DataWave Reports Five-Fold Increase in Operating Income on 57% Increase in Second Quarter Revenue.WAYNE Wayne, city (1990 pop. 19,899), Wayne co., SE Mich., a suburb of Detroit, on the Lower Rouge River; inc. as a village 1869, and with surrounding areas as a city 1960. It has automobile and aircraft industries and other varied manufactures. , N.J. -- Company Generates Strong 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 With Significant Increase in Cash Position DataWave Systems, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : DWVS), a premier provider of prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. and stored value delivery systems, today reported financial results for
the second quarter and six months ended September September: see month. 30, 2005.
Total revenue for the second quarter of fiscal 2006 increased 57% to $8.4 million, compared to $5.3 million for the same period in fiscal 2005. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the second quarter of fiscal 2006 was $435,000 versus operating income of $81,000 for the same period last year. Net income for the second quarter of fiscal 2006 was $297,000, or $0.01 per 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. share, versus net income of $159,000, or $0.00 per diluted share, for the same period last year. The company generated approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $3.5 million of cash flow from operations during the second quarter, resulting in approximately $5.2 million of cash and cash equivalents as of September 30, 2005. Total revenue for the six months ended September 30, 2005 increased 55% to $15.3 million, compared to $9.8 million for the same period in fiscal 2005. Operating income for the six months ended September 30, 2005 was $533,000 versus operating income of $170,000 for the same period last year. Net income for the six months ended September 30, 2005 was $435,000, or $0.01 per diluted share, versus net income of $241,000, or $0.01 per diluted share, for the same period last year. Josh JOSH Joshua JOSH Job Scheduling Hierarchically Emanuel Besides being a common first name, Emanuel (sometimes spelled Emmanuel or Immanuel) may refer to:
integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" year-over-year increases in revenue, as we continued to aggressively expand our distribution network. Having established relationships with the majority of all major retailers 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 , we are leveraging our dominant position within Canada and our strong retail relationships in order to launch our major expansion into the U.S. We are also accelerating the introduction of new products such as cash cards and third party gift cards through our existing network, as well as new channel partners throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Overall, we have built a highly scaleable business model, as illustrated by our five-fold Adj. 1. five-fold - having five units or components fivefold, quintuple multiple - having or involving or consisting of more than one part or entity or individual; "multiple birth"; "multiple ownership"; "made multiple copies of the speech"; "his multiple improvement in operating income on top of a 57% increase in revenue, which also generates substantial cash flow, providing us more than sufficient capital to continue our strong organic growth." As of September 30, 2005, the Company had more than 5,380 terminals installed, and more than 850 host-to-host or distributor locations. Daily transactions processed for the quarter averaged more than 36,100 compared with 27,700 a year ago. About DataWave 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 systems that allow for point-of-sale point of sale n. pl. points of sale A business or place where a product or service can be purchased. Also called point of purchase. point 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. 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, prepaid phone cards and prepaid wireless time. These systems work equally well over the 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 , through intelligent freestanding free·stand·ing adj. Standing or operating independently of anything else: a freestanding bell tower; a freestanding maternity clinic. 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. and 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 terminals, or with various card activation devices, including cash registers. This press release contains "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. " within the meaning of 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. Examples of forward-looking statements in this press release include statements about the Company leveraging its position in the 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. market to expand into the U.S. market, the continued introduction of new products into the market by the Company and the scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it of the Company's business model. Generally, words such as "expect" "believe", "anticipate", "may", "will", "plan", "intend", "estimate", "could", and other similar expressions are intended to identify forward-looking statements. The forward-looking statements are based on the Company's future plans, strategies, projections and predictions. They should not be construed in any manner as guaranteeing that such results will in fact occur. They are subject to risks and uncertainties that could cause the actual results to differ from those set froth in the forward-looking statements. Such risk factors include, among others, future demand for the prepaid products and specifically the Company's products and brand, the Company's ability to attract new clients and retain existing clients, competition from other businesses providing similar products, the Company's ability to maintain profitability, control expenses and successfully execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution its business strategy. These and other risks and uncertainties are discussed in more detail in the Company's periodic reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, 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. , which are available at the SEC website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events. "DataWave" is a registered trademark of the Company. All other trademarks and trade names referred to are the property of their respective owners.
DATAWAVE SYSTEMS INC.
CONSOLIDATED BALANCE SHEETS
As at September 30, 2005 and March 31,2005
(Expressed in United States dollars, except share amounts)
(Unaudited)
----------------------------------------------------------------------
September 30 March 31
2005 2005
------------------------------------------ ---------------------------
Assets
Current
Cash and cash equivalents $ 5,172,927 $ 4,560,512
Accounts receivable and other 7,026,079 7,366,712
Inventories 5,954,265 4,155,614
Prepaid expenses and deposits 514,876 336,800
------------------------------------------ ---------------------------
Total current assets 18,668,147 16,419,638
------------------------------------------ ---------------------------
Machinery and equipment, net 2,518,106 2,453,571
Equity investment 103,849 39,387
Goodwill 1,885,429 1,857,985
Intangible assets, net 996,309 1,079,843
Other assets 209,252 225,575
------------------------------------------ ---------------------------
Total assets $ 24,381,092 $ 22,075,999
------------------------------------------ ---------------------------
Liabilities
Current
Accounts payable and accrued liabilities $ 15,846,117 $ 14,547,422
Deferred revenue 1,252,984 839,303
Other current liabilities 137,952 109,346
------------------------------------------ ---------------------------
Total current liabilities 17,237,053 15,496,071
------------------------------------------ ---------------------------
Deferred income taxes 322,437 309,509
Deferred inducement 353,854 342,184
Convertible promissory note 600,000 600,000
Other liabilities - 61,668
------------------------------------------ ---------------------------
Total liabilities 18,513,344 16,809,432
------------------------------------------ ---------------------------
Shareholders' equity
Common shares
Authorized, 100,000,000 common shares,
$0.001 par value
Issued, 46,826,834 shares issued and
outstanding at
September 30, 2005 and March 31, 2005 46,827 46,827
Additional paid-in capital 17,920,408 17,920,408
Accumulated other comprehensive income 631,491 465,048
Accumulated deficit (12,730,978) (13,165,716)
------------------------------------------ ---------------------------
Total shareholders' equity 5,867,748 5,266,567
------------------------------------------ ---------------------------
Total liabilities and shareholders' equity $ 24,381,092 $ 22,075,999
------------------------------------------ ---------------------------
DATAWAVE SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and six month period ended September 30, 2005 and 2004
(Expressed in United States dollars, except share amounts)
(Unaudited)
----------------------------------------------------------------------
Three months ended Six months ended
September 30, September 30,
2005 2004 2005 2004
------------------- --------------------------------------------------
Revenue
Sales $ 6,333,326 $ 3,470,894 $11,386,914 $6,235,101
Net agency sales 2,018,358 1,840,027 3,917,176 3,611,429
------------------- --------------------------------------------------
Total revenue 8,351,684 5,310,921 15,304,090 9,846,530
Cost of revenues
(exclusive of
depreciation and
amortization) 5,627,202 3,282,883 10,186,565 5,929,937
------------------- --------------------------------------------------
2,724,482 2,028,038 5,117,525 3,916,593
------------------- --------------------------------------------------
Operating costs and
expenses
General and
administrative 1,054,193 819,880 2,002,461 1,578,668
Selling and
marketing 468,757 399,384 1,050,305 826,374
Product
development 397,160 331,146 793,733 621,401
Depreciation and
amortization 369,284 303,039 738,471 552,649
Merger costs - 93,873 - 167,015
------------------- --------------------------------------------------
Total operating
costs and expenses 2,289,394 1,947,322 4,584,970 3,746,107
------------------- --------------------------------------------------
------------------- --------------------------------------------------
Operating income 435,088 80,716 532,555 170,486
------------------- --------------------------------------------------
Other income 38,270 3,454 73,134 2,894
Gain on foreign
exchange 9,755 39,210 9,752 35,783
------------------- --------------------------------------------------
Income before
income taxes 483,113 123,380 615,441 209,163
------------------- --------------------------------------------------
Income taxes (216,460) - (245,165) -
Equity income from
investee 30,214 35,367 64,462 31,812
------------------- --------------------------------------------------
Net income $ 296,867 $ 158,747 $ 434,738 $ 240,975
------------------- ---------------------------===========-===========
Net income per
share $
- basic $ 0.01 $ 0.00 $ 0.01 $ 0.01
------------------- --------------------------------------------------
- diluted $ 0.01 $ 0.00 $ 0.01 $ 0.01
------------------- --------------------------------------------------
Weighted-average
number of common
shares
- basic 46,826,834 43,889,334 46,826,834 43,889,334
------------------- --------------------------------------------------
- diluted 56,562,342 43,889,334 56,484,807 43,889,334
------------------- --------------------------------------------------
DATAWAVE SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six month period ended September 30, 2005 and 2004
(Expressed in United States dollars, except share amounts)
(Unaudited)
----------------------------------------------------------------------
Six months ended
September 30,
2005 2004
------------------------------------------ --------------- -----------
Operating activities
Net income $ 434,738 $ 240,975
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 738,471 552,649
Equity (income) loss from investee (64,462) (31,812)
Amortization of lease inducement 12,735 10,809
Net change in non-cash operating assets
and liabilities
Accounts receivable and other 340,633 (726,861)
Inventories (1,798,651) (1,909,826)
Prepaid expenses and deposits (178,076) 91,725
Accounts payable and accrued
liabilities 1,298,695 3,477,588
Deferred revenue 413,681 352,387
------------------------------------------ --------------- -----------
Net cash (used in) provided by operating
activities 1,197,764 2,057,634
------------------------------------------ --------------- -----------
Investing activity
Purchase of machinery and equipment (698,891) (660,707)
------------------------------------------ --------------- -----------
Net cash used in investing activity (698,891) (660,707)
------------------------------------------ --------------- -----------
Financing activity
Repayment of capital lease obligations (34,127) (31,637)
------------------------------------------ --------------- -----------
Net cash used in financing activity (34,127) (31,637)
------------------------------------------ --------------- -----------
Effect of exchange rate changes on cash
and cash equivalents 147,669 32,235
------------------------------------------ --------------- -----------
(Decrease) increase in cash 612,415 1,397,525
Cash and cash equivalents, beginning of
period 4,560,512 852,406
------------------------------------------ --------------- -----------
Cash and cash equivalents, end of period $ 5,172,927 $ 2,249,931
------------------------------------------ --------------- -----------
Note: These financial statements have been prepared by Management 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 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. |
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