Danka Reports Third Quarter and Year to Date 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)--Feb. 4, 2004 Danka Business Systems PLC (Nasdaq:DANKY) today announced results for the three and nine month periods ended December December: see month. 31, 2003. The highlights for the quarter reflect: -- as expected, the company delivered substantially improved overall operating performance versus the first two quarters, -- an increase in cash of almost $7 million during the quarter, after interest payments of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $13 million, and -- significant progress in the implementation of its 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). plan, resulting in lower SG&A. Listed below are definitions of non-GAAP terms that are used in this press release. Adjusted 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 is defined as net income before income taxes, interest expense, depreciation, amortization, restructuring charges/(credits) and 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 (see GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). reconciliation on page 10). Free cash flow is defined as net cash provided by operating activities, less capital expenditures, plus proceeds from the sale of property and equipment (see GAAP reconciliation on page 11). Net debt is defined 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 (see GAAP reconciliation on page 11). The company will hold a conference call today at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy to discuss these results. Third Quarter Results Total revenues were $331.1 million in the third quarter of fiscal year 2004, a decline of $22.0 million or 6.2% from the year-ago quarter including a currency benefit of 7.1%. Retail equipment and related sales revenue were $114.6 million in the third quarter, a 5.9% decrease from the year-ago quarter. This decrease was primarily due to reduced revenues in the U.S. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). offset, in part, by an increase in
International. Retail service revenues were $156.5 million in the third
quarter, down 10.1% from the year-ago quarter. This decrease was
primarily due to a decline in the U.S. Retail service revenues increased
slightly from the second quarter. Retail supplies 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. revenues
were $35.0 million during the third quarter, a 0.3% decrease from the
year-ago quarter. This decrease was primarily due to the past downsizing (1) Converting mainframe and mini-based systems to client/server LANs.(2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing of the capital intensive U.S. and European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. rental business and a reduction in our U.S. supplies business. Wholesale revenues were $25.0 million during the third quarter, a 12.8% increase from the year-ago quarter which is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a foreign currency benefit. Total gross margins decreased to 36.3% in the third quarter from 37.2% in the year-ago and sequential One after the other in some consecutive order such as by name or number. quarter. Gross margins in the U.S. decreased to 39.6% from 42.2% in the year-ago quarter while Europe's gross margins increased slightly to 31.9% from 31.7% and International's gross margins increased to 36.6% from 31.4% in the year-ago quarter. The retail equipment and related sales margin increased to 35.1% in the third quarter from 34.0% in the year-ago quarter primarily due to a shift in the mix of our sales toward higher margin equipment in Europe and International even though we experienced a $2.0 million decrease in lease and residual Residual See:Residual value payments in the U.S. from a diminishing di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. external lease funding program which contributed $2.4 million, or 2.0% to gross margins in the year-ago quarter. Gross margins for retail service decreased to 38.7% from 40.2% primarily due to a decrease in the U.S. offset by improved operational efficiency in Europe. Gross margins for supplies and rentals decreased to 41.1% from 45.2% in the year-ago quarter due to declines in Europe. The wholesale gross margins increased to 19.4% from 18.5%. Overall, SG&A expenses in the third quarter decreased by $11.2 million or 9.3% from the year-ago quarter to $108.7 million. The decrease was due to the Company's ongoing cost reduction efforts, the progress in the implementation of our worldwide cost restructuring program and $3.0 million of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. pension adjustments in Europe offset, in part, by an unfavorable foreign currency movement of $7.2 million. As a percentage of revenue, SG&A costs decreased to 32.8% from 34.0% in the year-ago quarter and 36.9% in the second quarter. Total capital expenditures in the quarter were $4.8 million which, as expected, was a substantial decrease from prior quarters. This decrease was driven in part by reductions in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. resulting from the completion of the implementation of phase one of our Oracle ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. system in the U.S. and the substantial completion of our U.S. headquarters building. On December 12, 2003, the company announced the initial phase of a cost restructuring plan that is expected to provide total annual savings of approximately $40 to $45 million, primarily resulting from headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. and facility reductions. As a result of the employee severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and related costs, and the costs associated with the facility reductions, the Company took a restructuring charge 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 $20.0 million in the quarter. In addition to the plan announced on December 12, 2003, Danka will take immediate additional steps designed to further reduce costs. These further reductions will be focused in all segments of the business and are expected to result in an additional restructuring charge ranging from $20 to $25 million. These actions are expected to provide additional annual savings of up to $11 million when fully implemented. These reductions primarily result from a decrease of approximately 375 employees or approximately 5% of the workforce. These additional steps will be instrumental in Danka achieving its longer-term goal of lowering SG&A to 30% of revenue. Including the initial restructuring charges discussed above, 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 $10.6 million for the third quarter of fiscal year 2004 compared to 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 $12.8 million in the comparable year-ago quarter. The company's net loss for the third quarter was $16.9 million or a loss of $.35 per 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. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Depository The place where a deposit is placed and kept, e.g., a bank, savings and loan institution, credit union, or trust company. A place where something is deposited or stored as for safekeeping or convenience, e.g., a safety deposit box. Share (ADS) after allowing for the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of dividends and accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the on participating shares. CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Comments and Observations Danka Chairman and Chief Executive Officer, Lang Lang language LANG Louisiana Army National Guard Lang Langobardian (linguistics) LANG Los Angeles Newspaper Guild Lowrey, commented, "Our third quarter was highlighted by a 76% increase in Adjusted EBITDA over our second quarter. I am pleased with the rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in the U.S. which contributed significantly to this improvement. Our Adjusted EBITDA totaled $24.4 million and was assisted by a $3.0 million gain from one-time European pension adjustments. We continued to increase our cash balance in a quarter where we paid our semi-annual interest of approximately $13 million. This and the additional cash generated in the normal course of our business will allow us to fund the restructuring plan as well as accelerate our growth plans, to which we will be devoting substantial attention in the coming quarters. We continue to experience a favorable confluence confluence /con·flu·ence/ (kon´floo-ins) 1. a running together; a meeting of streams.con´fluent 2. in embryology, the flowing of cells, a component process of gastrulation. of events which include revenue 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 , costs rationalization rationalization, in psychology: see defense mechanism. and positioning for growth. Of course, all of this has created a high level of enthusiasm about our future prospects." Danka increased its cash balance in the third quarter to $105.1 million from $98.3 million in the previous quarter. Nine Month Results Total revenues were $987.8 million in the first nine months of fiscal year 2004, a decline of $56.1 million or 5.4% from the year-ago period, including a currency benefit of 6.6%. Retail equipment and related sales revenue were $342.6 million in the first nine months, a 2.1% decrease from the year-ago period. The decrease was primarily due to decreased revenues in the U.S. and Europe. Retail service revenues were down 9.2% from the year-ago period to $477.7 million. This decline was largely due to the continuing industry-wide conversion from analog-to-digital equipment. Retail supplies and rental revenues were $97.2 million during the first nine months, an 8.9% decrease from the year-ago period. This decrease was primarily due to the company's downsizing of the capital intensive U.S. and European rental business. Wholesale revenues were $70.3 million during the first nine months, a 14.5% increase from the year-ago period which is attributable entirely to a foreign currency benefit. Total gross margins decreased slightly to 36.7% in the first nine months from 37.3% in the year-ago period. Gross margins in the U.S. declined to 40.6%, from 42.4% in the year-ago period while Europe's gross margins increased to 32.2% from 32.1% and International's gross margins increased to 36.1% from 27.9% in the year-ago period. The International gross margin percentage for the year-ago period was adversely affected by a $3.4 million charge that consisted primarily of inventory and residual write-downs in 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 in the prior year second quarter. The retail equipment and related sales margin increased slightly to 34.0% in the first nine months from 33.9% in the year-ago period. The retail equipment and related sales revenue gross margin increased despite an $8.8 million decrease in lease and residual payments from a diminishing external lease funding program which contributed $10.6 million to gross margins in the year-ago period. Gross margins for retail service increased slightly to 40.5% from 40.4% primarily due to operational efficiencies in Europe. Gross margins for supplies and rentals decreased to 40.7% from 43.1%. The wholesale gross margins increased to 19.2% from 19.0%. During the first nine months, SG&A decreased by $11.3 million or 3.2% to $346.3 million from the year-ago period. This decrease was due to our ongoing cost reduction efforts, the progress in the implementation of our restructuring program and favorable one-time pension adjustments in Europe. The unfavorable foreign currency movement increased SG&A by 5.4% or $19.2 million. As a percentage of revenue for the period, SG&A costs increased to 35.1% from 34.3%. Danka reported an operating loss of $4.7 million in the first nine months of fiscal year 2004 compared to operating earnings of $37.1 million in the comparable year-ago period. The company's net loss for the first nine months was $35.0 million, compared to net earnings of $10.8 million in the year-ago period. The net loss for the first nine months includes the impact of the $20.6 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta write-off of debt issuance costs related to the company's former credit facility and the $20.0 million third quarter pre-tax restructuring charge. After allowing for the dilutive effect of dividends and accretion on participating shares, Danka posted a loss in the first nine months of $.79 per basic and diluted ADS compared to a loss of $.04 per basic and diluted ADS in the year-ago period. Net cash provided by operating activities during the nine months ended December 31, 2003 was $52.3 million compared to $121.8 million in the year-ago period. The decrease in free cash flow is primarily related to the reduction in net working capital that occurred last year during the de-leveraging of the company. In the first nine months of the prior fiscal year, $55.2 million of free cash flow was generated from net working capital versus $6.2 million this fiscal year. Total capital expenditures to date in the current fiscal year were $35.9 million compared to $32.1 million in the year-ago period. Total capital expenditures during the current fiscal year related to the Vision 21 project and the new U.S. headquarters building were $11.3 million and $6.3 million, respectively. CFO See Chief Financial Officer. Comments and Observations "We are pleased with our strong cash generation in the third fiscal quarter, which helped us reduce our net debt to its lowest level in recent years. We also concluded a new credit facility in Europe which will free up restricted cash, increase short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. liquidity and allow us to better manage our cash globally," stated Mark Wolfinger, Danka's Chief Financial Officer. "In addition to those accomplishments, the operating groups have begun to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on their cost reduction initiatives and made strides toward achieving our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. 30% SG&A goal." Conference Call A conference call and webcast to discuss Danka's third quarter and year to date fiscal year 2004 results has been scheduled for today, Wednesday Wednesday: see week. , February February: see month. 4 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 http://www.danka.com. U.S., Canada and some U.K. callers please dial (800) 901-5259; International callers please dial (617) 786-4514. You must also enter reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 79256364. If you are unable to join the call, a recording will be available via an instant replay approximately two hours after the call's completion. To access the replay of the call, U.S., Canada and some U.K. callers may dial (888) 286-8010; International callers may dial (617) 801-6888. You must also enter reservation number 90812093. This playback Playback could mean:
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 office imaging equipment, document solutions and related services and supplies, Danka 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 should strengthen the company's client relationships and expand its strategic value. 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" 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 and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. 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 comply with the financial or other covenants in our debt instruments; (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 and unify 1. (database, product) Unify - A relational database produced by Unify Corporation. 2. (algorithm) unify - To perform unification. 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 inability to achieve or maintain cost savings; (xvi) 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 beyond our current expectations, which could adversely affect our liquidity; and (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 past or future 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, or the SEC. 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. Danka is a registered trademark and Danka @ the Desktop is a trademark of Danka Business Systems PLC. United Kingdom Companies Act: The financial information contained in this announcement for the quarter ended December 31, 2003 is unaudited and does not constitute full statutory accounts within the meaning of Section 240 of the United Kingdom Companies Act 1985. Statutory accounts for the quarter ended December 31, 2003 have been delivered to the Registrar of Companies The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. for England and Wales England and Wales are both constituent countries of the United Kingdom, that together share a single legal system: English law. Legislatively, England and Wales are treated as a single unit (see State (law)) for the conflict of laws. . This press release contains information regarding Adjusted EBITDA that is computed as net income before income taxes, interest expense, depreciation, amortization, restructuring charges and write-off of debt issuance costs, free cash flow that is computed as net cash provided by 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 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 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 EBITDA, free cash flow and net debt represent non-GAAP financial measures, management considers 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. Management uses these measures in its planning and budgeting processes, to monitor and evaluate its financial and operating results and to measure performance of its separate divisions. Management also believes that Adjusted EBITDA, 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 management uses in evaluating the company. Management expects that such measures provide investors with the means to evaluate our financial and operating results against other companies within our industry. In addition, management believes that these measures are meaningful to investors in evaluating our ability to meet our future debt service requirements, 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 EBITDA, free cash flow and net debt may not be consistent with the calculation of these measures by other companies in our industry. Adjusted EBITDA, free cash flow and net debt are not measurements of financial performance under GAAP and should not be considered as an alternative to net income (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 Business Systems PLC
Consolidated Statements of Operations for the three and nine months
ended December 31, 2003 and 2002
(In thousands, except per American Depositary Share ("ADS") amounts)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
------------------- --------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2003 2002 2003 2002
--------- --------- --------- ----------
Revenue:
Retail equipment and related
sales $114,607 $121,768 $342,608 $349,913
Retail service 156,493 174,098 477,717 525,972
Retail supplies and rentals 35,012 35,113 97,176 106,642
Wholesale 24,969 22,136 70,328 61,399
----------------------------- --------- --------- --------- ----------
Total revenue 331,081 353,115 987,829 1,043,926
----------------------------- --------- --------- --------- ----------
Costs and operating expenses:
Cost of retail equipment
sales 74,373 80,427 226,260 231,124
Retail service costs 95,940 104,142 284,344 313,298
Retail supplies and rental
costs 20,614 19,245 57,622 60,719
Wholesale costs of revenue 20,132 18,048 56,832 49,703
Selling, general and
administrative expenses 108,720 119,926 346,322 357,643
Restructuring charges
(credits) 20,046 - 19,452 (556)
Other (income) expense 1,861 (1,491) 1,651 (5,085)
----------------------------- --------- --------- --------- ----------
Total costs and operating
expenses 341,686 340,297 992,483 1,006,846
----------------------------- --------- --------- --------- ----------
Operating earnings (loss) (10,605) 12,818 (4,654) 37,080
Interest expense (7,931) (8,734) (25,753) (23,038)
Interest income 429 419 978 739
Writeoff of debt issuance
costs - - (20,562) -
----------------------------- --------- --------- --------- ----------
Earnings (loss) before income
taxes (18,107) 4,503 (49,991) 14,781
Provision (benefit) for
income taxes (1,166) 1,219 (14,995) 3,990
----------------------------- --------- --------- --------- ----------
Net earnings (loss) $(16,941) $3,284 $(34,996) $10,791
============================= ========= ========= ========= ==========
Calculation of (loss)
earnings per ADS
Earnings (loss) $(16,941) $3,284 $(34,996) $10,791
Dividends and accretion on
participating shares (4,811) (4,528) (14,216) (13,384)
--------- --------- --------- ----------
Income (loss) available to
common shareholders $(21,752) $(1,244) $(49,212) $(2,593)
========= ========= ========= ==========
Basic (loss) earnings available to
common shareholders per ADS:
Net earnings (loss) per ADS,
continuing operations $(0.35) $(0.02) $(0.79) $(0.04)
========= ========= ========= ==========
Weighted average ADSs 62,531 62,194 62,474 62,078
Diluted (loss) earnings available to
common shareholders per ADS:
Net earnings (loss) per ADS $(0.35) $(0.02) $(0.79) $(0.04)
========= ========= ========= ==========
Weighted average ADSs 62,531 62,194 62,474 62,078
Certain prior year amounts have been reclassified to conform to
current year presentation.
Danka Business Systems PLC
Condensed Consolidated Balance Sheets as of December 31, 2003 and
March 31, 2003
(In Thousands)
(Unaudited)
Dec. 31, March 31,
2003 2003
--------- ---------
Assets
Current assets:
Cash and cash equivalents $105,055 $81,493
Accounts receivable, net 241,227 257,329
Inventories 106,571 111,471
Prepaid expenses, deferred income taxes and other
current assets 31,471 45,879
-------------------------------------------------- --------- ---------
Total current assets 484,324 496,172
Equipment on operating leases, net 32,804 39,829
Property and equipment, net 73,547 67,782
Goodwill, net 280,156 256,990
Noncompete agreements, net 2,281 799
Deferred income taxes 92,958 78,480
Other assets 26,636 41,568
-------------------------------------------------- --------- ---------
Total assets $992,706 $981,620
================================================== ========= =========
Liabilities and shareholders' equity
Current liabilities:
Current maturities of long-term debt and notes
payable $2,405 $58,443
Accounts payable 122,722 140,207
Accrued expenses and other current liabilities 116,196 101,749
Taxes payable 117,962 112,311
Deferred revenue 43,334 40,628
-------------------------------------------------- --------- ---------
Total current liabilities 402,619 453,338
Long-term debt and notes payable, less current
maturities 242,093 174,412
Deferred income taxes and other long-term
liabilities 32,033 29,785
-------------------------------------------------- --------- ---------
Total liabilities 676,745 657,535
-------------------------------------------------- --------- ---------
6.5% convertible participating shares 272,493 258,376
-------------------------------------------------- --------- ---------
Shareholders' equity:
Ordinary shares, 1.25 pence stated value 5,182 5,167
Additional paid-in capital 327,768 327,173
Accumulated deficit (239,104) (189,995)
Accumulated other changes (50,378) (76,636)
-------------------------------------------------- --------- ---------
Total shareholders' equity 43,468 65,709
-------------------------------------------------- --------- ---------
Total liabilities & shareholders' equity $992,706 $981,620
================================================== ========= =========
Certain prior year amounts have been reclassified to conform to
current year presentation.
Danka Business Systems PLC
Consolidated Statements of Cashflows for the nine months ended
December 31, 2003 and 2002
(In Thousands)
(Unaudited)
Dec. 31, Dec. 31,
2003 2002
--------- --------
Operating activities:
Net earnings (loss) $(34,996) $10,791
Adjustments to reconcile net earnings
(loss) to net cash provided:
Depreciation and amortization 39,274 43,112
Deferred income taxes (14,352) (5,455)
Amortization of debt issuance costs 4,993 7,090
Writeoff of debt issuance costs 20,562 -
Loss on sale of property and equipment and
equipment on operating leases 1,959 3,589
Proceeds from sale of equipment on operating
leases 2,790 1,922
Restructuring and other special charges
(credits) 19,452 (556)
Changes in net assets and liabilities:
Accounts receivable 16,440 40,358
Inventories 4,900 22,020
Prepaid expenses and other current assets 3,345 5,280
Other non-current assets and other items 2,412 5,938
Accounts payable (19,696) 3,149
Accrued expenses and other current
liabilities 1,230 (15,073)
Deferred revenue 2,706 (2,329)
Other long-term liabilities 1,254 2,013
-------------------------------------------------- --------- --------
Net cash provided by operating activities 52,273 121,849
-------------------------------------------------- --------- --------
Investing activities:
Capital expenditures (35,872) (32,054)
Proceeds from the sale of property and
equipment 706 463
-------------------------------------------------- --------- --------
Net cash provided by/(used) in investing
activities (35,166) (31,591)
-------------------------------------------------- --------- --------
Financing activities:
Net payments under line of credit agreements (112,960) (53,000)
Net proceeds/(payments) under capital lease
arrangements 2,436 2,777
Payments of debt (48,867) (14,490)
Proceeds from debt 170,905 -
Payment of debt issue costs (10,767) (17,162)
-------------------------------------------------- --------- --------
Net cash provided by/(used) in financing
activities 747 (81,875)
-------------------------------------------------- --------- --------
Effect of exchange rates 5,708 3,789
-------------------------------------------------- --------- --------
Net increase (decrease) in cash and cash
equivalents 23,562 12,172
Cash and cash equivalents, beginning of period 81,493 59,470
-------------------------------------------------- --------- --------
Cash and cash equivalents, end of period $105,055 $71,642
================================================== ========= ========
Certain prior year amounts have been reclassified to conform to
current year presentation.
Danka Business Systems PLC
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation,
Amortization, Restructuring and Write-off of Debt Issuance Costs) for
the three months ended
(In Thousands)
(Unaudited)
Dec. 31, Sept. 30, June 30,
2003 2003 2003
-------- --------- -------
Net income (loss) (16,941) (17,259) (796)
Provision (benefit) for income taxes (1,166) (10,103) (3,726)
Interest expense 7,931 8,069 9,753
Depreciation and amortization 14,578 12,659 12,037
Restructuring Charge/(Credit) 20,046 - (594)
Write off of Debt Issuance Costs - 20,562 -
-------- --------- -------
Adjusted EBITDA 24,448 13,928 16,674
======== ========= =======
Danka Business Systems PLC
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation,
Amortization, Restructuring and Write-off of Debt Issuance Costs)
for the three months ended
(In Thousands)
(Unaudited)
March 31, Dec. 31, Sept. 30, June 30,
2003 2002 2002 2002
--------- -------- -------------------
Net income (loss) (1,058) 3,284 1,756 5,752
Provision (benefit) for
income taxes (386) 1,219 644 2,127
Interest expense 9,785 8,734 6,881 7,423
Depreciation and amortization 14,716 13,991 14,579 14,542
Restructuring Charge/(Credit) - - (555) -
Write off of Debt Issuance Costs - - - -
--------- -------- -------------------
Adjusted EBITDA 23,057 27,228 23,305 29,844
========= ======== ===================
Danka Business Systems PLC
Free cash flow for the three and nine months ended
December 31, 2003 and 2002
(In Thousands)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
----------------- ------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2003 2002 2003 2002
-------- -------- -------- ---------
Net cash provided by operating
activities $8,323 $54,263 $52,273 $121,849
Capital expenditures (4,785) (14,613) (35,872) (32,054)
Proceeds from the sale of
property and equipment 4 229 706 463
-------- -------- -------- ---------
Free cash flow $3,542 $39,879 $17,107 $90,258
======== ======== ======== =========
Danka Business Systems PLC
Net Debt as of December 31, 2003 and March 31, 2003
(In Thousands)
(Unaudited)
For the Three
Months Ended
-------------------
Dec. 31, March 31,
2003 2003
--------- ---------
Current maturities of long-term debt and notes
payable $2,405 $58,443
Long-term debt and notes payable 242,093 174,412
Less: Cash and cash equivalents (105,055) (81,493)
--------- ---------
Net Debt $139,443 $151,362
========= =========
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