DONE SOLUTIONS CORPORATION POSTS GROWTH IN NET SALES AND MAKES OPERATING PROFIT
Done Solutions Corporation
Stock Exchange Release February 28, 2006, at 9:00 a.m.
DONE SOLUTIONS CORPORATION POSTS GROWTH IN NET SALES AND MAKES OPERATING PROFIT
Financial Statements for 2005
- Consolidated net sales in 2005 came to EUR 11.5 million (EUR 8.4 million in
2004), up 36 percent year on year.
- Consolidated operating profit amounted to EUR 0.9 million (loss of EUR 1.4
million), or 8 percent of net sales (-16 percent). All segments were in the
black.
- Net profit for the period from continuing operations totaled EUR 0.8 million
(loss of EUR 1.5 million), or 7 percent of net sales (-18 percent), that from
discontinuing operations totaled EUR 1.5 million (EUR 0.9 million), or 13 percent
of net sales (11 percent). Net profit for the period from both continuing and
discontinuing operations totaled EUR 2.3 million (loss of EUR 0.6 million), or 20
percent of net sales (-7 percent).
- In December, the Group bought a 57.1 percent holding Tiolat Oy, whose income
and expenses are not included in the financial statements. The company's balance
sheet was consolidated into Done's annual accounts on December 31, 2005.
- Earnings per share from continuing operations were EUR 0.016 (EUR -0.031) while
those from discontinuing operations were EUR 0.029 (0.018). Earnings per share
from both continuing and discontinuing operations were EUR 0.046 (-EUR 0.012).
Equity ratio stood at 47.5 percent (-4.8 percent). Equity ratio including
subordinated loans stood at 57.1 percent (9.5 percent).
- Period-end liquid assets totaled EUR 3.7 million (EUR 1.6 million).
- Reported figures, including comparatives, are in accordance with IFRS.
- The Services (Done Information) and Systems (Done Logistics) segments will show
moderate growth as before. The inclusion of the Health Care segment as from
January 1, 2006 will increase consolidated net sales and profit from the previous
year's levels. All of the Group's segments are projected to record higher
operating results than a year ago.
TRANSITION TO IFRS
On January 1, 2005, Done Solutions Corporation changed over to the International
Financial Reporting Standards (IFRS). The financial statements and interim
reports for 2004 were based on the Finnish Accounting Standards (FAS). The Stock
Exchange Release on April 26, 2004 provided information on transition to IFRS.
Figures for 2005 in this financial report, including comparatives, are in
accordance with IFRS.
In the financial statements for 2005, the lease agreement for the Systems
segment's office premises, sold and leased back in December 2005, is treated as a
finance lease. The related comparatives for 2004 were adjusted in these financial
statements, as compared to a stock exchange release on the effects of transition
to IFRS published on April 26, 2005. In the opening IFRS balance sheet on January
1, 2004, this adjustment increased property, plant and equipment (PPE) by EUR 0.5
million, reduced shareholders' equity by EUR 0.7 million and increased long-term
interest-bearing liabilities by EUR 1.0 million and accounts payable and other
payables by EUR 0.2 million. This adjustment also improves operating results for
2004 by EUR 0.1 million and pre-tax results by EUR 0.0 million. In the balance
sheet on December 31, 2004, this adjustment increased property, plant and
equipment (PPE) by EUR 0.5 million, reduced shareholders' equity by EUR 0.6
million and increased long-term liabilities by EUR 1.0 million and accounts
payable and other payables by EUR 0.1 million. The adjustment increases the
balance sheet total on January 1, 2004 and December 31, 2004 by EUR 0.5 million.
BUSINESS DEVELOPMENTS
Done continued successfully to develop its segments and improve their
profitability throughout 2005: net sales and operating profit reported by both
Services (Done Information) and Systems (Done Logistics) were at good levels,
while the latter segment showed a clear growth trend compared with the previous
year's performance. In September 2005, Done decided to dispose of Logistics
(Providor Logistics). In November 2005, it decided to make use of its greater
financial resources by re-focusing its strategy: the Group will develop its
segments by seeking growth through corporate acquisitions aimed at strengthening
its current segments or entering new segments. December 2005 saw the first
acquisition in line with this new strategy.
NET SALES AND PROFITABILITY
Consolidated net sales from continuing operations for 2005 came to EUR 11.5
million (EUR 8.4 million), up 35.8 percent year on year. Operating profit came to
EUR 0.9 million (loss of EUR 1.4 million), or 8.2 percent of net sales (-16.2
percent). Net profit from continuing operations was EUR 0.8 million (loss of EUR
1.5 million), or 7.1 percent of net sales (-18.0 percent) while that from
discontinuing operations came to EUR 1.5 million (EUR 0.9 million). Lower
provisions had no effect on net profit.
Earnings per share from continuing operations were EUR 0.016 (EUR -0.031). Equity
per share was EUR 0.067 (EUR -0.006). Earnings per share from discontinuing
operations amounted to EUR 0.029 (EUR 0.018).
Services (Done Information), Systems (Done Logistics) and Health Care (Tiolat), a
new segment, form the Group's primary, IFRS-compliant segment reporting format.
The consolidated income statement includes neither income nor expenses from the
Health Care segment due to its acquisition in late December. Net sales and
operating profit/loss by segment (MEUR):
Net sales Net sales Operating profit/loss
2005 2004 2005 2004
Services 4.7 4.7 0.4 -0.1
Systems 6.8 3.7 0.5 -1.3
Health Care 0.0 0.0 0.0 0.0
Total 11.5 8.4 0.9 -1.4
Consolidated net sales and operating profit/loss by quarter (MEUR):
MEUR Q1/2005 Q2/2005 Q3/2005 Q4/2005 Total
Net sales 2.9 3.0 2.5 3.1 11.5
Operating profit/loss 0.1 0.2 0.3 0.3 0.9
Net profit/loss 0.1 0.2 0.2 0.3 0.8
MEUR Q1/2004 Q2/2004 Q3/2004 Q4/2004 Total
Net Sales 2.4 1.9 1.9 2.2 8.4
Operating profit/loss -0.2 -0.4 -0.4 -0.4 -1.4
Net profit/loss -0.3 -0.4 -0.4 -0.4 -1.5
FINANCIAL POSITION
The period-end consolidated balance-sheet total amounted to EUR 10.8 million (EUR
6.4 million on December 31, 2004). Shareholders' equity came to EUR 4.0 million
(EUR -0.3 million) while FAS-compliant parent-company shareholder's equity
amounted to EUR 8.4 million (EUR 4.8 million). Group interest-bearing liabilities
totaled EUR 2.1 million (EUR 2.3 million). Gearing stood at -33.4 percent (-281.6
percent). At the period-end, equity ratio was 47.5 percent (-4.8 percent) and
equity ratio, including subordinated loans, was 57.1 percent (9.5 percent).
Liquid assets totaled EUR 3.7 million (EUR 1.6 million) at the end of the year.
The Group expects to show a positive cash flow from business operations over the
next twelve months. The company projects its liquid assets to suffice during the
next 12-month period.
CHANGES IN GROUP STRUCTURE
In September 2005, Done Solutions Corporations' subsidiary, Providor Logistics Oy
(Logistics), sold its distribution and warehousing services business to Hahka Way
Oy for EUR 1.7 million. Providor Logistics Oy's income and expenses are presented
under discontinuing operations. In December 2005, Done Solutions Corporation
acquired all of the shares of Sunob Holding Oy which has a 57 percent holding in
the acquired company's subsidiary, Tiolat Oy. The payment of this acquisition was
made in cash and by issuing 10 million new shares of the company. Based on the
market price on the date of the Extraordinary General Meeting, the acquisition
cost totaled EUR 2.5 million. Tiolat Oy's 12-month net sales and operating profit
for 2005 totaled EUR 2.8 million and 1.5 million, respectively.
EUR 1.8 million of Tiolat Oy's (Health Care) acquisition cost was allocated to
the acquired company's intangible assets and EUR 0.1 million to inventories. The
intangible assets will be amortized on a straight-line basis over their duration.
The remaining goodwill of EUR 1.1 million is based on favorable business
prospects resulting from expansion in new markets. According to the impairment
test under IFRS, the recoverable amount exceeds the value of goodwill.
PRODUCT DEVELOPMENT
Product development costs for 2005 came to EUR 0.1 million (EUR 0.1 million) and
were expensed as incurred.
HUMAN RESOURCES
At the end of the year, the Group had a staff of 129 (166), two of whom worked
abroad (3). The number of employees averaged 135 (181).
MANAGEMENT AND AUDITORS
Done Solutions Corporation's Board of Directors is made up of the following
members: Jyri Merivirta (Chairman), Jaakko Asanti, Matti Nevalainen and Pekka
Pystynen, President and CEO.
The Corporate Management Group comprises Pekka Pystynen, President and CEO; Elina
Karjalainen, Managing Director, Done Information, a subsidiary; Juha Kujala,
General Counsel; Juha Mikkola, Managing Director, Done Logistics, a subsidiary,
and Mika Söyring, CFO.
Deloitte & Touche Oy, Authorized Public Accountants, acted as the company's
auditor, with Eero Lumme, Authorized Public Accountant, acting as the chief
auditor and Jonathan Bäck, Authorized Public Accountant, as deputy auditor.
INSIDER ISSUES AND CORPORATE GOVERNANCE
Done Solutions Corporation complies with the Helsinki Stock Exchange's Guidelines
for Insiders effective as of January 1, 2006 and, to the applicable extent, the
Recommendation on the Corporate Governance for Listed Companies effective as of
July 1, 2004. The Company's Corporate Governance Statement is available in the
Investors section on the Company's website.
DECISIONS BY THE ANNUAL GENERAL MEETING OF MARCH 31, 2005
The AGM's decisions can be found in the company's stock exchange release of March
31, 2005.
DECISIONS BY THE EXTRAORDINARY GENERAL MEETING OF DECEMBER 19, 2005
The EGM's decisions can be found in the company's stock exchange release of
December 19, 2005.
SHARE CAPITAL AND SHARES
In 2005, the Company increased its share capital from EUR 3,957,398.72 to EUR
4,757,398.72, corresponding to 10,000,000 shares.
Date Increase (shares) Private placement
Dec. 19, 2005 10,000,000 Gateway Finland Oy
The increase of share capital was registered in the Trade Register on December
23, 2005.
On December 31, 2005, Done Solutions had a share capital of EUR 4,757,398.72 and
the number of shares totaled 59,467,484.
The unexercised share-issue authorization given by the Annual General Meeting of
March 31, 2005 to the Board of Directors applied to 9,893,496 shares on December
31, 2005. As of the same date, the company held no treasury shares.
The reported share turnover of Done Solutions Corporation in 2005 was EUR 3.2
million, representing 20,583,610 shares and 41.6 percent of the total number of
shares. The highest share quotation for 2005 was EUR 0.25 and the lowest EUR
0.08. The share averaged EUR 0.16 and closed at EUR 0.25 on December 31, 2005.
The company's market capitalization on December 31, 2005 totaled EUR 14.9
million. This figure includes 10,000,000 shares subscribed on December 19, 2005,
which are projected to become available for public trading in March 2006.
SHAREHOLDERS
On December 31, 2005, the number of company shareholders totaled 1,748 (1,956).
The fiscal year saw four flagging notifications related to shareholdings. As a
result of a corporate acquisition carried out on November 30, 2005, Gateway
Finland Oy announced that its holding would exceed three-twentieths of Done
Solution Corporation shares and votes, conditional on the approval given by the
EGM of December 19, 2005 for a private placement related to the corporate
acquisition. As a result of the private placement on December 19, 2005, Gateway
Finland Oy's holding exceeded three-twentieths of Done Solution Corporation
shares and votes, following the required registration in the Trade Register on
December 23, 2005. The holding of Conventum Venture Finance Oy, Pohjola Group
plc's controlled corporation, decreased to below one quarter of Done Solutions
Corporation shares and votes, as a result of share transactions on December 19,
2005, and to below one-fifth on December 23, 2005, following the required Trade
Register registration of the abovementioned private placement.
The company's largest shareholders are listed on Done's website at
www.donesolutions.com (Investors / Financial Information / Largest shareholders).
MANAGEMENT SHAREHOLDINGS
On December 31, 2005, the Board of Directors and the President and CEO held 25.5
percent of the company's shares, totaling 15,152,500 shares, and 0.0 percent of
stock options. Moreover, on the same date, Gateway Finland Oy held 19.3 percent
of company shares, totaling 11,500,000 shares. Matti Nevalainen, a Board member,
holds 50 per cent of Gateway Finland Oy shares.
MAJOR BUSINESS RISKS
Done Solutions Corporation's risks are associated with business operations.
Managing and mitigating these risks is based on the avoidance of uncontrollable
risks or those endangering ongoing business operations. The Board of Directors
approves the general risk-management guidelines, and the Group's financial
department and business-area management are responsible for their practical
implementation. Risk-management responsibilities are divided according to
business and organization. The most significant risks exposed by the Group are
associated with financing in daily business operations, such as credit and
liquidity risks. The Group's risk-management aims to minimize the detrimental
effects of these risks on profit performance.
ENVIRONMENT
Done Solutions Corporation's operations are characterized by minimal
environmental impacts.
LEGAL PROCEEDINGS
In addition to proceedings previously announced, Done Solutions Corporation has
no major court cases pending.
FUTURE PROSPECTS
The Services (Done Information) and Systems (Done Logistics) segments will show
moderate growth as shown earlier. The inclusion of the Health Care segment as
from January 1, 2006 will increase consolidated net sales and profit from the
previous year's levels. All of the Group's segments are projected to record
higher operating results than a year ago.
BOARD'S PROPOSAL FOR PROFIT ALLOCATION
The Board of Directors will propose to the AGM of March 31, 2006 that the parent
company's profit of EUR 1,886,333.60 for 2005 be entered in retained profit/loss
and no dividend for the fiscal year be distributed.
Done Solutions Corporation
Board of Directors
For further information, please contact:
Pekka Pystynen, President and CEO, tel. +358 (0)205 253427, GSM +358 (0)50 0508
962, pekka.pystynen@donesolutions.com
Mika Söyring, CFO, tel. + 358 (0)205 253425, GSM +358 40 777 0033,
mika.soyring@donesolutions.com
http://www.donesolutions.com
Distribution
Helsinki Stock Exchange
Major media
With its shares having been quoted on the Helsinki Stock Exchange's NM List since
2001, Done Solutions is organized into three business areas: Services (Done
Information) provides multilingual documentation services; Systems (Done
Logistics) provides comprehensive logistics systems, based on automated materials-
handling and supporting information systems; and Health Care (Tiolat) provides
iCare-tonometers for eye specialists and opticians. The Group's largest customers
are based in the Nordic countries, Central Europe and the United States.
GROUP KEY FIGURES AND RATIOS (MEUR) 2005 2004
Net sales 11.5 8.4
Operating profit/loss 0.9 -1.4
Operating margin, % 8.2 -16.2
Pre-tax profit/loss 0.8 -1.5
Pre-tax profit/loss, % 7.1 -17.9
Net profit/loss for the period 0.8 -1.5
Net profit/loss for the period, % 7.1 -18.0
Gross capital expenditure 3.0 0.6
Gross capital expenditure, % of net sales 25.8 6.9
R&D costs 0.1 0.1
R&D costs, % 0.4 0.9
Gearing, % -33.4 -281.6
Equity ratio, % 47.5 -4.8
Return on investment (ROI), % 21.6 -55.9
Return on equity (ROE), % 34.3 -6,440.3
Earnings per share, continuing operations EUR 0.016 -0.031
Earnings per share, discontinuing oper. EUR 0.029 0.018
Equity per share, EUR 0.067 -0.006
Dividend per share, EUR 0.00 0.00
Payout ratio, % 0.0 0.0
Effective dividend yield, % 0.0 0.0
Price-earnings ratio neg. neg.
Average no. of issue adjusted shares 49,796,251 49,467,484
Issue adjusted no. of shares at period-end 59,467,484 49,467,484
Average no. of employees 135 181
Cash flow from business operations 1.0 -0.1
Cash flow from investments 1.6 0.6
Cash flow from financing -0.4 0.0
Total cash flow 2.2 0.5
CONSOLIDATED INCOME STATEMENT (MEUR) 2005 2004
NET SALES 11.5 8.4
Other operating income 0.1 0.1
Materials and services -3.6 -2.2
Employee benefits -5.1 -5.5
Depreciation -0.2 -0.3
Other operating expenses -1.7 -2.0
OPERATING PROGIT/LOSS 0.9 -1.4
Share of associates' results 0.0 0.0
Financial expenses (net) -0.1 -0.2
PRE-TAX PROFIT/LOSS 0.8 -1.5
Income tax charge -0.0 -0.0
Minority interest 0.0 0.0
NET PROFIT/LOSS FOR THE PERIOD, cont. oper. 0.8 -1.5
Net profit/loss of discontinuing operations 1.5 0.9
NET PROFIT/LOSS FOR THE PERIOD 2.3 -0.6
Earnings per share, continuing operations
undiluted EUR 0.016 -0.031
Earnings per share, continuing operations
diluted EUR 0.016 -0.031
Earnings per share, discontinuing operations
undiluted EUR 0.029 0.018
Earnings per share, discontinuing operations
diluted EUR 0.029 0.018
CONSOLIDATED INCOME STATEMENT (MEUR) Q4/2005 Q4/2004
NET SALES 3.1 2.2
Other operating income 0.0 0.0
Materials and services -0.9 -0.5
Employee benefits -1.5 -1.4
Depreciation -0.0 -0.1
Other operating expenses -0.4 -0.6
OPERATING PROGIT/LOSS 0.3 -0.4
Share of associates' results 0.0 0.0
Financial expenses (net) 0.0 -0.0
PRE-TAX PROFIT/LOSS 0.3 -0.4
Income tax charge -0.0 -0.0
Minority interest 0.0 0.0
NET PROFIT/LOSS FOR THE PERIOD, cont. oper. 0.3 -0.4
Net profit/loss of discontinuing operations -0.0 0.2
NET PROFIT/LOSS FOR THE PERIOD 0.3 -0.3
CONSOLIDATED BALANCE SHEET (MEUR) Dec. 31, 2005 Dec. 31, 2004
ASSETS
NON-CURRENT ASSETS
Tangible assets 0.5 0.9
Goodwill 1.2 0.1
Intangible assets 1.8 0.0
Shares in associates 0.4 0.3
Available-for-sale assets 0.0 0.0
Receivables 0.5 0.7
TOTAL NON-CURRENT ASSETS 4.4 2.0
CURRENT ASSETS
Inventories 0.3 0.1
Account and other receivables 2.3 2.8
Cash and cash equivalents 3.7 1.6
TOTAL CURRENT ASSETS 6.4 4.4
TOTAL ASSETS 10.8 6.4
LIABILITIES AND SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY
Share capital 4.8 4.0
Share premium 1.0 0.4
Contingency fund 0.0 0.2
Fair value reserve 0.3 0.0
Retained earnings/loss -2.0 -4.8
TOTAL SHAREHOLDERS' EQUITY 4.0 -0.3
MINORITY INTEREST 1.0 0.0
LIABILITIES
LONG-TERM LIABILITIES
Deferred tax liabilities 0.5 0.0
Provisions 0.7 0.7
Interest-bearing liabilities 1.0 1.9
Other payables 0.1 0.0
TOTAL LONG-TERM LIABILITIES 2.3 2.6
SHORT-TERM LIABILITIES
Account and other payables 2.3 3.2
Provisions 0.1 0.4
Interest-bearing liabilities 1.0 0.5
TOTAL SHORT-TERM LIABILITIES 3.5 4.1
TOTAL LIABILITIES 5.7 6.7
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 10.8 6.4
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (MEUR)
Share Share pre- Contin- Fair Retained
capital mium fund gency value earnings
fund reserve
SHAREHOLDERS' EQUITY 31.12.2003 7.4 0.4 0.2 0.0 -6.9
Transition to IFRS -0.8
SHAREHOLDERS' EQUITY 1.1.2004 7.4 0.4 0.2 0.0 -7.7
Reduction of share capital -3.5 3.5
Net profit/loss for the period -0.6
SHAREHOLDERS' EQUITY 31.12.2004 4.0 0.4 0.2 0.0 -4.8
SHAREHOLDERS' EQUITY 1.1. 2005 4.0 0.4 0.2 0.0 -4.8
Private placement 19.12. 2005 0.8 0.9 0.3
Cover of adopted losses -0.3 -0.2 0.5
Net profit/loss for the period 2.3
SHAREHOLDERS' EQUITY 31.12.2005 4.8 1.0 0.0 0.3 -2.0
The data in these financial statements for 2005 are based on unaudited figures.
