Kelowna, B.C. --
Bridges.com Inc. (TSX: BIT) today releases its financial results for the six months ending December 31, 2003.
Bridges products are primarily sold to schools and school districts in the United States and Canada. Over the past 18 months, revenues have steadily declined as a result of reduced education funding, changing priorities in education and unfavorable currency exchange rates. In reaction to these conditions, Bridges' management has restructured its business to establish an efficient operating structure. As a result of this work, second quarter fiscal 2004 expense levels are approximately 30% less than those during the same period in fiscal 2003. The effect of this program is evident in the Company's second quarter results. For the first time since the market downturn, Bridges has produced a comparative improvement in quarterly operating earnings*.
As well, prudent expense management has allowed the Company's balance sheet to strengthen. Over the past six months, working capital has steadily increased and, at quarter end, cash balances were in excess of $5.5 million up from $ 2.7 million at June 30, 2003.
Bridges' greatest asset is the breadth and depth of its customer relationships. Using this position in the market it is the business plan of the Company to significantly increase the array of quality products and services offered to North American schools and related customers. The beginning of this new direction was made evident by last summer's appointment of Bridges as the exclusive school distributor for Test University's college admission test prep products. Over the past six months, the Company has placed great effort into integrating these products into its sales and marketing processes. This has led to a thorough market introduction and, while early revenues are still quite small, the sales pipeline is filling and Company management expects to produce increasingly positive results over the coming quarters.
* Specifically, "Earnings Before Amortization, Foreign Currency Exchange, Other Income and Income Tax"
BRIDGES.COM INC.
Consolidated Interim Financial Statements - Six Months Ended
December 31, 2003
Consolidated Balance Sheet
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December 31 June 30
2003 2003
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ASSETS (unaudited) (audited)
Current
Cash and cash equivalents $ 5,723,417 $ 2,416,227
Accounts receivable 1,692,945 3,641,053
Prepaid expenses and other 402,323 346,535
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7,818,685 6,403,815
Restricted cash 200,000 200,000
Property and equipment 5,910,044 6,700,471
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$ 13,928,729 $ 13,304,286
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LIABILITIES
Current
Accounts payable and accrued
liabilities $ 1,241,855 $ 1,745,376
Accrued restructuring charge 199,070 824,682
Current portion of long-term
debt 288,000 216,000
Deferred revenue 8,061,041 5,968,896
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9,789,966 8,754,954
Long-term debt 720,000 864,000
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10,509,966 9,618,954
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SHAREHOLDERS'EQUITY
Common stock 17,820,093 17,857,264
Contributed surplus 23,817 -
Deficit (14,425,147) (14,171,932)
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3,418,763 3,685,332
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$ 13,928,729 $ 13,304,286
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BRIDGES.COM INC.
Consolidated Interim Statements of Operations and Deficit
(Unaudited)
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Three months Three months Six months Six months
ended ended ended ended
December 31 December 31 December 31 December 31
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2003 2002 2003 2002
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REVENUE $ 3,634,791 $ 4,717,986 $ 6,533,458 $ 11,860,395
COSTS OF
REVENUE 1,200,621 1,557,269 2,459,955 3,240,967
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GROSS MARGIN 2,434,170 3,160,717 4,073,503 8,619,428
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EXPENSES
Sales and
marketing 1,252,071 1,650,571 2,370,986 3,569,202
Research and
development 70,742 84,343 138,439 167,165
General and
administrative 454,267 879,252 883,934 1,507,533
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1,777,080 2,614,166 3,393,359 5,243,900
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EARNINGS BEFORE
AMORTIZATION,
FOREIGN CURRENCY
EXCHANGE AND
OTHER (LOSS)
INCOME, AND
INCOME TAXES 657,090 546,551 680,144 3,375,528
Restructuring
charge - (3,142,021) - (3,142,021)
Amortization of
property and
equipment (417,832) (263,624) (818,635) (538,400)
Amortization of
other
intangibles - (18,112) - (45,280)
Foreign
currency
exchange and
other (loss)
income (79,079) (27,131) (114,724) 177,468
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EARNINGS (LOSS)
BEFORE INCOME
TAXES 160,179 (2,904,337) (253,215) (172,705)
Income tax
expense - 980,459 - 2,154,613
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EARNINGS (LOSS)
BEFORE
IMPAIRMENT OF
GOODWILL FOR
THE PERIOD 160,179 (3,884,796) (253,215) (2,327,318)
Impairment of
goodwill - (2,235,114) - (2,235,114)
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NET EARNINGS
(LOSS) FOR THE
PERIOD 160,179 (6,119,910) (253,215) (4,562,432)
DEFICIT,
BEGINNING OF
PERIOD (14,585,326) (3,564,634) (14,171,932) (5,121,041)
Excess of
purchase cost
over carrying
value of common
shares
cancelled - - - (1,071)
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DEFICIT, END OF
PERIOD $(14,425,147) $ (9,684,544) $(14,425,147) $ (9,684,544)
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Basic earnings
(loss) per
share $ 0.01 $ (0.32) $ (0.02) $ (0.19)
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Diluted
earnings (loss)
per share $ 0.01 $ (0.32) $ (0.02) $ (0.19)
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Weighted
average number
of shares used
to calculate
basic earnings
(loss) per
share 12,141,403 12,167,591 12,158,331 12,153,110
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Weighted
average number
of shares used
to calculate
diluted
earnings (loss)
per share 12,144,482 12,167,591 12,158,331 12,153,110
BRIDGES.COM INC.
Consolidated Interim Statements of Cash Flows
(Unaudited)
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Three months Three months Six months Six months
ended ended ended ended
December 31 December 31 December 31 December 31
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2003 2002 2003 2002
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CASH FLOWS FROM
OPERATING
ACTIVITIES
Net earnings
(loss) for the
period $ 160,179 $ (6,119,910) $ (253,215) $ (4,562,432)
Items not
affecting cash
Amortization of
property and
equipment 417,832 263,624 818,635 538,398
Amortization of
intangibles - 18,112 - 45,280
Non-cash
portion of
restructuring
charge - 386,050 31,908 386,050
Impairment of
goodwill - 2,235,114 - 2,235,114
Future income
tax recovery - 982,265 - 2,151,032
Changes in
operating
assets and
liabilities:
Accounts
receivable 1,765,517 2,487,484 1,948,108 (293,268)
Prepaid
expenses and
other (22,868) (53,390) (55,788) (69,438)
Accounts
payable and
accrued
liabilities 36,382 2,268,743 (536,464) 1,680,818
Deferred
revenue (812,930) (361,682) 2,092,145 521,271
Accrued
restructuring
charge (209,175) - (625,612) -
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1,334,937 2,106,410 3,419,717 2,632,825
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CASH FLOW FROM
INVESTING
ACTIVITY
Purchase of
property and
equipment, net
of related
accounts
payable (10,001) (286,064) (37,928) (775,242)
Sale of
property and
equipment 2,255 - 10,755 -
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(7,746) (286,064) (27,173) (775,242)
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CASH FLOWS FROM
FINANCING
ACTIVITIES
Issuance of
common shares - 8,361 65 16,531
Shares
purchased and
cancelled (35) - (32,423) (35)
Interest on
shareholder
loans 9,553 - 19,004 -
Repayment of
obligations
under capital
lease - (47,141) - (77,096)
Repayment of
obligations
under long-term
debt (72,000) - (72,000) -
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(62,482) (38,780) (85,354) (60,600)
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NET CASH INFLOW
DURING THE
PERIOD 1,264,709 1,781,566 3,307,190 1,796,983
CASH AND CASH
EQUIVALENTS,
BEGINNING OF
PERIOD 4,458,708 2,381,396 2,416,227 2,365,979
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CASH AND CASH
EQUIVALENTS,
END OF PERIOD $ 5,723,417 $ 4,162,962 $ 5,723,417 $ 4,162,962
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Supplemental
Cash Flow
Disclosure:
Interest earned $ 29,926 $ 15,928 $ 46,068 $ 36,037
Interest paid $ 19,135 $ 14,987 $ 39,550 $ 21,850
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About Bridges
Bridges is North America's leading provider of products and services used by schools, universities and agencies to help people achieve education and career success. Over 13,500 schools and agencies use Bridges' products and services. Bridges serves the needs of millions of people seeking educational or career planning assistance. For more information, visit http://www.bridges.com. The Company is listed on the Toronto Stock Exchange under the symbol: BIT.
Forward-Looking Statements
The foregoing includes forward-looking statements which are based on management's beliefs as well as on a number of assumptions concerning future events made by and information currently available to management.
These forward-looking statements relate to, among other things, plans and timing for the introduction or enhancement to the Company's services and products; customer demand for its products and services; expectations concerning future revenue and earnings; control of costs and expenses; loss of key employees; stock market volatility; changes in laws and regulations; Bridges' ability to compete successfully and adapt to technological advances and changing industry standards; currency exchange rate fluctuations; economic, political, and other risks associated with international sales and operations; U.S. government regulation; price and product competition; the ability to implement in a timely manner the Company's restructuring plans; the ability to form and implement alliances, and other factors and risks.
All forward-looking statements in this news release are based on management's reasonable beliefs, intentions, and expectations with respect to future events and are subject to certain risks, uncertainties, and assumptions as of the date of this release. In light of the many risks and uncertainties, readers are cautioned not to put undue reliance on such forward-looking statements which are not a guarantee of performance and are subject to a number of uncertainties and other factors -- many of which are outside of Bridges' control -- that could cause actual results, performances or achievements of Bridges to differ materially from any future results, performances or achievements expressed or implied by such forward-looking statements. The Company cannot give assurance that the forward-looking statements contained in this news release will be realized. Bridges assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
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