-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CbOQ0s4dq81nodksLZU2LoawLdKHIuHgUm2WBYd6KOWVwfyUkTjfuZZr4G/9jQl3 hsgcHYBdKBbouxmygOzRlw== 0001144204-05-022348.txt : 20050722 0001144204-05-022348.hdr.sgml : 20050722 20050722170043 ACCESSION NUMBER: 0001144204-05-022348 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050720 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050722 DATE AS OF CHANGE: 20050722 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WORKSTREAM INC CENTRAL INDEX KEY: 0001095266 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 000000000 FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15503 FILM NUMBER: 05969297 BUSINESS ADDRESS: STREET 1: 495 MARCH RD STE 300 STREET 2: OTTAWA ONTARIO CITY: CANADA K2K 3G2 STATE: A6 ZIP: 00000 BUSINESS PHONE: 6132362263 MAIL ADDRESS: STREET 1: 495 MARCH RD SE 300 STREET 2: OTTAWA ONTARIO CITY: CANADA K2K 3G2 STATE: A6 ZIP: 00000 FORMER COMPANY: FORMER CONFORMED NAME: E CRUITER COM INC DATE OF NAME CHANGE: 19990917 8-K 1 v022172_8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ------------------ Date of report (Date of earliest event reported): July 20, 2005 Workstream Inc. (Exact Name of Registrant as Specified in Charter)
Canada 001-15503 N/A (State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer Identification Incorporation) No.) 495 March Road, Suite 300, Ottawa, Ontario, Canada K2K-3G1 (Address of Principal Executive Offices) (Zip Code)
(613) 270 0619 (Registrant's Telephone Number, Including Area Code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. On July 20, 2005, Workstream Inc. issued a press release regarding its consolidated financial results for the fourth quarter and year end results ended May 31, 2005. The full text of such press release is furnished as Exhibit 99.1 to this report. Item 9.01 Financial Statements and Exhibits (c) Exhibits 99.1 Press Release issued on July 20, 2005 by Workstream Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WORKSTREAM INC. Dated: July 22, 2005 By: /s/ Michael Mullarkey -------------------------------- Name: Michael Mullarkey Title: Chief Executive Officer Exhibit Index Exhibit No. Description 99.1 Press released issued on July 20, 2005 by Workstream Inc. EX-99.1 2 v022172_ex99-1.txt Workstream Inc. Announces Fourth Quarter and Fiscal 2005 Year-End Results Ottawa, ON, July 20, 2005 - Workstream Inc. (NASDAQ - WSTM), a provider of On-Demand Enterprise Workforce Management software, today announced its fourth quarter and fiscal 2005 year-end results for the period ended May 31, 2005. All figures are in U.S. dollars. Total revenue for the fourth quarter was $7,076,899 compared to $4,557,522 in the prior year's period, an increase of $2,519,377 or 55%. EBITDA for the fourth quarter of fiscal 2005 was $(3,757,200), or $(0.08) per share, compared to an EBITDA of $158,683, or $0.01 per share in the previous year. The Company's net loss for the quarter ended May 31, 2005 was $6,246,924 or $(0.13) per share compared to a net loss of $908,148 or $(0.03) in last year's comparable quarter. The results of operations for the fourth quarter were significantly impacted by unusually large professional fees, Sarbanes Oxley implementation and offshore development resources, inefficiencies related to some large fixed-fee contracts acquired during the year and an increase in marketing expenditures and compensation. Total revenue for the fiscal year 2005 was $26,818,587 compared to fiscal year 2004 revenue of $17,166,880, an increase of 56%. The Company had EBITDA of $(7,391,417) or $(0.17) per share compared to EBITDA of $965,912 or $0.04 per share for fiscal year 2004. The net loss for fiscal year 2005 was $15,158,975 or $(0.35) per share compared to a net loss of $5,536,899 or $(0.22) per share for fiscal year 2004. The increase in the net loss is primarily attributable to several acquisitions made since the beginning of last year. These resulted in significant increases in intangible asset amortization, the operational absorption of entities which all had pre-acquisition losses and the organization of the Company's development resources around the TalentCenter vision. Commenting on the results, Michael Mullarkey, Chairman and Chief Executive Officer said, "Our team successfully achieved three major milestones in 2005. We completed the build out of our TalentCenter Product Suite, providing an end-to-end Enterprise Workforce Management software solution. We also increased our customer base and added covered employee lives. Lastly, we rounded out our senior management team for our next phase of growth." Mullarkey went on to add that, "Our investments earlier this year are starting to show results. We have addressed many of the challenges that we faced in the last few quarters that forced us to spend considerable time and money. Workstream now enters fiscal year 2006 with a broad product offering, strong customer base and the financial and management resources to achieve our long-term goals. Workstream will continue to invest in innovative products for our customers, increase our focus on our Workstream TalentCenter product suite and efficiently manage our cash resources." 2005 Fiscal Year Highlights: The following highlights were announced or occurred since Workstream Inc.'s last annual earnings statement: Financial Milestones o 56% year over year revenue growth over fiscal 2004. o 55% quarter over quarter revenue growth over prior year. o Raised $25 million with institutional and other accredited investors. Company Acquisitions o During the first quarter, Workstream acquired Bravanta, Inc. a provider of Enterprise Incentive Management software solutions. o During the second quarter the Company acquired the assets of HRSoft, LLC, a provider of Workforce Planning software. o During the third quarter Workstream acquired the assets of ProAct Technologies, a provider of Enterprise Benefits software. Customer Activity o New customers announced include Reader's Digest, Mervyns, Children's Healthcare, Halton Healthcare, MyFamily.com and Mercedes-Benz. o Companies who renewed or upgraded their service that were previously announced include Cendant, Dupont, Tektronix and Nordstrom. Management will host a conference call today at 9:00 a.m. EST. The dial in number to participate in the call is 800-387-6216 for North American participants and 800-7664-7664 for those outside of North America. The instant replay number for the call will be available until July 27, 2005 by calling 800-408-3053 access code 3158691. EBITDA and EBITDA per share are non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. EBITDA is commonly defined as earnings before interest, taxes, depreciation and amortization. We believe that EBITDA provides useful information to investors as it excludes transactions not related to the core cash operating business activities. We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash operations. All companies do not calculate EBITDA in the same manner, and EBITDA as presented by Workstream may not be comparable to EBITDA presented by other companies. Workstream defines EBITDA as earnings or loss before interest, taxes, depreciation amortization and non-recurring goodwill impairment. Included, following the financial statements, is a reconciliation of net loss to EBITDA loss and EBITDA per share that should be read in conjunction with the financial statements. About Workstream Inc. Workstream provides On-Demand Enterprise Workforce Management solutions and services that help companies manage the entire employee lifecycle - from recruitment to retirement. Workstream's TalentCenter provides a unified view of all Workstream products and services including Recruitment, Benefits, Performance, Compensation, Rewards and Transition. Access to TalentCenter is offered on a monthly subscription basis under an On-Demand software delivery model to help companies build high performing workforces, while controlling costs. With nine offices across North America, Workstream services over 400 customers including Chevron, Eli Lilly Canada, The Gap, Home Depot, Kaiser Permanente, Motorola, Nordstrom, Samsung, Sony Music Canada, VISA, and Wells Fargo. For more information visit www.workstreaminc.com or call toll free 1-866-470-WORK This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations or beliefs of Workstream's management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: inability to grow our client base and revenue because of the number of competitors and the variety of sources of competition we face; client attrition; inability to offer services that are superior and cost effective when compared to the services being offered by our competitors; inability to further identify, develop and achieve success for new products, services and technologies; increased competition and its effect on pricing, spending, third-party relationships and revenues; as well as the inability to enter into successful strategic relationships and other risks detailed from time to time in filings with the Securities and Exchange Commission. For more information contact: Investor Relations: Tammie Brown Workstream Inc. Tel: 877-327-8483 ext. 263 Email: tammie.brown@workstreaminc.com WORKSTREAM INC. Statement of Operations and Net Loss per Share
QUARTER ENDING YEAR ENDING ---------------------------- ---------------------------- MAY 31, 2005 MAY 31, 2004 MAY 31, 2005 MAY 31, 2004 REVENUE $ 7,076,899 $ 4,557,522 $ 26,818,587 $ 17,166,880 Cost of Revenues 1,778,127 397,743 7,013,980 1,586,989 ------------ ------------ ------------ ------------ GROSS PROFIT 5,298,772 4,159,779 19,804,607 15,579,891 ------------ ------------ ------------ ------------ Selling and Marketing 2,033,455 1,211,603 7,210,996 4,362,292 General and Administrative 6,100,587 2,724,023 17,837,777 9,798,440 Research and Development 921,930 65,470 2,147,251 453,247 Amortization and Depreciation 2,477,754 1,427,277 8,534,715 5,601,910 ------------ ------------ ------------ ------------ 11,533,726 5,428,373 35,730,739 20,215,889 ------------ ------------ ------------ ------------ OPERATING LOSS (6,234,954) (1,268,594) (15,926,132) (4,635,998) ------------ ------------ ------------ ------------ Interest and Other Income 63,680 5,165 189,851 11,959 Interest and Other Expenses (57,880) (46,910) (234,451) (2,647,265) ------------ ------------ ------------ ------------ LOSS BEFORE INCOME TAXES (6,229,154) (1,310,339) (15,970,732) (7,271,304) ------------ ------------ ------------ ------------ Recovery of deferred income taxes -- 470,697 847,920 1,789,235 Current income tax expense (17,770) (68,506) (36,163) (54,830) ------------ ------------ ------------ ------------ NET LOSS $ (6,246,924) $ (908,148) $(15,158,975) $ (5,536,899) ============ ============ ============ ============ Weighted Average Shares Outstanding 48,824,747 29,038,713 43,461,514 25,036,056 NET LOSS PER SHARE $ (0.13) $ (0.03) $ (0.35) $ (0.22) ============ ============ ============ ============
WORKSTREAM INC. Balance Sheet
May 2005 May 2004 ASSETS CURRENT ASSETS Cash and cash equivalents $ 11,811,611 $ 4,338,466 Restricted cash 3,063,368 2,760,259 Short-term investments 312,322 301,194 Accounts receivable, net of allowance for doubtful accounts 3,388,501 1,379,610 Prepaid expenses and other assets 669,692 753,379 -------------- -------------- Total Current Assets 19,245,494 9,532,908 -------------- -------------- CAPITAL ASSETS 1,224,332 1,429,143 OTHER ASSETS 89,570 79,073 ACQUIRED INTANGIBLE ASSETS 12,814,525 9,242,617 GOODWILL 42,283,442 28,598,706 -------------- -------------- Total Assets $ 75,657,363 $ 48,882,447 ============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities $ 5,094,294 $ 5,542,725 Line of credit 2,326,612 1,972,218 Current portion of long-term obligations 1,738,966 303,240 Deferred revenue 3,366,120 2,065,604 -------------- -------------- Total Current Liabilities 12,525,992 9,883,787 -------------- -------------- DEFERRED INCOME TAX LIABILITY 0 839,265 LONG-TERM OBLIGATIONS 192,258 420,213 -------------- -------------- Total Liabilities 12,718,250 11,143,265 -------------- -------------- SHAREHOLDERS' EQUITY CAPITAL STOCK Issued and outstanding, no par value common shares 109,019,358 72,705,603 Additional paid-in capital 7,506,376 3,605,224 Accumulated other comprehensive loss (928,303) (1,072,302) Accumulated deficit (52,658,318) (37,499,343) -------------- -------------- Total Shareholders' Equity 62,939,113 37,739,182 -------------- -------------- Total Liabilities and Shareholders' Equity $ 75,657,363 $ 48,882,447 ============== ==============
WORKSTREAM INC. Statement of Cash Flows
YEAR ENDING ----------------------------- MAY 31, 2005 MAY 31, 2004 Net Loss $(15,158,975) $ (5,536,899) Amortization and depreciation 8,494,615 5,572,366 Non-cash interest on debt 53,746 2,318,444 Recovery of deferred income taxes (847,920) (1,758,049) Other -- 642,130 Changes in working capital (1,481,524) (1,164,772) ------------ ------------ Operating Activities (8,940,058) 73,220 ------------ ------------ Cash paid in business acquisitions (8,838,592) (416,385) Capital expenditures (339,499) (228,408) Other (92,452) (1,722,135) ------------ ------------ Investing Activities (9,270,543) (2,366,928) ------------ ------------ Proceeds from issuance of stock, net 24,089,938 7,577,770 Proceeds from exercise of options and warrants 2,383,703 39,997 Line of credit, net activity 186,289 1,488,180 Debt / capital lease repayments (1,050,292) (2,572,023) ------------ ------------ Financing Activities 25,609,638 6,533,924 ------------ ------------ Effect of exchange rate changes 74,108 (156,923) Increase (Decrease) in cash 7,473,145 4,083,293 Cash at beginning of year 4,338,466 255,173 ------------ ------------ Cash at End of Year $ 11,811,611 $ 4,338,466 ============ ============
WORKSTREAM INC. Reconciliation of Earnings or Loss before Interest, Taxes, Depreciation and Amortization (EBITDA)
QUARTER ENDING YEAR ENDING ---------------------------- ---------------------------- MAY 31, 2005 MAY 31, 2004 MAY 31, 2005 MAY 31, 2004 Net Loss $ (6,246,924) $ (908,148) $(15,158,975) $ (5,536,899) Recovery of Deferred Income Taxes -- (470,697) (847,920) (1,789,235) Other Income Tax Expense 17,770 68,506 36,163 54,830 Interest and Other Expense 57,880 46,910 234,451 2,647,265 Interest and Other Income (63,680) (5,165) (189,851) (11,959) Amortization and Depreciation 2,477,754 1,427,277 8,534,715 5,601,910 ------------ ------------ ------------ ------------ EBITDA (Loss) $ (3,757,200) $ 158,683 $ (7,391,417) $ 965,912 ============ ============ ============ ============ Weighted Average Number of Common Shares 48,824,747 29,038,713 43,461,514 25,036,056 ============ ============ ============ ============ EBITDA (Loss) per Share $ (0.08) $ 0.01 $ (0.17) $ 0.04 ============ ============ ============ ============
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