05/09/12 -- Redknee Solutions, Inc.(TSX: RKN), a leading provider of business-critical software andsolutions for communications service providers, reported resultsfor the fiscal second quarter ended March 31, 2012. Fiscal Q2 2012 Highlights Revenue was $14.1 million (Q2 2011: $16.0 million) Gross margin was 67% (Q2 2011: 68%) EBITDA was $1.5 million (Q2 2011: $1.7 million) Recurring revenue increased to 51% of revenue (Q2 2011: 34%) Order backlog increased to $60.5 million (Q2 2011: $48.6 million) Cash increased to $19.9 million (Q4 2011: $15.7 million) Secured multi-million dollar orders with existing customers inAmericas and EMEA Announced breakthrough converged billing benchmark results for 250Msubscribers Joined Microsoft Dynamics CRM Global ISV program Initiated Normal Course Issuer Bid program Fiscal Q2 2012 Results Revenue for the fiscal second quarter 2012 was $14.1 million, flatcompared to last quarter and down from $16.0 million in the sameyear-ago quarter. The decrease was primarily due to a largeone-time license expansion recognized in the Asia-Pacific region inQ2 of fiscal 2011. Recurring revenue, on a trailing twelve month basis, was 48% ofrevenue, compared to 41% one year ago.
The improvement was due toincreased sales and renewals of customer support services, softwaresubscriptions and term licenses. Gross margin for the fiscal second quarter 2012 decreased slightlyto 67% from 68% in the same year-ago quarter. EBITDA (Earningsbefore Interest, Taxes, Depreciation, Amortization and non-cashstock-based compensation) for the fiscal second quarter 2012 was$1.5 million, or 11% of revenue, compared to $1.7 million and 11%of revenue in the same year-ago quarter. Net income for the fiscal second quarter 2012 totaled $1.3 millionor $0.02 per basic and diluted share, compared to a net income of$430,000 or $0.01 per basic and diluted share in the same year-agoperiod.
The increase was partially attributable to a foreigncurrency exchange gain of $550,000 in fiscal Q2 2012, compared to aforeign currency exchange loss of $350,000 in the same year-agoquarter. At March 31, 2012, cash and investments totaled $19.9 millioncompared to $15.7 million as at September 30, 2011. This increasewas attributable to cash generated from operating activities of$5.9 million, compared to $0.5 million in the same period lastyear. Please see the section regarding forward-looking statements whichform an integral part of this release. These results, along withthe unaudited consolidated financial statements and the company'sMD&A, are available on the company's website at and on SEDAR at.
Management Commentary "We made significant progress on our strategic initiatives duringthe quarter, which helped drive strong recurring revenue,profitability and order backlog for the second quarter," saidRedknee's CEO Lucas Skoczkowski. "Our next generation technology platform, coupled with our globalpartnerships with Microsoft and Tech Mahindra, has allowed us totarget larger and longer-term contracts with Tier 1 networkoperators. Our industry leading solution's capacity is proven toserve at least 250 million subscribers, which sets a new standardfor carrier-grade scalability and performance with significant costsavings. An example of this is our Telco-In-The-Box offering withTech Mahindra, which offers a turnkey, flexible solution and fasttime to market.
We expect our technology and partnerships tofurther support our growth and increase our market share." "We continue to focus on real-time converged billing and customercare with on-premise and cloud delivery capability with an emphasison multi-year, term-based licensing models. These types ofcontracts will drive long-term recurring revenue and profitability,and ultimately build shareholder value." Conference Call The company will host a conference call tomorrow (Thursday, May10, 2012) to discuss these results. Redknee's CEO Lucas Skoczkowskiand CFO David Charron will host the presentation starting at 8:30a.m. Eastern time. A question and answer session will follow themanagement's presentation.
Dial-in number: 1-877-941-8416 International: 1-480-629-9808 Conference ID#: 4532798 The presentation will be webcast live and available for replay viathe Investors section of the company's website at . Please call the conference telephone number 5-10 minutes prior tothe start time. An operator will register your name andorganization. If you have any difficulty connecting with theconference call, please contact Liolios Group at 1-949-574-3860.
A replay of the call will be available after 11:30 a.m. Easterntime on the same day until June 10, 2012. Toll-free replay number: 1-877-870-5176 International replay number: 1-858-384-5517 Replay PIN#: 4532798 Forward-Looking Statements Certain statements in this document may constitute"forward-looking" statements which involve known and unknown risks,uncertainties and other factors which may cause our actual results,performance or achievements, or industry results, to be materiallydifferent from any future results, performance or achievementsexpressed or implied by such forward-looking statements. When usedin this document, such statements use such words as "may," "will,""expect," "continue," "believe," "plan," "intend," "would,""could," "should," "anticipate" and other similar terminology.These statements reflect current assumptions and expectationsregarding future events and operating performance and speak only asof the date of this document.
Forward-looking statements involvesignificant risks and uncertainties, should not be read asguarantees of future performance or results, and will notnecessarily be accurate indications of whether or not such resultswill be achieved. A number of factors could cause actual results tovary significantly from the results discussed in theforward-looking statements, including, but not limited to, thefactors discussed under the "Risk Factors" section of the Company'sthe most recently filed AIF which is available on SEDAR at and on the Company's web-site at . Although the forward-looking statements contained in this documentare based upon what we believe are reasonable assumptions, wecannot assure investors that our actual results will be consistentwith these forward-looking statements. We assume no obligation toupdate or revise these forward-looking statements to reflect newevents or circumstances, except as required by securities law.
About Redknee Solutions, Inc. Redknee is a leading global provider of innovative communicationsoftware products, solutions and services. Redknee's award-winningsolutions enable operators to monetize the value of each subscribertransaction while personalizing the subscriber experience to meetmainstream, niche and individual market segment requirements.Redknee's revenue generating solutions provide advanced convergedbilling, rating, charging and policy for voice, messaging and newgeneration data services to over 90 network operators in over 50countries. References to Redknee refer to the combined operationsof the parent Redknee Solutions, Inc., and all wholly ownedsubsidiaries. Redknee®, Redknee Solutions, and the Redknee logo aretrademarks or registered trademarks of Redknee Solutions Inc.
Allother company, product names and any registered and unregisteredtrademarks mentioned (if any) are used for identification purposesonly and remain the exclusive property of their respective owners.For more information, visit . Redknee Solutions Inc. Interim Condensed Consolidated Statement ofFinancial Position (Expressed in U.S. dollars) (Unaudited)---------------------------------------------------------------------------March 31, September 30, October 1, 2012 2011 2010 -------------------------- ------------- Assets Current assets Cash and cashequivalents $ 19,179,885 $ 14,879,940 $ 18,038,121 Short-terminvestments - - 21,356 Trade accounts and other receivables12,927,419 12,987,865 14,400,281 Unbilled revenue 8,947,9299,253,901 6,927,557 Prepaid expenses 1,237,640 1,398,145 1,320,649Inventory 409,167 450,788 247,108 ------------- -------------------------- 42,702,040 38,970,639 40,955,072 Restricted cash731,762 784,820 781,611 Property and equipment 759,762 378,013611,757 Deferred income taxes 1,282,280 1,463,249 765,456 Long-termunbilled revenue 1,226,670 1,226,496 - Other assets 1,119,100464,416 499,257 Intangible assets 3,643,783 3,976,609 5,642,037Goodwill 7,638,590 7,638,590 7,381,368 ------------- -------------------------- $ 59,103,987 $ 54,902,832 $ 56,636,558 ========================== ============= Liabilities and Shareholders EquityCurrent liabilities Accounts payable $ 1,476,359 $ 1,731,396 $2,526,188 Accrued liabilities 5,469,831 6,001,706 3,564,561 Incometaxes payable 3,540,446 3,199,295 2,628,543 Contingentconsideration 8,667,985 5,848,086 - Deferred revenue 877,377870,789 5,805,971 Loans and borrowings 2,141,738 3,232,8572,980,289 ------------- ------------- ------------- 22,173,73620,884,129 17,505,552 Deferred revenue 882,549 - - Otherliabilities 564,768 524,520 450,983 Contingent Consideration - -1,160,816 Loans and borrowings 3,981,327 4,804,700 6,859,743Deferred income taxes 785,715 815,829 1,217,842 -------------------------- ------------- 28,388,095 27,029,178 27,194,936Shareholders' Equity Share capital, net of employee share purchaseloans 46,469,720 46,312,920 45,880,359 Contributed surplus5,143,588 4,739,437 4,428,818 Deficit (20,910,885) (23,192,172)(20,867,555) Accumulated other comprehensive income 13,469 13,469 -------------- ------------- ------------- 30,715,892 27,873,65429,441,622 ------------- ------------- ------------- $ 59,103,987 $54,902,832 $ 56,636,558 ============= ============= =============Redknee Solutions Inc.
Interim Condensed Consolidated Statement ofComprehensive Income (Loss) (Expressed in U.S. dollars) (Unaudited)---------------------------------------------------------------------------Three months ended Six months ended March 31 March 31------------------------ ------------------------ 2012 2011 20122011 ----------- ----------- ----------- ----------- RevenueSoftware, services and other $ 8,424,913 $11,037,820 $16,614,624$19,276,397 Support 5,682,723 4,975,088 11,457,216 10,336,070----------- ----------- ----------- ----------- 14,107,63616,012,908 28,071,840 29,612,467 Cost of revenue 4,594,3195,203,818 9,179,555 10,281,361 ----------- ----------- ---------------------- Gross profit 9,513,317 10,809,090 18,892,285 19,331,106Operating expenses Sales and marketing 3,706,253 3,774,1207,099,911 7,191,429 General and administrative 2,137,613 2,700,6984,021,528 5,078,051 Research and development 2,727,782 3,428,9125,146,432 6,418,881 ----------- ----------- ----------- -----------8,571,648 9,903,730 16,267,871 18,688,361 ----------- ---------------------- ----------- Income from operations 941,669 905,3602,624,414 642,745 Foreign exchange gain (loss) 554,569 (346,912)(6,846) (872,074) Other income (13,938) 76,966 (13,938) 246,087Finance Income 22,141 43,322 40,213 80,217 Finance Cost (100,808)(128,392) (217,947) (266,995) ----------- ----------- ---------------------- Income (loss) before income taxes 1,403,633 550,3442,425,896 (170,020) Income taxes (recovery): Current 104,770207,130 224,057 375,352 Deferred (32,988) (88,041) (79,448)(193,698) ----------- ----------- ----------- ----------- 71,782119,089 144,609 181,654 ----------- ----------- ---------------------- Net income (loss) 1,331,851 431,255 2,281,287 (351,674)Other Comprehensive income: Foreign currency translation adjustment- 41,199 - 131,213 ----------- ----------- ----------- -----------Comprehensive Income (loss) $ 1,331,851 $ 472,454 $ 2,281,287 $(220,461) =========== =========== =========== =========== Netincome (loss) per common share Basic 0.02 0.01 0.04 (0.01) Diluted0.02 0.01 0.03 (0.01) =========== =========== ====================== Weighted average number of common shares Basic64,410,404 64,158,363 64,316,481 64,132,813 Diluted 65,304,23265,799,580 65,201,571 64,132,813 =========== ====================== =========== Redknee Solutions Inc. Interim CondensedConsolidated Statement of Cash Flows (Expressed in U.S. dollars)(Unaudited)---------------------------------------------------------------------------Three months ended March 31 2012 2011 ------------- -------------Cash provided by (used in) Operating activities Net income (loss) $1,331,851 $ 431,255 Adjustments for: Depreciation of property andequipment 50,061 34,532 Amortization of intangible assets 183,850404,700 Finance income (22,141) (43,322) Finance costs 100,808128,392 Income tax expense 71,782 119,089 Unrealized foreignexchange loss (13,077) 652,745 Share-based compensation 371,166290,208 Changes in non-cash operating working capital 3,691,292(1,270,798) ------------- ------------- 5,765,592 746,801 Interestpaid (39,497) (141,715) Interest received 42,750 43,322 Incometaxes received (paid) 96,111 (168,189) ------------- -------------5,864,956 480,219 Financing activities Proceeds from exercise ofstock options - 35,370 Repayment of loans and borrowings(1,655,852) (1,956,920) ------------- ------------- (1,655,852)(1,921,550) Investing activities Purchase of property and equipment(374,494) (25,646) Purchase of intangible assets - (35,874)Decrease (increase) in other assets (447,382) 10,663 Decrease(increase) in restricted cash (20,786) 268,709 Acquisition ofNimbus Systems - (76,506) ------------- ------------- (842,662)141,346 Effect of foreign exchange rate changes on cash and cashequivalents 13,077 (28,740) ------------- ------------- Increase(decrease) in cash and cash equivalents 3,379,519 (1,328,725) Cashand cash equivalents - beginning of period 15,800,366 16,004,407------------- ------------- Cash and cash equivalents - end ofperiod $ 19,179,885 $ 14,675,682 ============= =============Redknee Solutions Inc.
Reconciliation of Net loss (income) toEBITDA (Expressed in U.S. dollars) (Unaudited)---------------------------------------------------------------------------Three months ended Six months ended March 31 March 31---------------------- ---------------------- 2012 2011 2012 2011 $$ $ $ AS REPORTED Net income (loss) income for the period 1,331,851431,255 2,281,287 (351,674) Addback / (subtract): Amortization ofproperty and equipment and intangible assets 233,911 439,232468,382 899,522 Interest Income (22,141) (43,322) (40,213) (80,217)Interest Expense 100,808 128,392 217,947 266,995 Income Taxes71,782 119,089 144,609 181,654 Stock based compensation 371,166290,208 500,491 505,922 Foreign exchange (gain) loss (554,569)346,912 6,846 872,074 ---------- ---------- ---------- ----------EBITDA (1) 1,532,808 1,711,766 3,579,349 2,294,276 ==================== ========== ========== (1) EBITDA represents net (loss)income from continuing operations excluding amounts foramortization, interest, income taxes, foreign exchange (gain) lossand stock based compensation and is a common measure of operatingperformance in the industry. EBITDA is not a measure of financialperformance under IFRS, and should not be considered in isolationor as a substitute for consolidated net (loss) income as a measureof performance Add to Digg Bookmark with del.icio.us Add to Newsvine For further details please contact: Redknee Solutions Inc. Lucas Skoczkowski, Chief Executive Officer David Charron, Chief Financial Officer Tel: +1 905 625 2622 Investor Relations Liolios Group, Inc.
Matt Glover or Michael Koehler Tel: +1 949 574 3860 Copyright @ Marketwire. I am Power Supplies writer, reports some information about samarium cobalt magnet , malleable iron castings.
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