-----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, WnAM0Gqrnb/8e4oguzGabddm6UEF4A2ppksSH/tpSDWTDf7gsXP0PNjgkj3uIQAE KVDIf+XCm065zc6PoXSpAA== 0001144204-05-030539.txt : 20050930 0001144204-05-030539.hdr.sgml : 20050930 20050930170225 ACCESSION NUMBER: 0001144204-05-030539 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050929 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050930 DATE AS OF CHANGE: 20050930 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: 051114899 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 v026527_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): September 29, 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 Incorporation) No.) Identification 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 September 29, 2005, Workstream Inc. issued a press release regarding its consolidated financial results for the first quarter results ended August 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 September 29, 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: September 30, 2005 By: /s/ Michael Mullarkey -------------------------------- Name: Michael Mullarkey Title: Chief Executive Officer Exhibit Index Exhibit No. Description - ----------- ----------- 99.1 Press release issued on September 29, 2005 by Workstream Inc. EX-99.1 2 v026527_ex99-1.txt Exhibit 99.1 Workstream Inc. Announces Fiscal First Quarter 2006 Results Ottawa, ON, September 29, 2005 - Workstream Inc. (NASDAQ - WSTM), a provider of On-Demand Enterprise Workforce Management software, today announced its fiscal first quarter financial results for the period ended August 31, 2005. All figures are in U.S. dollars. Workstream reported first quarter 2006 revenue of $6,342,100 compared to $5,719,100 for the same period last year, an increase of 11% or $623,000. The increase in the Company's revenue compared to the first quarter 2005 related to a $1,415,000 or 45% increase in the Enterprise Workforce (EWF) segment offset by a 30% or $792,400 decline in the legacy Career Networks (CN) business. The growth in the EWF segment, which comprises software, services and awards, was fueled by acquisitions made in the latter half of 2005 and strong organic growth in certain key products such as Compensation. The outplacement business in the CN segment has been in a steady decline since last summer and accounts for $695,600 of the overall decrease in revenue for that segment. Gross profit was $4,401,300, or 69% of revenues for the first quarter 2006 compared to $4,647,300 or 81% of revenues for the first quarter 2005. The decrease in the gross profit margin was primarily the result of the change in product and service mix due to the various acquisitions in fiscal 2005. The Company's EBITDA loss was $(1,944,600) or $(0.04) per share for the first quarter 2006 compared to EBITDA loss of $(972,500) or $(0.03) per share for the first quarter 2005. (GAAP Reconciliation shown below.) The net loss for the first quarter 2006 was $(3,838,200) or $(0.08) per share compared to a net loss of $(2,508,300) or $(0.07) per share for the same period last year. The increase in the EBITDA loss and net loss compared to prior year's first quarter was due to an increase in operating expenses in excess of the margin improvement from new revenue. Additionally, last year's net loss was further reduced by the recovery of deferred income taxes. Commenting on the results, Michael Mullarkey, Chairman and Chief Executive Officer said, "Our team successfully achieved three major objectives in the first quarter of 2006. We continued to invest and build out our TalentCenter suite, the hallmark of our long term strategy to provide an end-to-end Enterprise Workforce Management software solution. We reinvigorated our sales pipeline through both our direct sales channel and by cross selling products and services to our existing customers which resulted in an increase in bookings. Finally, we moved forward on our mission to simplify our business, rationalize our product lines and complete the integration that we began in fiscal 2005." Stephen Lerch, Chief Operating and Financial Officer further noted, "I am extremely pleased with our team's response to the financial controls that we have put in place to allow us to continue our plans for growth in a disciplined manner. In this last period, we prudently adjusted our spending to what we anticipated would be a transition quarter. Cash used in operations was $1.35 million which was below our targeted range of $1.5 to $1.8 million." "This was an important quarter for us," added Lerch. "As we look ahead into the second quarter, we are committed to sales execution and conversion of our expanding sales pipeline and we are increasingly focused on disciplined organic growth in our core businesses. We believe that we are well positioned to take advantage of the growing market for on-demand software in the Human Capital marketplace." Management will host a conference call today at 5:00 p.m. EST. The dial in number to participate in the call is 866-898-9626 for North American participants and 800-8989-6323 for those outside of North America. The instant replay number for the call will be available until October 6, 2005 by calling 800-408-3053 access code 3162448#. 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, 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. UNAUDITED CONSOLIDATED BALANCE SHEETS
August 31, 2005 May 31, 2005 --------------- ------------ ASSETS Current assets: Cash and cash equivalents $ 8,828,790 $ 11,811,611 Restricted cash 2,966,709 3,063,368 Short-term investments 291,813 312,322 Accounts receivable, net 3,046,906 3,388,501 Prepaid expenses and other assets 670,751 669,692 ------------- ------------- Total current assets 15,804,969 19,245,494 Property and equipment, net 1,264,196 1,224,332 Other assets 103,052 89,570 Acquired intangible assets, net 11,105,600 12,814,525 Goodwill 42,284,766 42,283,442 ------------- ------------- TOTAL ASSETS $ 70,562,583 $ 75,657,363 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,262,513 $ 2,520,038 Accrued liabilities 1,960,074 1,658,155 Line of credit 2,261,029 2,326,612 Accrued compensation 965,521 916,101 Current portion of long-term obligations 247,924 1,738,966 Deferred revenue 3,557,050 3,366,120 ------------- ------------- Total current liabilities 11,254,111 12,525,992 Long-term obligations 159,398 192,258 ------------- ------------- ------------- Total liabilities 11,413,509 12,718,250 Commitments and contingencies -- -- STOCKHOLDERS' EQUITY Common stock, no par value: 49,194,178 and 49,182,772 shares issued and outstanding, respectively 109,030,194 109,019,358 Additional paid-in capital 7,506,376 7,506,376 Accumulated other comprehensive loss (891,027) (928,303) Accumulated deficit (56,496,469) (52,658,318) ------------- ------------- Total stockholders' equity 59,149,074 62,939,113 ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 70,562,583 $ 75,657,363 ============= =============
WORKSTREAM INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months ended August 31, 2005 2004 ------------ ------------ Enterprise Workforce Solutions $ 4,530,983 $ 3,115,588 Career Networks 1,811,143 2,603,541 ------------ ------------ Revenues, net 6,342,126 5,719,129 Cost of revenues (exclusive of depreciation expense as shown below) 1,940,832 1,071,827 ------------ ------------ Gross profit 4,401,294 4,647,302 ------------ ------------ Operating expenses: Selling and marketing 1,466,826 1,727,105 General and administrative 3,919,674 3,488,015 Research and development 959,413 404,693 Amortization and depreciation 1,891,324 1,863,604 ------------ ------------ Total operating expenses 8,237,237 7,483,417 ------------ ------------ (3,835,943) (2,836,115) ------------ ------------ Interest and other income 73,143 8,595 Interest and other expense (30,691) (91,526) ------------ ------------ Other income (expense), net 42,452 (82,931) ------------ ------------ Loss before income tax (3,793,491) (2,919,046) Recovery of deferred income taxes -- 418,285 Current income tax expense (44,660) (7,565) ------------ ------------ NET LOSS FOR THE PERIOD $ (3,838,151) $ (2,508,326) ============ ============ Weighted average number of common shares outstanding 49,193,310 37,140,857 ============ ============ Basic and diluted net loss per share $ (0.08) $ (0.07) ============ ============
WORKSTREAM INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months ended August 31, 2005 2004 ------------ ------------ Cash provided by (used in) operating activities: Net loss for the period $ (3,838,151) $ (2,508,326) Adjustments to reconcile net loss to net cash used in operating activities: Amortization and depreciation 1,900,123 1,851,115 Non-cash interest on convertible notes and notes payable -- 51,636 Provision for bad debt 72,432 39,262 Recovery of deferred income taxes -- (418,285) Non-cash payment to consultants 40,779 -- Net change in operating components of working capital 469,744 (1,525,217) ------------ ------------ Net cash used in operating activities (1,355,073) (2,509,815) ------------ ------------ Cash provided by (used in) investing activities: Purchase of property and equipment (230,833) (47,093) Cash paid for business combinations -- (2,146,679) (Increase)/decrease in restricted cash 239,646 (158,414) Sale (purchase) of short-term investments 39,966 158,414 ------------ ------------ Net cash provided by (used in) investing activities 48,779 (2,193,772) ------------ ------------ Cash provided by (used in) financing activities: Proceeds from exercise of options and warrants 10,836 51,455 Proceeds from share and warrants issuance -- 9,999,988 Cost related to the registration and issuance of common stock -- (64,834) Repayment of long-term obligations (1,519,698) (757,592) Line of credit, net activity (195,802) 185,703 ------------ ------------ Net cash (used in) provided by financing activities (1,704,664) 9,414,720 ------------ ------------ Effect of exchange rate changes on cash and cash equivalents 28,137 40,010 ------------ ------------ Net (decrease) increase in cash and cash equivalents (2,982,821) 4,751,143 Cash and cash equivalents, beginning of period 11,811,611 4,338,466 ------------ ------------ Cash and cash equivalents, end of period $ 8,828,790 $ 9,089,609 ============ ============
WORKSTREAM INC. UNAUDITED RECONCILIATION OF EARNINGS OR LOSS BEFORE INTEREST, TAXES, DEPRECIATION, AMORTIZATION (EBITDA)
Three Months Ended August 31, 2005 2004 ------------ ------------ Net loss, per GAAP $ (3,838,151) $ (2,508,326) Recovery of deferred income taxes -- (418,285) Other income tax recovery 44,660 7,565 Interest and other expense 30,691 91,526 Interest and other income (73,143) (8,595) Amortization and depreciation 1,891,324 1,863,604 ------------ ------------ EBITDA (loss) $ (1,944,619) $ (972,511) ============ ============ Weighted average number of common shares outstanding 49,193,310 37,140,857 ============ ============ Basic and diluted loss per share, per GAAP $ (0.08) $ (0.07) ============ ============ Basic and diluted EBITDA loss per share $ (0.04) $ (0.03) ============ ============
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