the year-ago second quarter. Operating earnings were favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted this quarter by the net reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of $2.1 million of 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). reserves and the approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. $1 million reversal of an accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. related to a historic asset disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of . Operating earnings were negatively impacted in the quarter by higher than expected costs in Danka's Sarbanes-Oxley compliance program and consulting fees related to cost reduction efforts. --Free cash flow (net cash provided by operating activities less capital expenditures) was $21.9 million compared to negative free cash flow of $28.1 million in the first quarter. As a result, the company's cash balance at the end of the second quarter was $106.6 million compared to $85.9 million at the end of the first quarter. --Total revenue for the six months ended September 30, 2004 was $619.0 million compared to $656.7 million in the year-ago period. Gross margins were 37.3% for the period compared to 37.0% in the year-ago period. Operating earnings were $13.9 million compared to $6.0 million, an increase of 132%. Cash flow from operations was $3.9 million compared to $44.0 million in the year-ago period. "During the second quarter, we increased the size of our U.S. sales force to improve our sales coverage, added new technology offerings to our product portfolio and continued to leverage our recent IT investments to improve back office processes, all of which will lead to improved execution, new revenue opportunities and the rightsizing Selecting a computer system, whether micro, mini or mainframe, that best meets the needs of the application. of our cost structure," concluded Mavis. "Moving forward, we will further expand sales coverage, accelerate our TechSource business and bring additional product offerings to market. We are also progressing a multi-faceted reengineering Using information technology to improve performance and cut costs. Its main premise, as popularized by the book "Reengineering the Corporation" by Michael Hammer and James Champy, is to examine the goals of an organization and to redesign work and business processes from the ground up of our business that we believe will generate important new cost reductions and operational efficiencies. We believe these actions will provide long term benefit to our customers, provide a platform for growth and create value across all aspects of our business." Conference Call and Webcast A conference call and Webcast to discuss Danka's second-quarter results has been scheduled for today, Thursday Thursday: see week. , November November: see month. 4 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . 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 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 some United Kingdom callers) can dial 800-309-1555; other international callers should dial 706-643-7754. No conference number is needed. A recording of the call will be available from approximately 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 5:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on Thursday, November 11. To access this recording, please call either 800-642-1687 or 706-645-9291, or visit Danka's Web site. 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 half year ended September 30, 2004 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 (loss) that is computed as operating earnings 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. , free cash flow that is computed as net cash provided by (used in) operating activities less capital expenditures plus proceeds from the sale of property and equipment 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 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
September 30, 2004 and 2003
(In thousands, except per American Depository Share ("ADS") amounts)
(Unaudited)
For the Three Months Ended
--------------------------
September 30,September 30,
2004 2003
--------------------------
Revenue:
Retail equipment and related sales $114,522 $115,223
Retail service 146,275 155,300
Retail supplies and rentals 27,093 30,325
Wholesale 20,764 22,115
-------- --------
Total revenue 308,654 322,963
-------- --------
Cost of sales:
Retail equipment sales costs 75,986 73,679
Retail service costs 87,031 91,948
Retail supplies and rental costs 16,528 18,998
Wholesale costs 17,165 18,107
-------- --------
Total cost of sales 196,710 202,732
-------- --------
Gross Profit 111,944 120,231
Operating expenses:
Selling, general and administrative expenses 107,601 119,127
Restructuring credits (2,069) -
Other expense 460 152
-------- --------
Total operating expenses 105,992 119,279
-------- --------
Operating earnings 5,952 952
Interest expense (7,597) (8,069)
Interest income 405 317
Write-off of debt issuance costs - (20,562)
-------- --------
Earnings (loss) before income taxes (1,240) (27,362)
Provision (benefit) for income taxes 600 (10,103)
-------- --------
Net earnings (loss) $ (1,840) $(17,259)
======== ========
Calculation of net earnings (loss) per ADS
Net earnings (loss) $ (1,840) $(17,259)
Dividends and accretion on participating
shares (5,037) (4,740)
-------- --------
Loss available to common shareholders $ (6,877) $(21,999)
======== ========
Basic and diluted net earnings (loss)
available to common shareholders per ADS:
Net earnings (loss) per ADS $ (0.11) $ (0.35)
======== ========
Weighted average ADSs 62,858 62,586
======== ========
Danka Business Systems PLC
Consolidated Statements of Operations for the Six Months Ended
September 30, 2004 and 2003
(In thousands, except per American Depository Share ("ADS") amounts)
(Unaudited)
For the Six Months Ended
--------------------------
September 30,September 30,
2004 2003
--------------------------
Revenue:
Retail equipment and related sales $ 214,278 $228,001
Retail service 303,711 321,223
Retail supplies and rentals 56,325 62,164
Wholesale 44,665 45,359
--------- --------
Total revenue 618,979 656,747
--------- --------
Cost of sales:
Retail equipment sales costs 139,889 151,887
Retail service costs 177,421 188,403
Retail supplies and rental costs 33,988 37,008
Wholesale costs 36,429 36,700
--------- --------
Total cost of sales 387,727 413,998
--------- --------
Gross Profit 231,252 242,749
Operating expenses:
Selling, general and administrative expenses 218,930 237,602
Restructuring credits (2,069) (594)
Other expense (income) 529 (210)
--------- --------
Total operating expenses 217,390 236,798
--------- --------
Operating earnings 13,862 5,951
Interest expense (15,109) (17,822)
Interest income 608 549
Write-off of debt issuance costs - (20,562)
--------- --------
Earnings (loss) before income taxes (639) (31,884)
Provision (benefit) for income taxes 780 (13,829)
--------- --------
Net earnings (loss) $ (1,419) $(18,055)
========= ========
Calculation of net earnings (loss) per ADS
Net earnings (loss) $ (1,419) $(18,055)
Dividends and accretion on participating
shares (9,997) (9,405)
--------- --------
Loss available to common shareholders $ (11,416) $(27,460)
========= ========
Basic and diluted net earnings (loss)
available to common shareholders per ADS:
Net earnings (loss) per ADS $ (0.18) $ (0.44)
========= ========
Weighted average ADSs 62,807 62,445
========= ========
Danka Business Systems PLC
Consolidated Balance Sheets as of
September 30, 2004 and March 31, 2004
(In Thousands)
September 30,March 31,
2004 2004
-----------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 106,622 $ 112,790
Accounts receivable, net 243,879 246,996
Inventories 105,297 93,295
Prepaid expenses, deferred income taxes and
other current assets 19,916 16,862
--------- ---------
Total current assets 475,714 469,943
Equipment on operating leases, net 24,007 29,478
Property and equipment, net 58,475 65,888
Goodwill, net 283,365 282,430
Other intangible assets, net 1,021 2,340
Deferred income taxes 7,688 7,688
Other assets 24,653 25,801
--------- ---------
Total assets $ 874,923 $ 883,568
========= =========
Liabilities and shareholders' equity (deficit)
Current liabilities:
Current maturities of long-term debt and
notes payable $ 3,859 $ 3,212
Accounts payable 156,272 135,460
Accrued expenses and other current
liabilities 106,602 128,963
Taxes payable 42,891 47,200
Deferred revenue 42,778 45,090
--------- ---------
Total current liabilities 352,402 359,925
Long-term debt and notes payable, less current
maturities 240,162 240,761
Deferred income taxes and other long-term
liabilities 66,650 68,029
--------- ---------
Total liabilities 659,214 668,715
--------- ---------
6.5% senior convertible participating shares 289,604 279,608
Shareholders' equity (deficit):
Ordinary shares, 1.25 pence stated value 5,207 5,194
Additional paid-in capital 328,471 328,070
Accumulated deficit (354,002) (342,586)
Accumulated other comprehensive loss (53,571) (55,433)
--------- ---------
Total shareholders' equity (deficit) (73,895) (64,755)
--------- ---------
Total liabilities and shareholders' equity
(deficit) $ 874,923 $ 883,568
========= =========
Danka Business Systems PLC
Consolidated Statements of Cash Flows for the Six Months Ended
September 30, 2004 and 2003
(In Thousands)
(Unaudited)
September 30,September 30,
2004 2003
--------------------------
Operating activities:
Net earnings (loss) $ (1,419) $ (18,055)
Adjustments to reconcile net earnings (loss)
to net cash provided by operating
activities:
Depreciation and amortization 19,593 24,696
Deferred income taxes (46) (12,346)
Amortization of debt issuance costs 1,230 4,485
Write-off of debt issuance costs - 20,562
(Gain) loss on sale of property and
equipment and equipment on operating
leases (654) 2,249
Proceeds from sale of equipment on
operating leases 2,921 1,756
Restructuring credits (2,069) (594)
Changes in net assets and liabilities:
Accounts receivable, net 3,117 21,419
Inventories (12,002) 4,852
Prepaid expenses and other current
assets (2,954) 982
Other non-current assets 3,645 3,126
Accounts payable 20,812 (14,727)
Accrued expenses and other current
liabilities (24,602) 2,377
Deferred revenue (2,312) 1,702
Other long-term liabilities (1,333) 1,468
-------- ---------
Net cash provided by operating
activities 3,927 43,952
-------- ---------
Investing activities:
Capital expenditures (10,359) (31,087)
Proceeds from the sale of property and
equipment 174 702
-------- ---------
Net cash used in investing activities (10,185) (30,385)
-------- ---------
Financing activities:
Net borrowings (payments) under line of
credit agreements 561 (112,941)
Net payments under capital lease
arrangements (731) (1,115)
Principal payments of debt - (44,853)
Proceeds from debt - 170,905
Proceeds from stock options exercised 414 -
Payment of debt issue costs (100) (10,767)
-------- ---------
Net cash provided by financing
activities 144 1,229
-------- ---------
Effect of exchange rates (54) 2,011
-------- ---------
Net (decrease) increase in cash and
cash equivalents (6,168) 16,807
Cash and cash equivalents, beginning of
period 112,790 81,493
-------- ---------
Cash and cash equivalents, end of period $106,622 $ 98,300
======== =========
Danka Business Systems PLC
Adjusted operating earnings for the three and six months ended
September 30, 2004 and 2003
(In Thousands)
(Unaudited)
For the Three Months Ended For the Six Months Ended
September 30, September 30, September 30,September 30,
2004 2003 2004 2003
------------- ------------ ------------- -------------
Operating
earnings $ 5,952 $ 952 $ 13,862 $ 5,951
Restructuring
credits (2,069) - (2,069) (594)
----------- ---------- ---------- ----------
Adjusted
operating
earnings $ 3,883 $ 952 $ 11,793 $ 5,357
=========== ========== ========== ==========
Danka Business Systems PLC
Free cash flow for the three and six months ended September 30, 2004
and 2003
(In Thousands)
(Unaudited)
For the Three Months Ended For the Six Months Ended
September 30,September 30, September 30,September 30,
2004 2003 2004 2003
------------- ------------ ------------- ------------
Net cash provided
by operating
activities $ 27,635 $ 43,097 $ 3,927 $ 43,952
Capital
expenditures (3,902) (16,277) (10,359) (31,087)
Proceeds from the
sale of property
and equipment (1,869) 441 174 702
---------- ---------- ---------- ----------
Free cash flow $ 21,864 $ 27,261 $ (6,258) $ 13,567
========== ========== ========== ==========
Danka Business Systems PLC
Net Debt as of September 30, 2004 and March 31, 2004
(In Thousands)
(Unaudited)
September 30, March 31,
2004 2004
-------------- -------------
Current maturities of long-term debt
and notes payable $ 3,859 $ 3,212
Long-term debt and notes payable 240,162 240,761
Less: Cash and cash equivalents (106,622) (112,790)
------------ -------------
Net Debt $ 137,399 $ 131,183
============ =============
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