Business Services Industry
BCE Emergis Reports Third Quarter Financial Results
Business Wire, Nov 2, 2004
Consolidated Statements of Earnings
(millions of
Canadian dollars,
except For the three For the three For the nine For the nine
income month period month period month period month period
(loss) per share ended ended ended ended
and number September September September September
of shares) 30, 2004 30, 2003 30, 2004 30, 2003
---------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue 48.3 69.6 172.9 216.0
Direct costs 11.7 20.4 43.7 62.8
---------------------------------------------------------------------
Gross margin 36.6 49.2 129.2 153.2
---------------------------------------------------------------------
Contract
settlements
(note 9) - - 13.8 -
Expenses
Operations 11.4 19.2 51.9 66.6
Sales and
marketing 5.4 6.6 18.5 24.7
Research and
development,
net (note 18) 8.0 8.7 27.2 25.9
General and
administrative 6.3 10.4 19.8 27.6
Restructuring
and other charges
(note 13) 1.2 - (2.7) -
---------------------------------------------------------------------
32.3 44.9 114.7 144.8
Earnings before
under noted items 4.3 4.3 28.3 8.4
Depreciation 3.5 3.8 9.4 10.8
Amortization of
intangible assets 3.6 5.1 12.3 16.2
Interest income (1.0) (4.8) (9.8) (13.2)
Interest on long-
term debt 0.9 0.9 2.1 3.1
Gain on sale of
assets (notes 6
and 7) (0.1) - (12.2) -
(Gain) loss on
foreign exchange (4.4) 0.2 (0.9) 0.9
Other (0.1) (0.1) (0.1) (0.1)
---------------------------------------------------------------------
Income (loss) from
continuing
operations
before income
taxes 1.9 (0.8) 27.5 (9.3)
Income taxes
Current 0.6 1.5 1.6 2.2
Future - (0.4) 71.6 2.7
---------------------------------------------------------------------
0.6 1.1 73.2 4.9
Net income (loss)
from continuing
operations 1.3 (1.9) (45.7) (14.2)
Net (loss) income
from discontinued
operations -net of
income taxes
(note 11) (2.8) 8.1 6.9 31.1
---------------------------------------------------------------------
Net (loss)
income (1.5) 6.2 (38.8) 16.9
---------------------------------------------------------------------
---------------------------------------------------------------------
Basic income (loss)
per share ($)
from continuing
operations 0.01 (0.02) (0.44) (0.14)
Basic (loss) income
per share ($)
from discontinued
operations (0.03) 0.08 0.07 0.30
Basic (loss) income
per share ($) (0.01) 0.06 (0.38) 0.17
Diluted income (loss)
per share ($)
from continuing
operations 0.01 (0.02) (0.44) (0.14)
Diluted (loss) income
per share ($)
from discontinued
operations (0.03) 0.08 0.07 0.30
Diluted (loss)
income per
share ($) (0.01) 0.06 (0.38) 0.17
Weighted average
number of shares
outstanding used
in computing
basic and diluted
net (loss) income
per share 103,391,219 102,752,341 103,311,015 102,239,248
Weighted average
number of shares
outstanding used
in computing
diluted income
from continuing
operations per
share 103,395,204 102,752,341 103,311,015 102,239,248
The accompanying notes are an integral part of the Interim
Consolidated Statements of Deficit
For the nine For the nine
month period month period
ended ended
September 30, 2004 September 30, 2003
---------------------------------------------------------------------
(millions of Canadian dollars) (unaudited) (unaudited)
Deficit - beginning of period (1,176.9) (1,080.1)
Net (loss) income (38.8) 16.9
---------------------------------------------------------------------
Deficit - end of period (1,215.7) (1,063.2)
---------------------------------------------------------------------
The accompanying notes are an integral part of the Interim
Consolidated Balance Sheets
As at As at
September 30, December 31,
(millions of Canadian dollars) 2004 2003
---------------------------------------------------------------------
(unaudited) (audited)
ASSETS
Current
Cash and cash equivalents 238.5 128.6
Accounts receivable 21.8 25.4
Future income taxes 0.2 -
Other current assets (note 18 and 19) 23.4 31.1
Current assets held for sale (note 11) - 272.7
---------------------------------------------------------------------
283.9 457.8
Fixed assets 27.1 26.1
Intangible assets 33.2 24.2
Goodwill 47.5 38.6
Future income taxes - 77.3
Other long-term assets 7.6 3.6
Long-term assets held for sale
(note 11) - 13.1
---------------------------------------------------------------------
399.3 640.7
---------------------------------------------------------------------
LIABILITIES
Current
Accounts payable and accrued
liabilities 84.0 144.9
Deferred revenue 6.9 27.9
Deferred credits 5.3 8.9
Current portion of long-term debt
(note 10) 38.8 17.4
Current liabilities related to assets
held for sale (note 11) - 7.7
---------------------------------------------------------------------
135.0 206.8
Deferred credits and other 6.1 6.9
Future income taxes 3.8 -
Long-term debt 9.3 11.7
---------------------------------------------------------------------
154.2 225.4
---------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock (note 14) 175.6 1,546.7
Contributed surplus (note 14) 1,289.2 76.8
Deficit (1,215.7) (1,176.9)
Foreign currency translation adjustment (4.0) (31.3)
---------------------------------------------------------------------
245.1 415.3
---------------------------------------------------------------------
399.3 640.7
---------------------------------------------------------------------
The accompanying notes are an integral part of the Interim
Consolidated Statements of Cash Flows
For the three For the three For the nine For the nine
month period month period month period month period
(millions of ended ended ended ended
Canadian September September September September
dollars) 30, 2004 30, 2003 30, 2004 30, 2003
---------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
Operating
activities
Net income
(loss) from
continuing
operations 1.3 (1.9) (45.7) (14.2)
Depreciation and
amortization 7.1 8.9 21.7 27.0
Gain on sale
of assets (0.1) - (12.2) -
Future income
taxes - (0.4) 71.6 2.7
Non-cash foreign
exchange (gain)
loss on
derivative
financial
instruments (4.0) - 1.0 -
Non-cash
portion of
restructuring
and other
charges - - - 0.4
Non-cash stock
based
compensation
(note 2) - - 0.4 -
Other (0.1) (1.4) 0.2 (2.7)
Changes in
working capital 1.4 43.9 (61.7) 22.5
Cash flows from
(used for)
operating
activities 5.6 49.1 (24.7) 35.7
Investing
activities
Additions to
fixed and
intangible
assets (2.5) (2.1) (10.7) (6.1)
Acquisitions
(note 12) (0.6) (2.6) (22.6) (2.6)
Cash acquired
on acquisition
of businesses - - 0.3 -
Proceeds on
sale of
businesses 6.4 - 326.6 -
Cash flows
from (used
for) investing
activities 3.3 (4.7) 293.6 (8.7)
Financing
activities
Repayment of
long-term debt (3.7) (23.4) (16.3) (34.5)
Issue of long
term debt 1.1 - 1.1 -
Issue (reduction)
of common shares 0.3 - (148.9) -
Cash flows used
for financing
activities (2.3) (23.4) (164.1) (34.5)
Foreign exchange
loss on cash held
in foreign
currencies (10.5) (0.4) (6.4) (3.7)
Cash flows (used
for) from continuing
operations (3.9) 20.6 98.4 (11.2)
Cash flows from
discontinued
operations (note 11) - 3.4 2.7 31.1
Cash and cash
equivalents
(Decrease)
increase (3.9) 24.0 101.1 19.9
Balance, beginning
of period 242.4 102.9 137.4 107.0
Balance, end
of period (1) 238.5 126.9 238.5 126.9
Supplemental
disclosure of
cash flow
information
Interest paid 1.3 0.8 2.3 2.6
Income taxes paid 0.6 - 1.7 0.9
(1) Includes the following:
Cash and cash
equivalents
related to:
Continuing
operations 238.5 124.3 238.5 124.3
Discontinued
operations
(note 11) - 2.6 - 2.6
238.5 126.9 238.5 126.9
Non-cash investing
and financing
activities
Additions to
fixed and
intangible
assets financed 0.3 1.0 5.0 9.3
The accompanying notes are an integral part of the Interim
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
As at September 30, 2004
(In millions of Canadian dollars except share data) (unaudited)
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