CALGARY, Aug. 28 /CNW/ - WellPoint Systems Inc. ("WellPoint" or the
"Company") (TSX-V: WPS) the premier supplier of innovative software solutions
to the energy sector, today announced results for the three and six-month
periods ended June 30, 2007. All dollar amounts are in Canadian dollars unless
- Subsequent to the quarter-end, acquired essentially all the assets of
Bolo Systems, Inc.;
- Increased revenue 156% to $9.4 million for the second quarter ended
June 30, 2007 and 127% to $14.4 million for the first six months of
- Grew EBITDA for the second quarter to $2,280,646 compared with
$498,197 in the second quarter of 2006. EBITDA was $2,743,764 for the
first six months of 2007, up 174% when compared with $1,001,638 for
the comparable period of 2006;
- Reported net income of $916,362 in the second quarter of 2007
compared with $34,119 in the second quarter of 2006. Net income was
$826,967 for the first six months of 2007 compared to $163,069 in
- Named the 2007 Microsoft Dynamics(TM) Partner of the Year for Canada;
- Signed a significant software licensing, services and maintenance
contract with a South American party to provide financial enterprise
software to several subsidiaries of the entity;
- Launched WellPoint Energy Broker; a solution designed to provide
multi-commodity marketing functionality that will revolutionize the
way midstream companies run and measure their business; and
- Added Adanac Molybdenum Corporation and Global Gold Corporation to
growing roster of mining sector clientele.
"Our strong performance in this quarter reflects the conversion of
international sales opportunities which helped generate solid organic growth,"
said Frank Stanford, CEO of WellPoint Systems. "The recent launch of WellPoint
Energy Broker highlights our ongoing commitment to releasing new and
innovative products to support the long-term growth of the Company. With our
recent acquisition of Bolo Systems, Inc., we are well positioned to rapidly
bring our products into the significant U.S. Market."
Revenues for the quarter ended June 30, 2007 totaled $9,459,995, up 156%
from revenues of $3,699,643 for the quarter ended June 30, 2006. Revenues for
the six months ended June 30, 2007 totaled $14,383,046, up 127%, from revenues
of $6,335,854 for the six months ended June 30, 2006. License revenue and
professional service fees all increased, reflecting the organic growth in
WellPoint's products as the Company continues to add to its rapidly growing
list of international clientele. U.S. and International revenues represented
62% of total revenue in the six month period ended June 30, 2007.
Direct costs consist of the costs relating to the use of outside
contractors, costs arising from Microsoft Business Solutions license and
maintenance sales, commissions and agency fees. Direct costs of $3,315,526 for
the second quarter of 2007 represented 35% of total revenue as compared to
$887,978 or 24% of total revenue for 2006. Direct costs of $4,627,328 for the
first six months of 2007 represented 32% of total revenue as compared to
$1,445,809, or 23% of total revenue, for the same period in 2006. The increase
in the percentage of direct costs relative to revenues largely reflects agency
fees associated with a significant sale to a South American Company.
Gross margin percentage decreased to 65% for the second quarter of 2007
compared with 76% for the comparable period of 2006; however, gross margin
dollars increased 119% to $6,144,469 in the current quarter from $2,811,665 in
the comparable quarter of 2006. Gross margin percentage decreased to 68% for
the six months ended June 30, 2007 compared with 77% for the comparable period
of 2006. Gross margin increased 100% to $9,755,718 from $4,890,045 in 2006.
General and administrative expenses increased to $3,841,145 for the
quarter ended June 30, 2007 as compared with $2,327,260 for the comparable
period of 2006; these expenses now represent 41% of revenues as compared to
63% in 2006. General and administrative expenses increased to $6,996,416 for
the first six months of 2007 as compared with $3,908,821 for the comparable
period of 2006, these expenses now represent 49% of revenues as compared with
62% in 2006. Salaries and benefits account for the largest portion of the
general and administrative expense (71% in 2007 compared to 75% in 2006) with
the increase attributable to the growth in staff as a result of increased
business in 2007. Salaries and benefits accounted for 71 % of general and
administrative expense in the first six months of 2007 compared with 75% in
EBITDA increased 358% in the quarter ended June 30, 2007 to $2,280,646
from the 2006 EBITDA of $498,197. EBITDA increased 174% for the first six
months of 2007 to $2,743,764 from 2006 EBITDA of $1,001,638. The increase was
largely due to significantly higher revenues in excess of related expenses.
Net income was $916,362 in the second quarter of 2007 compared with
$34,119 in the second quarter of 2006. Net income was $826,967 for the first
six months of 2007 compared to $163,069 in 2006.
Working capital totaled approximately $1.8 million at June 30, 2007,
compared with $2.6 million on December 31, 2006.
Progress toward WellPoint's 2007 key strategy points:
1. Exploit receptive U.S. & International markets.
- U.S. and International revenue represented 62% of total revenue
for the first six months of 2007.
2. Pursue strategic acquisitions and partnerships that complement a
focused corporate strategy.
- Acquired essentially all the assets of Bolo Systems, Inc. on
August 13, 2007.
- WellPoint now owns the most valuable piece of mining intellectual
property in the Microsoft application world with the first quarter
2007 acquisition of iSoft.
- WellPoint continues to look for new acquisition opportunities.
3. Leverage a differentiated relationship with Microsoft.
- Named the 2007 Microsoft Dynamics(TM) Partner of the Year for
The Company's quarterly financial statements and management's discussion
and analysis are available on SEDAR at www.sedar.com.
(1) Non-GAAP Financial Measure
In addition to providing earnings measures in accordance with Generally
Accepted Accounting Principles (GAAP), WellPoint presents a non-GAAP
earnings measure. This is earnings before interest, taxes, depreciation
and amortization (EBITDA). This measure does not have any standardized
meaning prescribed by GAAP and is therefore unlikely to be comparable to
similar measures presented by other companies. EBITDA is provided to
assist investors in determining the ability of WellPoint to generate cash
from operations, to service the interest on indebtedness and to fund
deferred development costs.
A reconciliation of EBITDA to a GAAP financial measure is shown below:
Three months ended Six months ended
2007 2006 2007 2006
EBITDA $ 2,280,646 $ 498,197 $ 2,743,764 $ 1,001,638
Amortization (476,061) (320,753) (885,021) (549,359)
Interest (222,919) (143,325) (366,472) (289,210)
Income taxes (665,304) - (665,304) -
Net income (loss)
measure) $ 916,362 $ 34,119 $ 826,967 $ 163,069
About WellPoint Systems Inc.
WellPoint Systems provides premier software and related services for
managing critical operations within the energy industry. Aligning tightly with
Microsoft Corporation, WellPoint is the only Independent Software Vendor (ISV)
and Microsoft Dynamics partner dedicated to the energy sector. It is breaking
new ground with the creation of a more comprehensive, integrated energy
software suite based on existing Microsoft ERP technology that utilizes
state-of-the-art Dynamics AX(R) and .NET architectures. WellPoint became a
Microsoft Gold Certified Partner in 2005. Founded in 1997, Calgary-based
WellPoint Systems also has major operations in Houston, TX, Livingston, NJ,
Tampa, FL, Tunis, Tunisia and Moscow, Russia. WellPoint is publicly traded on
the TSX Venture Exchange under the symbol WPS.
This document contains forward-looking statements. Some forward looking
statements may be identified by words like "expects", "anticipates", "plans",
"intends", "indicates" or similar expressions. The statements are not a
guarantee of future performance and are inherently subject to risks and
uncertainties. The Company's actual results could differ materially from those
currently anticipated due to a number of factors, including, but not limited
to, successful integration of structural changes, including restructuring
plans, acquisitions, technical or manufacturing or distribution issues, the
competitive environment for the Company's products, the degree of market
penetration of the Company's products, and other factors set forth in reports
and other documents filed by the Company with Canadian securities regulatory
authorities from time to time.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information:
For further information: WellPoint Systems Inc., Frank Stanford, CEO,
(403) 538-3604, firstname.lastname@example.org, www.wellpointsystems.com;
The Equicom Group Inc., Nick Hurst, Investor Relations, (403) 538-4845,