RAND Worldwide(TM) announces second quarter 2007 financial results



    MISSISSAUGA, ON, Aug. 14 /CNW/ - Rand A Technology Corporation (TSX:RND),
operating as RAND Worldwide(TM) ("Rand" or the "Company"), a global leader in
providing technology solutions to organizations with engineering design and
information technology requirements, announces financial results for the
three- and six-month period ended June 30, 2007.

    
    Q2 2007 Highlights

    -   Revenue increased to $26.0 million, up 7.4% from $24.2 million in Q2
        2006
    -   Revenue from the IMAGINiT business was $20.9 million, up 11.5% from
        Q2 2006
    -   Negative EBITDA(1) was $2.1 million, compared to positive EBITDA of
        $0.6 million in Q2 2006
    -   Net loss from continuing operations was $0.11 per share, compared to
        net income from continuing operations of $0.02 per share in Q2 2006
    -   Completed sale of European PLM operations in Finland and Denmark
    -   Completed CADVisions acquisition, subsequent to quarter end
    -   Agreement to acquire the Company by Ampersand Ventures for $2.10 per
        share (see separate press release dated August 14, 2007)


    Consolidated Financial Highlights

    (in thousands, except
     per share data)           Three Months Ended         Six Months Ended
    (CDN$)                   06/30/07     06/30/06     06/30/07     06/30/06
                             --------     --------     --------     --------

    Revenue                  $ 26,022       24,239     $ 59,137       51,691
    Gross Profit (%)             47.1%        56.3%        46.7%        52.8%
    EBITDA(1)                $ (2,142)         579     $ (1,356)       2,253
    Income (Loss) from
     Continuing Operations   $ (2,300)         452     $ (1,675)       1,947
    Net Earnings (Loss)      $ (2,625)          56       (2,236)       1,176
    Net Earnings (Loss)
     Per Common Share -
     Continuing Operations   $  (0.11)        0.02     $  (0.08)        0.09
    Net Earnings Per Common
     Share - Basic           $  (0.13)        0.00     $  (0.11)        0.06
    Weighted Avg. No. Common
     Shares - Basic            20,020       20,207       19,868       20,145
    

    Financial Review

    Revenue for Q2 2007 was $26.0 million, a 7.4% increase from $24.2 million
in Q2 2006. This increase was driven primarily by additional revenue from
IMAGINiT. Revenue from IMAGINiT was $20.9 million, an increase of 11.5% from
Q2 2006, while revenue from RAND PLM was $5.1 million, a decrease of 6.9% from
Q2 2006. IMAGINiT generated 80.3% of revenue in Q2 2007, up from 77.3% of
revenue in Q2 2006. Rand generates approximately 80% of its revenue in foreign
currencies and as a result of the year-over-year impact of those currencies
relative to the Canadian dollar, revenues were negatively impacted by
approximately $0.3 million for the quarter.
    Driven by 20.0% growth at IMAGINiT, revenue for the year-to-date ("YTD")
period ended June 30, 2007 was $59.1 million, up 14.4% compared to the same
period last year. For the first half of 2007, the year-over-year impact of
foreign currencies relative to the Canadian dollar positively impacted revenue
by $0.3 million.
    Rand's gross margin was 47.1% in Q2 2007, compared to 56.3%, in Q2 2006.
The primary cause for the decline can be attributed to the margin drop within
IMAGINiT North America as a result of incentive changes implemented by
Autodesk earlier in the year. During the quarter, gross margin for IMAGINiT
was 39.3%, and for PLM was 78.7%. Sales of lower margin 2D products continue
to put near-term pressure on IMAGINiT's overall gross margin percentage. 3D
products earn a higher gross margin percentage for the Company than 2D
products, and also attract incremental services revenue.
    Rand's gross margin for the first half of 2007 was 46.7% compared to
52.8% for the first half of fiscal 2006. Gross margin for the YTD period was
impacted by the same factors described in the prior paragraph.
    Q2 2007 operating expenses were $13.5 million or 52.0% of revenue,
compared to $12.7 million, or 52.4% of revenue in Q2 2006. The increase is
primarily due to corporate costs associated with the Ampersand transaction, as
well as increases in employee benefits and occupancy.
    Total YTD operating expenses were $27.8 million, or 46.9% of revenue
compared to $24.3 million, or 47.0% of revenue for the same period last year.
    Rand recorded negative EBITDA of $2.1 million in Q2 2007, versus positive
EBITDA of $0.6 million in Q2 2006. EBITDA was impacted primarily by the
changes within IMAGINiT described above, combined with higher overall
operating expenses. For the first half of the year, Rand recorded negative
EBITDA of $1.4 million versus positive EBITDA of $2.3 million last year.
    Net loss from continuing operations in Q2 2007 was $2.3 million, or a net
loss per share of $0.11 for the quarter, compared to net income from
continuing operations of $0.5 million, or net earnings per share of $0.02 in
the second quarter of the previous year. The decrease was primarily driven by
the items mentioned above. YTD, net loss from continuing operations totalled
$1.7 million, or a net loss per share of $0.08, compared to net income from
continuing operations of $1.9 million, or net earnings per share of $0.09 per
share, in the same period last year.
    Net loss for Q2 2007 was $2.6 million resulting in a net (basic) loss per
common share of $0.13, compared to net income of $0.06 million, or net
earnings per share of $0.00 in the second quarter of the previous year. Net
loss for Q2 2007 included the items noted above, as well as a loss from
discontinued operations of $0.3 million. Net earnings for Q2 2006 included a
loss from discontinued operations of $0.4 million. YTD, net loss totalled
$2.2 million, or a net loss per share of $0.11, compared to net earnings of
$1.2 million, or net earnings per share of $0.06, in the same period last
year.
    At June 30, 2007, the Company had cash and cash equivalents totalling
$10.6 million compared with $13.4 million at December 31, 2006.

    Acquisition, Divestiture, and Additional Event Updates

    On May 15, 2007, RAND Worldwide completed the sale of its wholly-owned
subsidiaries in Finland and Denmark, which represented the majority of the
Company's European PLM operations. The divestiture is expected to result in
annual cost savings of approximately $1.0 million. RAND has retained a
presence in Europe by continuing to manage its remaining divisions.
    On July 5, 2007, RAND Worldwide completed the acquisition of CADVisions,
Inc., a Dallas Texas based leading provider of Autodesk software and
associated training, consulting and support services.
    On August 14, 2007, the Company entered into a definitive agreement with
funds managed by Ampersand Ventures ("Ampersand"), a leading private equity
firm whose limited partners include some of the leading financial investors in
private equity, whereby a new subsidiary of Ampersand would acquire all of the
outstanding shares of the Company at a price of $2.10 per share pursuant to a
plan of arrangement under the Ontario Business Corporations Act. The
transaction is subject to the customary conditions, including shareholder
approval at a special meeting of the shareholders expected to be held in
October 2007 and approval of the Superior Court of Justice of Ontario. The
transaction is expected to close in the fourth quarter. However, there can be
no assurances that the proposed transaction will be completed at that time or
at all. Prior to completion of the transaction, the Company will conduct its
business in the ordinary course consistent with past practice.
    Management's discussion and analysis, consolidated financial statements
and notes thereto for Q2 2007 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 448 people in more
than 50 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, ("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 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 EBITDA to GAAP measure for the three and six months
    ended June 30th:

                                    Three Months Ended     Six Months Ended
    (In thousands of dollars)        2007      2006(2)     2007      2006(2)
    -------------------------------------------------------------------------
    EBITDA                        $  (2,142) $     579  $  (1,356) $   2,253
    Amortization of property
     and equipment                      157        163        329        359
    Amortization of intangibles          18         19         38         38
    Interest income                     (47)       (96)       (97)      (150)
    -------------------------------------------------------------------------
    Income (loss) before income
     taxes and discontinued
     operations                   $  (2,270) $     493  $  (1,626) $   2,006
    -------------------------------------------------------------------------
    (2) Restated for discontinued operations.
    

    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.

    
    Consolidated Balance Sheets
    RAND A TECHNOLOGY CORPORATION
    As at June 30, 2007 and December 31, 2006

                                                       June 30,  December 31,
                                                          2007        2006(1)
    (In thousands of dollars)                       (unaudited)     (audited)
    -------------------------------------------------------------------------
    ASSETS
    CURRENT ASSETS
      Cash and short-term investments                $  10,630     $  13,362
      Accounts receivable                               12,916        12,914
      Other receivables                                  1,509         4,854
      Inventory                                          2,817         1,494
      Prepaid expenses and deposits                      1,558         1,654
      Due from related parties                           1,103         1,374
      Current assets held for disposal by sale               -           596
      Current assets held for disposal other
       than by sale                                        183           192
    -------------------------------------------------------------------------
    Total Current Assets                                30,716        36,440
    -------------------------------------------------------------------------
    Property and equipment                               2,459         2,089
    Goodwill                                             7,261         7,573
    Intangibles                                          1,829         1,773
    Long-term assets held for disposal by sale               -            93
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    TOTAL ASSETS                                     $  42,265     $  47,968
    -------------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES
      Bank loan                                      $     473     $       -
      Accounts payable and accrued liabilities          15,663        17,240
      Deferred revenue                                   3,277         3,382
      Income taxes payable                                 211           500
      Current portion of capital lease                       -            34
      Due to related parties                               291           307
      Current liabilities held for disposal by sale          -           559
      Current liabilities held for disposal
       other than by sale                                  806           851
    -------------------------------------------------------------------------
    Total Current Liabilities                           20,721        22,873
    -------------------------------------------------------------------------
    SHAREHOLDERS' EQUITY
      Capital stock                                     52,668        52,118
      Contributed surplus                               13,486        13,247
      Deficit                                          (47,825)      (45,589)
      Accumulated other comprehensive income             3,215         5,319
    -------------------------------------------------------------------------
    TOTAL SHAREHOLDERS' EQUITY                          21,544        25,095
    -------------------------------------------------------------------------
    TOTAL LIABILITIES & SHAREHOLDERS' EQUITY         $  42,265     $  47,968
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Restated for discontinued operations.



    Consolidated Statements of Earnings (Loss) (unaudited)
    RAND A TECHNOLOGY CORPORATION
    For the three months and six months ended June 30:

    (In thousands of dollars,
     except earnings per share
     and weighted average           Three months ended     Six months ended
     share data)                     2007      2006(1)     2007      2006(1)
    -------------------------------------------------------------------------
    REVENUE                       $  26,022  $  24,239  $  59,137  $  51,691
    COST OF SALES                    13,768     10,597     31,494     24,388
    -------------------------------------------------------------------------
    GROSS PROFIT                     12,254     13,642     27,643     27,303
    -------------------------------------------------------------------------
    EXPENSES
      Operating expenses             13,540     12,698     27,763     24,313
      Foreign exchange                  436         32        412         91
      Research and development          420        333        824        646
    -------------------------------------------------------------------------
                                     14,396     13,063     28,999     25,050
    -------------------------------------------------------------------------
    INCOME (LOSS) BEFORE:            (2,142)       579     (1,356)     2,253
    -------------------------------------------------------------------------
      Amortization of property
       and equipment                    157        163        329        359
      Amortization of intangibles        18         19         38         38
      Interest income                   (47)       (96)       (97)      (150)
    -------------------------------------------------------------------------
                                        128         86        270        247
    -------------------------------------------------------------------------
    INCOME (LOSS) BEFORE INCOME
     TAXES AND DISCONTINUED
     OPERATIONS                      (2,270)       493     (1,626)     2,006
    Provision for income taxes           30         41         49         59
    -------------------------------------------------------------------------
    INCOME (LOSS) FROM CONTINUING
     OPERATIONS                      (2,300)       452     (1,675)     1,947
    -------------------------------------------------------------------------
    DISCONTINUED OPERATIONS
    Net loss on disposition of
     discontinued operations            (62)         -        (62)         -
    Loss from discontinued
     operations net of income taxes
    - Disposition by sale              (263)      (396)      (499)      (771)
    -------------------------------------------------------------------------
    NET EARNINGS (LOSS)           $  (2,625) $      56  $  (2,236) $   1,176
    -------------------------------------------------------------------------
    Net earnings (loss) per
     Common Share - Basic
    Continuing operations         $   (0.11) $    0.02  $   (0.08) $    0.09
    Discontinued operations       $   (0.02) $   (0.02) $   (0.03) $   (0.03)
    -------------------------------------------------------------------------
    Net earnings (loss) per
     Common Share - Basic         $   (0.13) $    0.00  $   (0.11) $    0.06
    -------------------------------------------------------------------------
    Fully diluted earnings
     (loss) per Common Share      $   (0.13) $    0.00  $   (0.11) $    0.05
    -------------------------------------------------------------------------
    Weighted Average Number of
     Common Shares - Basic
     (in '000s)                      20,020     20,207     19,868     20,145
    -------------------------------------------------------------------------
    Weighted Average Number of
     Common Shares - Fully
     Diluted (in '000s)              20,311     20,746     20,186     21,039
    -------------------------------------------------------------------------
    (1) Restated for discontinued operations.



    Consolidated Statements of Deficit (unaudited)
    RAND A TECHNOLOGY CORPORATION
    For the three months and six months ended June 30:

                                   Three months ended     Six months ended
    (In thousands of dollars)        2007       2006       2007       2006
    -------------------------------------------------------------------------
    DEFICIT, beginning of period  $ (45,200) $ (48,025) $ (45,589) $ (49,145)
    Earnings (loss) for the period   (2,625)        56     (2,236)     1,176
    -------------------------------------------------------------------------
    Deficit - end of period       $ (47,825) $ (47,969) $ (47,825) $ (47,969)
    -------------------------------------------------------------------------



    Consolidated Statements of Comprehensive Income (Loss) (unaudited)
    RAND A TECHNOLOGY CORPORATION
    For the three months and six months ended June 30:

                                   Three months ended     Six months ended
    (In thousands of dollars)        2007       2006       2007       2006
    -------------------------------------------------------------------------
    Net earnings (loss) for
     the period                   $  (2,625) $      56  $  (2,236) $   1,176
    -------------------------------------------------------------------------
    Other comprehensive loss,
     net of income taxes:
    Change in unrealized gains
     on translating financial
     statements of self-sustaining
     foreign operations           $  (1,982) $    (331) $  (2,104) $    (465)
    -------------------------------------------------------------------------
    Other comprehensive loss         (1,982)      (331)    (2,104)      (465)
    -------------------------------------------------------------------------
    Comprehensive income (loss)
     for the period               $  (4,607) $    (275) $  (4,340) $     711
    -------------------------------------------------------------------------



    Consolidated Cash Flow Statements (unaudited)
    RAND A TECHNOLOGY CORPORATION
    For the three months months and six months ended June 30:

                                    Three months ended     Six months ended
    (In thousands of dollars)        2007      2006(1)     2007      2006(1)
    -------------------------------------------------------------------------
    CASH PROVIDED BY (USED IN)
     OPERATING ACTIVITIES
            Income (loss) from
             continuing
             operations           $  (2,300) $     452  $  (1,675) $   1,947
    -------------------------------------------------------------------------
      Add - Items not affecting
             cash:
            Amortization of
             property and equipment     157        163        329        359
            Amortization of
             intangibles                 18         19         38         38
            Employee stock options       80        164        239        327
            Changes in operating
             assets and liabilities       -          -          -          -
            other than cash           1,034     (2,627)       949     (4,443)
    -------------------------------------------------------------------------
    CASH USED IN OPERATING
     ACTIVITIES                      (1,011)    (1,829)      (120)    (1,772)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
            Proceeds from Bank loan       -          -        590          -
            Repayment of Bank loan      (28)         -        (47)         -
            Repayment of obligations
             under capital lease          -        (49)       (34)      (112)
    -------------------------------------------------------------------------
    CASH PROVIDED BY (USED IN)
     IN FINANCING ACTIVITIES            (28)       (49)       509       (112)
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
            Net cash paid on
             acquisition                  -       (921)      (523)      (921)
            Net cash outflow on
             disposition                (94)         -        (94)         -
            Additions to goodwill
             and intangibles              -        (84)         -        (84)
            Additions to property
             and equipment             (324)      (184)      (827)      (458)
            Proceeds on sale of
             property and equipment       3          -          3          -
    -------------------------------------------------------------------------
    CASH USED IN INVESTING
     ACTIVITIES                        (415)    (1,189)    (1,441)    (1,463)
    -------------------------------------------------------------------------
    CUMULATIVE TRANSLATION EFFECTS   (1,768)       194     (1,681)       103
    -------------------------------------------------------------------------
    CASH USED IN CONTINUING
     OPERATIONS                      (3,222)    (2,873)    (2,733)    (3,244)
    CASH PROVIDED BY (USED IN)
     DISCONTINUED OPERATIONS
     HELD FOR DISPOSAL BY SALE          (61)        33       (105)        40
    -------------------------------------------------------------------------
    DECREASE IN CASH AND SHORT-
     TERM INVESTMENTS                (3,283)    (2,840)    (2,838)    (3,204)
    -------------------------------------------------------------------------
    CASH AND SHORT-TERM
     INVESTMENTS, beginning of
     period                          13,914     13,986     13,469     14,350
    -------------------------------------------------------------------------
    CASH AND SHORT-TERM
     INVESTMENTS, end of period   $  10,631  $  11,146  $  10,631  $  11,146
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    CONSISTS OF:
      CASH AND SHORT-TERM
       INVESTMENTS, of
       continuing operations         10,630     11,061     10,630     11,061
      CASH AND SHORT-TERM
       INVESTMENTS, of
       discontinued operations
       held for disposal other
       than by sale                       1         85          1         85
    -------------------------------------------------------------------------
    TOTAL                         $  10,631  $  11,146  $  10,631  $  11,146
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Restated for discontinued operations.
    





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

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