Absolute Software Reports Fiscal 2009 Year-End Results
VANCOUVER, Aug. 25, 2009 (Canada NewsWire via COMTEX) --
Companies: Absolute Software Corp. (ABT), Absolute Software Corp. (ALSWF)
<<
Absolute issues Sales Contract and Cash from Operating Activities
guidance for F2010
>>
Absolute(R) Software Corporation ("Absolute" or the "Company") (TSX: ABT), the leading provider of firmware-based, patented, computer theft recovery, data protection and secure IT asset management solutions announces its financial results for the three- and twelve-month periods ended June 30, 2009. All dollar amounts are in Canadian dollars unless otherwise stated.
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-------------------------------------------------------------------------
Key Financial Metrics Q4 F2009 Q4 F2008 % F2009 F2008 %
change change
-------------------------------------------------------------------------
Sales Contracts
reported(1.a) $20.2M $21.5M -6% $71.9M $72.5M -1%
-------------------------------------------------------------------------
Sales Contracts in
constant currency(1.b) $17.7M $21.5M -17% $62.9M $72.5M -13%
-------------------------------------------------------------------------
Cash from Operating
Activities(1.a) $2.1M $5.4M -60% $17.4M $30.0M -42%
Per share (Basic) $0.05 $0.11 -58% $0.37 $0.64 -72%
Per share (diluted) $0.05 $0.11 -55% $0.36 $0.60 -40%
-------------------------------------------------------------------------
Revenue $14.3M $11.2M +28% $53.2M $37.9M +41%
-------------------------------------------------------------------------
Net Income (loss) $16.5M ($2.3M) N/A% ($2.3M) ($8.4M) +72%
Per share (basic) $0.36 ($0.05) N/A% ($0.05) ($0.18) +67%
Per Share (diluted) $0.35 ($0.05) N/A% ($0.05) ($0.18) +67%
-------------------------------------------------------------------------
Cash, cash equivalents
and investments
(including long term) $68.9M $64.0M +8%
-------------------------------------------------------------------------
Deferred revenue, net $95.9M $79.5M +21%
-------------------------------------------------------------------------
Fiscal 2009 Highlights:
- Increased contracted subscription base by 26% to 4.1 million
computers, from 3.3 million at the end of F2008
- Expanded retail reach with Computrace(R) LoJack(R) for Laptops being
rolled out to 1,010 Best Buy U.S. stores and online at bestbuy.com
- Released IT Asset Management and Theft Recovery Solutions for netbooks
- Added Wi-Fi geo-location tracking to the Computrace line of products
- Announced general availability of Computrace with Intel's Anti Theft
technology on Lenovo Think Pad T400 notebooks
- Launched a new Global Customer Center with multi-lingual capability
enhanced security and management features
- Launched Computrace Mobile for the BlackBerry(R) platform, which
provides asset management, data protection and geo-location tracking
- Launched Computrace LoJack for Laptops in Europe
- Announced BIOS firmware support for the Computrace line of products
with select Acer, ASUS and Getac laptop and notebook models
- Purchased 3.26 million shares during F2009 under the company's normal
course issuer bid, at a total cost of $10.6 million
>>
"In fiscal 2009, despite it being a challenging year economically, we made strategic investments in our product, personnel, partner relationships and geographic reach in order to enhance our positioning for future growth," said John Livingston, Chairman and CEO of Absolute. "As a result, we ended the year with renewed momentum throughout the business and we have firmly established Absolute as the industry leader capable of providing a diversified suite of asset management, data security and theft protection solutions."
Mr. Livingston added: "With our extensive partnership network, we have one of the software industry's broadest international footprints on desktop, notebook and netbook computers. Our solutions provide clients with a permanent tether to their devices that allows them to deploy a variety of services to track, manage and protect digital assets, both pre- and post-theft. In fiscal 2010 and beyond, we will continue to leverage our footprint and our unique technology capabilities to launch new services, expand our global presence and capitalize on our growing market opportunity."
Financial Review
Sales Contracts(1.a), a non-standard measure under Canadian Generally Accepted Accounting Principals ("GAAP"), totaled $71.9 million in F2009, down 1% compared to $72.5 million in F2008. Sales Contracts for Q4-F2009 totaled $20.2 million, down 6% compared to $21.5 million in Q4-F2008. A majority of Absolute's sales are denominated in U.S. dollars and therefore, periodic fluctuations in the US/Canadian exchange rate can impact reported Sales Contract levels. In constant dollar terms, Sales Contracts declined 13% for F2009 and 17% for Q4-F2009 compared to the same periods last year. The declines from the prior periods in constant dollar terms are primarily due to reduced consumer sales (down 43% for the year in constant dollars) from a bundle sales program with one PC OEM partner. In addition, commercial sales were down 5% for the year in constant dollars (up 9% in Canadian dollars) primarily due to reduced U.S. federal government sales and new customer adoption due to the challenging economy. Conversely, commercial sales to existing customers continued to show strength, generating sales of $52.5 million for the year, up 23% (8% in U.S. dollars) compared to $42.6 million in fiscal 2008. On a sequential basis, Q4-F2009 sales increased 20% (30% in U.S. dollars) due to seasonally strong commercial sales.
As a software-as-a-service ("SaaS") company, Absolute considers Cash from Operating Activities one of its key financial metrics. For F2009, Cash from Operating Activities was $17.4 million, compared to $30.0 million in F2008. Absolute's Cash from Operating Activities for Q4-F2009 totaled $2.1 million compared to $5.4 million in Q4-F2008.
"Having navigated through a challenging economic environment, we view fiscal 2009 as an important year of investment and planning for strong future growth," said Rob Chase, CFO of Absolute. "We continue to believe that the long term opportunity for Absolute is significant and expanding, and that our computer security management solutions are a "must-have" in our increasingly mobile world. Supported by our investment in fiscal 2009 as well as our ongoing sales and marketing and product development initiatives, in fiscal 2010 we expect to resume our Sales Contract growth. However, as we continue to invest significantly for future growth, and given the current economic conditions, we are expecting reduced cash flow in fiscal 2010."
Revenue for F2009 was $53.2 million, an increase of 41% from $37.9 million in F2008. Revenue in Q4-F2009 increased 28% to $14.3 million, compared to $11.2 million in Q4-F2008. Revenue is a lagging performance indicator as it is a function of deferred revenue as opposed to sales in the quarter. The majority of all of the revenue from Q4-F2009 Sales Contracts is included in deferred revenue on the balance sheet at June 30, 2009, which climbed to $95.9 million, compared to $79.5 million at June 30, 2008.
For Q4-F2009, Absolute generated operating income, excluding stock-based compensation and investment tax credits, of $101,000, compared to a loss of $792,000 in Q4-F2008. For fiscal 2009, Absolute generated an operating loss, excluding stock-based compensation and investment tax credits, of $3.8 million, compared to $3.2 million in fiscal 2008. The operating income in Q4-F2009 is due to adjustments for positive warranty experience which benefited Q4-F2009, offset by an increase in bad debt provisions. The increased operating loss for fiscal 2009 reflects the revenue increase offset by increased operating costs resulting from Absolute's investment in sales and marketing and research and development.
The GAAP net income in Q4-F2009 was $16.5 million ($0.36 earnings per share) compared to a net loss of $2.3 million ($0.05 loss per share) in Q4-F2008. The net income for Q4-F2009 was due to a $16.8 million income tax recovery for future income tax assets. For fiscal 2009, net loss decreased to $2.3 million ($0.05 loss per share), compared to $8.4 million ($0.18 loss per share) in fiscal 2008. The year-over-year decrease is primarily due to the income tax benefits recorded in Q4, offset by a one time $12.0 million stock-based compensation charge incurred in Q2-F2009 for the cancellation of 2.9 million employee stock options.
Absolute is in a strong financial position. The Company is generating positive operating cash flow, has no debt and has the financial resources necessary to fund its operating and capital requirements and to execute on its growth strategies. Accordingly, the company launched a normal course issuer bid in November 2008 for the repurchase and retirement of up to 4.2 million of Absolute's shares. Under this bid, Absolute has repurchased 3.26 million shares for a total of $10.6 million. After the share repurchase, at June 30, 2009, Absolute's cash, cash equivalents and investments (including long term) were $68.9 million, compared to $64.0 million at June 30, 2008.
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Guidance
With today's announcement, based on current U.S. dollar exchange rates of
$1.10, Absolute is issuing F2010 financial guidance of:
- Sales Contracts of $80-86 million
- Cash from Operations of $12-15 million
Management's discussion and analysis (MD&A), consolidated financial
statements and notes thereto for the first quarter can be obtained today from
Absolute's corporate website at www.absolute.com. The documents will also be
available at www.sedar.com.
Notice of Conference Call
Absolute Software will hold a conference call to discuss the contents of
this release on Tuesday August 25, 2009 at 8:30 a.m. ET (5:30 a.m. PT). All
interested parties can join the call by dialing 416-644-3414 or
1-800-733-7560. Please dial-in 15 minutes prior to the call to secure a line.
The conference call will be archived for replay until Tuesday, September 1,
2009 at midnight. To access the archived conference call, please dial
416-640-1917 or 1-877-289-8525 and enter the reservation code 21311364
followed by the number sign.
A live audio webcast of the conference call will be available at
www.absolute.com and www.newswire.ca. Please connect at least 15 minutes prior
to the conference call to ensure adequate time for any software download that
may be required to join the webcast. An archived replay of the webcast will be
available for 365 days.
(1.a) Absolute refers to "Sales Contracts" (invoiced sales) as a revenue
measure, "Cash from Operations" as a profitability measure, and "Basic
and Diluted Operating Cash per Share" (Cash from Operations divided by
the average shares outstanding for the period; diluted calculated using
the treasury stock method) as an earnings per share measure. With the
exception of Cash from Operations, these are non-standard measures under
Canadian Generally Accepted Accounting Principals. Absolute considers
these measures to be key performance metrics as substantially all Sales
Contracts in each quarter are deferred on the balance sheet, while the
related costs are expensed in that same quarter. Refer to the Business
Model section in our Management Discussion and Analysis for more details.
(1.b) Sales Contracts in constant currency refers to the Canadian dollar
sales that would have been reported had the U.S. dollar exchange rate
been unchanged from the rate in the prior year. With approximately 95% of
Sales Contracts in U.S. dollars management believes this to be a more
meaningful evaluation of the underlying performance of the business.
>>
About Absolute Software
Absolute Software Corporation (TSX: ABT) is the leader in computer theft recovery, data protection and Secure Asset Tracking(R) solutions. Absolute Software provides organizations and consumers with solutions in the areas of regulatory compliance, data protection and theft recovery. The Company's Computrace software is embedded in the firmware of computers by global leaders, including ASUS, Dell, Fujitsu, General Dynamics Itronix, HP, Lenovo, Motion, Panasonic and Toshiba, and the Company has reselling partnerships with these OEMs and others, including Apple. For more information about Absolute Software and Computrace, visit www.absolute.com and http://blog.absolute.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, a continuing, or increased need for data protection and theft recovery services in difficult economic times, the attainment of certain subscription targets, attach rates and company performance, the increased adoption of the Company's data protection and theft deterrence products, the ability of the Company to achieve its fiscal 2010 Sales Contracts and cash from operating activities guidance, the ability of the Company to successfully execute on its growth strategies, including attracting new distribution partners, continuation of embedded firmware support from its current and anticipated PC OEM partners, the demand for its products continuing to increase, stable currency valuations and a sufficiently stable and healthy global economic and business environment, and other expectations, intentions and plans contained in this press release that are not historical fact. When used in this press release, the words "plan," "expect," "believe," and similar expressions generally identify forward-looking statements. These statements reflect Absolute's current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and general market conditions. In light of the many risks and uncertainties you should understand that Absolute cannot assure you that the forward-looking statements contained in this press release will be realized.
<<
(C)2009 Absolute Software Corporation. All rights reserved. Computrace,
Secure Asset Tracking and Absolute are registered trademarks of Absolute
Software Corporation. All other trademarks are property of their
respective owners. Computrace U.S. patents No. 5,715,174, No. 5,764,892,
No. 5,802,280, No. 5,896,497, No. 6,244,758, No. 6,269,392, No.
6,300,863, and No. 6,507,914. Canadian patents No. 2,284,806 and No.
2,205,370. U.K. patents No. EP793823 and No. GB2338101. German patent No.
695 125 34.6-08. Australian patent No. 699045. Japanese patent No.
JP4067035. The Toronto Stock Exchange has neither approved nor
disapproved of the information contained in this news release.
ABSOLUTE SOFTWARE CORPORATION
Consolidated Balance Sheets (Unaudited)
(Expressed in Canadian dollars)
-------------------------------------------------------------------------
As At
June 30, June 30,
2009 2008
------------- -------------
ASSETS
CURRENT
Cash and cash equivalents $ 56,078,004 $ 46,460,299
Short-term investments 8,743,861 10,488,167
Accounts receivable, net of allowance
for doubtful accounts of $715,000
(2007 - $20,000) 15,570,780 18,396,731
Prepaid expenses and deposits 974,564 906,792
Current portion of deferred
contract costs 3,609,944 3,086,833
Current portion of future income
tax assets 10,646,521 1,341,691
-------------------------------------------------------------------------
95,623,674 80,680,513
INVESTMENTS 4,076,211 7,016,074
DEFERRED CONTRACT COSTS 3,765,717 3,212,827
PROPERTY AND EQUIPMENT 2,644,275 1,971,003
FUTURE INCOME TAX ASSETS 11,081,073 1,512,970
INTANGIBLE ASSET 127,775 255,549
-------------------------------------------------------------------------
$117,318,725 $ 94,648,936
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES
CURRENT
Accounts payable and accrued
liabilities $ 6,775,466 $ 6,240,941
Income tax payable $ 1,575,000 $ -
Current portion of accrued warranty 5,288,520 5,448,513
Current portion of deferred revenue 46,577,880 37,527,453
-------------------------------------------------------------------------
60,216,866 49,216,907
ACCRUED WARRANTY 5,963,650 6,396,080
DEFERRED REVENUE 49,278,726 41,934,880
-------------------------------------------------------------------------
115,459,242 97,547,867
-------------------------------------------------------------------------
SHAREHOLDERS' EQUITY (DEFICIENCY)
Share capital and other equity 41,988,977 41,915,225
Contributed surplus 26,822,975 11,938,462
Deficit (66,952,469) (56,752,618)
-------------------------------------------------------------------------
1,859,483 (2,898,931)
-------------------------------------------------------------------------
$117,318,725 $ 94,648,936
-------------------------------------------------------------------------
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ABSOLUTE SOFTWARE CORPORATION
Consolidated Statements of Income (Loss)
Three and twelve months ended June 30, 2009 and 2008
(Expressed in Canadian dollars)
-------------------------------------------------------------------------
Three Months Twelve Months
2009 2008 2009 2008
------------- ------------- ------------- -------------
REVENUE 14,330,961 11,215,693 53,218,894 37,853,404
COST OF SALES 1,278,594 2,880,408 11,733,139 11,459,549
-------------------------------------------------------------------------
GROSS MARGIN 13,052,367 8,335,285 41,485,755 26,393,855
-------------------------------------------------------------------------
EXPENSES
Sales and
marketing 7,479,674 5,717,932 29,039,585 18,078,427
Research and
development 2,014,294 1,559,400 7,259,803 4,782,038
General and
adminis-
tration 3,457,514 1,850,438 8,951,743 6,686,105
Investment
tax credits (2,225,000) (1,400,000) (3,000,000) (1,400,000)
Stock-based
compensation 642,213 1,592,734 15,792,738 4,948,972
-------------------------------------------------------------------------
11,368,695 9,320,504 58,043,869 33,095,542
-------------------------------------------------------------------------
OPERATING
INCOME (LOSS) 1,683,672 (985,219) (16,558,114) (6,701,687)
-------------------------------------------------------------------------
OTHER INCOME
(EXPENSE)
Interest and
bank charges 151,317 503,122 1,384,195 1,885,071
Foreign
exchange
(loss) gain (888,443) 81,808 1,407,946 (805,115)
Gain (loss)
on foreign
exchange
contracts 663,000 - (849,500) -
Restructuring
charges - - (989,132) -
Write-down of
investment (197,569) (526,586) (952,023) (1,369,786)
-------------------------------------------------------------------------
(271,695) 58,344 1,486 (289,830)
-------------------------------------------------------------------------
LOSS FOR PERIOD
BEFORE INCOME
TAXES 1,411,977 (926,875) (16,556,628) (6,991,517)
CURRENT INCOME
TAX EXPENSE (1,700,000) (1,400,000) (4,575,000) (1,400,000)
FUTURE INCOME
TAX RECOVERY 16,772,933 - 18,872,933 -
-------------------------------------------------------------------------
NET INCOME
(LOSS) FOR
THE PERIOD 16,484,910 (2,326,875) (2,258,695) (8,391,517)
DEFICIT,
BEGINNING
OF PERIOD (83,437,379) (54,425,743) (56,752,618) (48,361,101)
ADJUSTMENT
RELATED TO
SHARE
REPURCHASE - - (7,941,156) -
-------------------------------------------------------------------------
DEFICIT, END
OF PERIOD $(66,952,469) $(56,752,618) $(66,952,469) $(56,752,618)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
BASIC EARNINGS
(LOSS) PER
SHARE $ 0.36 $ (0.05) $ (0.05) $ (0.18)
DILUTED
EARNINGS
(LOSS) PER
SHARE $ 0.35 $ (0.05) $ (0.05) $ (0.18)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
WEIGHTED
AVERAGE NUMBER
OF COMMON
SHARES
OUTSTANDING:
BASIC 45,477,754 47,666,899 47,057,386 47,160,094
DILUTED 47,106,085 47,666,899 47,057,386 47,160,094
-------------------------------------------------------------------------
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ABSOLUTE SOFTWARE CORPORATION
Consolidated Statements of Cash Flows
Three and twelve months ended June 30, 2009 and 2008
(Expressed in Canadian dollars)
-------------------------------------------------------------------------
Three Months Twelve Months
2009 2008 2009 2008
------------ ------------ ------------ ------------
OPERATING
ACTIVITIES
Net income
(loss) for
the period $16,484,910 $(2,326,875) $(2,258,695) $(8,391,517)
Items not
involving
cash
Amortization
of property
and
equipment 446,333 249,571 1,238,643 813,597
Stock-based
compensation 642,213 1,592,734 15,792,738 4,948,972
Amortization
of intangible
asset 31,943 31,944 127,775 127,775
Future
income
taxes (16,772,933) - (18,872,933) -
Write-down
(write-up)of
investment 197,569 526,586 952,023 1,369,786
Realized loss
(gain) on
foreign
exchange
contract (38,000) - 849,500 -
Change in
non-cash
operating
items
Accounts
receivable (2,145,301) (6,931,554) 2,825,950 (6,740,471)
Prepaid
expenses
and deposits (165,111) (577,905) (67,772) (121,055)
Deferred
contract
costs (292,675) (893,188) (1,076,001) (1,675,620)
Accounts
payable and
accrued
liabilities 133,709 3,629,144 534,524 4,069,096
Income tax
payable (525,000) - 1,575,000 -
Accrued
warranty (2,806,810) 1,231,354 (592,423) 3,839,542
Deferred
revenue 6,959,134 8,819,761 16,394,273 31,782,978
-------------------------------------------------------------------------
CASH FROM
OPERATING
ACTIVITIES 2,149,981 5,351,572 17,422,602 30,023,083
-------------------------------------------------------------------------
INVESTING
ACTIVITIES
Property and
equipment
purchased (670,343) (469,789) (1,911,915) (1,580,581)
Realized gain
(loss) on
foreign
exchange
contract 38,000 - (849,500) -
Proceeds from
maturities of
short term
investments 5,590,000 9,414,988 15,570,571 31,672,314
Purchases of
short term
investments (5,646,510) (486,001) (14,778,288) (16,413,299)
Proceeds from
maturities of
investments 38,061 - 8,375,000 -
Purchases of
investments - (4,161,907) (5,435,137) (7,016,074)
-------------------------------------------------------------------------
CASH (USED IN)
FROM INVESTING
ACTIVITIES (650,792) 4,297,291 970,731 6,662,360
-------------------------------------------------------------------------
FINANCING
ACTIVITIES
Repurchase
of common
shares for
cancellation - - (10,637,373) -
Issuance of
common shares 355,324 213,049 1,861,745 1,995,351
-------------------------------------------------------------------------
CASH FROM (USED
IN) FINANCING
ACTIVITIES 355,324 213,049 (8,775,628) 1,995,351
-------------------------------------------------------------------------
NET CASH INFLOW
(OUTFLOW) 1,854,513 9,861,912 9,617,705 38,680,794
CASH AND CASH
EQUIVALENTS,
BEGINNING OF
PERIOD 54,223,491 36,598,387 46,460,299 7,779,505
-------------------------------------------------------------------------
CASH AND CASH
EQUIVALENTS,
END OF PERIOD $56,078,004 $46,460,299 $56,078,004 $46,460,299
-------------------------------------------------------------------------
-------------------------------------------------------------------------
COMPOSITION OF
CASH AND CASH
EQUIVALENTS:
Cash $13,516,317 $ 3,472,324
Cash
equivalents 42,561,687 42,987,975
-------------------------------------------------------------------------
$56,078,004 $46,460,299
-------------------------------------------------------------------------
-------------------------------------------------------------------------
>>
%SEDAR: 00013849E
SOURCE: Absolute Software Corporation
John Livingston, Chief Executive Officer (jliving@absolute.com), Phone: (604) 730-9851; Rob Chase, Chief Financial Officer (rchase@absolute.com), Phone: (604) 730-9851; Dave Mason, Investor Relations (dmason@equicomgroup.com), Phone: (416) 815-0700 x237; Website: http://www.absolute.com
Copyright (C) 2009 CNW Group. All rights reserved
News Provided by COMTEX
Companies: Absolute Software Corp. (ABT), Absolute Software Corp. (ALSWF)
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