EMJ Data Systems Ltd. Third Quarter Results -- Net Income Up 165%.Business Editors GUELPH Guelph (gwĕlf), city (1991 pop. 87,976), S Ont., Canada, on the Speed River. It is an industrial and agricultural center located in one of Canada's most densely populated regions. , Ontario--(BUSINESS WIRE)--June 1, 2000 (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :EMJ EMJ Emergency Medicine Journal .) Solid 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 , lower tax rates and a significant liquidity event in EMJ's incubator incubator, apparatus for the maintenance of controlled conditions in which eggs can be hatched artificially. Incubator houses with double walls of mud, a fireroom, and several compartments each holding about 6,000 hens' eggs were developed in ancient times; the strategy led the way to higher earnings in EMJ's third quarter. Net income for the third quarter increased 165% to $2.7 million or $0.35 per common share compared to $1.0 million or $0.14 per common share for the third quarter in 1999. EMJ's twelve-month trailing earnings Trailing earnings Past earnings. Often used in the context of the price earnings ratio. This ratio is usually distinguished as price to trailing earnings (today's price divided by the most recent 12 months of earnings) versus price to prospective earnings (today's price divided by per share is $0.61per share. Sales for the third quarter were $44.7 million compared to $52.8 million for the comparable period the previous year, a decrease of 15.5%. A decline in government sales accounts for the decrease. A government contract in 1999 was completed, and the new one for 2000 has not yet been awarded. The company is optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that the contract will be awarded soon. In addition, Windows and Unix products suffered from sluggish sales due to a Year 2000 "hangover". Companies were doing final installations of equipment and software purchased in the last quarter of 1999. Sales in the current quarter so far would indicate that this "hangover" is cured and sales volumes are improving versus a year ago. The gross margin for the quarter increased to 9.3% from 8.1% the previous year as the 1999 government business was at lower margins. EMJ continues to focus on profits - not just sales. EMJ has had an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for 80 consecutive quarters. EMJ has acquired equity interests or warrants in a number of small innovative firms - an "incubator" strategy. EMJ adds value to these firms in several ways including distribution of their product, serving on their Board of Directors, or offering informal advice or market insights. As a result, EMJ is able to get involved in firms at a very early stage of their development, with minimal investment and risk while yielding maximum return. In the third quarter, EMJ realized a net gain on sale of investments of $1.2 million or $0.15 per share as a result of these activities. EMJ's incubator investments as at April 30, 2000 include: Atlantic Systems Group Inc. (301,000 shares - Canadian Venture Exchange The Canadian Venture Exchange (CDNX) is now a defunct stock exchange having been acquired by the TSX Group in 2001 and renamed the TSX Venture Exchange. History of the Canadian Venture Exchange (CDNX) - ASGT ASGT American Society of Gene Therapy ASGT Adult Sergeant (UK Air Training Corps) ASGT Auxiliary Steam Generator ); Aztech Aztech is a company which designs and manufactures voice and data communications products. Founded in 1986, Aztech was listed on SESDAQ on the Stock Exchange of Singapore in 1994. The company has since grown much bigger. New Media Corp. (2 million shares - Canadian Venture Exchange - ANM ANM Azienda Napoletana Mobilità (Italian) ANM Advancing Native Missions ANM Answer Message (telecommunications) ANM Auxiliary Nurse Midwife ANM Arab Nationalist Movement ANM Advanced Network Management ; BorderWare Technologies Inc. (6.9%); Free Software Club (over 900,000 shares - 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 BBS (1) (Bulletin Board System) A computer system used as an information source and forum for a particular interest group. They were widely used in the U.S. FSWC FSWC Florida Suncoast Writers' Conference FSWC Family Services Women's Center (Indiana) FSWC Flight Simulator Water Configurator FSWC Flight Simulator Water Configurator ); IamNatural.com (28%); EMJ 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 (20%); a small investment in Rebel.com Inc. and a number of other companies. These assets are valued on the balance sheet at zero value. It is reasonable to expect that the minimum realized profit Realized profit (or loss) A capital gain or loss on securities held in a portfolio that has become actual by the sale or other type of surrender of one or many securities. on these investments in the fourth quarter will be in excess of $0.05 per share. Selling, general and administrative expenses for the quarter decreased by $138,000 but increased as a percentage of sales to 4.8% from 4.3% for the previous year. In 1999, EMJ recorded a future income tax benefit of $2.8 million as a result of its acquisition of Sidus Systems Inc. This income tax benefit has been reduced by $392,000 for the nine months ended April 30, 2000. The Company has also recognized an additional benefit of $963,000 from the unrecognized portion of the deferred income tax benefit. The Company's balance sheet improved compared with a year ago. The current ratio increased to 1.53 from 1.29 and the debt to equity ratio The debt to equity ratio (D/E) is a financial ratio indicating the relative proportion of equity and debt used to finance a company's assets. It is equal to total debt divided by shareholders' equity. improved from 2.36 to 1.36. This improvement came from a combination of operating earnings, collection of a large lease payment, lower tax payments, and control over other current assets Other Current Assets A balance sheet item that includes the value of non-cash assets due within one year. Notes: Examples are things like prepaid expenses and accounts receivable. . The improvement of the already strong balance sheet will reduce borrowing costs. EMJ Data Systems Ltd., headquartered in Guelph, Ontario Guelph (IPA: gwɛlf) (population 114,943[1]) is a city located in the Southwestern region of Ontario, Canada. , is a 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. , publicly owned Publicly owned can refer to:
superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" products for Apple, Digital Audio/Video, Internetworking internetworking - The interconnection of two or more networks, usually local area networks so that data can pass between hosts on the different networks as though they were one network. This requires some kind of router or gateway. , 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 and Unix. EMJ Data Systems Ltd. has branch offices in 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. , Calgary, Winnipeg, Ottawa, Markham, Montreal and Halifax, as well as one office 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. . Interested parties can reach EMJ via the World Wide Web at the award winning website www.emj.ca.
EMJ Data Systems Ltd.
Consolidated Balance Sheets
As at April 30
---------------------------------------------------------------
($000s unaudited) 2000 1999
---------------------------------------------------------------
ASSETS
Current
Accounts receivable - Trade 19,840 24,715
- Other 953 734
Inventory 15,232 12,561
Prepaid expenses 655 601
Future income tax benefits 489 2,812
Loans receivable-current portion 200 404
Investment in sales-type leases-current
portion 1,252 1,452
---------------------------------------------------------------
Total current assets 38,621 43,279
---------------------------------------------------------------
Deferred income taxes - 18
Future income tax benefits-net of
current portion 1,931 -
Loans receivable-net of current portion 317 -
Investment in sales-type leases-net of
current portion 49 1,084
Capital assets 3,375 3,639
Investments 33 184
---------------------------------------------------------------
Total assets 44,326 48,204
---------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness 18,849 17,467
Accounts payable and accrued charges 6,183 13,905
Income taxes payable 174 524
Note payable on acquisition - 1,600
---------------------------------------------------------------
Total current liabilities 25,206 33,496
---------------------------------------------------------------
Long-term debt 376 358
---------------------------------------------------------------
Shareholders' equity
Share capital 7,171 6,378
Share purchase warrants 344 344
Retained earnings 11,229 7,628
---------------------------------------------------------------
Total shareholders' equity 18,744 14,350
---------------------------------------------------------------
Total liabilities and shareholders' equity 44,326 48,204
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EMJ Data Systems Ltd.
Consolidated Statements of Income and Retained Earnings
Three Months Ended Nine Months Ended
April 30 April 30
---------------------------------------------------------------
($000s except per share
figures, unaudited) 2000 1999 2000 1999
---------------------------------------------------------------
SALES 44,674 52,843 122,065 127,562
Cost of goods sold 40,507 48,572 110,985 115,883
---------------------------------------------------------------
Gross margin 4,167 4,271 11,080 11,679
EXPENSES
Selling, general and
administrative 2,140 2,278 6,682 7,118
Interest, net 222 179 676 627
---------------------------------------------------------------
2,362 2,457 7,358 7,745
---------------------------------------------------------------
Income from
operations 1,805 1,814 3,722 3,934
Gain on sale of
investments 1,154 3 1,154 406
---------------------------------------------------------------
Income before
provision
for income taxes 2,959 1,817 4,876 4,340
Provision for
income taxes 304 815 646 1,470
---------------------------------------------------------------
Net income
for period 2,655 1,002 4,230 2,870
Retained earnings,
beginning of
period 8,574 6,626 7,610 5,193
Dividends - - (611) (435)
---------------------------------------------------------------
Retained earnings,
end of period 11,229 7,628 11,229 7,628
---------------------------------------------------------------
Earnings per share $0.35 $0.14 $0.56 $0.40
---------------------------------------------------------------
Weighted average
number of shares
outstanding 7,665,619 7,307,454 7,546,897 7,269,666
---------------------------------------------------------------
EMJ Data Systems Ltd.
Consolidated Statements of Cash Flows
Nine Months Ended April 30
---------------------------------------------------------------
($000s unaudited) 2000 1999
---------------------------------------------------------------
OPERATING ACTIVITIES
Net income for period 4,230 2,870
Adjustments for non-cash items:
Amortization 215 281
Gain on sale of investments, net (1,154) (406)
---------------------------------------------------------------
3,291 2,745
---------------------------------------------------------------
Change in non-cash working capital components
(Increase) in trade and other receivables (1,189) (10,557)
(Increase) in inventories (4,141) (1,554)
Decrease (increase) in prepaid expenses 57 (129)
Decrease in income taxes recoverable - 544
Decrease in future income tax benefits 392 625
(Decrease) increase in accounts payable (1,218) 7,194
(Decrease) increase in income taxes payable (946) 524
---------------------------------------------------------------
(7,045) (3,353)
---------------------------------------------------------------
Cash flows (used in) operating activities (3,754) (608)
---------------------------------------------------------------
INVESTING ACTIVITIES
Decrease in investment in sales-type leases 1,275 1,983
Capital asset additions, net (24) (141)
(Increase) in loans receivable (80) (404)
(Increase) in investments (27) -
Acquisitions - (182)
Proceeds on sale of investments 1,387 406
---------------------------------------------------------------
Cash flows from investing activities 2,531 1,662
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FINANCING ACTIVITIES
Increase in bank loan 3,378 378
Repayment of note payable (1,600) (625)
Other (219) 12
Dividends paid (611) (435)
Issuance of common shares 800 3
Deferred income tax benefits
related to share issue costs - 54
---------------------------------------------------------------
Cash flows from (used in)
financing activities 1,748 (613)
---------------------------------------------------------------
Net cash provided during period 525 441
Bank overdraft, beginning of period (937) (1,668)
---------------------------------------------------------------
Bank overdraft, end of period (412) (1,227)
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