TAMPA , Fla., Oct. 26 /PRNewswire/ -- Global Imaging Systems, Inc. (Nasdaq: GISX) today announced record revenues, operating income, net income and earnings per share for its fiscal second quarter ended September 30, 2006 . Highlights of the quarter include:
* Revenues increased 10.4 percent to $285.8 million.
* Automated office equipment, primarily copiers, continued to post
positive internal revenue growth for the 33rd consecutive quarter.
* Operating income grew 11.1 percent to $31.3 million.
* Net income was up 17.9 percent to $18.0 million.
* Adjusted EBITDA increased 9.7 percent to $36.0 million.
* Other income of $1.2 million resulted from the sale of selected
training division assets.
* Diluted earnings per share were $0.35, up 16.7 percent from the year
ago second quarter diluted EPS of $0.30 after adjusting to reflect the
2-for-1 stock split in August 2006.
* Repurchased 941,965 shares of common stock for a total price of
approximately $20.0 million.
* Acquired 20th core company, adding approximately $13.0 million in
annualized revenue.
The company also reported record results for the first half of fiscal 2007 ended September 30, 2006 . Highlights of the first six months include:
* Revenues increased 9.0 percent to $550.7 million.
* Operating income grew 10.8 percent to $61.1 million.
* Net income was up 12.4 percent to $33.6 million.
* Adjusted EBITDA increased 9.6 percent to $70.2 million.
* Diluted earnings per share were $0.65, up 10.2 percent from the year
ago first half diluted EPS of $0.59 after adjusting to reflect the
2-for-1 stock split in August 2006.
* Completed the recasting of the company's capital structure, which
includes a more flexible senior credit facility with lower interest
rates.
* Paid down debt to 27.0 percent of total capital.
* Repurchased 1,564,365 shares of common stock for a total price of
approximately $32.5 million.
* Completed three acquisitions, acquiring approximately $29.4 million in
annualized revenue.
The company's second quarter conference call is scheduled for this morning, October 26 , at 10:00 a.m. ET , and the third quarter 2007 conference call is scheduled for January 25, 2007 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 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 other income. 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 Six Months Ended
September 30, September 30,
2006 2005 2006 2005
Revenues:
Equipment and supplies sales $ 216,765 $ 194,993 $ 412,418 $ 377,500
Service and rentals 69,026 63,818 138,302 127,640
Total revenues 285,791 258,811 550,720 505,140
Costs and operating expenses:
Cost of equipment and
supplies sales 142,525 126,036 266,046 241,761
Service and rental costs 36,182 33,076 72,100 66,425
Selling, general and
administrative expenses 75,361 71,099 150,591 140,959
Intangible asset amortization 437 436 906 889
Total costs and operating
expenses 254,505 230,647 489,643 450,034
Income from operations 31,286 28,164 61,077 55,106
Other income 1,194 - 1,194 -
Loss on early extinguishment
of debt - - (1,045) -
Interest expense (3,138) (3,445) (6,463) (6,771)
Income before income taxes 29,342 24,719 54,763 48,335
Income taxes 11,326 9,443 21,138 18,417
Net income $ 18,016 $ 15,276 $ 33,625 $ 29,918
Net income per common share:
Basic $ 0.35 $ 0.33 $ 0.68 $ 0.65
Diluted(a) $ 0.35 $ 0.30 $ 0.65 $ 0.59
Weighted average number of
shares outstanding:
Basic 51,017 45,810 49,462 46,160
Diluted 52,081 51,574 52,190 51,943
(a) The calculation of diluted earnings per common assumes the conversion
of convertible notes issued in May 2003 resulting in 4,814 additional
shares for the three months ended September 30, 2005, and 1,719 and
4,814 additional shares for the six months ended September 30, 2006
and 2005, respectively. For purposes of diluted earnings per common
share, net income for the three months ended September 30, 2005
includes the addback of $442, representing interest and financing fee
expense, net of taxes, associated with the convertible notes. For the
six months ended September 30, 2006 and 2005, net income includes the
addback of $219 and $885, respectively. All previously outstanding
convertible notes were converted to common stock as of June 9, 2006.
Reconciliation of Net Income to EBITDA
and Adjusted EBITDA:
Net income $ 18,016 $ 15,276 $ 33,625 $ 29,918
Income taxes 11,326 9,443 21,138 18,417
Interest expense 3,138 3,445 6,463 6,771
Amortization 437 436 906 889
Depreciation 4,246 4,180 8,249 8,091
EBITDA 37,163 32,780 70,381 64,086
Other income (1,194) - (1,194) -
Loss on early extinguishment
of debt - - 1,045 -
Adjusted EBITDA $ 35,969 $ 32,780 $ 70,232 $ 64,086
GLOBAL IMAGING SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
September 30, March 31,
2006 2006
ASSETS
Current assets:
Cash and cash equivalents $ 10,112 $ 51,610
Accounts receivable, net 142,165 131,497
Inventories 109,156 98,073
Other current assets 15,209 14,757
Total current assets 276,642 295,937
Rental equipment, net 17,504 15,687
Property and equipment, net 19,042 17,810
Goodwill and other assets 574,952 555,223
Total assets $ 888,140 $ 884,657
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued liabilities $ 99,211 $ 102,500
Current maturities of
long-term debt 24 2,133
Deferred revenue 27,799 27,159
Income taxes payable 10,588 7,711
Total current liabilities 137,622 139,503
Deferred income taxes 45,958 42,247
Long-term debt, less current maturities 190,066 260,713
Other long-term liabilities - 976
Total liabilities 373,646 443,439
Total stockholders' equity 514,494 441,218
Total liabilities
and stockholders' equity $ 888,140 $ 884,657
GLOBAL IMAGING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Six Months Ended
September 30,
2006 2005
OPERATING ACTIVITIES:
Net income $ 33,625 $ 29,918
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 8,249 8,091
Amortization 906 889
Amortization of financing fees 347 545
Other income (1,194) -
Non-cash portion of loss on early
extinguishment of debt 1,045 -
Tax benefit of stock option exercises and
vested restricted stock - 1,159
Deferred income tax expense 4,018 3,671
Stock-based compensation expense 1,582 841
Changes in operating assets and liabilities,
net of amounts acquired in purchase
business combinations:
Accounts receivable (8,752) (4,437)
Inventories (8,907) (2,581)
Prepaid expenses and other current assets (747) (1,051)
Other assets 108 669
Accounts payable and accrued liabilities (8,541) (20,189)
Deferred revenue (576) 201
Income taxes payable 2,877 7,083
Other long-term liabilities - 976
Net cash provided by operating activities 24,040 25,785
INVESTING ACTIVITIES:
Purchases of property, equipment and rental
equipment, net of proceeds from disposals (10,645) (11,118)
Proceeds from sale of technology training
division assets 1,575 -
Purchases of businesses, net of cash acquired (20,208) (8,864)
Net cash used in investing activities (29,278) (19,982)
FINANCING ACTIVITIES:
Payments on long-term debt (241,508) (32,876)
Proceeds from issuances of long-term debt 226,251 31,728
Financing fees paid (2,112) -
Purchases of treasury stock (32,548) (20,000)
Stock options exercised 10,019 2,096
Tax benefit of stock option exercises and
vested restricted stock 3,638 -
Net cash used in financing activities (36,260) (19,052)
Net decrease in cash and cash equivalents (41,498) (13,249)
Cash and cash equivalents, beginning of period 51,610 25,365
Cash and cash equivalents, end of period $ 10,112 $ 12,116
Non-cash financing activity:
Conversion of convertible notes to common
stock, net $ 56,105 $ -
Treasury stock issued for business purchases $ 1,100 $ 920
Note: Certain prior year amounts have been reclassified to conform to the
current year presentation.
SOURCE Global Imaging Systems, Inc.
