TAMPA , Fla., May 10 /PRNewswire/ -- Global Imaging Systems, Inc. (Nasdaq: GISX) today announced record results for the fiscal year and fourth quarter ended March 31, 2006 . Highlights of the year:
* Revenues, operating income, net income and earnings per share set new
record highs.
* Revenues increased 11.2 percent, totaling $1.031 billion.
* Combined internal revenue growth exceeded five percent for the year
while automated office equipment, primarily copiers, which accounts for
almost 80 percent of the company's business, topped six percent.
* Operating income grew 8.2 percent to $114.1 million.
* Net income increased 8.7 percent to $61.9 million.
* Diluted earnings per share were $2.45, an increase of 8.4 percent.
* Earnings before interest, taxes, depreciation and amortization, loss on
early extinguishment of debt and the impact of the acceleration of
unvested stock options (adjusted EBITDA) increased 8.6 percent to
$132.8 million.
* Funded six acquisitions with cash flow from operations, representing
$28 million in acquired annualized revenue and bringing total annualized
acquired revenue to $229 million for the three-year period ended March
31, 2006.
* Debt to total capitalization was reduced to 37.3 percent.
Highlights of the fourth fiscal quarter ended March 31, 2006:
* Revenues, operating income, net income and earnings per share set new
fourth-quarter records.
* Revenues increased 8.6 percent to $268.6 million.
* Automated office equipment, primarily copiers, continued to post solid
internal revenue growth of more than seven percent, marking six
consecutive quarters of five percent or more internal growth.
* Combined internal revenue growth for the fourth quarter was six percent.
* Operating income grew 9.8 percent to $29.3 million.
* Net income was up 9.2 percent to $15.9 million.
* Diluted earnings per share were $0.63, up 10.5 percent.
* As announced earlier, effective March 31, 2006, the company accelerated
the vesting of unvested stock options previously awarded to employees
and officers. As a result, the company recorded within fourth-quarter
selling, general and administrative expenses additional compensation
expense of approximately $0.5 million ($0.3 million after taxes).
* Excluding the impact of the one-time stock options acceleration:
-- Operating income grew 11.6 percent to $29.8 million.
-- Net income was up 11.3 percent to $16.2 million.
-- Diluted earnings per share were $0.64, up 12.3 percent.
-- Adjusted EBITDA increased 10.8 percent to $34.4 million.
He added, 'This effort helped us overcome our typical fourth fiscal quarter increase in payroll taxes as we began a new calendar year. We are also encouraged that healthcare costs held level with the previous quarter and with the year-ago quarter. We believe the healthcare plan changes we implemented in January are proving effective.'
Looking forward,
For the fiscal 2007 first quarter,
The company's fiscal year and fourth quarter conference call is scheduled for this morning, May 10 , at 10:00 a.m. ET , and the company's first quarter 2007 conference call is scheduled for August 1, 2006 at 10:00 a.m. ET . You may access the calls through live webcasts by using the link provided on the company's Internet home page at http://www.gisx.com . The webcasts will also be archived and available on the company's website.
About Global Imaging Systems
Global Imaging Systems offers thousands of middle-market customers a one- stop solution for office technology needs in 32 states and the District of Columbia. The company provides a broad line of office technology solutions including the sale and service of copiers and other automated office equipment, network integration services, and electronic presentation systems. The company is also a disciplined, profitable consolidator in the highly fragmented office technology solutions industry.
This press release includes presentations of earnings before interest, taxes, depreciation and amortization ('EBITDA') and adjusted EBITDA. Adjusted EBITDA represents EBITDA adjusted for the loss on early extinguishment of debt and the one-time impact of accelerating previously unvested stock options. EBITDA is a measure commonly used by the capital markets to value enterprises. Interest, taxes, depreciation and amortization can vary significantly between companies due in part to differences in accounting policies, tax strategies, levels of indebtedness and interest rates. Excluding these items provides insight into the underlying results of operations and facilitates comparisons between Global and other companies. EBITDA is also a useful measure of the company's ability to service debt and is one of the measures used for determining debt covenant compliance. Management believes EBITDA and adjusted EBITDA information is useful to investors for these reasons. Both EBITDA and adjusted EBITDA are non-GAAP financial measures and should not be viewed as an alternative to GAAP measures of performance. Management believes the most directly comparable GAAP financial measure is net income and has provided a reconciliation of EBITDA and adjusted EBITDA to net income in this press release.
This news release contains forward-looking statements and statements based on forward-looking information, including statements relating to Global's expected future acquisitions, future revenue growth and future diluted earnings per share. These statements include the words 'expect,' 'believe,' 'should,' variations of such words, 'we are optimistic' and similar expressions which are intended to identify such forward-looking statements. These statements are based on numerous assumptions and are subject to uncertainties and risks. Actual results could differ materially. Factors that might cause Global's results to differ materially include risks relating to changes in the overall economy; rising interest rates; Global's debt and debt service obligations; the challenge of integrating acquired businesses; the need for funding acquisitions; Global's ability to close acquisitions in a timely and cost-effective manner; the need for skilled employees; rapid technological change in Global's industry; dependence on suppliers; and high levels of competition. Most of these risks are discussed in more detail under the caption 'Risk Factors' in Global's annual report on Form 10-K for the year ended March 31, 2005 .
GLOBAL IMAGING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Amounts in thousands except per-share amounts)
Three Months Ended Fiscal Year Ended
March 31, March 31,
2006 2005 2006 2005
Revenues:
Equipment and supplies sales $200,506 $186,014 $ 768,331 $694,745
Service and rentals 68,094 61,378 262,253 231,705
Total revenues 268,600 247,392 1,030,584 926,450
Costs and operating expenses:
Cost of equipment and
supplies sales 124,423 116,374 486,073 441,591
Service and rental costs 36,073 33,443 137,407 120,789
Selling, general and
administrative expenses 78,383 70,434 291,259 257,112
Intangible asset amortization 428 467 1,775 1,518
Total costs and operating
expenses 239,307 220,718 916,514 821,010
Income from operations 29,293 26,674 114,070 105,440
Loss on early extinguishment
of debt -- -- -- 1,655
Interest expense 3,583 3,273 13,985 11,896
Income before income taxes 25,710 23,401 100,085 91,889
Income taxes 9,821 8,848 38,185 34,918
Net income $ 15,889 $ 14,553 $ 61,900 $ 56,971
Net income per common share:
Basic $ 0.69 $ 0.62 $ 2.68 $ 2.48
Diluted(a) $ 0.63 $ 0.57 $ 2.45 $ 2.26
Weighted average number of shares
outstanding:
Basic 23,172 23,370 23,100 22,979
Diluted 26,084 26,358 25,993 25,997
(a) The calculation of diluted earnings per common share for the three
months and fiscal years ended March 31, 2006 and 2005 assumes the
conversion of convertible notes issued in May 2003 resulting in 2,407
additional shares for all periods presented. For purposes of diluted
earnings per common share, net income for the three months ended March 31,
2006 and 2005 includes the addback of $442 and $445, respectively,
representing interest and financing fee expense, net of taxes, associated
with the convertible notes. For the year ended March 31, 2006 and 2005,
net income includes the addback of $1,768 and $1,773, respectively.
Reconciliation of Net Income to EBITDA
and Adjusted EBITDA:
Three Months Ended Fiscal Year Ended
March 31, March 31,
2006 2005 2006 2005
Net income $ 15,889 $ 14,553 $ 61,900 $ 56,971
Income taxes 9,821 8,848 38,185 34,918
Interest expense 3,583 3,273 13,985 11,896
Amortization 428 467 1,775 1,518
Depreciation 4,237 3,948 16,491 15,317
EBITDA 33,958 31,089 132,336 120,620
Loss on early
extinguishment of debt -- -- -- 1,655
Acceleration of unvested
stock options 488 -- 488 --
Adjusted EBITDA $ 34,446 $ 31,089 $ 132,824 $ 122,275
GLOBAL IMAGING SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
March 31, March 31,
2006 2005
ASSETS
Current assets:
Cash and cash equivalents $ 51,610 $ 25,365
Accounts receivable, net 131,497 115,905
Inventories, net 98,073 93,376
Other current assets 14,757 12,870
Total current assets 295,937 247,516
Rental equipment, net 15,687 16,475
Property and equipment, net 17,810 12,577
Goodwill and other assets 555,223 540,349
Total assets $ 884,657 $ 816,917
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 102,500 $ 99,002
Current maturities of long-term debt 2,133 2,235
Deferred revenue 27,159 27,217
Income taxes payable 7,711 3,707
Total current liabilities 139,503 132,161
Deferred income taxes 42,247 34,466
Long-term debt, less current maturities 260,713 262,847
Other long-term liabilities 976 --
Total liabilities 443,439 429,474
Total stockholders' equity 441,218 387,443
Total liabilities and stockholders'
equity $ 884,657 $ 816,917
GLOBAL IMAGING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Fiscal Year Ended
March 31,
2006 2005
OPERATING ACTIVITIES:
Net income $ 61,900 $ 56,971
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 16,491 15,317
Amortization 1,775 1,518
Amortization of financing fees 1,097 1,025
Tax benefit of stock option exercises and
vested restricted stock 2,250 4,711
Loss on early extinguishment of debt -- 1,655
Deferred income tax expense 7,907 7,215
Unearned stock-based compensation expense 1,681 470
Stock option acceleration expense 488 --
Changes in operating assets and liabilities,
net of amounts acquired in purchase
business combinations:
Accounts receivable (13,732) (15,832)
Inventories (3,153) (8,456)
Prepaid expenses and other current assets (82) (192)
Other assets 755 (702)
Accounts payable and accrued liabilities 981 11,118
Deferred revenue (1,348) (3,389)
Income taxes payable 4,004 (579)
Other long-term liabilities 976 --
Net cash provided by operating activities 81,990 70,850
INVESTING ACTIVITIES:
Proceeds from related party notes receivable -- 400
Purchases of property, equipment and rental
equipment, net of proceeds from disposals (20,340) (16,013)
Purchases of businesses, net of cash acquired (19,219) (151,740)
Net cash used in investing activities (39,559) (167,353)
FINANCING ACTIVITIES:
Proceeds from revolving line of credit 31,728 32,717
Payments on revolving line of credit (31,728) (32,717)
Payments on other long-term debt (2,236) (1,963)
Proceeds from issuance of long-term debt -- 70,000
Financing fees paid (19) (1,897)
Purchases of treasury stock (20,000) --
Stock options exercised 6,069 8,462
Net cash (used in) provided by financing
activities (16,186) 74,602
Net increase (decrease) in cash and cash
equivalents 26,245 (21,901)
Cash and cash equivalents, beginning of year 25,365 47,266
Cash and cash equivalents, end of year $ 51,610 $ 25,365
Non-cash investing activities:
Stock issued for business purchases $ 920 $ 31,409
Note: Certain prior year amounts have been reclassified to conform to the
current year presentation.
SOURCE Global Imaging Systems, Inc.
