CIMdata PLM Industry Summary Online Archive
18 March 2005
Financial News
RAND Worldwide Announces Fiscal 2004 Net Income Of $23.8 Million, Including Gain On The Sale Of Subsidiaries Of $56.2 Million
Rand A Technology Corporation, operating as RAND Worldwide® ("the Company"), announced its financial results for the fourth quarter and year ended December 31, 2004.
As previously announced, in late 2004, the Company sold five of its European subsidiaries to Dassault Systèmes ("Dassault"), as well as 10% of the shares of Rand North America, Inc. for total proceeds of $51.2 million. Additionally, the Company has taken steps to finalize its restructuring in Europe and exit unprofitable operations in France, Italy and Poland. These subsidiaries are being accounted for as discontinued operations held for other than sale.
The Company's net earnings for the 2004 fourth quarter were $39.4 million, including the gain on sale of subsidiaries sold to Dassault, compared with a net loss of ($7.5 million) for the fourth quarter of 2003. For the year ended December 31, 2004, net earnings were $23.8 million, compared with a net loss of ($50.2 million) for 2003. Net earnings were $2.37 per Common Share for the quarter ended December 31, 2004, including earnings of $2.70 per share related to the gain on dispositions and discontinued operations. This is compared with a net loss of ($0.44) per Common Share for the fourth quarter of 2003, including a net loss of ($0.33) per share related to discontinued operations. Net earnings per Common Share for 2004 were $1.44 per share, including earnings of $2.61 per share related to the gain on disposition of subsidiaries and discontinued operations. For 2003, the net loss was ($3.02) per Common Share, including a loss of ($1.48) per share related to discontinued operations.
RAND Worldwide's gross profit margin for the fourth quarter was 55.7%, compared with 51.6% for the fourth quarter ended December 31, 2003. This was a result of focusing on higher margin professional services and reducing low margin hardware sales. For the 2004 year, the gross profit margin was 52.6%, compared with 47.6% for 2003. Salaries, commissions, and other operating expenses were reduced in 2004 to $52.2 million, down 21.4% from $66.4 million in 2003.
The Company recorded an operating loss during the fourth quarter of 2004, before interest, taxes, depreciation and amortization, restructuring and asset writedowns and equity losses net of dilution gains and losses and the results of discontinued operations (EBITDA loss 1), of ($0.9 million), consistent with an EBITDA loss of ($0.9 million) in the fourth quarter of 2003. EBITDA loss for the twelve month period ended December 31, 2004 was ($4.7 million), compared to an EBITDA loss of ($13.5 million) for the same period last year.
The Company had cash and short-term investments totaling $8.4 million as at December 31, 2004, compared with $5.6 million at September 30, 2004 and $13.4 million at December 31, 2003, as restated for discontinued operations.
The recent transaction with Dassault has eliminated existing long and short-term debt, including approximately $40.0 million owed to Dassault under convertible loan agreements that were entered into on June 18, 2002.
"Re-engineering RAND Worldwide over the past two years has given us a unique opportunity to once again have a solid financial position to rebuild a world class company for our shareholders," said Frank Baldesarra, President and Chief Executive Officer of RAND Worldwide. "Many thanks to our technology partner, Dassault Systèmes, for their support and we look forward to growing a strong business primarily centered around solutions from Dassault and Autodesk."
"RAND Worldwide has made significant progress this year restructuring our balance sheet to be debt free and improving the Company's productivity and performance by reducing our cost base through focused execution and implementing global best practices," said Kriss Bush, Chief Financial Officer of RAND Worldwide. "RAND is positioning itself for future growth, both internally and through acquisitions."
The contents of this News Release has been reviewed and approved by the Audit Committee and the Board of Directors. All currencies are stated in Canadian dollars.
The condensed financial statements which can be found at http://www.rand.com/na/index.htm do not include a comparative Consolidated Cash Flow Statement. The comparative Consolidated Cash Flow Statement for the year ended December 31, 2004 will be included in the Corporation's audited consolidated financial statements, with accompanying MD&A, to be filed with Canadian securities regulatory authorities on or before March 31, 2005. Such audited consolidated financial statements will also be concurrently posted to the Company's web site at www.rand.com and will be mailed to shareholders in connection with the Corporation's upcoming annual general meeting.
1 EBITDA is not a recognized measure under Canadian generally accepted accounting principles (GAAP). Management believes that, in addition to net income (loss), EBITDA is a useful supplemental measure as it is used by certain investors as one measure of the Company's financial performance. Investors should be cautioned, however, that EBITDA should not be construed as an alternative to net income (loss) determined in accordance with GAAP as an indicator of the Company's performance or to cash flows from operating, investing and financing activities as a measure of liquidity and cash flows. The Company's method of calculating EBITDA may differ from other companies and, accordingly, EBITDA may not be comparable to measures used by other companies.
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