TORONTO, Feb. 13 /PRNewswire-FirstCall/ - Softchoice Corporation (TSX: SO), a leading North American provider of technology solutions and services, today reported record financial results for the fourth quarter and 12 months ended December 31, 2007.
TORONTO, Feb. 13 /PRNewswire-FirstCall/ – Softchoice Corporation (TSX: SO), a leading North American provider of technology solutions and services, today reported record financial results for the fourth quarter and 12 months ended December 31, 2007.
For the year ended December 31, 2007, Softchoice recorded record net income of US$22.0 million on revenue of US$777.1 million compared to net income of US$15.9 million on revenue of US$703.2 million recorded during the year prior. Earnings per share for the year amounted to US$1.27 per share basic (or US$1.25 per share fully diluted) compared to US$0.93 per share basic (or US$0.92 per share fully diluted) recorded in 2006.
"I am pleased to report that the Softchoice team has delivered another exceptional set of financial results," said David MacDonald, President and CEO of Softchoice. "Over the past year we have focused on consolidating market share, expanding our revenue base and diversifying the offerings we deliver to our customers. As a leading Microsoft LAR in North America, we have benefited from the very strong new product pipeline that Microsoft began bringing to market in 2007. We also seeded our own growth opportunities toward the end of the year by making a series of strategic acquisitions that are allowing us to deliver more advanced infrastructure solutions to a larger number of North American mid-market, enterprise and public sector organizations. Together, these initiatives do two very important things for Softchoice: they increase the strategic value of what we do for customers and they lay the foundation for the next phase of our growth."
For the three-month period ended December 31, the Company recorded net income of US$5.2 million compared to US$6.3 million for the same period the prior year, a decrease of 17 percent as a result of costs related to the acquisitions in the quarter. Earnings per share were US$0.30 per share basic (or US$0.30 per share fully diluted), compared to the US$0.36 per share basic (or US$0.36 per share fully diluted) recorded in the fourth quarter of 2006. Revenues for the period increased by 24 percent over the same time last year to US$266.1 million. These results include the results from the following acquisitions Softchoice made late in the year: the business of NexInnovations for the period of October 12, 2007, to December 31, 2007, and Software Plus for the period of December 13 to December 31, 2007.
On a stand-alone basis, Softchoice recorded revenues of US$225.9 million for the quarter ended December 31, 2007, representing an increase of 6 percent over the same period the year prior. Hardware sales amounted to US$57.6 million, representing an increase by 23 percent over the same quarter last year. On a stand-alone basis, operating income for the quarter remained flat year over year at US$6.1 million.
NexInnovations recorded revenues of US$25.6 million in the period following the close of this acquisition, including US$22.1 million in hardware revenues and US$3.5 million in software revenues. As expected, operating costs had yet to be fully realigned, resulting in a negative contribution from the business and a reduction in earnings of $1.3 million in the period following the acquisition, including amortization costs of US$0.3 million.
Software Plus recorded US$14.7 million in revenues in the period following the close of this acquisition; 84 percent of this revenue represents sales of software. This acquisition resulted in a slight increase in earnings of US$0.3 million.
"Over the past few months we have also made tremendous strides in the implementation of our growth strategy with our acquisitions of NexInnovations, Software Plus and Optimus Solutions," added Mr. MacDonald. "These transformational transactions are highly complementary to our business, whether by giving us the opportunity to extend our software licensing expertise to new accounts or to deepen relationships with existing customers by delivering and supporting a full spectrum of infrastructure solutions. From this broader and deeper revenue base, we plan to continue to achieve above-market growth and to pursue selective acquisition opportunities that complement our business model."
On February 12, 2008, the Directors of Softchoice declares a dividend in the amount of C$0.10 per common share payable on March 31, 2007, to shareholders of record at the close of business on March 14, 2007.
Acquisition Highlights – On October 12 and October 25, 2007, Softchoice acquired the Technology Solutions and Professional Services divisions of NexInnovations for US$12.4 million, including fees and expenses of US$0.6 million. The acquisition gives the Company the necessary capabilities to provide advanced systems infrastructure solutions to Canadian enterprise and public sector organizations. – On December 11, 2007, Softchoice completed the acquisition of Software Plus, the largest corporate Microsoft reseller in the U.S. Midwest, for a purchase price of US$47.1 million, net of cash acquired of US$1.8 million and fees and expenses of US$3.8 million. The purchase has served to bolster Softchoice's position as the fifth-largest Microsoft LAR in North America and a key provider of software licensing to U.S. small, mid-market, enterprise and public sector organizations. – On January 3, 2008, Softchoice acquired Optimus Solutions for a purchase price of US$38.1 million with a deferred payment of US$9 million payable in 2008, depending on the financial performance of the company. Optimus Solutions is a comprehensive IT products and solutions provider focused on helping U.S. enterprise and mid-market organizations plan, build and maintain their information technology systems infrastructure. Financial and Operational Highlights – Softchoice's hardware business demonstrated strong growth, increasing from 25 percent of total sales in 2006 to 30 percent of total sales in 2007. During the fourth quarter, hardware sales grew by 76 percent year over year. – During the year, sales of Microsoft Enterprise Agreements (EAs) licensing increased in Canada and the U.S. by 71 percent and 36 percent, respectively. Softchoice is the fifth-largest Microsoft LAR in North America and the number one provider of EA licensing based on the number of agreements managed. – Gross profit per employee increased by 23 percent over 2006, reflecting the proficiency of Softchoice's sales and marketing personnel in providing integrated technology solutions to North American organizations. – Over the past year Softchoice completed a total of 275 TechCheck assessments, helping a wide range of small, mid-market and enterprise organizations to reduce the cost, complexity and risk of managing their IT environment. – In 2007, Softchoice became authorized as a North American Corporate Tier reseller by VMware, the world's leading provider of virtualization software, and successfully attained Diamond Partner status in Canada for Hewlett-Packard. – Softchoice was named one of Canada's Best Workplaces by Canadian Business magazine and Canada's Top Solution Provider of the Year by Computer Dealer News magazine for the second year in a row. Fourth-Quarter Results Conference Call Details
Softchoice will hold a conference call to discuss its fourth-quarter results on February 13, 2008, at 11 a.m. EST.
Dave MacDonald, Softchoice's President and CEO, and Anne Brace, Softchoice's Chief Financial Officer, will host the call. The conference call will begin with a brief presentation followed by a question-and-answer session.
To participate in the conference: Local/international: 416-849-6185 Toll-free in North America: 1-866-443-4183 To listen to the call and view the Web presentation: http://events.onlinebroadcasting.com/softchoice/021908/index.php
To ensure participation, please dial in at least 10 minutes prior to the start of the conference at 11 a.m. EST.
For those unable to participate in the call, a link will be made available on the Softchoice website to an archived Web and audio version on February 14, 2007.
As one of North America's leading providers of technology solutions and services, Softchoice helps businesses and organizations of all sizes to select, acquire and manage their software and hardware technology resources. Softchoice offers a full range of capabilities, including face-to-face consultations and IT asset management services designed to help customers save time, money and risk in IT procurement. In 2006, Softchoice was named Software Value Added Reseller (VAR) of the Year by VAR Business magazine. Softchoice currently has more than 900 employees operating from more than 40 branch offices located in major cities across the U.S. and Canada.
Softchoice stock is listed on the Toronto Stock Exchange (TSX) under the trading symbol "SO." The Common Shares of Softchoice are not registered under the U.S. Securities Act of 1933 and are not publicly traded in the United States.
This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, plans and timing for the introduction and enhancement of our services, and other expectations, intentions and plans contained in this press release that are not historical fact. When used in this press release, the words "anticipate," "expect" and similar expressions generally identify forward-looking statements. These statements reflect our current expectations and are subject to a number of risks and uncertainties including, but not limited to, our ability to integrate the business of Software Plus with our own, including the ability to maintain its customers, the ability to eliminate costs, and changes in technology and general market conditions, many of which are set out or incorporated by reference in the Company's latest Annual Information Form. Due to the many risks and uncertainties, Softchoice cannot assure that the forward-looking statements contained in this press release will be realized.
SOURCE Softchoice Corporation