Sierra Systems Reports Fourth Quarter and Fiscal 2003 Results.Business Editors/High-Tech Writers 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--(BUSINESS WIRE)--Dec. 4, 2003 Grant Gisel, President 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. of Sierra Systems Sierra Systems Group Inc. ("Sierra Systems") is a private information technology and business consulting corporation headquartered in Vancouver, BC, Canada. The company provides services to both the public and private sectors. Group Inc., commented on the Company's fourth quarter and fiscal year results. "While the past year was affected by difficult economic events, Sierra Systems performed admirably ad·mi·ra·ble adj. Deserving admiration. ad  mi·ra·ble·ness n.ad . Revenue in fiscal 2003 reached $151 million, a 16% growth on the prior year. Earnings from operations increased 115% in the same period. These results exceed the experience of our industry. Much diligent dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d hard effort by our outstanding staff delivered this accomplishment." Amounts in tables are in thousands of Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents except earnings per share.
Fiscal 2003 3 Months Ended September 30
2003 2002
---------------------------
Revenue 36,745 31,931
Earnings from Operations 685 512
Net Earnings for the Period 336 836
Basic and Diluted Earnings Per Share $0.04 $0.09
Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Fourth Quarter Results Fourth quarter revenue was 15% higher than the same period last year, with services revenue 11% higher. The staggered divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the Company's interest in Donna Cona II Inc. (DCII DCII Defense Central Index of Investigations DCII DFAS Corporate Information Infrastructure DCII Defense Clearance Investigations Index DCII Defense Clearance and Investigation Index ) resulted in the fourth quarter results of DCII no longer being proportionately pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. consolidated in the financial results of the Company (see note 5 to the financial statements). This reduced the revenue base by $1 million in the current quarter. Utilization was slightly lower at 69% compared to 70%, with available hours and average 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. consistent. Operational capability was augmented with higher external consultants. Compensation costs were 11% higher than last year. Most of this increase arose from higher external consultant cost. The modest annual base salary increases of approximately 2% were offset by the lower U.S. dollar exchange rate and by the absence of Donna Cona costs. The ratio of compensation costs to services revenue was consistent at 74%. Other costs were also 11% higher but the ratio to services revenue was stable at 7%. The increase was due to higher travel costs, generally a result of sales support. The gross margin percentage was stable at 18% leading to an increase in gross profit of 15%. General and administration costs increased by 19% with the ratio to services revenue increasing to 15% from 14%. There was a one time charge of $0.4 million recorded in the fourth quarter of fiscal 2003 for exit costs associated with sub-leasing excess space in the California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). region. Future sub-lease revenue will match lease costs for these two properties until the end of the lease terms. This accounts for half of the increase in general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. , the remainder is a result of the release of a provision for doubtful accounts in fiscal 2002 not replicated in fiscal 2003. On a sequential One after the other in some consecutive order such as by name or number. quarterly basis, services revenue declined by 8%, a higher decline than the normal seasonal fluctuation Fluctuation A price or interest rate change. for the summer months. The DCII impact was $1.2 million. As would be expected with summer vacations Summer vacation (also called summer holidays or summer break) is a vacation in the summertime between school years in which students are off for 3 months, depending on the country and district. , utilization dropped significantly to 69% from 78%. Compensation costs declined almost in parallel by 7% and the ratio of compensation costs to services revenue increased marginally to 74%. The primary variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality was vacation pay with a $0.9 million swing in this expense to relieve the cost base in the quarter and the absence of the DCII cost base of $0.8 million. Expenditures on other costs declined by 3%. General and administration costs increased 11%, a result of the rental exit costs. Amounts in tables are in thousands of Canadian dollars except earnings per share.
Fiscal 2003 Year Ended September 30
2003 2002
---------------------------
Revenue 150,920 129,952
Earnings from Operations 6,599 3,068
Net Earnings for the Year 1,417 1,688
Basic and Fully Diluted Earnings
Per Share $0.15 $0.18
Management's Discussion and Analysis of Fiscal 2003 Results Services revenue for fiscal 2003 increased 15% compared to the prior year, due in large part to the very significant Health Insurance Portability and Accountability Act The Health Insurance Portability and Accountability Act (HIPAA) was enacted by the U.S. Congress in 1996. According to the Centers for Medicare and Medicaid Services (CMS) website, Title I of HIPAA protects health insurance coverage for workers and their families when remediation project in California and also due to the acquisition of INSI INSI Initial Nuclear Safety Inspection strategic technologies inc. in the late third quarter of fiscal 2002. This acquisition led to a higher average headcount of 4%. Utilization improved to 75% compared to 72% in fiscal 2002. In terms of operational capability, the increase in revenue was also driven off the higher use of external consultants. The use of external consultants reached a peak in fiscal 2003 at 21% of total compensation cost, a result in part of two large projects. The ratio of compensation costs to services revenue also improved to 74% from 75%. Compensation costs increased 13% or $12.5 million. Two thirds of this increase related to the cost of external consultants increasing 60% to $23.1 million. A quarter of the increase in compensation costs was a result of higher salaries. Salaries increased by 4% due to higher average headcount and increase in base salaries of 2%, which was offset by the lower conversion rate of the U.S. dollar in the fiscal year. Other costs were 7% of services revenue consistent with the prior year. An increase in travel costs was offset by lower recruitment and education costs. The gross margin percentage improved to 20% from 18%. General and administration costs increased by $3.1 million or 19% but remained consistent as a percentage of services revenue at 13%. This resulted in an increase in earnings from operations of 115%. There was a material foreign exchange loss due to the accounting treatment of integrated operations of $2.4 million. As there is no tax deduction Tax deduction An expense that a taxpayer is allowed to deduct from taxable income. tax deduction See deduction. for this accounting item, the effective tax rate on income is 67%. The Company will be accounting for all its foreign subsidiaries as self-sustaining self-sus·tain·ing adj. Able to sustain oneself or itself independently. self  -sus·tain operations in fiscal 2004. This accounting translation
adjustment will therefore be reported through retained earnings Retained EarningsThe percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. in future years. The effect of this foreign exchange loss on the earnings per share of the Company was a reduction of $0.26. Therefore, earnings per share reported were lower than the prior year at $0.15 compared to $0.18. On another matter, the Company commenced a normal course issuer bid in January January: see month. 2003, which expires in the ordinary course in January 2004. It is the Company's intent to terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. this bid effective immediately. About Sierra Systems Sierra Systems Group Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :SSG SSG abbr. staff sergeant ) is one of North America's original business consulting and technology services organizations. For over 37 years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time Company has cultivated cultivated, n in herbal medicine, used to describe plants that are commercially farmed rather than collected from the wild. lasting associations with clients by integrating technical experience with industry knowledge for innovative, sustainable results. Sierra Systems has built industry-leading practices in health, justice, electronic government, enterprise solutions, financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and insurance, utilities and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , and established regional market expertise in its 15 strategic locations. Reach Sierra Systems at www.SierraSystems.com.
Conference Call Details
Date: Thursday, December 4, 2003
Start time: 1:30 p.m. Pacific (4:30 p.m. Eastern) time
Dial-in number: 1.866.384.0144
Live webcast: www.SierraSystems.com
Presentation: A presentation to be viewed in conjunction with the
conference call will be posted on the Company's
website with a link on the home page to the
presentation.
A replay of the conference call is available through Thursday Thursday: see week. , December December: see month. 18, 2003 by dialing 1.888.567.0782 and entering the passcode 102279. The conference call and the presentation will be archived in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company website at www.SierraSystems.com. Caveat [Latin, Let him beware.] A warning; admonition. A formal notice or warning given by an interested party to a court, judge, or ministerial officer in opposition to certain acts within his or her power and jurisdiction. The statements that are not historical facts contained in this release 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. that involve risks and uncertainties. Sierra Systems' actual results could differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, technological shifts, employee retention, fixed price contract delivery, competition, general economic conditions, foreign exchange and other risks detailed in the Company's annual report and other filings with 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. securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities .
SIERRA SYSTEMS GROUP INC.
CONSOLIDATED BALANCE SHEETS
(in thousands of Canadian dollars)
September 30 September 30
2003 2002
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 4,023 $ 10,803
Accounts receivable, including
work in progress 38,592 33,982
Current portion of long-term
accounts receivable - 1,558
Income taxes recoverable - 890
Prepaid expenses 2,171 2,306
------------ ------------
44,786 49,539
Intangible asset (note 5) 592 -
Property and equipment 10,700 10,265
Future income taxes 6,345 3,829
Goodwill 19,312 19,312
------------ ------------
$ 81,735 $ 82,945
------------ ------------
------------ ------------
LIABILITIES
Current liabilities
Bank indebtedness $ 230 $ 4,488
Accounts payable and accrued liabilities 14,421 12,770
Deferred revenue 974 2,465
Project financing - 995
Current portion of capital lease
obligation 45 136
Income taxes payable 304 -
Future income taxes 2,390 465
------------ ------------
18,364 21,319
Future income taxes 440 183
Capital lease obligation - 54
------------ ------------
18,804 21,556
SHAREHOLDERS' EQUITY
Capital stock (note 3) 41,320 41,147
Retained earnings 21,611 20,242
------------ ------------
62,931 61,389
------------ ------------
$ 81,735 $ 82,945
------------ ------------
------------ ------------
SIERRA SYSTEMS GROUP INC.
CONSOLIDATED STATEMENTS of RETAINED EARNINGS
(in thousands of Canadian dollars)
Three months ended Year ended
September 30 September 30
(unaudited)
2003 2002 2003 2002
--------- --------- --------- ---------
Retained earnings
- Beginning of
period $ 21,275 $ 19,406 $ 20,242 $ 18,554
Net earnings for
the period 336 836 1,417 1,688
Shares purchased
and cancelled
(note 3) - - (48) -
--------- --------- --------- ---------
Retained earnings
- End of period $ 21,611 $ 20,242 $ 21,611 $ 20,242
--------- --------- --------- ---------
--------- --------- --------- ---------
SIERRA SYSTEMS GROUP INC.
CONSOLIDATED STATEMENTS of EARNINGS
(in thousands of Canadian dollars except per share and share figures)
Three months ended Year ended
September 30 September 30
(unaudited)
2003 2002 2003 2002
--------- --------- --------- ---------
Revenue
Services $ 35,450 $ 31,864 $ 147,997 $ 128,589
Product sales 1,295 67 2,923 1,363
--------- --------- --------- ---------
36,745 31,931 150,920 129,952
--------- --------- --------- ---------
Expenses
Compensation costs 26,367 23,730 109,030 96,497
Other costs 2,533 2,272 9,786 9,368
Product costs 1,055 7 2,402 1,174
--------- --------- --------- ---------
29,955 26,009 121,218 107,039
--------- --------- --------- ---------
Gross profit 6,790 5,922 29,702 22,913
General and
administration 5,207 4,374 19,786 16,639
Amortization of
property and
equipment 898 1,036 3,317 3,206
--------- --------- --------- ---------
Earnings from
operations 685 512 6,599 3,068
--------- --------- --------- ---------
Foreign exchange
(loss) gain (196) 684 (2,402) 174
Other income 22 8 88 193
--------- --------- --------- ---------
Earnings before
income taxes 511 1,204 4,285 3,435
Provision for
income taxes -
Current 1,234 1,225 3,722 2,462
Future (1,047) (857) (842) (715)
--------- --------- --------- ---------
187 368 2,880 1,747
Earnings before
equity accounted
investee 324 836 1,405 1,688
Equity earnings of
Donna Cona II Inc. 12 - 12 -
--------- --------- --------- ---------
Net earnings for
the period $ 336 $ 836 $ 1,417 $ 1,688
--------- --------- --------- ---------
--------- --------- --------- ---------
Earnings per
share $ 0.04 $ 0.09 $ 0.15 $ 0.18
--------- --------- --------- ---------
--------- --------- --------- ---------
Diluted earnings
per share $ 0.04 $ 0.09 $ 0.15 $ 0.18
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average
number of
common shares
outstanding 9,344,558 9,322,073 9,337,523 9,237,964
--------- --------- --------- ---------
--------- --------- --------- ---------
SIERRA SYSTEMS GROUP INC.
CONSOLIDATED STATEMENTS of CASH FLOWS
(in thousands of Canadian dollars)
Three months ended Year ended
September 30 September 30
(unaudited)
2003 2002 2003 2002
--------- --------- --------- ---------
Cash flows provided
by (used in)
Operations
Net earnings for
the period $ 336 $ 836 $ 1,417 $ 1,688
Items not
affecting cash -
Amortization of
property and
equipment 898 1,036 3,317 3,206
Amortization of
intangible asset 39 - 39 -
Future income
taxes (1,047) (857) (842) (715)
--------- --------- --------- ---------
226 1,015 3,931 4,179
Net change in
non-cash working
capital relating
to operations (2,931) (5,550) (3,172) (3,767)
Net change in
long-term
accounts
receivable - 592 1,558 2,213
--------- --------- --------- ---------
(2,705) (3,943) 2,317 2,625
Financing
Project financing
- net - (718) (995) (2,777)
Shares purchased
for long-term
incentive plan (59) - (192) (193)
Shares purchased
and cancelled - - (92) -
Shares issued 99 82 337 270
Repayment of
capital lease
obligation (45) (40) (145) (52)
--------- --------- --------- ---------
(5) (676) (1,087) (2,752)
Investing
Purchase of
property and
equipment (811) (515) (3,752) (2,214)
Business
acquisitions - - - (8,072)
--------- --------- --------- ---------
(811) (515) (3,752) (10,286)
Decrease in cash
and cash
equivalents (3,521) (5,134) (2,522) (10,413)
Cash and cash
equivalents -
beginning of
period 7,314 11,449 6,315 16,728
--------- --------- --------- ---------
Cash and cash
equivalents - end
of period $ 3,793 $ 6,315 $ 3,793 $ 6,315
--------- --------- --------- ---------
--------- --------- --------- ---------
Represented by:
Cash and cash
equivalents $ 4,023 $ 10,803
Bank indebtedness (230) (4,488)
--------- ---------
$ 3,793 $ 6,315
Notes to Interim Consolidated Financial Statements (unaudited)
(Amounts in tables are in thousands of Canadian dollars except per
share figures)
1. Summary of significant accounting policies General These interim 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 have been prepared 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 Canadian 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 , using the same accounting policies as outlined in Note 1 to the Consolidated Financial Statements for the year ended September September: see month. 30, 2002, except as noted below. Certain comparative figures in the Consolidated Financial Statements have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current period presentation. On October October: see month. 1, 2002, the Company adopted the new recommendations of CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) Handbook
This article is about reference works. For the subnotebook computer, see .
The Section establishes standards for the recognition, measurement and disclosure of stock-based compensation. It encourages, but does not require, the use of the fair value method to account for stock-based compensation costs arising from awards to employees. The Section requires pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma disclosure of net earnings and earnings per share as if the fair value method of accounting had been used. The Company has chosen to adopt the disclosure-only provisions of the Section relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the fair value method of accounting for options granted to employees. Property and equipment Effective October 1, 2002, the Company changed the method of amortization for furniture and equipment, computer hardware and computer software from declining balance to straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. . The change did not have a material effect on the reported results. Property and equipment are carried at the lower of cost, accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. amortization and net recoverable amount. Amortization is calculated over their estimated useful lives at the following rates:
Furniture and equipment 7 years straight-line
Computer hardware 4 years straight-line
Computer software 3 years straight-line
Leasehold improvements over the remaining life of the lease
Enterprise application software 8 years straight-line
2. Supplementary cash flow information
Three months ended Year ended
Interest and income taxes September 30 September 30
2003 2002 2003 2002
---------------------------------------
Interest paid $ 8 $ 61 $ 72 $ 166
Interest received $ 33 $ 182 $ 170 $ 362
Income taxes paid $ 1,842 $ 1,572 $ 3,617 $ 2,937
Income taxes refunded $ 1,127 $ 897 $ 1,127 $ 897
3. Capital stock
a) Capital stock
Issued
As at As at
September 30, 2003 September 30, 2002
---------------------------------------
Common shares 9,344,843 9,324,827
Amount $ 41,320 $ 41,147
b) Options The Company has a stock option plan that grants to directors and certain employees of the Company the option to purchase up to 1,311,900 common shares of the Company. The exercise price of each option is determined by the market price of the Company's stock on the date of the grant and an option's maximum term is 10 years. Options generally vest over three to five years. Under this plan, had compensation costs been determined using the fair value based method at the day of the grant for awards granted since October 1, 2002, the Company's pro forma net earnings, basic and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of would have been as follows:
Three months ended Year ended
September 30, 2003 September 30, 2003
---------------------------------------
Net earnings - as reported $336 $1,417
Pro forma net earnings $292 $1,300
Basic and diluted earnings per
share as reported $0.04 $0.15
Pro forma basic and diluted
earnings per share $0.03 $0.14
The weighted-average grant date fair value of the 80,000 and 208,200 stock options granted in the three months and year ended September 30, 2003 was $7.70 and $7.86 per share. The fair value calculations were made using the Black-Scholes option pricing model option pricing model A mathematical formula for determining the price at which an option should trade. The model expresses the value of an option as a function of the value of the underlying asset, length of time until maturity, exercise price, yields on with the following assumptions: risk-free interest rate Risk-Free Interest Rate Describes return available to an investor in a security somehow guaranteed to produce that return. The risk-free interest rate compensataes the investor for the temporary sacrifice of consumption. (3.5% - 4.2%), dividend yield of 0%, expected volatility (29% - 51%) and expected life of one to four years. The following table summarizes the movement in options under this plan:
Three months ended Year ended
September 30, 2003 September 30, 2003
---------------------------------------
Balance - beginning of
period 1,132,660 1,043,957
Options granted in period 80,000 208,200
Options exercised in period - -
Options expired in period (6,000) (23,000)
Options cancelled in period (10,200) (32,697)
---------------------------------------
Balance - end of period 1,196,460 1,196,460
c) Employee share ownership plan (ESOP ESOP See: Employee Stock Ownership Plan ESOP See Employee Stock Ownership Plan (ESOP). ) The ESOP permits all full-time full-time adj. Employed for or involving a standard number of hours of working time: a full-time administrative assistant. full employees of the Company to purchase common shares through payroll deductions. Shares are purchased quarterly at prevailing market prices with a 15% subsidy subsidy, financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. from the Company. During the three months ended September 30, 2003, the Company contributed $22,000 (2002 - $20,000) and issued 13,405 shares (2002 - 11,393). During the year ended September 30, 2003, the Company contributed $94,000 (2002 - $71,000) and issued 45,574 shares (2002 - 39,101) pursuant to this plan. d) Shares purchased and cancelled On January 21, 2003, the Company initiated its first normal course issuer bid. Under the bid, the Company had the right to purchase for cancellation up to a maximum of 400,000 of its common shares (representing approximately 4.25% of the Company's outstanding shares) over the following 12 months through the facilities of the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. . The Company did not acquire any shares for cancellation during the three months ended September 30, 2003. During the year ended September 30, 2003, the Company acquired 10,000 shares at an average price of $9.20. 4. Business segment information The Company operates in one business segment - providing IT services. The Company operates primarily in Canada and the United States The United States and Canada share a unique legal relationship. U.S. law looks northward with a mixture of optimism and cooperation, viewing Canada as an integral part of U.S. economic and environmental policy. . Geographical information is based upon the country in which the Company's operations are located.
Revenue Canada U.S. Total
---------------------------------
For the three months ended
September 30, 2003 $ 22,033 $ 14,712 $ 36,745
For the three months ended
September 30, 2002 $ 21,266 $ 10,665 $ 31,931
For the year ended September
30, 2003 $ 98,755 $ 52,165 $ 150,920
For the year ended September
30, 2002 $ 83,355 $ 46,597 $ 129,952
Property, equipment and
goodwill
As at September 30, 2003 $ 26,379 $ 3,633 $ 30,012
As at September 30, 2002 $ 27,144 $ 2,433 $ 29,577
5. Investment in Donna Cona II Inc. (DCII) In August 2002, the Company entered into an agreement with DCII to relinquish its 49% interest in DCII over a four-year period in four equal installments commencing on July July: see month. 1, 2003. In conjunction, the Company was awarded a subcontracting agreement with DCII that extends over the same four-year period. The value assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. to the subcontracting agreement representing the investment in DCII has been recorded as an intangible asset Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. of $631,000, which is amortized over the four-year term of the subcontracting agreement on a straight-line basis and is recorded in cost of sales. Until June June: see month. 30, 2003, the proportionate pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. consolidation method was used to account for the Company's 49% interest in DCII, as joint control existed. On this date, the Company relinquished re·lin·quish tr.v. re·lin·quished, re·lin·quish·ing, re·lin·quish·es 1. To retire from; give up or abandon. 2. To put aside or desist from (something practiced, professed, or intended). 3. joint control over DCII and effective July 1, 2003 the equity method was used to account for the Company's remaining 42% interest. The following amounts represented the Company's interest in DCII:
Three months ended Year ended
September 30 September 30
2003 2002 2003 2002
---------------------------------------
Current assets n/a $ 1,180 n/a $ 1,180
Long-term assets n/a $ 42 n/a $ 42
Current liabilities n/a $ 845 n/a $ 845
Revenue n/a $ 1,036 $ 4,517 $ 3,788
Expenses n/a $ 1,003 $ 4,319 $ 3,682
Net earnings n/a $ 33 $ 198 $ 106
Cash flow from operating
activities n/a $ 1 $ 208 $ 29
Cash flow from investing
activities n/a $ (8) $ (5) $ (43)
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