CIMdata PLM Industry Summary Online Archive
6 May 2005
Financial News
Rand Worldwide Announces Profitable First Quarter 2005 Continuing Operations Net Income $0.5 Million
Rand A Technology Corporation, operating as RAND Worldwide® ("the Company") announced its financial results for the first quarter ended March 31, 2005 with a profitable quarter from continuing operations.
Following the previously announced 2004 year end sale of its five European subsidiaries to Dassault Systemes ("Dassault") that resulted in the elimination of 100% of the Company's debt, combined with the closure and exit of unprofitable operations in France, Italy, Ireland Shared Services and Poland, the Company has established a core business with positive continuing operations as reflected below:
RAND Worldwide's gross profit margin has continued to improve for Q1 2005 to 53.9%, compared with 52.4% for the first quarter ended March 31, 2004 and 52.6% for the full year 2004. This is a result of increasing the mix of higher margin professional services and reducing low margin hardware sales. Operating expenses were reduced in Q1 2005 to $12.3 million, down 20.3% from $15.4 million in Q1 2004.
The Company recorded an operating income for the first quarter ended March 31, 2005, 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), of $0.9 million, versus an EBITDA loss of ($0.9) million in the first quarter of 2004 and an EBITDA loss of ($4.7) million for the full year 2004.
The Company had cash and short-term investments totaling $9.3 million for the quarter ended March 31, 2005, compared with $7.8 million as at March 31, 2004 and $8.4 million at December 31, 2004. RAND continues to be debt-free post the recently announced transaction with Dassault.
During Q1 2005, the Company entered into legal proceedings to finalize the closure of the businesses in France, Italy and Poland. The Company expects these legal proceedings to be finalized in Q2 2005. The Q1 2005 losses relating to these closures are as follows: France ($1.0) million, Italy ($0.4) million and Poland ($0.1) million. The Company is also finalizing the closure of the Ireland Shared Services operations and will report a Q1 2005 loss of ($1.2) million. Therefore, the Q1 2005 net loss from discontinued operations net of income taxes (Other than Sale) is ($2.6) million. The Company does not expect any further losses from these operations in 2005.
"RAND Worldwide is focused on utilizing the Company's strong global brand, experienced management team and market leadership 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 employees and customers for their support and we look forward to continuing our growth in 2005."
"RAND Worldwide continues to "walk the talk." We have continued to make significant progress over the last year restructuring our balance sheet to be debt free and improving the Company's productivity, profitability and performance through focused execution and implementing global best practices," said Kriss Bush, Chief Financial Officer of RAND Worldwide.
(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.
More information including financial tables is available at http://www.rand.com/na/index.htm .
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