Rand Worldwide(TM) Announces 2006 Financial Results



    Driven by acquisitions and organic growth, IMAGINiT sales increase 24%

    MISSISSAUGA, ON, March 12 /CNW/ - Rand A Technology Corporation ("RAND
Worldwide(TM)" or the "Company"), (TSX: RND), a global leader in providing
technology solutions to organizations with engineering design and information
technology requirements, announces financial results for the three- and
12-month periods ended December 31, 2006.

    
    2006 Highlights
    -   Revenue increased to $106.2 million, up 8.5% from $97.8 million in
        2005
    -   Revenue from the IMAGINiT business was $81.9 million, up 24.1% from
        2005
    -   Earnings before interest, taxes, depreciation and amortization
        ("EBITDA")(1) was $2.5 million, compared to $4.0 million in 2005
    -   Reached a settlement agreement with Parametric Technology Corporation
        ("PTC")
    -   Income from continuing operations was $0.18 per share, including the
        net gain resulting from the PTC settlement, compared to $0.06 per
        share in 2005, and
    -   Acquired the Autodesk-related assets of Taylor Technologies and i-VEK
        Technology, and announced intention to acquire CAD/CAM Systems, which
        subsequently closed on January 2, 2007
    

    "In 2006, we focused our resources on the primary growth drivers of our
business and took the necessary steps to position the Company for top and
bottom-line growth in 2007," said Frank Baldesarra, President and CEO of RAND
Worldwide. "In addition to our organic growth, we have completed six
acquisitions in the past two years, adding more than $25 million in annualized
revenue to our IMAGINiT business. These acquisitions have fueled top-line
growth, extended our geographic footprint in North America, and enabled us to
penetrate new vertical markets, such as media and entertainment. Our IMAGINiT
team has solidified its position as one of Autodesk's leading global
resellers, and in 2007 we plan on continuing to invest in organic growth and
acquisition opportunities in this business."
    Mr. Baldesarra continued: "In 2006, we also made progress on two key
corporate milestones that should have an impact on our ongoing profitability.
In December, we reached a positive settlement with PTC in which we received
net proceeds of approximately $2.9 million in cash and the return of 681,048
RAND Worldwide common shares. And more recently, we announced our intention to
sell a majority ownership stake in certain of our European PLM operations. If
successfully concluded, through this revised ownership position, we expect to
retain the potential to participate in the ongoing growth of PLM deployments
within those markets, while preserving relationships with Dassault Systèmes
and our European employees and clients. We believe that both of these
developments should enhance the 2007 bottom-line performance of the Company
and will provide additional resources to invest in the most rapidly growing
segments of our business."

    
    Consolidated Financial Highlights

    (in thousands, except per
     share data)                    Three Months Ended     12 Months Ended
    (CDN$)                         12/31/06   12/31/05   12/31/06   12/31/05
                                   ---------  ---------  ---------  ---------

    Revenue                       $  26,878     24,563  $ 106,181     97,838
    Gross Profit (%)                  52.8%      54.1%      52.5%      55.1%
    EBITDA(1)                     $     744      1,297  $   2,542      3,968
    Income from Continuing
     Operations                   $   2,304         61  $   3,589      1,052
    Net Earnings (Loss)           $   2,304     (3,840) $   3,589     (3,438)
    Net Earnings Per Common
     Share - Continuing
     Operations                   $    0.11          -  $    0.18       0.06
    Net Earnings (Loss) Per
     Common Share - Basic         $    0.11      (0.19) $    0.18      (0.19)
    Weighted Avg. No.
     Common Shares - Basic           20,237     20,031     20,219     17,878
    

    Total revenue for 2006 was $106.2 million, an 8.5% increase from
$97.8 million in 2005. Revenue from IMAGINiT was $81.9 million, an increase of
24.1% from 2005, while revenue from RAND PLM was $24.3 million, a decrease of
23.8% from 2005. IMAGINiT generated 77.2% of total 2006 revenue, up from 67.5%
of total revenue in 2005. RAND Worldwide generates approximately 70% of its
revenue in U.S. dollars and as a result, in 2006, the stronger Canadian dollar
relative to the U.S. dollar negatively impacted revenue by approximately
$6 million for the year.
    RAND Worldwide's gross profit was 52.5% in 2006, compared to 55.1%, in
2005. Although the overall gross profit percentage decreased year-over-year,
both the IMAGINiT and PLM business units' gross profit percentages improved.
The overall decrease is due to the impact of the change in business mix, as
the higher margin PLM revenue decreased from 32.5% to 22.8% of total revenues.
    2006 operating expenses were $52.0 million or 49.0% of revenue, compared
to $48.5 million, or 49.6% of revenue in 2005. The increase is due primarily
to headcount growth in the IMAGINiT business, expansion of facility
requirements in growing regions, and opening of new offices in strategic
markets.
    RAND Worldwide recorded EBITDA of $2.5 million in 2006, versus EBITDA of
$4.0 million in 2005. Volume driven margin improvements were offset by the
change in business mix, foreign exchange impact due to the stronger Canadian
dollar during most of 2006, and growth in spending due to increased personnel
costs and facilities expansion. The investments in personnel and facilities
were made to support the Company's plans for growth. The stronger Canadian
dollar relative to the U.S. dollar during 2006 had approximately a
$0.6 million negative impact on EBITDA.
    Income from continuing operations in 2006 was $3.6 million, or $0.18 per
share, compared to $1.1 million, or $0.06 per share in 2005. In addition to
those items mentioned above, included in the income from continuing operations
for 2006 was the $2.9 million net gain on the PTC settlement, partially offset
by a $0.4 million charge for the impairment of goodwill. In 2005, income from
continuing operations included a $1.2 million property and equipment
write-down and a $0.6 million charge related to severance and office closures.
    Net earnings for 2006 was $3.6 million, or $0.18 per share, compared to a
net loss of ($3.4) million, or ($0.19) per share in 2005. Net earnings in 2006
included the items noted above, while the net loss in 2005 included a loss
from discontinued operations of ($4.5) million related to the sale of certain
of RAND Worldwide's European subsidiaries to Dassault Systemes S.A and the
closure of select European operations.
    RAND Worldwide maintains a strong balance sheet from which it expects to
support its anticipated growth activities. At December 31, 2006, the Company
had cash and cash equivalents totaling $13.5 million compared with
$14.3 million at December 31, 2005.
    "We are pleased with our liquidity position. Notwithstanding paying
$1.6 million in cash to fund acquisitions during the year, we maintained a
strong cash balance throughout fiscal 2006, and were able to generate positive
free cash flow," said Peter Gimon, Chief Financial Officer for RAND Worldwide.
"For 2007, we plan on continuing our investment in the business in order to
generate profitable growth, while maintaining a focus on cost management."

    Subsequent Events and Announcements
    On January 2, 2007, RAND Worldwide announced that it completed the
acquisition of certain assets and the Autodesk-related business of Atlantic
Canada based CAD/CAM Systems Ltd. CAD/CAM Systems is a leading provider of
Autodesk software and associated training, consulting and support services
throughout the Atlantic Provinces. CAD/CAM Systems, an Authorized Autodesk
Reseller, offers Autodesk products, as well as customized software and support
services for the manufacturing, building, civil, and geospatial industries.
    On January 31, 2006, RAND Worldwide announced its intention to acquire
Dallas, Texas based CADVisions, Inc. CADVisions, an Authorized Autodesk
Service and Support Center, is a leading provider of Autodesk software and
associated training, consulting and support services, with offices in Dallas,
Texas; Wichita, Kansas; and Tulsa, Oklahoma.
    On February 15, 2007, RAND Worldwide announced, subject to customary
closing conditions and approvals, its plans to sell a majority interest in
certain of its European PLM operations to a European-based private consortium
(the "Consortium").
    Management's discussion and analysis, consolidated financial statements
and notes thereto for 2006 can be obtained today from RAND's corporate website
at www.rand.com. The documents will also be available at www.sedar.com.

    About RAND Worldwide
    RAND Worldwide is one of the world's leading providers of professional
services and technology to the engineering community; targeting organizations
in the manufacturing, building, infrastructure and media and entertainment
industries. RAND Worldwide enables its clients to improve their
competitiveness, productivity and profitability by enhancing key aspects of
their 3D Design, Data Management and Collaboration capabilities. With more
than 20 years of industry experience, RAND Worldwide delivers knowledge,
expertise and design processes to clients through proven technical support,
training and consulting services. RAND Worldwide employs 447 people in over 60
sales and client service centers. For more information please visit
www.rand.com.

    (1) The Company has included earnings before interest, taxes,
    depreciation and amortization, and other non-recurring (income) expense
    ("EBITDA"), which is a non-GAAP financial measurement. EBITDA does not
    have any standardized meaning prescribed by GAAP and is therefore
    unlikely to be comparable to similar measurements presented by other
    issuers. EBITDA is provided as a supplement, and should not be considered
    an alternative to measurements required by GAAP. Management believes
    that, in addition to net earnings (loss), EBITDA is a useful supplemental
    measure as it provides investors with an indication of cash available for
    distribution prior to debt service, depreciation, amortization, other
    non-recurring expenses and income taxes. Investors should be cautioned,
    however, that EBITDA should not be construed as an alternative to net
    earnings (loss) determined in accordance with GAAP, as an indicator of
    the Company's performance or cash flows from operating, investing and
    financing activities or 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. EBITDA is part of the financial and other metrics used by
    management for purposes of the Company's operating plans.

    
    Reconciliation of 2006 and 2005
     "Income (loss) from continuing operations"
     to "Net earnings (loss)":

                                                            2006        2005
                                                       ----------  ----------
    Income (loss) from continuing
     operations                                           $3,589   $   1,052
    Net gain (loss) on the disposition
     of discontinued operations                                -      (1,319)
    Loss from discontinued operations -
     Disposition by sale                                       -           -
    Loss from discontinued operations -
     Disposition other than by sale                            -      (3,171)
    -------------------------------------------------------------------------
    Net earnings (loss)                                   $3,589     $(3,438)
    

    FORWARD-LOOKING STATEMENTS

    This news release contains forward-looking statements based on
management's current projections, beliefs and opinions at the date of this
news release. The future results of the Company may differ materially from
those expressed in the forward-looking statements contained in this news
release. Reference should be made to the Company's MD&A and Annual Information
Form and other continuous disclosure documents filed from time-to-time with
Canadian securities regulatory authorities, for a detailed description of
material factors and assumptions on these risks and uncertainties. RAND
Worldwide does not undertake any obligation to update or release any revisions
to forward-looking statements to reflect events, circumstances or the
occurrence of unanticipated events, or if management's projections, beliefs or
opinions change after the date of this press release.

    

    RAND A TECHNOLOGY CORPORATION
    Consolidated Balance Sheets
    As at December 31

    (In thousands of dollars)                               2006        2005
    -------------------------------------------------------------------------
    ASSETS
    CURRENT ASSETS
      Cash and cash equivalents                        $  13,468   $  14,349
      Accounts receivable                                 13,210      10,607
      Other receivables                                    4,903       1,558
      Inventory                                            1,494         383
      Prepaid expenses and deposits                        1,800       1,608
      Due from related parties                             1,374       1,389
      Current assets held for disposal other
       than by sale                                          192         172

    -------------------------------------------------------------------------
    Total Current Assets                                  36,441      30,066
    -------------------------------------------------------------------------
    Property and Equipment                                 2,181       2,358
    Goodwill                                               7,573       6,375
    Intangibles                                            1,773       1,209
    -------------------------------------------------------------------------
    TOTAL ASSETS                                       $  47,968   $  40,008
    -------------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES
      Accounts payable and accrued liabilities         $  17,743   $  14,960
      Deferred revenue                                     3,438       3,193
      Income taxes payable                                   500         653
      Current portion of capital lease                        34         195
      Due to related parties                                 307         263
      Current liabilities held for disposal
       other than by sale                                    851         866
    -------------------------------------------------------------------------
    Total Current Liabilities                             22,873      20,130
    -------------------------------------------------------------------------
    Obligations under capital lease                            -          51
    -------------------------------------------------------------------------
    TOTAL LIABILITIES                                     22,873      20,181
    -------------------------------------------------------------------------
    SHAREHOLDERS' EQUITY
      Capital stock                                       52,118      62,304
      Contributed surplus                                 13,247       1,747
      Deficit                                            (45,589)    (49,145)
      Cumulative translation adjustment                    5,319       4,921
    -------------------------------------------------------------------------
    TOTAL SHAREHOLDERS' EQUITY                            25,095      19,827
    -------------------------------------------------------------------------
    TOTAL LIABILITIES & SHAREHOLDERS' EQUITY           $  47,968   $  40,008
    -------------------------------------------------------------------------



    RAND A TECHNOLOGY CORPORATION
    Consolidated Statements of Earnings
    For the years ended December 31

    (In thousands of dollars, except earnings per
     share and weighted average share data)                 2006        2005
    -------------------------------------------------------------------------
    REVENUE                                            $ 106,181   $  97,838
    COST OF SALES                                         50,471      43,954
    -------------------------------------------------------------------------
    GROSS PROFIT                                          55,710      53,884
    -------------------------------------------------------------------------
    EXPENSES
      Operating expenses                                  52,035      48,525
      Foreign exchange                                      (123)        225
      Research and development                             1,256       1,166
    -------------------------------------------------------------------------
                                                          53,168      49,916
    -------------------------------------------------------------------------
    INCOME BEFORE:                                         2,542       3,968
    -------------------------------------------------------------------------
      Amortization of property and equipment               1,025       1,164
      Amortization of intangibles and write
       down of goodwill                                      501          91
      Interest income                                       (282)       (249)
    -------------------------------------------------------------------------
                                                           1,244       1,006
    Other non-recurring (income) expense                  (2,374)      1,802
    -------------------------------------------------------------------------
    INCOME BEFORE INCOME TAXES AND DISCONTINUED
     OPERATIONS                                            3,672       1,160
    Provision for income taxes                                83         108
    -------------------------------------------------------------------------
    INCOME FROM CONTINUING OPERATIONS                      3,589       1,052
    -------------------------------------------------------------------------
    DISCONTINUED OPERATIONS
    Loss on disposition of discontinued operations             -      (1,319)
    Loss from discontinued operations net of income
     taxes - Disposition other than by sale                    -      (3,171)
    -------------------------------------------------------------------------
    NET EARNINGS (LOSS)                                $   3,589   $  (3,438)
    -------------------------------------------------------------------------
    Earnings (loss) per Common Share - Basic
    Continuing operations                              $    0.18   $    0.06
    Disposition of discontinued operations                     -       (0.07)
    Discontinued operations                                    -       (0.18)
    -------------------------------------------------------------------------
    Earnings (loss) per Common Share - Basic           $    0.18   $   (0.19)
    -------------------------------------------------------------------------
    Fully diluted earnings per common Share            $    0.17   $       -
    -------------------------------------------------------------------------
    Weighted Average Number of Common Shares -
     Basic (in '000s)                                     20,219      17,878
    -------------------------------------------------------------------------
    Weighted Average Number of Common Shares -
     Fully Diluted (in '000s)                             20,711      18,906
    -------------------------------------------------------------------------



    RAND A TECHNOLOGY CORPORATION
    Consolidated Statements of Deficit
    For the years ended December 31

    (In thousands of dollars)                               2006        2005
    -------------------------------------------------------------------------
    DEFICIT, beginning of year                         $ (49,145)  $ (45,707)
    Earnings (loss) for the year                           3,589      (3,438)
    Dividends                                                (33)          -
    -------------------------------------------------------------------------
    Deficit - end of year                              $ (45,589)  $ (49,145)
    -------------------------------------------------------------------------



    RAND A TECHNOLOGY CORPORATION
    Consolidated Cash Flow Statements
    For the years ended December 31

    (In thousands of dollars)                               2006        2005
    -------------------------------------------------------------------------
    CASH PROVIDED BY OPERATING ACTIVITIES
        Income from continuing operations              $   3,589   $   1,052
    -------------------------------------------------------------------------

      Add - Items not affecting cash
        Amortization of property and equipment             1,025       1,164
        Amortization of intangibles and write
         down of goodwill                                    501          91
        Write-down of property and equipment                   -       1,162
        Equity in losses of ENGINEERING.com,
         net of dilution gain                                  -          48
        Employee stock options                               654         392
        Changes in operating assets and
         liabilities other than cash                      (4,662)      1,022
    -------------------------------------------------------------------------
    CASH PROVIDED BY OPERATING ACTIVITIES                  1,107       4,931
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
        Proceeds from private placement offering               -       7,575
        Exercise of stock options                            184         159
        Cash contributed by minority interest holder          59           -
        Repayment of obligations under capital lease        (212)       (180)
        Dividends                                            (33)          -
    -------------------------------------------------------------------------
    CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES           (2)      7,554
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
        Net cash paid on acquisitions                     (1,611)       (314)
        Additions to property and equipment                 (706)       (805)
        Proceeds from sale of property and equipment           2           -
    -------------------------------------------------------------------------
    CASH USED IN INVESTING ACTIVITIES                     (2,315)     (1,119)
    -------------------------------------------------------------------------
    CUMULATIVE TRANSLATION EFFECTS                           371      (1,956)
    -------------------------------------------------------------------------
    CASH (USED IN) PROVIDED BY CONTINUING
     OPERATIONS                                             (839)      9,410
    -------------------------------------------------------------------------
    CASH USED IN DISCONTINUED OPERATIONS HELD
     FOR DISPOSAL OTHER THAN BY SALE                         (43)    (3,417)
    -------------------------------------------------------------------------
    CASH HELD BY DISCONTINUED OPERATIONS                       1          1
    -------------------------------------------------------------------------
    (DECREASE) INCREASE IN CASH AND CASH
     EQUIVALENTS                                            (881)     5,994
    -------------------------------------------------------------------------
    CASH AND CASH EQUIVALENTS, beginning of year          14,349      8,356
    -------------------------------------------------------------------------
    CASH AND CASH EQUIVALENTS, end of year             $  13,468   $ 14,349
    -------------------------------------------------------------------------
    





For further information:

For further information: Peter Gimon, Chief Financial Officer, RAND
Worldwide, Tel: (905) 625-2000, Fax: (905) 625-8535; Dave Mason, Investor
Relations, The Equicom Group Inc., Tel: (416) 815-0700 ext. 237

Organization Profile

RAND WORLDWIDE

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890