Homeserve Reports First Quarter Results

TORONTO, July 9 /CNW/ - Homeserve Technologies Inc. today reported net income of $3.7 million or $0.39 per common share, after preferred share dividends on revenues of $5.7 million for the first quarter ended May 31, 2010, compared to net income of $3.2 million or $0.32 per common share, after preferred share dividends on revenues of $5.4 million for the same period of the last fiscal year. The $0.5 million quarter-over-quarter increase in net income was primarily attributed to increased revenue of $0.3 million on increased relocation file volumes and reduced operating expenses of $0.2 million due primarily to reduced staffing requirements.

    
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                                                         Three Months Ended
                                                           May 31,   May 31,
    ($ thousands, except per share amounts)                  2010      2009
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    Revenue                                                 5,706     5,366
    Cost of sales                                              92        63
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    Gross margin                                            5,614     5,303
    Operating costs - selling, general and administrative     706       867
    Operating costs - amortization                          1,238     1,272
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    Net income from operations                              3,670     3,164
    Investment income                                           -        65
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    Net income for the period                               3,670     3,229
    Preferred share dividends                                (994)     (994)
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    Basic and diluted earnings to common shareholders       2,676     2,235
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    Basic and diluted earnings per common share             $0.39     $0.32
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Calculation of Earnings per share

A summary of the components of the Company's diluted earnings per share is as follows:

    
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                                                         Three Months Ended
    ($ thousands, except number of shares and              May 31,   May 31,
     per share amounts)                                      2010      2009
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    Net income                                              3,670     3,229
    Preferred share dividends                                (994)     (994)
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    Net income available to common shareholders             2,676     2,325
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    Weighted average outstanding common shares              6,944     6,944
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    Common shares and common share equivalents              6,944     6,944
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    Basic and diluted income per common share               $0.39     $0.32
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Outlook

The award of the Government of Canada Contract ("GOC Contract") for the combined Canadian Forces, Government of Canada Department and Agencies and the Royal Canadian Mounted Police to a subsidiary of BRPS for a five year term with two one-year renewal options, which commenced on December 1, 2009, secures significant relocation volumes from which the Company earns licensing fees. Management anticipates the fees earned from the GOC Contract will provide sustainable cash flows for the Company for the immediately foreseeable future.

About Homeserve

Homeserve is a Canadian based software development and services company focused on home-related services for the real estate, relocation and banking industries. Homeserve provides a one-stop shopping service for home buyers and sellers, offering real-estate related products and services throughout the customer's purchasing and selling cycle, coordinated by a proprietary software system and contact centre.

Forward-Looking Statements

This press release contains forward-looking information, including "forward-looking statements". The words "will", "intends", "expected" and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward looking statements. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause Homeserve's performance to differ materially from the description of the investment expressed or implied by such forward-looking statements. Although Homeserve believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information. Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include general economic conditions; interest rate changes; availability of equity and debt financing; and other risks and factors described from time to time in the documents filed by the Company with the securities regulators in Canada including in the Annual Information Form under the heading "Risk Factors." The Company undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.

Additional Information

Detailed financial information and Management's Discussion and Analysis of Results and Financial Condition as at and for the quarter ended May 31, 2010 is posted on Homeserve's website (under Investor Relations, Financial Information) at www.homeserve.ca and should be read in conjunction with this press release and the Company's audited financial statements for the year ended February 28, 2010, which are and is also available on SEDAR's website at www.sedar.com.

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For further information: Jenn Pearce, Homeserve Technologies Inc., [phone] or [email protected]