Time for profits for Fortsum Business Solutions Inc. - Release of 2007 Financial Results



    
    Financial Highlights

    - $27.9M in annual consolidated revenues, up 29% over 2006
    - Adjusted EBITDA up 69% over 2006
    - Net consolidated earnings up 185% over 2006
    - Solid balance sheet - liquidities of $10.1M
    - Major restructuring expenses of $1.6M
    

    QUEBEC CITY, March 31 /CNW Telbec/ - Fortsum Business Solutions Inc.
(Fortsum Business Solutions) (TSXV: FRT) is pleased to present its financial
results for fiscal 2007 to its shareholders. Once again the Corporation posted
a significant increase over the preceding year.
    The Corporation's consolidated annual revenues totalled $27.9 million as
at December 31, 2007, up 29% compared with $21.5 million as at December 31,
2006. Earnings before interest, income taxes, depreciation and amortization
excluding unusual items (adjusted EBITDA) was $4.2 million, surging 69% from
$2.5 million in 2006. This translated into consolidated net earnings of
$0.3 million compared with a net loss of $0.4 million for the previous year.
Fiscal 2007 marked the Corporation's first profitable year since its listing
on the stock market in 2004.

    OUTLOOK

    "Management is satisfied with its reported results, as they include a
$1.6 million unusual charge related to restructuring costs and $0.4 million in
costs related to early repayment of long-term loans," commented President and
Chief Executive Officer, André Thompson. "We see reported results as proof
that initiatives to improve productivity and lower operating costs are
beginning to pay off. We expect to report higher results for fiscal 2008 than
for 2007, both in terms of overall revenues and consolidated net earnings. The
Corporation expects to derive significant benefits from the restructuring
initiative and the synergies created in its Software Publishing and
Integration segments. Accordingly, not including potential future
acquisitions, the Corporation expects to maintain organic growth levels that,
in addition to maximized productivity, will support the solid upward trend in
its financial results."
    "In addition to focusing on the development of our Web technologies and
services, in the upcoming months and years, we intend to increase our presence
outside of Québec, particularly in Ontario and the Atlantic provinces. Our
acquisition of mCite, if completed successfully, will be the first significant
strategic milestone in this direction. Furthermore, we will target partnership
opportunities both in Québec and elsewhere to develop new vertical synergies
and strengthen our positioning as a single-window services firm for SMBs. We
are currently reviewing the most attractive acquisition targets capable of
supporting the Corporation's profitable growth objectives and intend to use
cash resources in the short term to that effect. I'm particularly enthusiastic
about Fortsum Business Solution's potential and the challenge of taking the
company to new heights: satisfied and enthusiastic clients, motivated and
productive employees accompanied by shareholders and investors pleased with
the Corporation's yield and outlook," concluded Thompson.

    
    Consolidated Balance Sheets
    As at December 31
    (in thousands $)
                                                        2007            2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    ASSETS
    Current assets
    Cash                                               1,049           1,494
    Temporary investment, 4.07%, maturing
     in January 2008
      (3.8% matured in January 2007 for 2006)          9,050           4,600
    Accounts receivable                                2,515           2,763
    Work in progress                                     271             195
    Investment tax credits receivable                    668               -
    Income taxes receivable                              141               -
    Inventories                                          150             274
    Prepaid expenses                                     244             158
    Future income tax assets                             655             669
    -------------------------------------------------------------------------
    Total current assets                              14,743          10,153
    -------------------------------------------------------------------------
    Investment                                            42              19
    -------------------------------------------------------------------------
    Property, plant and equipment                        810             703
    -------------------------------------------------------------------------
    Intangible assets                                  3,746           3,023
    -------------------------------------------------------------------------
    Deferred charges                                       -             340
    -------------------------------------------------------------------------
    Goodwill                                          11,438           9,119
    -------------------------------------------------------------------------
    Future income tax assets                             403             343
    -------------------------------------------------------------------------
                                                      31,182          23,700
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Accounts payable and accrued liabilities           3,391           3,674
    Income taxes payable                                   -             452
    Current portion of long-term debt                  1,310             859
    -------------------------------------------------------------------------
                                                       4,701           4,985
    Deferred revenues                                  5,688           4,876
    -------------------------------------------------------------------------
    Total current liabilities                         10,389           9,861
    -------------------------------------------------------------------------
    Long-term debt                                     3,142           3,398
    -------------------------------------------------------------------------
    Future income tax liabilities                        996             829
    -------------------------------------------------------------------------
    Shareholders' equity
    Share capital                                     19,421          12,741
    Warrants                                             350              30
    Contributed surplus                                3,102           2,786
    Deficit                                           (6,218)         (5,945)
    -------------------------------------------------------------------------
                                                      16,655           9,612
    -------------------------------------------------------------------------
                                                      31,182          23,700
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Net Earnings (Loss) and Comprehensive
    Income (Loss)
    For the years ended December 31
    (in thousands $ except per-share amounts)

                                                        2007            2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Revenues                                          27,893          21,540
    -------------------------------------------------------------------------
    Cost of goods sold                                10,498           6,728
    Selling and customer service expenses              6,942           6,725
    Administrative expenses                            4,801           3,918
    Development costs, net of investment
     tax credits                                       1,450           1,685
    -------------------------------------------------------------------------
                                                      23,691          19,056
    -------------------------------------------------------------------------
                                                       4,202           2,484
    -------------------------------------------------------------------------
    Depreciation and amortization                      1,104           2,247
    Financial expenses, net of interest income           432             720
    Change in fair value of investment                   (40)              -
    -------------------------------------------------------------------------
                                                       1,496           2,967
    -------------------------------------------------------------------------
    Earnings (loss) before unusual items and
     income taxes                                      2,706            (483)
    -------------------------------------------------------------------------
    Unusual items
    Costs related to early repayment of
     long-term loans                                     407               -
    Restructuring costs                                1,599               -
    -------------------------------------------------------------------------
    Earnings (loss) before income taxes                  700            (483)
    -------------------------------------------------------------------------
    Income taxes
      Current                                            314             426
      Future                                              50            (515)
    -------------------------------------------------------------------------
                                                         364             (89)
    -------------------------------------------------------------------------
    Net earnings (loss) and comprehensive
     income (loss)                                       336            (394)
    -------------------------------------------------------------------------
    Basic and diluted net earnings (loss)
     per outstanding share                              0.01           (0.01)
    -------------------------------------------------------------------------
    Average number of outstanding shares during
     the year (in thousands)                          40,467          33,075
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Deficit
    For the years ended December 31
    (in thousands of $)

                                                        2007            2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Deficit, beginning of year                        (5,945)         (5,509)
    -------------------------------------------------------------------------
    Add
    Unit issue expenses (net of related future
     income tax benefits amounting to $279,000
     in 2007 and $19,000 in 2006)                       (609)            (42)
    Net earnings (loss)                                  336            (394)
    -------------------------------------------------------------------------
                                                        (273)           (436)
    -------------------------------------------------------------------------
    Deficit, end of year                              (6,218)         (5,945)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Cash Flows
    For the years ended December 31
    (in thousands of $)

                                                        2007            2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net earnings (loss)                                  336            (394)
    Adjustments for:
      Stock-based compensation expense                   139             209
      Depreciation of property, plant and equipment      314             247
      Amortization of intangible assets                  696           1,906
      Amortization of pre-operating costs                 94              94
      Amortization and write-off of deferred charges     222             134
      Accrued interest on balance of purchase
       price payable                                      29               3
      Change in fair value of investment                 (40)              -
      Gain on disposal of property, plant and
       equipment                                          19               -
      Future income taxes                                 50            (515)
    -------------------------------------------------------------------------
                                                       1,859           1,684
    Net change in non-cash working capital items        (689)          1,763
    -------------------------------------------------------------------------
    Cash flows related to operating activities         1,170           3,447
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
    Additions to property, plant and equipment          (362)           (317)
    Proceeds from disposal of property, plant
     and equipment                                         1               -
    Additions to intangible assets                      (262)              -
    Business acquisitions                             (3,021)         (2,800)
    Increase in deferred charges                         (34)            (45)
    Partial receipt of investment                          -              21
    -------------------------------------------------------------------------
    Cash flows related to investing activities        (3,678)         (3,141)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
    Increase in long-term debt                         5,000               -
    Repayment of long-term debt                       (4,776)           (753)
    Units issued                                       7,000             750
    Unit issue costs                                    (711)            (61)
    -------------------------------------------------------------------------
    Cash flows related to financing activities         6,513             (64)
    -------------------------------------------------------------------------
    Net increase in cash and cash equivalents          4,005             242
    Cash and cash equivalents, beginning of year       6,094           5,852
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of year            10,099           6,094
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Fortsum Business Solutions presents segmented information to help readers
    better understand the Corporation's performance and outlook. The reader
    can consult complete consolidated financial statements submitted to SEDAR
    and available on our Web site at www.fortsum.com.
    -------------------------------------------------------------------------


    Earnings before interest, income taxes, depreciation and amortization
    excluding unusual items (adjusted EBITDA)

    Adjusted EBITDA excludes the unusual items presented in the statement of
net earnings and comprehensive income, such as restructuring costs and costs
related to early repayment of loans. This measure will be used throughout this
MD&A to compare our operating performance. Since the aforementioned unusual
items were inexistent in 2006, adjusted EBITDA provides readers with a
consistent basis for assessing results, as well as additional information
regarding the Corporation's cash resources and its ability to generate cash to
fund its operations. However, adjusted EBITDA is not intended to replace
financial information prepared in accordance with GAAP.

    About Fortsum Business Solutions

    Fortsum Business Solutions Inc. is mainly involved in the development,
sale, integration and support of accounting, commercial and banking software.
For more information: www.fortsum.com.

    Forward-looking Information

    This press release could contain forward-looking information. Statements
based on current management expectations involve inherent risks and
uncertainties, both known and unknown. Actual results may vary from forecasts.
The reader should not place undue faith in forward-looking information.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of the release.
    
    %SEDAR: 00019855EF




For further information:

For further information: André Thompson, President and Chief Executive
Officer, athompson@fortsum.com; Dany Beaudet, Corporate Communications
Coordinator, dbeaudet@fortsum.com; (418) 877-0088, ext. 2272, Toll-free:
1-888-268-0088, Fax: (418) 877-9994

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FORTSUM BUSINESS SOLUTIONS INC.

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