TAMPA , Fla., Jan. 25/PRNewswire/ -- Global Imaging Systems, Inc. (Nasdaq: GISX) today announced third quarter record revenues, operating income, net income and earnings per share for the three months ended December 31, 2006 . Highlights of the quarter include:
* Revenues increased 8.0 percent to $277.5 million.
* Automated office equipment, primarily copiers and multi function
products (MFPs), continued to post positive internal revenue growth
for the 34th consecutive quarter.
* Operating income grew 6.1 percent to $31.5 million.
* Net income was up 8.5 percent to $17.5 million.
* Adjusted EBITDA increased 5.5 percent to $36.2 million.
* Diluted earnings per share were $0.34, up from the year ago third
quarter diluted EPS of $0.32 after adjusting to reflect the 2-for-1
stock split in August 2006.
* Repurchased 589,750 shares of common stock for a total price of
approximately $12.6 million.
* Acquired Copy Dynamics, Inc., a New Jersey office technology dealer,
adding approximately $13.0 million in annualized revenue.
The company also reported record results for the first nine months of fiscal 2007 ended December 31, 2006 . Highlights of the nine months include:
* Revenues increased 8.7 percent to $828.2 million.
* Operating income grew 9.2 percent to $92.5 million.
* Net income was up 11.0 percent to $51.1 million.
* Adjusted EBITDA increased 8.2 percent to $106.4 million.
* Diluted earnings per share were $0.99 versus the year ago comparable
period diluted EPS of $0.91, 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 28.2 percent of total capital.
* Repurchased 2,154,115 shares of common stock for a total price of
approximately $45.1 million.
* Completed four acquisitions, acquiring approximately $42.4 million in
annualized revenue.
The company's third quarter conference call is scheduled for this morning, January 25 , at 10:00 a.m. ET , and the fiscal year 2007 conference call is scheduled for May 9, 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,' and variations of such words, 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)
(IN THOUSANDS EXCEPT PER-SHARE AMOUNTS)
Three Months Ended Nine Months Ended
December 31, December 31,
2006 2005 2006 2005
Revenues:
Equipment and supplies sales $205,853 $190,325 $618,271 $567,825
Service and rentals 71,625 66,519 209,927 194,159
Total revenues 277,478 256,844 828,198 761,984
Costs and operating expenses:
Cost of equipment and
supplies sales 130,848 119,889 396,894 361,650
Service and rental costs 38,127 34,909 110,227 101,334
Selling, general and
administrative expenses 76,547 71,917 227,138 212,876
Intangible asset amortization 485 458 1,391 1,347
Total costs and operating
expenses 246,007 227,173 735,650 677,207
Income from operations 31,471 29,671 92,548 84,777
Other income - - 1,194 -
Loss on early extinguishment
of debt - - (1,045) -
Interest expense (3,046) (3,631) (9,509) (10,402)
Income before income taxes 28,425 26,040 83,188 74,375
Income taxes 10,972 9,947 32,110 28,364
Net income $17,453 $16,093 $51,078 $46,011
Net income per common share:
Basic $ 0.35 $0.35 $1.02 $1.00
Diluted (a) $ 0.34 $0.32 $0.99 $0.91
Weighted average number of
shares outstanding:
Basic 50,551 46,141 49,842 46,154
Diluted 51,599 51,935 51,981 51,943
(a) The calculation of diluted earnings per common share assumes the conversion of convertible notes issued in May 2003 resulting in 4,814 additional shares for the three months ended December 31, 2005 , and 1,144 and 4,814 additional shares for the nine months ended December 31, 2006 and 2005, respectively. For purposes of diluted earnings per common share, net income for the three months ended December 31, 2005 includes the addback of $442 , representing interest and financing fee expense, net of taxes, associated with the convertible notes. For the nine months ended December 31, 2006 and 2005, net income includes the addback of $219 and $1,326 , 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 $17,453 $16,093 $51,078 $46,011
Income taxes 10,972 9,947 32,110 28,364
Interest expense 3,046 3,631 9,509 10,402
Amortization 485 458 1,391 1,347
Depreciation 4,226 4,163 12,475 12,254
EBITDA 36,182 34,292 106,563 98,378
Other income - - (1,194) -
Loss on early extinguishment
of debt - - 1,045 -
Adjusted EBITDA $36,182 $34,292 $106,414 $98,378
GLOBAL IMAGING SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
December 31, March 31,
2006 2006
ASSETS
Current assets:
Cash and cash equivalents $9,386 $51,610
Accounts receivable, net 141,859 131,497
Inventories 109,381 98,073
Other current assets 15,855 14,757
Total current assets 276,481 295,937
Rental equipment, net 17,401 15,687
Property and equipment, net 19,053 17,810
Goodwill and other assets 585,115 555,223
Total assets $898,050 $884,657
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $90,576 $102,500
Current maturities of long-term debt 22 2,133
Deferred revenue 28,172 27,159
Income taxes payable 5,887 7,711
Total current liabilities 124,657 139,503
Deferred income taxes 47,113 42,247
Long-term debt, less current maturities 205,060 260,713
Other long-term liabilities - 976
Total liabilities 376,830 443,439
Total stockholders' equity 521,220 441,218
Total liabilities and stockholders' equity $898,050 $884,657
GLOBAL IMAGING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Nine Months Ended
December 31,
2006 2005
OPERATING ACTIVITIES:
Net income $51,078 $46,011
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 12,475 12,254
Amortization 1,391 1,347
Amortization of financing fees 490 823
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 (3,866) 1,978
Deferred income tax expense 5,170 5,631
Stock-based compensation expense 2,494 1,261
Changes in operating assets and liabilities,
net of amounts acquired in purchase business
combinations:
Accounts receivable (7,451) (9,822)
Inventories (8,809) (6,289)
Prepaid expenses and other current assets (1,387) (1,888)
Other assets 220 807
Accounts payable (15,196) (10,556)
Accrued liabilities, compensation and benefits
and interest (3,160) (5,519)
Deferred revenue (1,990) (371)
Income taxes payable 2,042 5,320
Other long-term liabilities - 976
Net cash provided by operating activities 33,352 41,963
INVESTING ACTIVITIES:
Purchases of property, equipment and
rental equipment (14,537) (14,761)
Proceeds from sale of technology training
division assets 1,575 -
Purchases of businesses, net of cash acquired (29,697) (13,879)
Net cash used in investing activities (42,659) (28,640)
FINANCING ACTIVITIES:
Payments on long-term debt (285,389) (33,419)
Proceeds from issuances of long-term debt 285,125 31,728
Financing fees paid (2,143) (19)
Purchases of treasury stock (45,129) (20,000)
Stock options exercised 10,753 4,294
Tax benefit of stock option exercises and
vested restricted stock 3,866 -
Net cash used in financing activities (32,917) (17,416)
Net decrease in cash and cash equivalents (42,224) (4,093)
Cash and cash equivalents, beginning of period 51,610 25,365
Cash and cash equivalents, end of period $9,386 $21,272
Non-cash financing activity:
Conversion of convertible notes to
common stock, net $56,081 $-
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
