MONTREAL, March 14 /CNW Telbec/ - Isacsoft Inc. (TSX: ISF) announced its audited consolidated financial results for the year ended December 31, 2006. The Company also announced that it has filed its audited financial statements and notes for the year ended December 31, 2006 and its related management's discussion and analysis with Canadian securities regulators. The information is available electronically to interested parties at www.sedar.com and on the Company's web site at www.ISACSOFT.com. ISACSOFT's 2006 annual report will be mailed to shareholders during the third week of March 2007.
2006 Financial Highlights
- Net income before impairment and asset write-down of $329,335 compared to $1,129,230 for the year ended December 31 2005.
- EBITDA(1) of $850,943 compared to $1,813,300 for the year ended December 31, 2005.
- Revenues of $15,527,743 compared to $17,192,358 for the year ended December 31, 2005
- Non-cash impairment expense of goodwill and write-down of assets of $10,470,802
- Net loss of $10,141,467 after impairment and asset write-down.
The Company closed the year ended December 31, 2006 with cash and cash equivalents (including restricted cash) of $776,123, a decrease of $544,193 over the amount of $1,320,316 reported as at December 31, 2005. The decrease is mainly attributable to lower revenue streams and the timing of reception of multimedia tax credits.
Working capital was $1,643,994 as at December 31, 2006, and was slightly better than the December 31, 2005 position of $1,542,143.
Revenues for the year ended December 31, 2006 were $15,527,743 compared to $17,192,358 for the year ended December 31, 2005. Total Expenses were $14,810,310 compared to $15,426,251 for the year ended December 31, 2005. Net income before Interest, Amortization, Impairment of goodwill and write-down of assets totalled $717,433 compared to $1,766,107 for the year ended December 31 2006. The decrease is mainly related to loss of revenues in software and consulting related revenues and a longer than expected transition period for the training segment of the Company
Adhering to strict financial stewardship, the Company recognized both a non cash write-down of property and equipment and an impairment loss on goodwill that provides a better estimate of fair value. The total non-cash impact on net income was $10,470,802, comprised of $10,335,853 for impairment of goodwill and an amount of $134,949 related to the write-down of property and equipment values. No impairment or write-down of property and equipment were recorded in the year ended December 31, 2005.
The Company reported a Net loss of $10,141,467, or ($0.80) per share, compared to a Net income of $1,129,230 or $0.09 per share for the year ended December 31, 2005.
|REVENUES||$ 15,527,743||$ 17,192,358|
|Research and development costs||1,730,076||1,975,635|
|Selling, general and administrative expenses||3,130,093||3,150,717|
|Income before the following items||717,433||1,766,107|
|Amortization of property and equipment||384,623||511,280|
|Impairment of goodwill||10,335,853||-|
|Write-down of property and equipment||134,949||-|
|Net income (loss) before income taxes|
|Net income (loss)||($ 10,141,467)||$ 1,129,230|
|Net income (loss) per share - basic and diluted||($0.80) $||0.09|
The Company reported lower operating results in 2006 mainly because of lower revenues in software and consulting related activities, while educational sector revenues enjoyed positive growth. The main contributor to the increase in revenues in the educational sector was the result of the decision of the Company in late 2005 to embark on a full-fledged training courses service offering. In order to reduce the impact of lower revenues, the Company began in 2005 to reduce costs and continued in 2006, reducing total operational costs.
"As the Chairman of the Company and as an investor, I am clearly not happy with these results. That is why we announced our intention on February 9, 2006, that we would be evaluating various strategic alternatives, that include, but are not limited to, the sale of the Company, a business combination or a capital reorganization in order to enhance shareholder value." indicated Mr. Brisebois, President and CEO of ISACSOFT.
(Financial Position table omitted)
ISACSOFT is a provider of software business solutions, information technology- training and systems integration consulting to its national and international customers. The revenue model is based on software licences, recurring maintenance revenues and strategic IT projects targeting key >customers and training. ISACSOFT is headquartered in Montréal, Canada with offices in Québec City, Paris, London, Cologne and The Hague.