RNS Number:9298T
Gatekeeper Systems, Inc
08 May 2008
For immediate release May 8, 2008
Gatekeeper Systems, Inc.
Preliminary results for the year ended 31 December 2007
Gatekeeper Systems, Inc. ("Gatekeeper" or the "Group"), the leading global
provider of intelligent shopping cart solutions, today announces full year
results for the year ended 31 December 2007
Key Financials:
2007 (U$) 2006 (U$)
Turnover 28.4m 29.6m
Gross profit percentage 50% 49%
Profit before tax 1.4m 3.3m
Net profit 1.0m 2.4m
EBITDA 2.1m 3.5m
Cash generated from operations 2.9m 1.3m
Financial results
Group turnover declined to $28.4 million from $29.6 million in 2006. Gross
profit percentage increased to 50% (2006: 49%). Profit before tax was $1.4
million (2006: $3.3 million). Profit before tax net of intangible amortization
and depreciation was $2.1 million (2006: $3.5 million). Net profit after tax
was $1.0 million (2006: $2.4 million).
Product turnover totaled $21.8 million slightly down from $21.9 million in 2006.
Installation turnover was $5.5 million (2006: $7.2 million). Service turnover
increased to $1.0 million (2006: $0.6 million).
North America turnover in 2007 was $19.0 million compared to $21.5 million in
2006. European turnover increased to $9.3 million up from $8.1 million in 2006.
Asia sales were $0.2M (2006: $0).
The decline in North America turnover was largely due to the completion of a
one-time, 700-store rollout for a U.S. customer in 2006 (which was not
replicated in 2007). Additionally, a significant portion of our US order
pipeline in the final months of the year was not converted into sales. We
expect most of this business to convert in the first half of 2008. The Group
was also impacted by the transition of our Canadian distribution from an outside
sales agent to an internal sales force. While we grew the European business by
15%, we did not receive anticipated orders in the final month of the year. In
addition, Asia and Latin America sales did not meet expectations.
General and administrative expenses increased as a percentage of revenue to 36%
(2006: 30%). The Group organized the business to support a higher level of
turnover which did not materialize. The overall increase in expenditures was
primarily attributed to staffing and travel costs associated with the expansion
of our European sales and field service operations as well as increased staffing
in Canada as a result of the acceleration of our rights acquisition. Selling
expense increased slightly as a percentage of revenue to 9.8% (8.9% in 2006),
largely attributable to the addition of sales staff in Europe.
Acquisitions
During the period, we invested US$2.75m to complete the purchase of our Canadian
rights, which replaced, in part, the contingent portion of the previous
agreement entered into in August 2005 which required additional payments in 2006
and 2007.
On 19 April 2007, we acquired certain assets from Hipersistem, S.L. for a total
of Euro1 million in cash consideration. In addition, the Company entered into a
distribution arrangement with the seller, which has a term of three years. The
assets acquired related to Hipersistem's trolley coin lock business. Through
this acquisition, the Company will further its already extensive line of
shopping cart related solutions. Following these acquisitions our cash
position was $5.5m at 31 December 2007 as compared to $7.9m at 31 December 2006.
Post balance sheet event
On 11 January 2008, we acquired a minority interest in RTP Controls, Inc. ("RTP
") of Woodstock, Georgia. RTP provides demand response, real-time price control
and aggregated power monitoring solutions targeted at commercial businesses
across North America. RTP's solutions include store-level hardware and a
web-based software platform which allows customers to aggregate and control
electrical load throughout multiple customer sites. Through this aggregation
and control of electrical load, customers can receive incentive payments from
power companies to reduce power usage during times of extreme power demands.
Under the terms of the transaction, Gatekeeper acquired 30% of the outstanding
shares of RTP for $2.5 million. In addition, Gatekeeper has an option to acquire
an additional 30% of the shares, for a price to be determined, based upon a
multiple of future gross profit. The option has a term of five years. Upon
completion of the investment, Richard Brandes has assumed the role of Chairman
of RTP Controls, Inc. Mr. Brandes and Michael Lawler will have key roles in
developing the company's overall strategy, as it enters this critical stage of
growth. The Board believes there is potential to roll out the RTP solutions to
Gatekeeper's existing retail client base.
Management changes
Further to Richard Brandes' appointment to the board of RTP, Michael Lawler has
been appointed Chairman of Gatekeeper Systems, Inc. and Erik Paulson has been
promoted to President and CEO. Richard Brandes will remain on the Board of
Gatekeeper as Chairman Emeritus.
Outlook
With the addition of projected net profitability from our recent acquisitions
and anticipated growth of our existing product offerings, our profit before tax
for 2008 is expected to be at least U$4.0 million with an EPS of $0.07.
For further information please contact:
Gatekeeper Systems, Inc.
Erik Paulson, CEO +1 949.268.1319
Aaron Neilsen, CFO +1 949.268.1323
Jeff Keating, Landsbanki +44 (0)20.7426.9000
Nomad & Broker
GATEKEEPER SYSTEMS, INC. AND SUBSIDIARIES
PROFIT AND LOSS ACCOUNT
For the Year Ended
31 December
2007 2006
Notes $'000 $'000
TURNOVER 2 28,388 29,626
COST OF SALES 14,268 15,129
GROSS PROFIT 14,120 14,497
OPERATING EXPENSES
General and administrative expenses 10,014 8,889
Selling expenses 2,785 2,644
12,799 11,533
OPERATING INCOME 1,321 2,964
OTHER INCOME (EXPENSE)
Interest income (expense), net 47 245
Other expense, net (23)
Gain on foreign currency exchange, net 91 117
138 339
INCOME FROM ORDINARY ACTIVITIES
BEFORE TAXATION 1,459 3,303
TAX ON INCOME FROM ORDINARY ACTIVITIES 247 877
INCOME FROM ORDINARY ACTIVITIES
AFTER TAXATION 1,212 2,426
$ $
NET INCOME PER SHARE
Basic 3 0.03 0.05
Diluted 3 0.03 0.05
'000 '000
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 3 44,444 44,403
Diluted 3 44,486 44,892
GATEKEEPER SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
31 December
2007 2006
Notes $'000 $'000
Fixed and other assets
Goodwill 4 6,461 5,527
Other intangible assets 1,128 628
Tangible fixed assets 2,163 1,893
9,752 8,048
Current assets
Stocks 3,713 2,964
Debtors 6,704 8,421
Cash at bank 5,517 7,866
Prepaid expenses and other current assets 801 374
Deferred income taxes 290 308
17,025 19,933
Creditors: Amounts falling due within one year
Trade creditors 3,578 2,618
Amounts due under acquisition obligations 2,750
Amounts due to affiliates 138
Long-term debt, current portion 57 33
Capital lease obligations, current portion 166 47
Accrued expenses 1,366 2,255
5,167 7,841
Net current assets 11,858 12,092
Total assets less current liabilities 21,610 20,140
Creditors: Amounts falling due after more than one year
Long-term debt, net of current portion 163 109
Capital lease obligations, net of current portion 345 182
508 291
Provisions for liabilities
Deferred income taxes 179 176
Net assets 20,923 19,673
Capital and reserves
Capital shares (200,000,000 shares authorised;
44,443,333 issued and outstanding
at $0.001 par value) 44 44
Additional paid-in capital 21,875 21,691
Deferred compensation (367) (235)
Accumulated deficit (545) (1,757)
Accumulated other comprehensive loss (84) (70)
Total shareholders' funds: All equity 20,923 19,673
GATEKEEPER SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended
December 31
2007 2006
Notes $'000 $'000
Cash flows from operating activities
Net income 1,212 2,426
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortisation 812 566
Loss on disposal of assets 19 22
Share-based expense 77 103
Deferred income taxes 21 (25)
Changes in operating assets and liabilities:
Debtors 1,570 (2,764)
Stocks (749) 320
Prepaid expenses and other current assets (285) (112)
Other assets (415) 12
Trade creditors 1,275 334
Accrued expenses (635) 467
Net cash provided by (used in) operating activities 2,902 1,349
Cash flows from investing activities
Notes receivable (100)
Purchase of tangible fixed assets (580) (1,227)
Acquisition of specified assets 5 (1,694)
Net cash used in investing activities (2,274) (1,327)
Cash flows from financing activities
Repayments on long term debt financing (43) (72)
Repayment on capital lease obligations (70)
Repayments on amounts due under acquisition obligations (2,750)
Repayments of amounts due to affiliates (138)
Net cash used in financing activities (3,001) (72)
Effect of exchange rate fluctuations on cash 24 (13)
Net change in cash and cash equivalents (2,349) (63)
Cash and cash equivalents at beginning of year 7,866 7,929
Cash and cash equivalents at end of year 5,517 7,866
Footnotes:
Footnotes:
1. Basis of presentation
These statements do not constitute accounts as defined by section 240 of the
Companies Act 1985. The preliminary announcement contains extracts from the
full financial statements.
The consolidated financial statements include the accounts of Gatekeeper Systems
Inc. and its subsidiaries (collectively, the Group). In 2006, the company
acquired the remaining minority interest in Gatekeeper Systems, Ltd. SAS. All
intercompany transactions and balances have been eliminated in consolidation.
Certain prior year amounts have been reclassified to conform with the current
year's presentation.
2. Geographic information
The Company's revenues were generated in various geographic areas throughout the
world as follows:
For the year ended
31 December
2007 2006
'$000 '$000
North America $ 18,995 $ 21,526
Europe 9,235 8,100
Asia 158
$ 28,388 $ 29,626
3. Earnings per common share
Basic earnings per share is computed by dividing the income available to common
shareholders by the average number of common shares outstanding. Diluted
earnings per share includes the dilutive effect, if any, from the potential
exercise of stock options using the treasury stock method. The weighted average
shares outstanding used in the calculations of earnings per share were as
follows:
For the year ended
31 December
2007 2006
'$000 '$000
Shares outstanding, beginning 44,468 44,358
Weighted average shares issued (24) 45
Weighted average shares outstanding - basic 44,444 44,403
Effect of dilutive securities (stock options) 42 489
Weighted average shares outstanding - diluted 44,486 44,892
4. Goodwill and other intangible assets
The Company accounts for intangible assets under Statement of Financial
Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets. As
such, goodwill and other intangible assets deemed to have indefinite lives are
no longer amortized but are instead subject to annual impairment tests. SFAS
142 requires the company to compare the fair value of the reporting unit,
determined based on discounted cash flows, to its carrying amount on an annual
basis to determine if there is potential impairment. An impairment loss, if
any, is recorded to the extent that that fair value of the goodwill within the
reporting unit is less than its carrying value. In management's opinion, there
has been no impairment to the value of goodwill during the year ended 31
December 2007.
At 31 December 2007, the company had identifiable intangible assets with finite
lives consisting of organization costs, trademarks and intellectual properties.
Identifiable finite-lived intangible assets are amortized on a straight-line
basis over their estimated useful lives, ranging from 2 to 7 years.
5. Acquisitions
On February 2007, we finalized our agreement to accelerate the Canadian
distribution rights. The company invested US$2.75m to complete the purchase of
our Canadian rights, which replaced, in part, the contingent portion of the
previous agreement entered into in August 2005 which required additional
payments in 2006 and 2007
On 19 April 2007, we acquired certain assets from Hipersistem, S.L. for a total
of Euro1 million in cash consideration. In addition, the Company entered into a
distribution arrangement with the seller, which has a term of three years. The
assets acquired related to Hipersistem's trolley coin lock business. Through
this acquisition, the Company will further its already extensive line of
shopping cart related solutions.
6. Post balance sheet event
On 11 January 2008, we acquired a minority interest in RTP Controls, Inc. ("RTP
") of Woodstock, Georgia. Under the terms of the transaction, Gatekeeper
acquired 30% of the outstanding shares of RTP for $2.5 million, payable in cash
upon completion. In addition, Gatekeeper has an option to acquire an additional
30% of the shares, for a price to be determined, based upon a multiple of future
gross profit. The option has a term of five years.
7. Annual report
The annual report of the Company for the year ended 31 December 2007 will be
sent to shareholders during June 2008 and will be available, free of charge,
from the offices of Landsbanki located at Beaufort House 15 St. Botolph Street,
London, United Kingdom, EC3A 7QR
This information is provided by RNS
The company news service from the London Stock Exchange
END
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