Amadeus Strengthens its Foundations in 2005 to Better Tackle the Corporate Governance Management Market in the United States
Fiscal Year Highlights:
- Launch of eQCM®, a new software solution on a Web platform
- Acquisition of M3K Solutions
- Restructuring of management, sales and marketing team
Fiscal 2005 Financial Results
Amadeus’s revenues fell 15.6% to $1,784,234 for the fiscal year ended June 30, 2005, compared with $2,115,074 for fiscal 2004. This decline is attributable mainly to the decrease in licensing revenues resulting from the launch of the new eQCM® Web solution in September 2004 and the gradual reduction in marketing efforts relating to the eQRP® customer/server solution. Conversely, services revenues jumped 194.6% from $196,707 in 2004 to $583,341 in 2005, following the acquisition of M3K Solutions on June 1, 2005. Note that Amadeus recorded 63.8% of its revenues in Canada in 2005, versus 51.8% in 2004.
Research and development expenses rose 30.4% to $1,071,999 in 2005 from $821,949 in 2004. This increase can be explained by the lack of projects eligible for government scientific research and experimental development credits in 2005.
Due mainly to the strengthening of the sales force to better serve the U.S. market, selling expenses increased by 48.4% to total $1,523,463 for fiscal 2005, compared with $1,026,600 for fiscal 2004.
General and administrative expenses went from $676,112 in 2004 to $857,152 in 2005, due mainly to the additional expenses incurred in managing a public company.
Depreciation and amortization expenses rose 98.4% to $290,965 in 2005 from $146,670 in 2004. This increase is attributable to the amortization of development expenses totalling $114,839 and the amortization of the identifiable intangible assets arising from the acquisition of M3K Solutions.
As a result, Amadeus incurred a net loss of $2,805,638 or $0.11 per share in 2005, compared with a net loss of $1,108,400 or $0.06 per share the previous year. The weighted average number of common shares issued and outstanding rose from 19,237,253 in 2004 to 24,724,557, due on the one hand to the issue of 7,050,000 and 2,756,463 common shares respectively in connection with the qualifying transaction and the concurrent private placement in December 2004, and on the other to the issue of 5,428,571 common shares as part of the acquisition of M3K Solutions in June 2005.
Results for the Quarter Ended June 30, 2005
Amadeus achieved revenues of $683,374 during the fourth quarter of fiscal 2005, up 64.4% over the revenues of $415,698 recorded in the same quarter the previous year. This growth is due entirely to the acquisition of M3K Solutions. Operating expenses amounted to $1,122,965 in the fourth quarter of fiscal 2005, compared with $902,002 in the same period a year earlier. This increase is attributable notably to the expansion of the sales force in the United States and the strengthening of the administrative structure. Amadeus incurred a net loss of $889,032 or $0.03 per share in the fourth quarter of fiscal 2005, compared with a net loss of $652,170 or $0.03 per share in the same period a year earlier.
Financial Position
The Company had total assets of $6,307,971 as at June 30, 2005, up from $3,823,637 on June 30, 2004. This $2,484,334 increase is due mainly to the acquisition of M3K Solutions, whose total assets were estimated at $3,827,391 on the transaction date, including identifiable intangible assets of $2,210,000. Current assets amounted to $2,230,906 as at June 30, 2005, versus $2,573,082 a year earlier. Accounts receivable rose from $814,015 at the close of fiscal 2004 to $1,408,278 as at June 30, 2005 as a result primarily of the consolidation of M3K Solutions’ assets. Conversely, refundable tax credits declined from $1,697,464 to $514,556 during the same period.
Total liabilities amounted to $6,042,317 at the close of fiscal 2005, compared with $3,740,473 as at June 30, 2004. Amadeus notably contracted a $1,500,000 long-term loan to acquire M3K Solutions. Consequently, financial liabilities, including the liability component of convertible debentures and long-term debt (including the current portion), totalled $3,266,162 at the close of fiscal 2005, compared with $1,850,757 as at June 30, 2004. As for current liabilities, they totalled $2,338,443 as at June 30, 2005, versus $1,995,231 a year earlier. It should be noted that the bank loan rose from $46,707 at the close of fiscal 2004 to $400,000 as at June 30, 2005, whereas accounts payable and accrued liabilities went from $522,791 to $1,029,927 during the same period as a result primarily of the consolidation of M3K Solutions’ liabilities. On account of the increase in current liabilities, Amadeus posted a working capital deficiency of $107,537 as at June 30, 2005.
Shareholders’ equity amounted to $265,654 at the fiscal year-end 2005, up from $83,164 as at June 30, 2004. Share capital totalled $4,187,651, compared with $1,813,059 a year earlier. Due to the share issues during the fiscal year, the number of common shares issued and outstanding stood at 34,381,378 by the close of fiscal 2005, compared with 19,237,253 as at June 30, 2004.
Objectives
Amadeus’s aims primarily to increase its sales and marketing efforts by continuing to implement its mixed marketing strategy which makes use of the Company’s sales force along with a network of resellers and strategic partners. “During the current fiscal year, we will focus on penetrating the U.S. market, especially among companies engaged in life sciences and financial services which have significant needs to be met in regard to compliance management and corporate governance related services and software solutions. After a turning point last year, we are confident we can get back on the growth track as of fiscal 2006. Concurrently, we remain on the lookout for acquisitions that would enable us to step up our growth and perfect our services offering,” concluded Benoît Cote, Chairman of the Board of Amadeus.
Forward-looking statements
Forward-looking statements contained in this press release involve known and unknown risks, uncertainties or other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
About Amadeus International
Amadeus International is a pioneer and leader in compliance process control solutions. Its flagship product, eQCM®, is a flexible, Web-based integrated suite of applications that allow organizations to map regulated business processes such as CAPA, non-conformances, customer complaints, audits, and other related quality and business processes. The application suite is coupled with powerful business intelligence capabilities, enterprise content management, and related technologies that help organizations achieve sustained compliance. Amadeus International's global headquarters are located in Quebec City. Amadeus solutions are distributed across four continents.
Financial Highlights
|
Fiscal Year ended June 30, 2005 |
Fiscal Year ended June 30, 2004 |
Revenues |
$1,784,234 |
$2,115,074 |
Gross profit |
$1,247,762 |
$1,794,799 |
Gross profit margin |
69.9% |
84.9% |
Research and development expenses |
$1,071,999 |
$821,949 |
Selling expenses |
$1,523,463 |
$1,026,600 |
General and administrative expenses |
$857,152 |
$676,112 |
Selling, general and administrative expenses/revenues |
133.4% |
80.5% |
Net loss |
$(2,805,638) |
$(1,108,400) |
Weighted average number of shares issued and outstanding |
24,724,557 |
19,237,253 |
|
As at June 30, 2005 |
As at June 30, 2004 |
Total assets |
$6,307,971 |
$3,823,637 |
Long-term debt |
$1,397,707 |
$142,958 |
Shareholders’ equity |
$265,654 |
$83,164 |
- 30 -
Information:
Frédéric Garand,
Vice President and Chief Financial Officer
Tel.: (418) 525-0606, ext. 269
frederic.garand@amadeussolutions.com
Isabelle Rivoal,
Manager, Marketing and Communications
Tel.: (418) 525-0606,ext. 2231
isabelle.rivoal@amadeussolutions.com
