DataWave Earns US$494,436 in Fiscal Year 2004, An Increase of 17%.VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography -- DataWave (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension VENTURE:DTV (Digital TeleVision) Transmitting TV using digital signals. The major DTV standards are ATSC (North America), DVB (Europe) and ISDB (Japan). All three use MPEG-2 video compression and Dolby Digital audio compression. DVB and ISDB also include MPEG audio compression. ) (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :DWVSF) announces its net income, as reported under 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 (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) increased 17% to US$494,436 for the fiscal year ended March 31, 2004, from US$421,495 for the fiscal year ended March 31, 2003. EBIDTA EBIDTA Earnings Before Interest Depreciation Taxes and Amortization (earnings before interest expense, depreciation, taxes and amortization) increased 97% for the year ended March 31, 2004 to US$1,417,913 from US$718,470 for last year (see attached schedule for non-GAAP financial measures). Total revenues of US$18,043,679 were similar to last year. Gross margins of US$7,188,014 are US$1,223,138 higher than last year and increased to 40% of total revenues from 33%. Our Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. operation, which generates most of its revenues from the sale of prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. long distance and prepaid wireless phone cards and
PINs to retailers, provided US$10,772,842 of revenues for the year to
March 31, 2004. The US operation experienced revenues of US$7,172,869,
primarily from the sale of prepaid long distance calling cards through
its network of intelligent vending machines vending machine, coin-operated, automatic device for selling goods. Many vending machines are capable of making change, and some of the more sophisticated ones accept paper money or credit cards. .Mr. Emanuel Besides being a common first name, Emanuel (sometimes spelled Emmanuel or Immanuel) may refer to:
"Our point-of-sale activation activation /ac·ti·va·tion/ (ak?ti-va´shun) 1. the act or process of rendering active. 2. the transformation of a proenzyme into an active enzyme by the action of a kinase or another enzyme. 3. technology is well established in the Canadian marketplace with more than 2,750 terminals installed as of June 30, 2004 and we serve a further 600 host-to-host or distributor locations. "Prepaid cellular is the most popular product that we dispense dispense /dis·pense/ (-pens´) to prepare medicines for and distribute them to their users. dis·pense v. To prepare and give out medicines. through our POSA POSA Public Order and Security Act POSA Pattern Oriented Software Architecture POSA Passive Optical Sample Assembly POSA Parks and Open Space Advocates (Seattle, WA) PoSA Pomona College Student Art Gallery systems and is the main contributor to our improvement in gross margin for the fiscal year. We record this revenue on a net agency basis (gross proceeds less payments to suppliers) and during the year gross proceeds increased to US$57,633,025 from US$5,790,818 in the previous year. The increase in gross proceeds shows that we have been successful in rolling out the prepaid cellular product in Canada. Net agency sales recognized under GAAP for prepaid cellular increased from US$61,523 to US$1,655,349. "Our ability to provide a technological solution that generates significant savings for retailers and provides the customer faster service further solidifies our relationships with national chains in Canada and provides a strong base for entering the US market. "Our POS (1) See point of sale and packet over SONET. (2) "Parent over shoulder." See digispeak. POS - point of sale capabilities also give us the ability to add value and authorize To empower another with the legal right to perform an action. The Constitution authorizes Congress to regulate interstate commerce. authorize v. to officially empower someone to act. (See: authority) or reload (1) To load a program from disk into memory once again in order to run it. Reload is entirely different than reinstall. Reinstall means that you have to run the install program from a CD-ROM or floppy disk and perform the installation procedure over again. prepaid products at retail check out registers. This gives us the potential to significantly increase our volume and market share by penetrating penetrating breaching the tissues of the body. the high traffic retail sectors such as grocery stores, quick service, and other high volume retailers. We are already applying this technology with AT&T Corp. and the largest international retailer in the Canadian market. "We continue to evaluate opportunities that incorporate our existing technology infrastructure. The DataWave financial middleware Software that functions as a conversion or translation layer. It is also a consolidator and integrator. Custom-programmed middleware solutions have been developed for decades to enable one application to communicate with another that either runs on a different platform or comes from a infrastructure, integrated with financial banking partners, affords opportunities to deliver Prepaid Cash Card programs to multiple niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. . The DataWave Point of Sale technology, integrated with Prepaid Wireless, Prepaid Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , and PrePaid Voice Over Internet providers Internet provider - Internet Service Provider , can offer distribution of POS products to new and existing customers. We are actively working on product development in these areas and we will announce in the future any consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. agreements that will have a material impact on the Company". A complete analysis of our annual results ending March 31, 2004 is provided on our Form 10K-SB annual report filed on Edgar and is available on the US Securities and Exchange Commission's web site (www.sec.gov) under DataWave's Central Index Number (CIK CIK Central Index Key (SEC) CIK Commission Internationale de Karting (French) CIK Crypto Ignition Key CIK Contribution in Kind CIK Confederazione Italiana Kendo ) 0001000157. Schedule for non-GAAP Financial Measures As a supplement to the Company's 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 presented on a GAAP basis, the Company provides additional non-GAAP measures for 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 . A non-GAAP financial measure is a 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. measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in 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. EBITDA is reconciled with Net Income as follows:
FY2004 FY2003
------ ------
Net Income (GAAP) $494,436 $421,495
Add:
Interest Expense (in Other income) 9,442 -
Depreciation 835,035 296,975
Taxes 79,000 -
---------- ----------
EBITDA $1,417,913 $718,470
---------- ----------
---------- ----------
Management uses EBITDA internally to evaluate its operating performance and for planning and forecasting of the Company's future periods. EBITDA is not a generally accepted earnings measure and should not be considered as an alternative to net income or cash flows as determined in accordance with GAAP. As there is no standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. method of calculating EBITDA, the Company's use of the term may not be comparable with similarly titled measures used by other companies. Fiscal 2004 Consolidated Financial Statements: These financial statements have been prepared by Management in accordance with generally accepted accounting principles 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 are reported in US dollars.
DATAWAVE SYSTEMS INC.
CONSOLIDATED BALANCE SHEETS
Years ended March 31, 2004 and 2003
(Expressed in United States dollars, except share amounts)
--------------------------------------------------------------------
2004 2003
------------ ------------
Assets
Current
Cash and cash equivalents $ 852,406 $ 2,139,063
Accounts receivable and other 4,337,034 2,031,895
Inventories 2,234,443 1,225,391
Prepaid expenses and deposits 451,377 482,549
Deferred income taxes - 79,000
------------ ------------
Total current assets 7,875,260 5,957,898
Restricted cash 54,000 54,000
Machinery and equipment, net 2,332,997 1,488,682
Deferred development costs 49,335 -
Other long term receivables 110,865 -
Goodwill 1,845,619 1,750,639
Intangible assets, net 378,529 442,510
------------ ------------
Total assets $ 12,646,605 $ 9,693,729
------------ ------------
------------ ------------
Liabilities
Current
Accounts payable and accrued
liabilities $ 7,638,011 $ 5,825,062
Deferred revenue 61,572 146,420
Current portion of capital lease
obligations 64,641 -
Current portion of deferred inducement 27,716 -
------------ ------------
Total current liabilities 7,791,940 5,971,482
Capital lease obligations 125,026 -
Deferred income taxes 267,766 267,766
Deferred inducement 280,835 -
------------ ------------
Total liabilities 8,465,567 6,239,248
------------ ------------
Shareholders' equity
Common shares
Authorized
100,000,000 common shares, no par value
Issued
43,889,334 shares issued and outstanding
at March 31, 2004 and March 31, 2003 15,006,743 15,006,743
Additional paid-in capital 2,725,492 2,725,492
Accumulated other comprehensive income 277,966 45,845
Accumulated deficit (13,829,163) (14,323,599)
------------ ------------
Total shareholders' equity 4,181,038 3,454,481
------------ ------------
Total liabilities and shareholders'
equity $ 12,646,605 $ 9,693,729
------------ ------------
------------ ------------
DATAWAVE SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended March 31, 2004 and 2003
(Expressed in United States dollars, except share amounts)
--------------------------------------------------------------------
2004 2003
------------ ------------
Revenue
Sales $ 11,144,952 $ 11,126,680
Net agency sales 6,898,727 6,994,548
------------ ------------
Total revenue 18,043,679 18,121,228
------------ ------------
------------ ------------
Operating costs and expenses
Cost of revenues 10,855,665 12,156,352
General and administrative 2,812,821 2,704,411
Selling and marketing 1,562,150 1,492,623
Product development 1,405,248 1,096,792
Depreciation and amortization 835,035 296,975
------------ ------------
Total operating costs and expenses 17,470,919 17,747,153
------------ ------------
Operating income 572,760 374,075
Other income 13,888 21,891
Equity loss from investee (64,491) -
Gain on foreign exchange 51,279 25,529
------------ ------------
Income before income taxes 573,436 421,495
Income taxes 79,000 -
------------ ------------
Net income $ 494,436 $ 421,495
------------ ------------
------------ ------------
Net income per share
Basic and diluted $ 0.01 $ 0.01
------------ ------------
------------ ------------
Weighted-average number of common
shares - basic and diluted 43,889,334 43,889,334
------------ ------------
------------ ------------
DATAWAVE SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended March 31, 2004 and 2003
(Expressed in United States dollars, except share amounts)
--------------------------------------------------------------------
2004 2003
------------ ------------
Operating activities
Net income $ 494,436 $ 421,495
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 835,035 296,975
Equity loss from investee 64,491 -
Deferred income taxes 79,000 -
Net change in non-cash operating
assets and liabilities
Accounts receivable and other (2,305,139) 76,559
Inventories (1,009,052) (1,780,511)
Prepaid expenses 31,172 65,282
Accounts payable and accrued
liabilities 1,812,949 2,567,018
Deferred revenue (84,848) (639,937)
------------ ------------
Net cash (used in) provided by operating
activities (81,956) 1,006,881
------------ ------------
Investing activities
Restricted cash - (24,000)
Deferred development costs (49,335) -
Deferred inducements, net of related
receivables 197,686 -
Purchase of machinery and equipment (1,170,118) (725,706)
------------ ------------
Net cash (used in) investing activities (1,021,767) (749,706)
------------ ------------
Financing activity
Repayment of capital lease obligations (182,934) -
------------ ------------
Net cash (used in) financing activity (182,934) -
------------ ------------
(Decrease) increase in cash (1,286,657) 257,175
Cash and cash equivalents, beginning of
period 2,139,063 1,881,888
------------ ------------
Cash and cash equivalents, end of period $ 852,406 $ 2,139,063
------------ ------------
------------ ------------
Supplemental disclosure of cash flow
information:
Income taxes paid $ - $ 1,520
------------ ------------
------------ ------------
Supplemental disclosure of non-cash
financing and investing items
Equipment acquired under capital
lease obligations $ 349,155 $ -
Tenant inducements for leased premises $ 540,466 $ -
About DataWave (http://www.datawave.com) DataWave has been an innovator and developer of prepaid and stored-value programs and merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. solutions since it was founded in 1994. DataWave pioneered a system that allows for point-of-sale activation of high value, high shrinkage Shrinkage The amount by which inventory on hand is shorter than the amount of inventory recorded. Notes: The missing inventory could be due to theft, damage, or book keeping errors. products, such as cash cards and phone cards. The system works equally well over the Internet, through intelligent freestanding free·stand·ing adj. Standing or operating independently of anything else: a freestanding bell tower; a freestanding maternity clinic. vending machines or with various card activation devices, including cash registers. DataWave Systems Inc. John Gunn John Gunn may refer to:
General Manager, CFO See Chief Financial Officer. Legal Notice Regarding 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. : Statements in this news release which are not purely historical are forward-looking statements, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements in this release include, but are not limited, references to: our terminals have captured a significant share of the Canadian prepaid cellular market, our ability to generate significant savings for retailers and provide the customer faster service, that we have a strong base for entering the US market, that prepaid cellular is our most popular product and that we have the potential to significantly increase our volume and market share. It is important to note that the company's actual results and outcomes may differ materially from those contained in the forward-looking statements contained in this release. Factors that could cause actual results to differ materially include, but are not limited to, risks and uncertainties such as: our products and systems operating as designed; competition who may develop better or cheaper systems; our ability to finance our planned growth; continued market acceptance of our existing products and whether we will achieve broad acceptance of our new products - particularly our Point of Sale Activation (POSA) systems - in the new markets that we have identified; and the overall success of our company in general. Although we believe that the beliefs, plans, expectations and intentions contained in this news release are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Readers should refer to the risk disclosures outlined in our annual report on Form 10-KSB for the year ended March 31, 2004, filed with the United States Securities and Exchange Commission. "DataWave" is a registered trademark of the Company. All other trademarks and trade names referred to are the property of their respective owners. The TSX Venture Exchange TSX Venture Exchange Originally called the Canadian Venture Exchange (CDNX), this was a result of the merger of the Vancouver and Alberta stock exchanges. The goal of TSX Venture Exchange is to provide venture companies with effective access to capital while protecting investors. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. |
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