Island Pacific, Inc. Reports Third Quarter Results.Business Editors IRVINE Irvine, town, Scotland Irvine (ûr`vĭn), town (1991 pop. 32,507), North Ayrshire, SW Scotland, on the Irvine River estuary. Industries include iron and brass foundries. Other products are chemicals, electric goods, and clothing. , Calif.--(BUSINESS WIRE)--Feb. 13, 2004 Combination with Page Digital and Proposed Acquisition of Retail Technologies International Positions Company for Future Growth Island Pacific (AMEX AMEX See: American Stock Exchange :IPI (Intelligent Peripheral Interface) A high-speed hard disk interface used with minis and mainframes that transfers data in the 10 to 25 MBytes/sec range. IPI-2 and IPI-3 refer to differences in the command set that they execute. See hard disk. ), a leading global provider of multi-channel See multichannel. application software technology and services for the retail industry, today announced fiscal results for the third quarter ended December December: see month. 31, 2003. For the third fiscal quarter ended December 31, 2003, the Company reported revenues of $5.1 million, compared to the $7.1 million reported in the same period of the prior fiscal year. For the three months ended December 31, 2003, the company reported a loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of ($346,000), compared to income from continuing operations of $391,000 for the same period of the prior fiscal year. The Company reported a net loss available to common stockholders of ($530,000), 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 $131,000, or $0.01 per share, for the year-earlier quarter. For the fiscal 2004 period, the company recorded 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 of $438,000, compared to $1.6 million in the same period of the prior fiscal year. The Company reported gross profit of $3.7 million for the period ended December 31, 2003, versus $4.9 million for the year-earlier period. For the nine months ended December 31, 2003, the Company reported revenues of $17.3 million, compared to $15.8 million reported for the same period last year; EBITDA of $3.4 million versus an EBITDA of $581,000; and income from continuing operations of $638,000, compared to a loss from continuing operations of ($4.0) million for the same period last year. "We are disappointed with the results of our sales and marketing initiatives and the fact that several significant orders we expected to receive in the third quarter were delayed," said Harvey Harvey, city (1990 pop. 29,771), Cook co., NE Ill., a suburb S of Chicago; inc. 1895. Its manufactures include steel castings, metal products, chemicals, machinery, and electronic equipment. Harvey has an oil research center. The city was founded by Turlington W. Braun Braun , Eva 1912-1945. German lover and later wife of Adolf Hitler. They began living together in 1936, but the liaison was kept secret, and she was never seen in public with him. They were married hours before their double suicide on April 30, 1945. , Island Pacific's Chairman and 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. . "Our results for the quarter were somewhat impacted by the acquisition and integration of Page Digital and the negotiations to acquire Retail Technologies International (RTI RTI - Return from interrupt ), but we believe that these combinations will make Island Pacific a formidable provider of technology solutions to small and mid-sized retailers in the future, as well as strengthen our management team. Our expectations are that with the integration of Page Digital and RTI and their corresponding sales and marketing teams, our ability to penetrate new and existing markets will significantly enhance our ability to sell and market all of our products more effectively. In fact, the response from RTI's reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. channel has exceeded our expectations for potential sales of IP Express. "Next week, over 40 RTI distribution partners will be attending training at our Irvine facility, which will enable them to not only sell IP Express but a number of our alliance products as well. We are dedicating a considerable amount of time integrating products and personnel so that the transition for our customers and resellers will be as seamless as possible. We should also benefit from a rationalization rationalization, in psychology: see defense mechanism. of overhead. I am pleased to report that the customer response, as demonstrated at our recent User's Conference, was overwhelmingly positive to our strategic direction. "The strategy that we have been executing over the last 12 months has now enabled us to become a fully integrated multi-channel retail solutions provider to small through large specialty retailers," continued Mr. Braun. "While revenue growth has been slower than expected, we are confident that we have all of the pieces in place to generate significant revenue and earnings growth over time. We believe in the coming months that customers, partners, and shareholders will see the power of this combination." Some of the highlights of the third quarter included: -- Acquisition of Page Digital. Island Pacific announced the acquisition of Page Digital, a leading provider of open systems-based, end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. , multi-channel commerce solutions. The acquisition closed in early February February: see month. . Each company has already successfully cross-marketed products to the other company's respective client base. -- Letter of Intent. Subsequent to the end of the third quarter, the Company announced that it had entered into a Letter of Intent to acquire RTI. RTI is a leading provider of retail management store solutions, via an international network of resellers, to small through mid-tier retailers. Shortly after the announcement, Island Pacific signed its first customer, Tadashi Shoji shoji In Japanese architecture, sliding partition doors and windows made of a latticework wooden frame and covered with a tough, translucent white paper. When closed, they softly diffuse light throughout the house. and Associates, Inc. Tadashi is an upscale women's apparel company. -- New customer wins. The Perfume perfume, aroma produced by the essential oils of plants and by synthetic aromatics. The burning of incense that accompanied the religious rites of ancient China, Palestine, and Egypt led gradually to the personal use of perfume. Shop, a leading European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. retailer, signed a contract to license Island Pacific's 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. Solution product running on an IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) iSeries A family of midrange servers from IBM that are based on IBM's POWER CPUs and run under the i5/OS, OS/400 and AIX operating systems. Windows and Linux can also be run in an attached x86-based server (see IXS). platform, as well as implementation services and client training. -- Signing of key value-added reseller A value-added reseller (VAR) is a company that adds some feature(s) to an existing product(s), then resells it (usually to end-users) as an integrated product or complete "turn-key" solution. . The company announced the signing of an agreement with i2 Technologies Inc., a leading provider of end-to-end supply chain management solutions. Island Pacific will market, sell, install, interface to, and support i2's Merchandise Planning Merchandise Planning is a strategic and systematic approach used by retailers, particularly in fashion and non-food areas. It is aimed at maximising return on investment, through planning and monitoring sales, margins and inventory in order to increase profitability. , INFOREM INFOREM Inventory Forecasting and Replenishment Module (inventory control) Forecasting and Replenishment replenishment the addition of an appropriate quantity of properly prepared solution containing the correct concentration of chemicals to the developer solutions used in radiography. , and Demand Profiling solutions. -- New product sales. The Company had a positive response to newly released IP Viewpoint, a report generating tool based on the iSeries platform. Additionally, many new customers deployed IP Synaro WebStore, providing real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. integration between online storefront A store on the Internet that offers items for sale and is capable of handling the financial transaction online. See cybermall and digital money. and fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. systems. -- Improved balance sheet. The Company cancelled can·cel v. can·celed also can·celled, can·cel·ing also can·cel·ling, can·cels also can·cels v.tr. 1. To cross out with lines or other markings. See Synonyms at erase. 2. a convertible note with a face value of $1.4 million and warrants to purchase 2.5 million shares of the company's common stock held by Toys "R" Us Toys "R" Us (currently typeset as ToYsЯuS in the logo) is a toy store chain based in the United States, Canada, Australia,The Netherlands, South Africa, Hong Kong and the United Kingdom. , 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 an agreement which provided, inter alia [Latin, Among other things.] A phrase used in Pleading to designate that a particular statute set out therein is only a part of the statute that is relevant to the facts of the lawsuit and not the entire statute. , for providing software and services to the toy retailer. Business Outlook Island Pacific expects to report fourth quarter revenue, for the period ending March 31, 2004, of $7 million to $8 million, and to generate net income of $0.02 to $0.03 per diluted share. This outlook includes revenue from the Page Digital acquisition, but excludes any revenue from RTI. The Company's executives will hold a conference call. The conference call will take place at 9 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . Interested participants should call 800-867-0938. There will be a playback Playback could mean:
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 by going to www.actioncast.acttel.com and entering the event id 20431. About Island Pacific For more than 25 years, Island Pacific has developed a reputation for delivering high-quality, high-reliability software to the retail industry. Recently, the company has transformed itself into the low-cost, high-value provider of retail enterprise solutions by developing breakthrough technologies, and by partnering with leading consulting organizations to provide next-generation services. In addition, Island Pacific leverages its years of experience with emerging and established retailers to craft creative solutions tailored for each customer's needs. As a result, Island Pacific is the definitive resource for scalable, flexible, and affordable solutions for retailers around the world. With nearly 200 customers, Island Pacific and its solutions are represented in more than 30,000 stores worldwide, and manage more than 1.5 billion transactions annually. Founded in 1978, the company is headquartered in Irvine, and has offices 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 the United Kingdom. For more information, please visit www.islandpacific.com. Certain statements contained in this news release regarding matters that are not historical facts 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. . These statements relate to future events or the Company's future performance. These statements are only predictions. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the risk factors listed in the Company's (SVI SVI Serveur Vocal Intéractif (French) SVI Sludge Volume Index (biological wastewater treatment - clarifiers) SVI Shareholder Value Index SVI Schweizerischer Verband der Informatikorganisationen ) Form 10-KA for the fiscal year ended March 31, 2003, and other risk factors identified from time to time in the Company's filings with the Securities and Exchange Commission. IPI undertakes no obligation to release publicly any revisions to the 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 after the date of this news release or to reflect the occurrence of unanticipated events.
Island Pacific, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
Dec. 31, March 31,
2003 2003
----------- ---------
Assets (unaudited) (audited)
Current Assets:
Cash and cash equivalents $5,131 $1,319
Accounts Receivable, net 5,500 3,974
Other receivables 113 97
Inventories 84 91
Current portion of non-compete agreements 748 917
Net asset from discontinued operations - 309
Prepaid expenses and other current assets 965 225
----------- ---------
Total Current Assets 12,541 6,932
Note receivable 162 -
Furniture and equipment, net 367 380
Capitalized software, net 19,854 14,804
Goodwill, net 14,795 14,795
Non-compete agreements, net 149 668
Other assets 29 58
----------- ---------
Total Assets $47,897 $37,637
=========== =========
Current Liabilities:
Debt due to stockholders $- $1,320
Current portion of long-term debts - 149
Convertible note 500 500
Accounts payable 667 2,941
Accrued expenses 2,454 4,517
Deferred revenue 3,242 1,561
Income tax payable 64 -
----------- ---------
Total current liabilities 6,927 10,988
Convertible debentures - 2,726
Deferred rent 65 81
----------- ---------
Total liabilities 6,992 13,795
----------- ---------
Stockholders' equity
Preferred stock 14,100 14,100
Committed stock - 1,383
Common stock 5 4
Additional paid-in capital 66,652 57,751
Retained deficits (39,852) (40,490)
Treasury stock - (8,906)
----------- ---------
Total Stockholders' Equity 40,905 23,842
----------- ---------
Total liabilities and stockholders' equity $47,897 $37,637
=========== =========
Island Pacific, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
2003 2002 2003 2002
--------- -------- -------- --------
Net sales $5,128 $7,118 $17,273 $15,808
Cost of sales 1,411 2,173 4,139 5,835
--------- -------- -------- --------
Gross Profit 3,717 4,945 13,134 9,973
Application development expense 361 650 1,044 2,894
Selling, general and
administrative expenses 2,918 2,671 8,715 6,498
--------- -------- -------- --------
EBITDA 438 1,624 3,375 581
Depreciation and amortization
expense (922) (1,040) (2,688) (3,122)
Interest expense - (209) (521) (894)
Other income (expense) 119 15 (50) 18
--------- -------- -------- --------
Income (loss) before income tax
provision (365) 390 116 (3,417)
Income tax benefits (19) (1) (522) -
--------- -------- -------- --------
Income (loss) before change in
accounting principle (346) 391 638 (3,417)
Cumulative effect of a change in
accounting principle - goodwill
valuation under SFAS 142 - - - (627)
--------- -------- -------- --------
Income (loss) from continuing
operations (346) 391 638 (4,044)
Income (loss) from discontinued
operations, net of applicable
income taxes - (7) - 152
--------- -------- -------- --------
Net income (loss) (346) 384 638 (3,892)
Cumulative preferred dividends 184 253 738 761
--------- -------- -------- --------
Net income (loss) available to
common stockholders $(530) $131 $(100) $(4,653)
========= ======== ======== ========
Basic earnings per share:
Income (loss) before change in
accounting principle $(0.01) $0.01 $0.02 $(0.12)
Cumulative effect of a change in
accounting principle - - - (0.02)
--------- -------- -------- --------
Income (loss) from
continuing operations (0.01) 0.01 0.02 (0.14)
Income from discontinued
operations - - - 0.01
Preferred stock dividends - 0.01 0.02 0.03
--------- -------- -------- --------
Net income (loss)
available for common
stockholders $(0.01) $- $- $(0.16)
========= ======== ======== ========
Diluted earnings per share:
Income (loss) before change in
accounting principle $(0.01) $0.01 $0.02 $(0.12)
Cumulative effect of a change in
accounting principle - - - (0.02)
--------- -------- -------- --------
Income (loss) from
continuing operations (0.01) 0.01 0.02 (0.14)
Income from discontinued
operations - - - 0.01
Preferred stock dividends - 0.01 0.02 0.03
--------- -------- -------- --------
Net income (loss)
available for common
stockholders $(0.01) - $- $(0.16)
========= ======== ======== ========
Weighted average common shares outstanding
Basic 46,172 30,395 38,656 29,257
Diluted 46,172 58,734 38,656 29,257
Reconciliation:
Net income (loss) $(530) $131 $(100) $(4,653)
Add back:
Depreciation and amortization 922 1,040 2,688 3,122
Interest expense - 209 521 894
Cumulative effect of a change in
accounting principle - - - 627
Cumulative preferred dividends 184 253 738 761
--------- -------- -------- --------
576 1,633 3,847 751
Deduct:
Other income (expense) 119 15 (50) 18
Income tax benefits, net 19 1 522 -
Income (loss) from discontinued
operations - (7) - 152
--------- -------- -------- --------
EBITDA from continuing operations $438 $1,624 $3,375 $581
========= ======== ======== ========
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