TORONTO, May 15 /CNW/ - Workbrain Corporation (TSX: WB), the leading
provider of workforce management solutions for large enterprises, today
reported Canadian GAAP financial results for the first quarter ended March 31,
2007.
AMOUNTS ARE EXPRESSED IN U.S. DOLLARS
For the three months ended March 31, 2007, Workbrain reported record
quarterly revenues of $25.3 million compared with $24.9 million for the first
quarter of 2006. The increase was due primarily to growth in license revenue
to $7.5 million, a new high for the Company, compared to $7.1 million for the
first quarter of 2006. Services, maintenance, and other revenue was $17.9
million, in-line with the first quarter of 2006.
New clients in the first quarter of 2007 included one of the world's
leading retailers, one of the largest regional airlines in North America, the
leading retailer of home and garden improvement products in Australia and New
Zealand, one of the world's largest manufacturers of home improvement
products, and one of the largest retailers in Canada.
Gross profit for the three months ended March 31, 2007, increased by
$0.8 million to $12.6 million. Gross profit as a percentage of revenue rose to
49.6% in the first quarter compared to 47.1% for the same period last year,
primarily due to increases in the contribution from license and maintenance
revenue.
Operating expenses increased to $12.2 million in the first quarter of
2007 from $11.8 million for the same period last year. Sales and marketing
expenses rose $0.3 million in the first quarter due to variable compensation
expenses associated with increased license sales and to severance charges.
General and administrative expenses increased by $0.8 million in the
first quarter of 2007 due primarily to a $0.5 million charge for restructuring
costs associated with consolidating facilities and severance, which are not
expected to be ongoing. Research and development expenses were reduced by
$0.8 million in the first quarter due primarily to a reduction in the average
number of research and development employees.
For the first quarter of 2007 the Company incurred net income of
$0.9 million or $0.05 per share, compared to net income of $0.3 million, or
$0.02 per fully diluted share for the first quarter of 2006. Not including
$0.9 million of restructuring charges incurred in the first quarter of 2007,
net income would have been $1.8 million or $0.10 per share.
"We were pleased to have achieved record revenues in the quarter, driven
by solid growth in license revenues from new customers," commented David
Ossip, President and CEO. "During the quarter we added a number of leading
global firms to our client roster, and we have a strong pipeline of new
business opportunities."
On April 2, 2007, the Company announced that it had reached a definitive
agreement with Infor Global Solutions European Finance, S.A.R.L. (Infor) under
which Infor would acquire all of Workbrain's outstanding common shares at a
price of CAD $12.50 per share in cash pursuant to a statutory plan of
arrangement. The transaction values Workbrain, on a fully diluted basis, at
approximately CAD $227 million dollars. An annual and special meeting of
shareholders has been scheduled for May 23, 2007, at which the Company's
shareholders will be asked to consider and, if deemed advisable, to pass a
special resolution approving a statutory plan of arrangement whereby Infor
will acquire all of the issued and outstanding common shares of Workbrain.
Copies of the consolidated financial statements will be available at
Workbrain's website at www.workbrain.com, or on SEDAR at www.sedar.com.
ABOUT WORKBRAIN
Workbrain provides the most widely deployed web-based workforce
management solution for large enterprises. The company is the only provider of
Total Workforce Management that helps organizations plan, deploy, and manage
their workforce to reduce costs, increase sales, and boost employee
satisfaction. Clients such as British Airways, General Mills, Target
Corporation, and Lifespan choose Workbrain's industry-focused workforce
management solutions to integrate workforce planning, labor forecasting,
workforce scheduling, time and attendance, and workforce analytics on a single
platform. For more information, please visit www.workbrain.com.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements, which are not
historical facts, but are based on certain assumptions and reflect Workbrain's
current expectations. These forward-looking statements are subject to a number
of risks and uncertainties that could cause actual results or events to differ
materially from current expectations. Workbrain disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Given these risks and
uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results.
Workbrain is a trademark of Workbrain, Inc. All other product or company
names mentioned are the property of their respective owners.
(C) Copyright 2007 Workbrain, Inc. All rights reserved.CANADIAN GAAP
WORKBRAIN CORPORATION
INTERIM CONSOLIDATED BALANCE SHEETS
(Amounts in U.S. Dollars, In Thousands, Except Share Data)
(Unaudited)
March 31, December 31,
2007 2006
---------- ------------
Assets:
Current assets:
Cash and cash equivalents.................... $ 19,414 $ 19,529
Short-term investments....................... 24,175 26,728
Accounts receivable, net of allowance for
doubtful accounts of $488
(December 31, 2006 - $1,439)................ 25,709 26,146
Accrued revenue.............................. 2,487 2,085
Other........................................ 4,756 3,841
---------- ----------
Total current assets........................... 76,541 78,329
Property and equipment....................... 3,570 3,968
Other........................................ 97 191
Income taxes recoverable..................... 269 269
Deferred tax assets.......................... 373 373
Intangibles and goodwill..................... 2,545 2,545
---------- ----------
Total assets................................... $ 83,395 $ 85,675
---------- ----------
---------- ----------
Liabilities and shareholders' equity:
Current liabilities:
Accounts payable............................. $ 2,452 $ 1,572
Accrued payroll.............................. 4,785 6,417
Accrued liabilities.......................... 2,763 5,039
Deferred revenue............................. 14,415 14,434
Current portion of capital lease and
other obligations........................... 2,098 2,248
Current portion of leasehold inducements..... 76 79
---------- ----------
Total current liabilities...................... 26,589 29,789
---------- ----------
Long-term liabilities:
Capital lease and other obligations, net of
current portion............................. 1,471 1,692
Leasehold inducements, net of current
portion..................................... 172 188
---------- ----------
Total long-term liabilities.................... 1,643 1,880
---------- ----------
Total liabilities.............................. 28,232 31,669
---------- ----------
Shareholders' equity:
Common shares:
Authorized - unlimited
Issued and outstanding - 17,844,918
(December 31, 2006 - 17,830,110)............ 68,472 68,376
Contributed surplus............................ 2,218 2,036
Accumulated other comprehensive income......... (127) (127)
Deficit........................................ (15,400) (16,279)
---------- ----------
Total shareholders' equity..................... 55,163 54,006
---------- ----------
Total liabilities and shareholders' equity..... $ 83,395 $ 85,675
---------- ----------
---------- ----------
CANADIAN GAAP
WORKBRAIN CORPORATION
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in U.S. Dollars, In Thousands, Except Per Share Data)
(Unaudited)
Three months ended
March 31,
------------------------
2007 2006
---------- ----------
Revenue:
Licence...................................... $ 7,477 $ 7,073
Service, maintenance and other............... 17,865 17,868
---------- ----------
Total revenue.............................. 25,342 24,941
---------- ----------
Cost of revenue:
Licence...................................... 346 398
Service, maintenance and other............... 12,418 12,803
---------- ----------
Total cost of revenue...................... 12,764 13,201
---------- ----------
Gross profit................................... 12,578 11,740
---------- ----------
Gross margin................................... 49.6% 47.1%
Operating expenses:
Sales and marketing.......................... 5,595 5,248
Research and development..................... 3,525 4,333
General and administrative................... 2,792 2,000
Amortization of acquisition-related
intangibles................................. - 34
Amortization of stock-based compensation(*).. 259 202
---------- ----------
Total operating expenses................... 12,171 11,817
---------- ----------
Income (loss) from operations.................. 407 (77)
Interest income, net........................... 472 384
---------- ----------
Income before provision for income taxes....... 879 307
Provision for income taxes..................... - -
---------- ----------
Net income and comprehensive income............ $ 879 $ 307
---------- ----------
---------- ----------
Net income per share:
Basic........................................ $ 0.05 $ 0.02
---------- ----------
---------- ----------
Basic weighted average number of common
shares outstanding.......................... 17,839 17,738
---------- ----------
---------- ----------
Diluted...................................... $ 0.05 $ 0.02
---------- ----------
---------- ----------
Diluted weighted average number of common
shares outstanding.......................... 18,017 18,011
---------- ----------
---------- ----------
-----------
(*) Note:
The amortization of stock-based compensation relates to cost of
revenue and operating expenses as follows:
Three months ended
March 31,
------------------------
2007 2006
---------- ----------
Amortization of stock-based compensation:
Cost of revenue - service, maintenance and
other....................................... $ 174 $ 33
Sales and marketing.......................... 66 95
Research and development..................... 6 6
General and administrative................... 13 68
---------- ----------
$ 259 $ 202
---------- ----------
---------- ----------
CANADIAN GAAP
WORKBRAIN CORPORATION
INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Amounts in U.S. Dollars, In Thousands, Except Share Data)
(Unaudited)
Accumulated
Other Total
Common Shares Contri- Compre- Share-
------------------- buted hensive holders'
Shares Amount Surplus Income Deficit Equity
---------- -------- -------- ------- --------- ---------
Balances at
December 31,
2005 17,730,825 $ 67,414 $ 2,069 $ (127) $(13,744) $ 55,612
Issuance of
common
shares on
stock
options
exercised 99,285 454 - - - 454
Amortization of
stock-based
compensation - - 934 - - 934
Settlement of
directors'
compensation - - (459) - - (459)
Transfer of
stock-based
compensation
to common
shares
related to
stock options
and warrants
exercised - 508 (508) - - -
Net loss - - - - (2,535) (2,535)
---------- -------- -------- ------- --------- ---------
Balances at
December 31,
2006 17,830,110 68,376 2,036 (127) (16,279) 54,006
Issuance of
common shares
on stock
options
exercised 14,808 47 - - - 47
Amortization
of stock-based
compensation - - 258 - - 258
Transfer of
stock-based
compensation
to common
shares
related to
stock options
exercised - 49 (49) - - -
Settlement of
directors'
compensation - - (27) - - (27)
Net income - - - - 879 879
---------- -------- -------- ------- --------- ---------
Balances at
March 31,
2007 17,844,918 $ 68,472 $ 2,218 $ (127) $(15,400) $ 55,163
---------- -------- -------- ------- --------- ---------
---------- -------- -------- ------- --------- ---------
CANADIAN GAAP
WORKBRAIN CORPORATION
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in U.S. Dollars, In Thousands)
(Unaudited)
Three months ended
March 31,
------------------------
2007 2006
---------- ----------
Cash flows from operating activities:
Net income................................... $ 879 $ 307
Adjustments to reconcile net income to net
cash provided by (used for) operating
activities:
Depreciation............................... 804 809
Amortization of acquisition-related
intangibles............................... - 34
Amortization of stock-based compensation... 259 202
Leasehold inducements...................... (19) 87
Unrealized foreign exchange loss........... 20 11
Change in operating assets and liabilities:
Accounts receivable........................ 437 (523)
Accrued revenue............................ (402) (1,945)
Other assets............................... (821) (458)
Accounts payable........................... 880 2,172
Accrued payroll............................ (1,632) (1,304)
Accrued liabilities........................ (2,304) (96)
Deferred revenue........................... (19) (1,107)
---------- ----------
Net cash used for operating activities......... (1,918) (1,811)
---------- ----------
Cash flows from investing activities:
Purchase of short-term investments........... (12,444) (7,361)
Maturity of short-term investments........... 14,997 32,497
Purchase of property and equipment........... (252) (541)
---------- ----------
Net cash provided by investing activities...... 2,301 24,595
---------- ----------
Cash flows from financing activities:
Proceeds on issuance of common shares upon
exercise of stock options................... 47 120
Proceeds on sale and leaseback of property
equipment................................... - 357
Repayment of obligations under capital
lease....................................... (525) (511)
---------- ----------
Net cash used for financing activities......... (478) (34)
---------- ----------
Foreign exchange loss on cash held in foreign
currency...................................... (20) (11)
---------- ----------
Change in cash and cash equivalents............ (115) 22,739
Cash and cash equivalents, beginning of
period........................................ 19,529 16,566
---------- ----------
Cash and cash equivalents, end of period....... $ 19,414 $ 39,305
---------- ----------
---------- ----------
Supplemental cash flow information:
Cash paid for:
Interest................................... $ 53 $ 60
---------- ----------
---------- ----------
Non-cash investing and financing activities:
Deferred stock-based compensation.......... $ - $ -
---------- ----------
---------- ----------
Property and equipment financed by
capital lease............................. $ 154 $ 137
---------- ----------
---------- ----------
For further information: Pat Ladisa, Corporate Communications, (416)
421-6700 extension 2579, pladisa@workbrain.com
