Softchoice Q3 EPS Grows 157 Percent



    
    -  Softchoice trailing 12-month net income increases 73 percent
    -  Gross profit grows 27 percent
    -  Hardware revenues increase 28 percent
    -  Gross profit per employee expands by 22 percent
    

    TORONTO, Nov. 12 /CNW/ - Softchoice Corp. (TSX: SO), a leading North
American provider of technology solutions and services, today announced
revenue and record net income results for the third quarter of 2007.
    For the three-month period ended September 30, 2007 the Company reported
third quarter net income of US$3.0 million or US$0.18 per share basic (US$0.17
per share fully diluted) on revenue of US$159.4 million compared to net income
of US$1.2 million or US$0.07 per share basic (US$0.07 per share fully diluted)
on revenue of US$141.4 million recorded during the same period the year prior.
Revenues increased by 13 percent in the quarter while net income grew by
147 percent, reflecting strong sales of Microsoft Enterprise Agreements and
robust margin performance across all product lines.
    On a rolling 12-month basis, year-over-year net income has grown by
73 percent while net income for the third quarter alone increased by 147
percent over the third quarter of 2006.
    Hardware sales demonstrated strong growth in the quarter, increasing by
28 percent over the same period in 2006 to US$52.7 million. Hardware sales
were made to 42 percent of customers, up from 38 percent for the third quarter
of 2006.
    "Our results reflect our focus on providing customers with integrated and
increasingly sophisticated technology solutions," said David MacDonald,
President and CEO of Softchoice. "We have made significant steps in
implementing our strategy and through our acquisition of NexInnovations - a
Canadian leader in the provision of large scale technology deployments - we
are raising the bar on these efforts, especially with our customers in the
enterprise space."

    Year-to-Date Results
    --------------------

    For the nine-month period ended September 30, 2007, the Company reported
record net income of US$16.8 million or US$0.97 per share basic (US$0.96 per
share fully diluted) on revenue of US$510.9 million compared to net income of
US$9.6 million or US$0.56 per share basic (US$0.56 per share fully diluted) on
revenue of US$489.0 million in the prior year.
    During the first nine months of 2007, hardware sales grew by 19 percent
on a consolidated basis compared to the same period in the year prior. Growth
in hardware sales in the U.S. was 16 percent, while Canadian growth in
hardware sales was 21 percent compared to the same period last year.
    Subsequent to the end of the quarter, on October 12, 2007 Softchoice
announced it had completed the acquisition of the Technology Solutions and
Professionals Services divisions of NexInnovations Inc., a leading provider of
technology products and services to the Canadian enterprise market.
NexInnovations had been in a CCAA process since October 2, 2007. On
October 16, 2007 Softchoice and Brains II, one of Canada's foremost providers
of mission critical maintenance and technical support services, announced a
partnership to provide NexInnovations customers with integrated solutions
fulfillment and break/fix warranty services support.
    Since the close of the acquisition, Softchoice has been able to hire
approximately 83 full time employees of NexInnovations and has received strong
endorsement from their customers. Sales to former NexInnovations customers
since the acquisition have been at approximately half the level of a year ago
as a result of the CCAA process. Management expects that sales levels will
grow significantly as we integrate the NexInnovations employees and customers
into our organization.
    "The exceptional people, customer relationships, and professional
services offerings we have acquired through NexInnovations certainly bode well
for our continued growth in Canada and the United Sates," added Mr. MacDonald.
"As one dedicated team, we are committed to leveraging our combined strengths
to provide organizations on both sides of border with holistic solutions that
lower costs, improve productivity, and reduce risk across the enterprise."
    The Directors of Softchoice have declared a dividend in the amount of
$0.10 per common share payable on December 31, 2007, to shareholders of record
at the close of business on December 14, 2007.

    
    Quarterly Highlights
    --------------------

    -  On a consolidated basis, Gross Profit per Sales Employee increased by
       22 percent over the same quarter the year prior, a reflection of the
       increasing tenure of the people hired in 2006 and their ability to
       process larger and more complex customer orders.
    -  For the sixth year in a row, Softchoice was named Microsoft Canada's
       Large Account Reseller of the Year in recognition of the industry-
       leading role the Company has played in the provision of software
       licensing solutions.
    -  During the quarter, agency fees increased by 40 percent, reflecting
       strong sales of Microsoft Enterprise Agreement 6.0 licensing.
    

    Quarterly financial statements, annual audited statements and the MD&A
are available on SEDAR or by visiting www.softchoice.com.

    Third-Quarter Results Conference Call
    -------------------------------------

    Softchoice will host a call to discuss its third quarter results at
11 a.m. EST on November 12, 2007.
    David MacDonald, Softchoice's President and CEO, and Anne Brace,
Softchoice's Chief Financial Officer, will host the call. The conference call
will begin with a brief presentation followed by a question-and-answer
session.

    To participate in the conference:

    Local/international: 416-915-9608
    Toll-Free in North America: 1-866-214-7077

    To listen to the call and view the web presentation:
    http://events.onlinebroadcasting.com/softchoice/111207/index.php

    To ensure participation, please dial in at least 10 minutes prior to the
    start of the conference at 11:00 a.m. EST.

    For those unable to attend the call, a link will be made available on the
    Softchoice web site to an archived web and audio version on November 13,
    2007.

    About Softchoice Corporation

    As one of North America's leading providers of technology products and
services, Softchoice helps businesses and organizations of all sizes to
select, acquire and manage their software and hardware technology resources.
Softchoice offers a full range of capabilities, including face-to-face
consultations and IT asset management services designed to help customers save
time, money and risk in IT procurement. In 2006, Softchoice was named Software
Value Added Reseller (VAR) of the Year by VAR Business magazine. Softchoice
currently has 668 employees operating from more than 30 branch offices located
in major cities across the U.S. and Canada.

    Softchoice stock is listed on the Toronto Stock Exchange (TSX) under the
trading symbol "SO". The Common Shares of Softchoice are not registered under
the U.S. Securities Act of 1933 and are not publicly traded in the United
States.

    Forward-Looking Statements

    This press release contains forward-looking statements that involve risks
and uncertainties. These forward-looking statements relate to, among other
things, plans and timing for the introduction and enhancement of our services,
and other expectations, intentions and plans contained in this press release
that are not historical fact. When used in this press release, the words
"anticipate," "expect" and similar expressions generally identify
forward-looking statements. These statements reflect our current expectations
and are subject to a number of risks and uncertainties including, but not
limited to, change in technology and general market conditions, many of which
are set out or incorporated by reference in the Company's latest Annual
Information Form. Due to the many risks and uncertainties, Softchoice cannot
assure that the forward-looking statements contained in this press release
will be realized.



    
                           Softchoice Corporation
                         Consolidated Balance Sheets
                         ---------------------------
                       (in thousands of U.S. dollars)

                                                   September 30, December 31,
                                                       2007          2006
                                                    (unaudited)   (audited)

    ASSETS
    Current assets
      Cash                                          $   27,415    $    7,328
      Accounts receivable                              116,526       152,747
       net of allowance for doubtful accounts
       of $2,027 (December 31, 2006 - $1,804)
      Inventories                                          455           240
      Prepaids and other assets                          3,227         2,125
      Future income taxes                                1,349           997
      Income taxes recoverable                             781             -
                                                    -------------------------
                                                       149,753       163,437

    Property and equipment                               7,455         6,280
    Goodwill (note 4)                                   13,399        12,465
    Intangible assets (note 4)                           4,101         4,603
    Future income taxes                                  1,574         1,478
                                                    -------------------------

                                                    $  176,282    $  188,263
                                                    -------------------------
                                                    -------------------------

    LIABILITIES
    Current liabilities
      Bank indebtedness (note 5)                    $   12,639    $   10,285
      Accounts payable and accrued liabilities          92,672       120,696
      Income taxes payable                                   -         1,155
                                                    -------------------------
                                                       105,311       132,136

    Shareholders' equity
      Capital stock (note 6)                             8,553         8,222
      Contributed surplus (note 7)                       1,165           482
      Retained earnings(*)                              58,077        46,136
      Accumulated other comprehensive income(*)
       (note 2)                                          3,176         1,287
                                                    -------------------------
                                                        70,971        56,127
                                                    -------------------------

                                                    $  176,282    $  188,263
                                                    -------------------------
                                                    -------------------------
    Contingencies (note 8)
    See accompanying notes to consolidated financial statements.
    (*) Accumulated comprehensive income is comprised of retained earnings
        and accumulated other comprehensive income



                           Softchoice Corporation
          Consolidated Statements of Earnings and Retained Earnings
          ---------------------------------------------------------
         (in thousands of U.S. dollars except per share information)
                                 (Unaudited)

                        3 month       3 month       9 month       9 month
                      period ended  period ended  period ended  period ended
                      September 30, September 30, September 30, September 30,
                          2007          2006          2007          2006

    Revenue
      Software          $   98,138    $   94,161    $  324,224    $  338,045
      Hardware              52,684        41,154       149,298       125,988
      Agency Fees            8,573         6,129        37,369        25,001
                        -------------------------   -------------------------
                           159,395       141,444       510,891       489,034

    Cost of sales          134,412       121,707       422,783       418,636
                        -------------------------   -------------------------

    Gross profit            24,983        19,737        88,108        70,398

    Expenses
      Salaries and
       benefits             12,488        10,148        38,005        33,686
      Selling,
       general and
       administrative        6,166         6,513        18,579        18,019
      Amortization of
       property and
       equipment               802           622         2,278         1,715
      Amortization
       of intangible
       assets                  404           392         1,158         1,165
                        -------------------------   -------------------------
                            19,860        17,675        60,020        54,585
                        -------------------------   -------------------------

    Operating income         5,123         2,062        28,088        15,813

      Interest expense         248           128           919           298
      Other                   (384)         (108)         (858)         (264)
                        -------------------------   -------------------------

    Earnings before
     income taxes            5,259         2,042        28,027        15,779
                        -------------------------   -------------------------

    Provision for
     income taxes
      Current                2,000           841        11,513         6,237
      Future                   218           (32)         (273)          (96)
                        -------------------------   -------------------------
                             2,218           809        11,240         6,141

    Net earnings
     for the period          3,041         1,233        16,787         9,638

    Retained
     earnings -
     Beginning of
     period                 56,761        41,641        46,136        36,250
       Dividends
       (note 9)             (1,725)       (1,548)       (4,846)       (4,562)
                        -------------------------   -------------------------
    Retained
     earnings -
     End of period      $   58,077    $   41,326    $   58,077    $   41,326
                        -------------------------   -------------------------
                        -------------------------   -------------------------

    Net earnings per
     common share
     (note 10)
      Basic             $     0.18    $     0.07    $     0.97    $     0.56
      Diluted           $     0.17    $     0.07    $     0.96    $     0.56

      Basic weighted
       average number
       of shares
       outstanding      17,325,511    17,229,073    17,303,215    17,201,126
      Diluted weighted
       average number
       of shares
       outstanding      17,519,611    17,392,418    17,481,661    17,356,817

    See accompanying notes to consolidated financial statements.



                           Softchoice Corporation
                    Consolidated Statements of Cash Flows
                    -------------------------------------
                       (in thousands of U.S. dollars)
                                 (Unaudited)

                        3 month       3 month       9 month       9 month
                      period ended  period ended  period ended  period ended
                      September 30, September 30, September 30, September 30,
                          2007          2006          2007          2006

    Cash provided by
     (used in)

    Operating
     activities
    Net earnings for
     the period         $    3,041    $    1,233    $   16,787    $    9,638
    Items not
     affecting cash
      Amortization of
       property and
       equipment               802           622         2,278         1,715
      Stock-based
       compensation            415             -           747            (6)
      Future income
       taxes                   218           (35)         (273)          (99)
      Amortization of
       intangible
       assets (note 4)         404           392         1,158         1,165
      Unrealized foreign
       currency loss
       (gain)                  206            47           277           259
      Loss (gain) on
       capital assets          (13)            -            11             -
      Realized foreign
       exchange loss             -             9             -            77
                        -------------------------   -------------------------
                             5,073         2,268        20,985        12,749

    Net change in
     non-cash working
     capital items
     relating to
     operations
     (note 13)               5,892         8,859         6,126         4,178
                        -------------------------   -------------------------

                            10,965        11,127        27,111        16,927
                        -------------------------   -------------------------

    Financing
     activities
      Proceeds
       (repayment)
       of bank
       indebtedness          1,355         7,055          (326)         (505)
      Payment of
       cash dividend        (1,725)       (1,548)       (4,846)       (4,562)
      Proceeds from
       issuance
       of common
       shares (note 6)          21           259           267           454
                        -------------------------   -------------------------
                              (349)        5,766        (4,905)       (4,613)
                        -------------------------   -------------------------

    Investing
     activities
      Purchase of
       property and
       equipment              (585)       (1,396)       (2,569)       (3,349)
      Proceeds on
       disposal of
       capital assets           29             -            29             -
      Notes receivable           -            10             -         1,922
                        -------------------------   -------------------------
                              (556)       (1,386)       (2,540)       (1,427)
                        -------------------------   -------------------------

    Effect of exchange
     rate changes on cash      238            30           421           300
                        -------------------------   -------------------------

    Increase (decrease)
     in cash                10,298        15,537        20,087        11,187

    Cash - Beginning
     of period              17,117         2,447         7,328         6,797
                        -------------------------   -------------------------

    Cash - End
     of period          $   27,415    $   17,984    $   27,415    $   17,984
                        -------------------------   -------------------------
                        -------------------------   -------------------------

    Interest paid       $      192    $       41    $      540    $      247
    Taxes paid          $    7,346    $    2,258    $   13,578    $    7,885



                           Softchoice Corporation
               Consolidated Statement of Shareholder's Equity
               ----------------------------------------------
           (in thousands U.S. dollars except per share information)
                                 (Unaudited)

                  -----------------------------------------------------------
                                     QUARTERLY SUMMARY

                                                       Accumulated
                                                             Other
                     Total                                  Compre-
                     Share-             Contri-            hensive    Compre-
                   holders'  Capital     buted  Retained    Income/  hensive
                    Equity     Stock   Surplus  Earnings     (loss)   Income
                  -------------------------------------------------

    Balance at
     December 31,
     2005           45,563     7,615       612    36,250     1,086

    Exercise of
     stock options     121       121
    Cash dividends  (1,471)                       (1,471)
    Stock based
     compensation
     expense            (6)                 (6)
    Transfer from
     contributed
     surplus             -        28       (28)
    Net earnings     1,807                         1,807               1,807
    Foreign
     currency
     translation
     adjustment        185                                     185       185
                                                                     --------
    Comprehensive
     income                                                            1,992
                                                                     --------
                                                                     --------
                  -----------------------------------------------------------
    Balance at
     March 31,
     2006           46,199     7,764       578    36,586     1,271

    Exercise of
     stock options      74        74
    Cash dividends  (1,543)                       (1,543)
    Transfer from
     contributed
     surplus             -        18       (18)
    Net earnings     6,598                         6,598               6,598
    Foreign
     currency
     translation
     adjustment        526                                     526       526
                                                                     --------
    Comprehensive
     income                                                            7,124
                                                                     --------
                                                                     --------
                  -----------------------------------------------------------
    Balance at
     June 30,
     2006           51,854     7,856       560    41,641     1,797

    Exercise of
     stock options     259       259
    Cash dividends  (1,547)                       (1,547)
    Transfer from
     contributed
     surplus             -        75       (75)
    Net earnings     1,234                         1,234               1,234
    Foreign
     currency
     translation
     adjustment         (2)                                     (2)       (2)
                                                                     --------
    Comprehensive
     income                                                            1,232
                                                                     --------
                                                                     --------
                  -----------------------------------------------------------
    Balance at
     September 30,
     2006           51,798     8,190       485    41,328     1,795

    Exercise of
     stock options      29        29
    Cash dividends  (1,483)                       (1,483)
    Transfer from
     contributed
     surplus             -         3        (3)
    Net earnings     6,291                         6,291               6,291
    Foreign
     currency
     translation
     adjustment       (508)                                   (508)     (508)
                                                                     --------
    Comprehensive
     income                                                            5,783
                                                                     --------
                                                                     --------
                  -----------------------------------------------------------
    Balance at
     December 31,
     2006           56,127     8,222      482     46,136     1,287

    Exercise of
     stock options      98        98
    Cash dividends  (1,492)                       (1,492)
    Transfer from
     contributed
     surplus             -         7       (7)
    Net earnings     3,658                         3,658               3,658
    Foreign
     currency
     translation
     adjustment        123                                     123       123
                                                                     --------
    Comprehensive
     income                                                            3,781
                                                                     --------
                                                                     --------
                  -----------------------------------------------------------
    Balance at
     March 31,
     2007           58,514     8,327       475    48,302     1,410

    Exercise of
     stock options     148       148
    Purchase of
     treasury shares     -
    Cash dividends  (1,629)                       (1,629)
    Stock based
     compensation
     expense           332                 332
    Transfer from
     contributed
     surplus             -        39       (39)
    Net earnings    10,088                        10,088              10,088
    Foreign
     currency
     translation
     adjustment        923                                     923       923
                                                                     --------
    Comprehensive
     income                                                           11,011
                                                                     --------
                                                                     --------
                  -----------------------------------------------------------
    Balance at
     June 30,
     2007           68,376     8,514       768    56,761     2,333

    Exercise of
     stock options      21        21
    Purchase of
     treasury shares     -
    Cash dividends  (1,725)                       (1,725)
    Stock based
     compensation
     expense           415                 415
    Transfer from
     contributed
     surplus             -        18       (18)
    Net earnings     3,041                         3,041               3,041
    Foreign
     currency
     translation
     adjustment        843                                     843       843
                                                                     --------
    Comprehensive
     income                                                            3,884
                                                                     --------
                                                                     --------
                  -----------------------------------------------------------
    Balance at
     September 30,
     2007           70,971     8,553     1,165    58,077     3,176
                  -----------------------------------------------------------
    





For further information:

For further information: Anne Brace, Chief Financial Officer, Softchoice
Corporation, (416) 588-9986, investor_relations@softchoice.com; Eric Gardiner,
Softchoice Corporation, (416) 588-9002 x2358, Contact Softchoice Corporate
Communications

Organization Profile

Softchoice Corporation

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