TAMPA , Fla., Aug. 1 /PRNewswire/ -- Global Imaging Systems, Inc. (Nasdaq: GISX) today announced record results for its fiscal first quarter ended June 30, 2006 . Highlights of the quarter:
* Revenues, operating income, net income and earnings per share set new
first-quarter records.
* Revenues increased 7.6 percent to $264.9 million.
* Automated office equipment, primarily copiers, continued to post
positive internal revenue growth for the 32nd consecutive quarter.
* Operating income grew 10.6 percent to $29.8 million.
* Net income was up 6.6 percent to $15.6 million.
* Adjusted EBITDA increased 9.4 percent to $34.3 million.
* Diluted earnings per share were $0.61, up 5.2 percent after absorbing
approximately three cents per share in charges for the early
extinguishment of debt and the impact of adopting Statement of Financial
Accounting Standards 123(R), Share-Based Payment.
* Completed the recasting of the company's capital structure, which
included redeeming and converting $57.5 million of convertible notes
into common stock and closing on a new senior credit facility with more
flexible terms that lowered interest rates and allowed the company to
continue a previously authorized $150 million, three-year stock
repurchase program.
* Repurchased 311,200 shares of common stock for a total price of
approximately $12.5 million.
* Paid down an additional $25 million in debt, bringing debt to 26.0
percent of total capital.
* Completed two acquisitions, acquiring $16.4 million in annualized
revenue.
He added, 'Following a quarter of solid financial results, we announced a two-for-one stock split payable August 15, 2006 to shareholders of record on August 1, 2006 . Our shares will begin trading on a split-adjusted basis on August 16.'
For the fiscal 2007 second quarter,
The company's first quarter conference call is scheduled for this morning, August 1 , at 10:00 a.m. ET , and the company's second quarter 2007 conference call is scheduled for October 26, 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. 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, 2006 .
GLOBAL IMAGING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Amounts in thousands except per-share amounts)
Three Months Ended
June 30,
2006 2005
Revenues:
Equipment and supplies sales $ 195,653 $ 182,507
Service and rentals 69,276 63,822
Total revenues 264,929 246,329
Costs and operating expenses:
Cost of equipment and supplies sales 123,521 115,725
Service and rental costs 35,918 33,349
Selling, general and administrative
expenses 75,230 69,860
Intangible asset amortization 469 453
Total costs and operating expenses 235,138 219,387
Income from operations 29,791 26,942
Loss on early extinguishment of debt 1,045 --
Interest expense 3,325 3,326
Income before income taxes 25,421 23,616
Income taxes 9,812 8,974
Net income $ 15,609 $ 14,642
Net income per common share:
Basic $ 0.65 $ 0.63
Diluted(a) $ 0.61 $ 0.58
Weighted average number of shares
outstanding:
Basic 23,945 23,257
Diluted 26,144 26,157
(a) The calculation of diluted earnings per common share assumes the
conversion of convertible notes issued in May 2003 resulting in 1,729 and
2,407 additional shares for the three months ended June 30, 2006 and 2005,
respectively. For purposes of diluted earnings per common share, net
income for the three months ended June 30, 2006 and 2005 includes the
addback of $219 and $443, respectively, representing interest and
financing fee expense, net of taxes, associated with the convertible
notes. All convertible debt was converted to common stock as of June 9,
2006.
Reconciliation of Net Income to EBITDA
and Adjusted EBITDA:
Net income $ 15,609 $ 14,642
Income taxes 9,812 8,974
Interest expense 3,325 3,326
Amortization 469 453
Depreciation 4,003 3,911
EBITDA 33,218 31,306
Loss on early extinguishment of debt 1,045 --
Adjusted EBITDA $ 34,263 $ 31,306
GLOBAL IMAGING SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
June 30, March 31,
2006 2006
ASSETS
Current assets:
Cash and cash equivalents $ 4,661 $ 51,610
Accounts receivable, net 135,881 131,497
Inventories 94,926 98,073
Other current assets 17,201 14,757
Total current assets 252,669 295,937
Rental equipment, net 16,128 15,687
Property and equipment, net 17,937 17,810
Goodwill and other assets 564,689 555,223
Total assets $ 851,423 $ 884,657
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 81,031 $ 102,500
Current maturities of long-term debt 24 2,133
Deferred revenue 27,651 27,159
Income taxes payable 7,187 7,711
Total current liabilities 115,893 139,503
Deferred income taxes 44,172 42,247
Long-term debt, less current maturities 180,009 260,713
Other long-term liabilities -- 976
Total liabilities 340,074 443,439
Total stockholders' equity 511,349 441,218
Total liabilities and stockholders'
equity $ 851,423 $ 884,657
GLOBAL IMAGING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Three Months Ended
June 30,
2006 2005
OPERATING ACTIVITIES:
Net income $ 15,609 $ 14,642
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation 4,003 3,911
Amortization 469 453
Amortization of financing fees 205 272
Tax benefit of stock option exercises and
vested restricted stock -- 252
Non-cash portion of loss on early
extinguishment of debt 1,045 --
Deferred income tax expense 2,037 1,705
Stock-based compensation expense 744 421
Changes in operating assets and liabilities,
net of amounts acquired in purchase
business combinations:
Accounts receivable (3,103) (475)
Inventories 4,611 (7,913)
Prepaid expenses and other current assets (2,290) (1,795)
Other assets (61) 243
Accounts payable and accrued liabilities (25,545) (21,814)
Deferred revenue (28) (280)
Income taxes payable (524) 4,810
Net cash used in operating activities (2,828) (5,568)
INVESTING ACTIVITIES:
Purchases of property, equipment and rental
equipment (4,265) (4,080)
Purchases of businesses, net of cash
acquired (10,188) (875)
Net cash used in investing activities (14,453) (4,955)
FINANCING ACTIVITIES:
Payments on long-term debt (217,016) (10,591)
Proceeds from issuance of long-term debt 191,703 15,253
Financing fees paid (1,958) 15
Purchases of treasury stock (12,548) (19,930)
Stock options exercised 7,484 411
Tax benefit of stock option exercises and
vested restricted stock 2,667 --
Net cash used in financing activities (29,668) (14,842)
Net decrease in cash and cash equivalents (46,949) (25,365)
Cash and cash equivalents, beginning of
period 51,610 25,365
Cash and cash equivalents, end of period $ 4,661 $ --
Note: Certain prior year amounts have been reclassified to conform to the current year presentation.
SOURCE Global Imaging Systems, Inc.
