ISACSOFT announces 2006 year end results



    MONTREAL, March 14 /CNW Telbec/ - Isacsoft Inc. (TSX: ISF) announced its
audited consolidated financial results for the year ended December 31, 2006.
The Company also announced that it has filed its audited financial statements
and notes for the year ended December 31, 2006 and its related management's
discussion and analysis with Canadian securities regulators. The information
is available electronically to interested parties at www.sedar.com and on the
Company's web site at www.ISACSOFT.com. ISACSOFT's 2006 annual report will be
mailed to shareholders during the third week of March 2007.

    
    2006 Financial Highlights:

    - Net income before impairment and asset write-down of $329,335
      compared to $1,129,230 for the year ended December 31 2005.
    - EBITDA(1) of $850,943 compared to $1,813,300 for the year ended
      December 31, 2005.
    - Revenues of $15,527,743 compared to $17,192,358 for the year ended
      December 31, 2005
    - Non-cash impairment expense of goodwill and write-down of assets of
      $10,470,802
    - Net loss of $10,141,467 after impairment and asset write-down.

    Overall Performance

    The Company closed the year ended December 31, 2006 with cash and cash
equivalents (including restricted cash) of $776,123, a decrease of $544,193
over the amount of $1,320,316 reported as at December 31, 2005. The decrease
is mainly attributable to lower revenue streams and the timing of reception of
multimedia tax credits.
    Working capital was $1,643,994 as at December 31, 2006, and was slightly
better than the December 31, 2005 position of $1,542,143.
    Revenues for the year ended December 31, 2006 were $15,527,743 compared to
$17,192,358 for the year ended December 31, 2005. Total Expenses were
$14,810,310 compared to $15,426,251 for the year ended December 31, 2005. Net
income before Interest, Amortization, Impairment of goodwill and write-down of
assets totalled $717,433 compared to $1,766,107 for the year ended December 31
2006. The decrease is mainly related to loss of revenues in software and
consulting related revenues and a longer than expected transition period for
the training segment of the Company
    Adhering to strict financial stewardship, the Company recognized both a
non cash write-down of property and equipment and an impairment loss on
goodwill that provides a better estimate of fair value. The total non-cash
impact on net income was $10,470,802, comprised of $10,335,853 for impairment
of goodwill and an amount of $134,949 related to the write-down of property
and equipment values. No impairment or write-down of property and equipment
were recorded in the year ended December 31, 2005.
    The Company reported a Net loss of $10,141,467, or ($0.80) per share,
compared to a Net income of $1,129,230 or $0.09 per share for the year ended
December 31, 2005.

                                                  ---------------------------
                                                          2006          2005
    REVENUES
                                                  $ 15,527,743  $ 17,192,358
    Expenses
      Operations                                     9,950,141    10,299,900
      Research and development costs                 1,730,076     1,975,635
      Selling, general and administrative
       expenses                                      3,130,093     3,150,717
                                                  ------------  -------------
                                                    14,810,310    15,426,251

    Income before the following items                  717,433     1,766,107
    Interest (net)                                       3,475       125,597
    Amortization of property and equipment             384,623       511,280
    Impairment of goodwill                          10,335,853             -
    Write-down of property and equipment               134,949             -
                                                  ------------  -------------

    Net income (loss) before income taxes          (10,141,467)    1,129,230

    Income taxes                                             -             -
                                                  ------------  -------------
    Net income (loss)                            ($ 10,141,467) $  1,129,230
                                                  ------------  -------------
                                                  ------------  -------------

    Net income (loss) per share -
     basic and diluted                                  ($0.80) $       0.09
                                                  ------------  -------------

    The Company reported lower operating results in 2006 mainly because of
lower revenues in software and consulting related activities, while
educational sector revenues enjoyed positive growth. The main contributor to
the increase in revenues in the educational sector was the result of the
decision of the Company in late 2005 to embark on a full-fledged training
courses service offering. In order to reduce the impact of lower revenues, the
Company began in 2005 to reduce costs and continued in 2006, reducing total
operational costs.
    "As the Chairman of the Company and as an investor, I am clearly not happy
with these results. That is why we announced our intention on February 9,
2006, that we would be evaluating various strategic alternatives, that
include, but are not limited to, the sale of the Company, a business
combination or a capital reorganization in order to enhance shareholder
value." indicated Mr. Brisebois, President and CEO of ISACSOFT.

    -----------------------
    (1) EBITDA is defined as Earnings before interest, taxes, depreciation,
        and amortization, impairment of goodwill, asset write-down and stock
        compensation expense. This is considered a non-GAAP measure.


    Financial Position:
                                                          2006          2005
                                                  ------------  -------------
    ASSETS
      Current assets
        Cash and cash equivalents                 $     58,303  $    511,896
        Restricted cash                                717,820       808,420
        Accounts receivable                          4,244,553     5,710,874
        Work in process                                388,075        13,492
        Inventory                                        5,559        20,561
        Prepaid expenses                               271,336       194,397
                                                  ------------  -------------
                                                     5,685,646     7,259,640
      Property and equipment                           850,948     1,113,284
      Investments                                            -        39,916
      Goodwill                                       1,101,894    10,801,894
                                                  ------------  -------------
                                                  $  7,638,488  $ 19,214,734
                                                  ------------  -------------
                                                  ------------  -------------
    LIABILITIES
      Current liabilities
        Bank indebtedness                         $          -  $    266,150
        Accounts payable and accrued
         liabilities                                 2,294,247     2,996,292
        Deferred revenues                            1,625,594     2,321,137
        Deferred credits                                32,706        40,111
        Instalments on long-term debt                   89,105        93,807
                                                  ------------  -------------
                                                     4,041,652     5,717,497

      Long term debt                                   380,890       373,334
                                                  ------------  -------------
                                                     4,422,542     6,090,831
                                                  ------------  -------------
    SHAREHOLDERS' EQUITY
      Capital stock                                 55,346,979    55,246,979
      Contributed surplus                            1,114,763       981,253
      Deficit                                      (53,245,796)  (43,104,329)
                                                  ------------  -------------
                                                     3,215,946    13,123,903
                                                  ------------  -------------
                                                  $  7,638,488  $ 19,214,734
                                                  ------------  -------------
                                                  ------------  -------------
    

    ABOUT ISACSOFT

    ISACSOFT is a provider of software business solutions, information
technology- training and systems integration consulting to its national and
international customers. The revenue model is based on software licences,
recurring maintenance revenues and strategic IT projects targeting key
customers and training. ISACSOFT is headquartered in Montréal, Canada with
offices in Québec City, Paris, London, Cologne and The Hague.

    FORWARD-LOOKING STATEMENTS

    Certain statements made in this news release are forward-looking and are
subject to important risks, uncertainties and assumptions. The results or
events predicted in these forward-looking statements may differ materially
from actual results or events. These statements do not reflect the potential
impact of any non-recurring items or of any dispositions, monetization,
mergers, acquisitions, other business combinations or other transactions that
may be announced or that may occur after the date hereof. Other factors that
could cause results or events to differ materially from current expectations
include, among other things: general economic factors, adoption rate of our
solutions by clients, signing contracts, response to industry's rapid rate of
change, competition, pricing, operating results, acquisitions, material change
in our strategic relationships, exposure under contract indemnities, defects
in software, security and privacy breaches, loss of key personnel, our ability
to protect intellectual property, infringement claims on our intellectual
property, and industry and government regulation. For additional information
with respect to certain of these and other factors, refer to ISACSOFT Inc.'s
Annual Report (Management's Discussion and Analysis) filed with the Canadian
securities commissions.

    THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS NEWS RELEASE REPRESENT
THE EXPECTATIONS OF ISACSOFT AND ITS SUBSIDIARIES AS AT MARCH 13, 2007 AND,
ACCORDINGLY, ARE SUBJECT TO CHANGE AFTER SUCH DATE. HOWEVER, ISACSOFT AND ITS
SUBSIDIARIES DISCLAIM ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.

    The information is available electronically to interested parties at
www.sedar.com and on the Company's web site at www.ISACSOFT.com. ISACSOFT's
2006 annual report will be mailed to shareholders during the third week of
March 2007.
    %SEDAR: 00015181EF




For further information:

For further information: Claude Gobeil, VP Finance and Chief Financial
Officer, (514) 282-7073, ext. 299, claude.gobeil@isacsoft.com

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