EX-99.1 2 a05-11185_1ex99d1.htm EX-99.1

Exhibit 99.1

 

News Release

 

GEAC ANNOUNCES FOURTH QUARTER AND YEAR END RESULTS FOR FISCAL YEAR 2005
 

Full-Year Diluted Net Earnings Per Share Increased to $0.87 in FY 2005 From $0.66 in FY 2004

 

Highest License Revenue in 5-Years with 21.1% Increase in Q4 FY 2005 Over Q4 FY 2004

 

Cash and Short-term Investments Increased to $188.2 Million
at Year End From $112.6 Million at Year End FY 2004

 

Average Deal Size and Number of Deals in EAS business
in Q4 FY 2005 Increased Appreciably from Q4 FY2004

 

Note to readers: All references to dollars are to U.S. dollars unless otherwise noted.

 

MARKHAM, Ontario and SOUTHBOROUGH, Massachusetts – June 22, 2005 – Geac Computer Corporation Limited (TSX: GAC and NASDAQ: GEAC), a global enterprise software company dedicated to addressing the needs of CFOs, today announced its fourth quarter and year end financial results for the three and twelve months ended April 30, 2005.

 

Fourth Quarter Revenue Highlights

 

US$ thousands

 

Q4 FY2005

 

Q3 FY2005

 

Q4 FY2004

 

% Change Over
Q3 FY 2005

 

% Change Over
Q4 FY 2004

 

Software Revenue

 

$

22,270

 

$

18,211

 

$

18,387

 

22.3

%

21.1

%

Support & Services Revenue

 

$

91,991

 

$

90,596

 

$

93,517

 

1.5

%

(1.6

)%

Hardware Revenue

 

$

2,943

 

$

5,083

 

$

4,201

 

(42.1

)%

(29.9

)%

Total Revenue

 

$

117,204

 

$

113,890

 

$

116,105

 

2.9

%

0.9

%

 

Geac reported total revenue in the fourth quarter of fiscal year (FY) 2005 of $117.2 million, an increase of $1.1 million, or 0.9%, compared to $116.1 million in total revenue in the fourth quarter of FY 2004, and

 



 

an increase of $3.3 million, or 2.9%, compared to $113.9 million in the third quarter of FY 2005.  License revenue for the fourth quarter of FY 2005 was $22.3 million, an increase of $3.9 million, or 21.1%, compared to $18.4 million for the same period last year, and an increase of $4.1 million, or 22.3%, compared to $18.2 million in the third quarter FY 2005.  This reflects a five-year record in software license growth at Geac.  For the fourth quarter, the Company recorded increases in year-over-year license sales across all of its major enterprise applications, including Geac Performance Management, Enterprise Server, System21, Runtime, Anael and SmartStream.  As a percentage of total revenue, license revenue increased from 15.8% in the fourth quarter of FY 2004 to 19.0% in the fourth quarter of FY 2005 this year.

 

“Internally developed new products contributed significantly to our software license revenue growth in the fourth quarter of FY 2005.  Overall contracted sales of these new products amounted to $6.6 million in license fees.  This entire amount, however, did not translate into software license revenue in the quarter, but will be recognized as revenue in future quarters as all the criteria for revenue recognition are met.  If all contracted sales of internally developed new products had been recognized as revenue in the quarter, total fees from these license sales would have represented approximately 28% of software license revenue,” said Charles S. Jones, President and Chief Executive Officer of Geac.

 

Net earnings in the fourth quarter of FY 2005 were $18.6 million, or $0.21 per diluted share, compared to $23.8 million, or $0.27 per diluted share, in the fourth quarter of FY 2004.  The decrease in net earnings during this period resulted in part from an increase in our effective tax rate, which was 3.7% in the fourth quarter of FY 2004 and 23.2% in the fourth quarter of FY 2005.  The effective tax rate in the fourth quarter of each of FY 2004 and FY 2005 was reduced as a result of the release of reserves and valuation allowances, which positively affected our net earnings in those quarters.

 

Operating expenses were $54.3 million in the fourth quarter of FY 2005, an increase of $5.6 million, or 11.5%, from $48.7 million in the fourth quarter of FY 2004.  This increase was due primarily to additional expenditures in sales, marketing and development and to increased general and administrative expenses

 

2



 

related to non-cash stock-based compensation incentives, Sarbanes-Oxley compliance, and certain merger and acquisition initiatives.

 

Full Year Revenue Highlights

 

US$ thousands

 

Fiscal Year 2005

 

Fiscal Year 2004

 

% Change

 

Software Revenue

 

$

71,040

 

$

65,190

 

9.0

%

Support & Services Revenue

 

$

360,947

 

$

355,019

 

1.7

%

Hardware Revenue

 

$

12,405

 

$

25,063

 

(50.5

)%

Total Revenue

 

$

444,392

 

$

445,272

 

(0.2

)%

 

Revenue for the twelve months ended April 30, 2005 was $444.4 million, a decline of $0.9 million, or 0.2%, compared to $445.3 million for the year ended April 30, 2004.  Each of support, services and license revenue increased, largely offsetting a $12.7 million hardware decline.  We continue intentionally to de-emphasize the resale of lower-margin hardware sales.  License revenue for FY 2005 was $71.0 million, an increase of $5.9 million, or 9.0%, compared to $65.2 million for FY 2004.  As a percentage of total revenue, license revenue increased from 14.6% in FY 2004 to 16.0% in FY 2005.

 

For the twelve months ended April 30, 2005, operating expenses increased $1.9 million, or 1.0%, to $199.9 million, compared to $197.9 million in the same period of FY 2004.  The increase was primarily caused by an increase in sales and marketing of $4.0 million, offset by a decline in general and administrative expenses of $4.3 million.

 

Earnings from operations for the twelve months ended April 30, 2005 increased $11.9 million, or 16.5%, to $84.2 million, compared to $72.2 million in the same period of FY 2004.  This increase resulted from an improvement in gross profit, partially offset by an increase in overall operating expenses.

 

Net earnings for FY 2005 grew to $77.0 million, or $0.87 per diluted share, compared to $57.2 million, or $0.66 per diluted share, in FY 2004.  The increase in net earnings during this period resulted in part from a

 

3



 

decrease in our effective tax rate, which was 19.3% in FY 2004 and 12.6% in FY 2005.  The effective tax rate in each of FY 2004 and FY 2005 was reduced as a result of the release of reserves and valuation allowances positively impacting our net earnings in those years.

 

“In FY 2005, we have been able to deliver more than a 34% increase in profitability to our shareholders by taking deliberate and calculated steps to innovate to improve our business, our products and our customer relationships, and by continuing to focus on fiscal discipline,” Mr. Jones said.  “In the last quarter of our 2005 fiscal year, we were particularly pleased with the growth of both license sales and total revenue, as these gains marked the first time in recent corporate history that our fourth quarter revenue exceeded our third quarter revenue.  Growth in these important areas is notable, particularly when one considers that hardware revenue was 42.1% less in the fourth quarter than it was in the third, as we continue to trend away from lower-margin sales.  With targeted expenditures in sales, marketing and development, as we outlined at the beginning of the year, and with increasing efforts around our enterprise product integration, we are pleased to have achieved our stated goals of license revenue growth and enhanced customer retention and acquisition in what continues to be a very competitive market climate.”

 

“Geac successfully generated cash from operations throughout the year resulting in $188.2 million on our balance sheet – a $75.7 million increase over our fiscal year-end position in 2004 in cash and short-term investments.  This strong cash position should assist us in accomplishing our growth strategy as we continue to examine acquisition opportunities that would enhance our existing product lines, expand our customer base and build our total revenue,” said Donna de Winter, Chief Financial Officer of Geac.  “As part of our long-term non-dilutive equity incentive program for management, we have funded fully the Restricted Share Units (RSU) that vest over the next three years through open market purchases completed on May 4, 2005 totaling 1,358,250 shares, which are currently held in trust for our employee recipients.  The cash for these post April 30th closing open market purchases has been deducted from our cash position on the April 30, 2005 balance sheet, and is included in restricted cash.”

 

4



 

Geac’s decision to use RSUs instead of dilutive stock options as our management incentive plan, coupled with the adoption of the expensing of stock-based compensation per section 3870 of the CICA handbook, will put increasing pressure on our generally accepted accounting principles (“GAAP”) net earnings, but does not negatively impact cash flow from operating activities.

 

Customers

 

In the fourth quarter, Geac closed approximately 470 deals in the Enterprise Applications Systems (EAS) segment of its business.  Thirty-eight of these deals each exceeded $150,000 – a 35.7% increase in the number of deals this size over Q3 FY 2005 — and the average deal size within this group was more than $420,000, also a significant increase over the previous quarter, in which the deals in excess of $150,000 averaged $350,000.

 

As Geac outlined in its third quarter earnings announcement in March of 2005, the Company is focused on industry-specific campaigns that capitalize on its collective expertise and established customer base and partnerships in the Government and Financial Services sectors.  Particularly strong evidence of Geac’s success in the government segment was a fourth quarter contract with a value in excess of $1 million dollars with Infraero, a Ministry of Defense agency that manages airports for the government of Brazil.  This contract augments the Company’s presence in a notable emerging growth economy and adds to a long list of government contracts for Geac worldwide.  It was one of three contracts closed this quarter in excess of $1 million.  Supporting the Company’s proactive efforts in the Financial Services sector, Geac won contracts with two global investment banks with total managed assets for each in excess of $1.1 trillion; with one of the oldest mutual life insurers in the U.S.; with a major bank in the mid-Atlantic region of the U.S. serving customers in 59 countries; and with a leading bank with regional branches in Australia, New Zealand and the United Kingdom, among other similar contracts in the fourth quarter.

 

Geac gained 54 net new EAS customers in the fourth quarter, compared to 52 net new customers in the third quarter of FY 2005.

 

5



 

In support of Geac’s product development efforts, Ventana Research, the leading Performance Management research and advisory services firm, named Geac its “Overall Category Winner” for the advances and success of its MPC performance management product family.

 

To learn more about deals Geac closed in both its EAS and ISA divisions, please visit www.geac.com/object/customers05.html.

 

Concluding Remarks

 

“However strong we feel the fourth quarter results have been, these results do not indicate for us that we have overcome the seasonality of our revenue and profits, in which the first quarter has been traditionally the weakest.  In the fourth quarter, we benefited from many parts of our diverse business performing well at the same time, and, in some areas, from a benefit associated with the value of the U.S. dollar.  Further, while we remain focused on cost control, we face significantly higher general and administrative costs due to Sarbanes-Oxley and continued selling and marketing expenses.  For these reasons and as we stated in the second and third quarter announcements, we remain uncertain about whether we can maintain our current level of profit going forward,” commented Mr. Jones.  “That said, however, we are optimistic about the future, and by far the most encouraging part of this quarter’s results was our ability to grow sales from internally developed products even in a challenging enterprise software market that is plagued by frugally managed IT budgets and industry consolidation.  We are pleased that in this competitive environment, we were able to increase the number and the size of our new deals in the fourth quarter of FY 2005, which, in turn, fueled both license and total revenue growth and increased earnings.  We are hopeful that our increased cash position will afford us enhanced opportunity as we move forward with internal development and acquisition initiatives to deliver expanded product suites to existing and new customers.”

 

To understand better this press release and for more in-depth analysis of these financial results, please see our Management Discussion and Analysis and our audited consolidated financial statements and notes for

 

6



 

the fiscal years ended April 30, 2005 and April 30, 2004, which will be filed today with the Canadian Securities Administrators at www.sedar.com and the United States Securities and Exchange Commission at www.sec.gov.  They will also be posted on our website at http://www.geac.com later today.  A corporate fact sheet for the quarter and year can be found at www.geac.com/object/factsheetQ405.html.

 

Earnings Call

 

Management will discuss the results announced on a conference call scheduled for later today, Wednesday, June 22, 2005, at 5:15 p.m. Eastern Time.

 

Listeners may access the conference call at 416.405.9328 / 800.387.6216, or via webcast at http://www.investors.geac.com.

 

A replay of the conference call will be available from June 22, 2005 at approximately 9:00 p.m. Eastern Time until July 1, 2005 at 11:59 p.m. Eastern Time.  The replay can be accessed at 416.695.5800 or 1.800.408.3053.  The pass code for the replay is 3156079#.

 

The conference call will be broadcast over Geac’s web site at www.investors.geac.com. Attendees will need to log in at least 15 minutes prior to the call.

 

About Geac

 

Geac (TSX: GAC, NASDAQ: GEAC) is a leading global provider of software and services for businesses and governmental bodies providing customers with financial and operational technology solutions to optimize their financial value chain.  Further information is available at http://www.geac.com or through email at info@geac.com.

 

Geac trades on the Toronto Stock Exchange under the symbol “GAC” and on the NASDAQ National Market under the symbol “GEAC” and had 86,377,012 common shares issued and outstanding at April 30, 2005.

 

7



 

This press release contains forward-looking statements of Geac’s intentions, beliefs, expectations and predictions for the future.  These forward-looking statements often include use of the future tense with words such as “will,” “may,” “intends,” “anticipates,” “expects” and similar conditional or forward-looking words and phrases.  These forward-looking statements are neither promises nor guarantees.  They are only predictions that are subject to risks and uncertainties, and they may differ materially from actual future events or results.  Geac disclaims any obligation to update any such forward-looking statements after the date of this release.  Among the risks and uncertainties that could cause a material difference between these forward-looking statements and actual events include, among other things: our ability to increase revenues from license sales, cross-sell into our existing customer base and reduce customer attrition; whether we can identify and acquire synergistic businesses and, if so, whether we can successfully integrate them into our existing operations; whether we are able to deliver products and services within required time frames and budgets to meet increasingly competitive customer demands and performance guarantees; risks inherent in fluctuating international currency exchange rates in light of our global operations and the unpredictable effect of geopolitical world and local events; whether we are successful in our continued efforts to manage expenses effectively and maintain profitability; our ability to achieve revenue from products and services that are under development; the uncertain effect of the competitive environment in which we operate and resulting pricing pressures; and whether the anticipated effects and results of our new product offerings and successful product implementation will be realized.  These and other potential risks and uncertainties that relate to Geac’s business and operations are summarized in more detail from time to time in our filings with the United States Securities and Exchange Commission and with the Canadian Securities Administrators, including Geac’s most recent quarterly reports available through the website maintained by the SEC at www.sec.gov and through the website maintained by the Canadian Securities Administrators and the Canadian Depository for Securities Limited at www.sedar.com.

 

Geac is a registered trademark of Geac Computer Corporation Limited.  All other marks are trademarks of their respective owners.

 

Geac’s financial statements and the financial information included in this press release have been prepared in accordance with Canadian generally accepted accounting principles.  In addition, the financial statements and the financial information included in this press release, as well as this press release itself, have been reviewed and approved by both the Audit Committee and the Board of Directors of the Company.

 

For more information, please contact:

 

Financial Contact:

 

Investor and Media Contact:

Donna de Winter

 

Alys Scott

Chief Financial Officer

 

Vice President, Corporate Communications

Geac

 

Geac

905.475.0525 ext. 3204

 

508.871.5064

donna.dewinter@geac.com

 

alys.scott@geac.com

 

8



 

Geac Computer Corporation Limited

Consolidated Balance Sheets

As at April 30, 2005 and 2004

(amounts in thousands of U.S. dollars)

 

 

 

April 30,

 

 

 

2005

 

2004

 

 

 

 

 

(Revised –

 

 

 

 

 

see note 1)

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

188,242

 

$

86,050

 

Restricted cash

 

4,808

 

95

 

Short-term investments

 

 

26,500

 

Accounts receivable and other receivables

 

56,853

 

55,837

 

Future income taxes

 

8,292

 

15,247

 

Prepaid expenses and other assets

 

8,230

 

8,437

 

Total current assets

 

266,425

 

192,166

 

Restricted cash

 

3,039

 

1,781

 

Future income taxes

 

34,558

 

21,741

 

Property, plant and equipment

 

22,005

 

23,843

 

Intangible assets

 

23,841

 

32,628

 

Goodwill

 

110,142

 

128,366

 

Other assets

 

6,156

 

6,378

 

Total assets

 

$

466,166

 

$

406,903

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

73,373

 

$

79,691

 

Income taxes payable

 

22,997

 

34,538

 

Current portion of long-term debt

 

424

 

391

 

Deferred revenue

 

112,605

 

117,927

 

Total current liabilities

 

209,399

 

232,547

 

Deferred revenue

 

2,058

 

2,256

 

Employee future benefits

 

26,334

 

23,967

 

Asset retirement obligations

 

1,678

 

1,648

 

Accrued restructuring

 

1,769

 

5,864

 

Long-term debt

 

4,630

 

4,550

 

Total liabilities

 

245,868

 

270,832

 

Shareholders’ Equity

 

 

 

 

 

Preference shares; no par value; unlimited shares authorized; none issued or outstanding

 

 

 

Common shares; no par value; unlimited shares authorized; issued and outstanding as at April 30, 2005—86,377,012 (2004—85,174,785)

 

131,445

 

124,019

 

Treasury shares; issued and outstanding as at April 30, 2005—816,598 (2004—nil)

 

(6,979

)

 

Common stock options

 

12

 

44

 

Contributed surplus

 

6,353

 

2,368

 

Retained earnings

 

111,541

 

34,517

 

Cumulative foreign exchange translation adjustment

 

(22,074

)

(24,877

)

Total shareholders’ equity

 

220,298

 

136,071

 

Total liabilities and shareholders’ equity

 

$

466,166

 

$

406,903

 

 

Approved by the Board of Directors

/s/ C. KENT JESPERSEN

 

/s/ ROBERT L. SILLCOX

 

C. Kent Jespersen

Robert L. Sillcox

Chairman

Chair of the Audit Committee

 

9



 

Geac Computer Corporation Limited

Consolidated Statements of Earnings

For the years ended April 30, 2005 and 2004

(amounts in thousands of U.S. dollars, except share and per share data)

 

 

 

Three months ended
April 30,

 

Year ended
April 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

Software

 

$

22,270

 

$

18,387

 

$

71,040

 

$

65,190

 

Support and services

 

91,991

 

93,517

 

360,947

 

355,019

 

Hardware

 

2,943

 

4,201

 

12,405

 

25,063

 

Total revenue

 

117,204

 

116,105

 

444,392

 

445,272

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

Costs of software

 

1,903

 

2,171

 

7,991

 

7,663

 

Costs of support and services

 

37,184

 

37,598

 

142,634

 

146,316

 

Costs of hardware

 

2,204

 

3,273

 

9,732

 

21,117

 

Total cost of revenue

 

41,291

 

43,042

 

160,357

 

175,096

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

75,913

 

73,063

 

284,035

 

270,176

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Sales and marketing

 

21,737

 

18,810

 

78,086

 

74,051

 

Product development

 

15,123

 

14,395

 

57,878

 

58,805

 

General and administrative

 

17,063

 

14,768

 

58,472

 

62,774

 

Net restructuring and other unusual items

 

(1,969

)

(1,527

)

(3,724

)

(5,281

)

Amortization of intangible assets

 

2,313

 

2,226

 

9,161

 

7,589

 

Total operating expenses

 

54,267

 

48,672

 

199,873

 

197,938

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations

 

21,646

 

24,391

 

84,162

 

72,238

 

Interest income

 

1,266

 

366

 

3,318

 

1,265

 

Interest expense

 

(404

)

(447

)

(1,583

)

(1,289

)

Other income (expense), net

 

1,770

 

390

 

2,252

 

(1,374

)

Earnings from operations before income taxes

 

24,278

 

24,700

 

88,149

 

70,840

 

Income taxes

 

5,640

 

920

 

11,125

 

13,674

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

18,638

 

$

23,780

 

$

77,024

 

$

57,166

 

 

 

 

 

 

 

 

 

 

 

Basic net earnings per share

 

$

0.22

 

$

0.28

 

$

0.90

 

$

0.68

 

Diluted net earnings per share

 

$

0.21

 

$

0.27

 

$

0.87

 

$

0.66

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares used in computing basic net earnings per share (‘000s)

 

85,903

 

84,977

 

85,574

 

84,645

 

Weighted average number of common shares used in computing diluted net earnings per share (‘000s)

 

89,773

 

87,591

 

88,170

 

86,233

 

 

10



 

Geac Computer Corporation Limited

Consolidated Statements of Cash Flows

For the years ended April 30, 2005 and 2004

(amounts in thousands of U.S. dollars)

 

 

 

Year ended April 30,

 

 

 

2005

 

2004

 

 

 

 

 

(Revised –
see note 1)

 

Cash Flows from Operating activities

 

 

 

 

 

Net earnings

 

$

77,024

 

$

57,166

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

Depreciation

 

5,930

 

7,243

 

Amortization of intangible assets

 

9,161

 

7,589

 

Amortization of deferred financing costs

 

943

 

607

 

Stock-based compensation

 

6,527

 

2,385

 

Employee future benefits

 

4,370

 

2,272

 

Future income tax expense

 

20,649

 

6,044

 

Release of tax reserves

 

(14,113

)

(3,020

)

Accrued liabilities and other provisions

 

(2,165

)

(6,015

)

Gain on sale of assets

 

 

(243

)

Other

 

64

 

(46

)

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable and other receivables

 

1,844

 

18,809

 

Prepaid expenses and other assets

 

788

 

4,902

 

Other assets

 

(627

)

(2,552

)

Accounts payable and accrued liabilities

 

(4,947

)

(16,104

)

Accrued restructuring

 

(10,560

)

(1,685

)

Asset retirement obligations

 

(159

)

 

Income taxes payable

 

(4,216

)

4,367

 

Deferred revenue

 

(8,952

)

(12,983

)

Other

 

(1,605

)

(2,150

)

Net cash provided by operating activities

 

79,956

 

66,586

 

Cash Flows from Investing activities

 

 

 

 

 

Acquisition of Comshare less cash acquired

 

 

(39,147

)

Proceeds from sale of assets less cash divested

 

 

339

 

Purchases of investments

 

(4,525

)

(90,203

)

Sales of investments

 

31,025

 

83,703

 

Additions to property, plant and equipment

 

(3,417

)

(3,907

)

Disposals of property, plant and equipment

 

46

 

278

 

Change in restricted cash

 

(5,893

)

652

 

Net cash provided by (used in) investing activities

 

17,236

 

(48,285

)

Cash Flows from Financing activities

 

 

 

 

 

Deferred financing costs

 

 

(2,828

)

Issue of common shares

 

5,767

 

2,907

 

Purchase of common shares

 

(6,979

)

 

Issuance of long-term debt

 

180

 

918

 

Repayment of long-term debt

 

(447

)

(3,793

)

Net cash used in financing activities

 

(1,479

)

(2,796

)

Effect of exchange rate changes on cash and cash equivalents

 

6,479

 

726

 

Cash and cash equivalents

 

 

 

 

 

Net increase in cash and cash equivalents

 

102,192

 

16,231

 

Cash and cash equivalents—Beginning of year

 

86,050

 

69,819

 

Cash and cash equivalents—End of year

 

$

188,242

 

$

86,050

 

 

11



 

Geac Computer Corporation Limited

Supplementary Information

April 30, 2005 and 2004

(amounts in thousands of U.S. dollars, except share and per share data)

 

NOTE 1.  RECLASSIFICATION

 

Short-term Investments

 

The Company has adjusted its consolidated balance sheet as at April 30, 2004, and its consolidated statements of cash flows for the year ended April 30, 2004.  In February 2005, the Company determined that its previously issued consolidated balance sheet as at April 30, 2004 required an adjustment to reclassify $26,500 of auction rate securities from cash and cash equivalents to short-term investments.  The auction rate securities were classified as cash and cash equivalents as a result of the Company’s intent to liquidate them within a 60-day period however, the original maturities of the securities exceeded 90 days.  The adjustments to the Company’s consolidated balance sheet as at April 30, 2004 resulted in a decrease of cash and cash equivalents of $26,500 and an increase in short-term investments of $26,500.  In addition, adjustments to the Company’s consolidated statement of cash flows resulted in a decrease of $6,500 in cash from investing activities for the year ended April 30, 2004 as a result of net purchases of the auction rate securities.  These reclassifications had no impact on the Company’s results of operations.

 

As of August 1, 2004 the Company no longer held any auction rate securities and ceased investing in these securities given that interest rates increased on traditional investment vehicles.

 

NOTE 2.  SEGMENTED INFORMATION

 

The Company reports segmented information according to CICA Handbook Section 1701, “Segment Disclosures.”  The Company operates the following business segments, which have been segregated based on product offerings, reflecting the way that management organizes the segments within the business for making operating decisions and assessing performance.

 

Enterprise Applications Systems (EAS) offer software solutions, which include cross-industry enterprise business applications for financial administration and human resource functions, and enterprise resource planning applications for manufacturing, distribution, and supply chain management.

 

Industry-Specific Applications (ISA) products include applications for the real estate, construction, banking, local government, hospitality and publishing marketplaces, as well as a range of applications for libraries and public safety administration.

 

Accounting policies for the operating segments are the same as those described in note 2 to the notes of the consolidated financial statements for the year ending April 30, 2005.  There are no significant inter-segment revenues. Segment assets consist of working capital items, excluding cash and cash equivalents.  Cash and cash equivalents are considered to be corporate assets.

 

For the year ended April 30, 2004, approximately $1,800 of general and administrative expenses has been reallocated from the EAS segment to the ISA segment to provide a more accurate portrayal of segment contribution.

 

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Year ended April 30, 2005

 

 

 

EAS

 

ISA

 

Total

 

Revenue:

 

 

 

 

 

 

 

Software

 

$

61,075

 

$

9,965

 

$

71,040

 

Support and services

 

281,096

 

79,851

 

360,947

 

Hardware

 

9,597

 

2,808

 

12,405

 

Total revenue

 

$

351,768

 

$

92,624

 

$

444,392

 

 

 

 

 

 

 

 

 

Segment contribution

 

$

93,509

 

$

15,017

 

$

108,526

 

Segment goodwill

 

$

101,864

 

$

8,278

 

$

110,142

 

Total identifiable segment assets

 

$

201,530

 

$

18,799

 

$

220,329

 

 

 

 

Year ended April 30, 2004

 

 

 

EAS

 

ISA

 

Total

 

Revenue:

 

 

 

 

 

 

 

Software

 

$

54,826

 

$

10,364

 

$

65,190

 

Support and services

 

274,859

 

80,160

 

355,019

 

Hardware

 

21,574

 

3,489

 

25,063

 

Total revenue

 

$

351,259

 

$

94,013

 

$

445,272

 

 

 

 

 

 

 

 

 

Segment contribution

 

$

79,417

 

$

9,273

 

$

88,690

 

Segment goodwill

 

$

120,195

 

$

8,171

 

$

128,366

 

Total identifiable segment assets

 

$

225,865

 

$

22,677

 

$

248,542

 

 

Reconciliation of segment contribution to earnings from operations before income taxes

 

 

 

Year ended April 30,

 

 

 

2005

 

2004

 

Segment contribution

 

$

108,526

 

$

88,690

 

Corporate expenses

 

(18,927

)

(14,144

)

Amortization of intangible assets

 

(9,161

)

(7,589

)

Interest income (expense), net

 

1,735

 

(24

)

Other income (expense), net

 

2,252

 

(1,374

)

Net restructuring and other unusual items

 

3,724

 

5,281

 

Earnings from operations before income taxes

 

$

88,149

 

$

70,840

 

 

13



 

Reconciliation of segment assets to total Company assets

 

 

 

April 30,

 

 

 

2005

 

2004

 

Total identifiable segment assets

 

$

220,329

 

$

248,542

 

Other assets

 

6,156

 

6,378

 

Future income taxes

 

42,850

 

36,988

 

Cash and cash equivalents

 

188,242

 

86,050

 

Short-term investments

 

 

26,500

 

Restricted cash

 

7,847

 

1,876

 

Other unallocated assets

 

742

 

569

 

Total assets

 

$

466,166

 

$

406,903

 

 

Geographical information

 

 

 

April 30, 2005

 

April 30, 2004

 

 

 

Revenue

 

Property, Plant
and Equipment
Intangible Assets
Goodwill and
Other Assets

 

Revenue

 

Property, Plant
and Equipment
Intangible Assets
Goodwill and
Other Assets

 

Canada

 

$

9,831

 

$

9,243

 

$

12,956

 

$

8,682

 

U.S.A.

 

213,699

 

112,473

 

213,070

 

136,349

 

United Kingdom

 

87,650

 

22,698

 

84,579

 

27,697

 

France

 

50,135

 

7,249

 

54,042

 

7,590

 

Australia

 

20,607

 

2,709

 

21,265

 

3,615

 

All other

 

62,470

 

7,772

 

59,360

 

7,282

 

Total

 

$

444,392

 

$

162,144

 

$

445,272

 

$

191,215

 

 

Revenues in the above tables are based on the location of the sales organization, which reflects the location of the customers to which sales are made. Revenues are derived from the licensing of software, the resale of hardware and the provision of related maintenance and professional services.

 

14