Category: Uncategorized
- Published: 29 November -0001
News Release: Computer Modelling Group Ltd. Announces Record Second Quarter Results
Computer Modelling Group Ltd. ('CMG') today announced the following record quarterly results - revenues of $3,000,590, operational earnings of $738,688 ($0.10 per share) and cash flow from operations of $886,961 ($0.12 per share) for the three months ended September 30, 2002. These results compare with revenues of $2,391,789, operational earnings of $391,784 ($0.05 per share) and cash flow from operations of $419,524 ($0.06 per share) for the comparable quarter ended September 30, 2001. CMG reported an additional $660,000 ($0.09 per share) in future income tax benefits in this quarter, thereby providing full recognition in its September 30, 2002 financial statements of its net future income tax asset position in Canada. In reaching the decision to fully recognize CMG's Canadian future income tax asset, consideration was given to both the Company's increasingly stronger financial results and the view of future earnings. CMG's reported earnings for the three months ended September 30, 2002 are $1,398,688 ($0.19 per share), compared to $391,784 ($0.05 per share) for the comparative quarter last year.
For the six months ended September 30, 2002, CMG reported $5,439,473 in revenues, operational earnings of $1,003,629 ($0.14 per share) and cash flow from operations of $1,189,317 ($0.17 per share). These results are consistently up in all categories from revenues of $4,457,946, operational earnings of $523,327 ($0.07 per share) and cash flow from operations of $570,217 ($0.07 per share) for the six months ended September 30, 2001.
Results from both the current fiscal periods ended September 30, 2002 and the comparative six months ended September 30, 2001 include unusual items. CMG's earnings for its current six months ended September 30, 2002 include $900,000 in future income tax benefits whereas the comparative period includes an income item of $749,143 resulting from the renegotiation and settlement of a 1997 research and development agreement. After the inclusion of these unusual items, CMG's reported earnings for the six months ended September 30, 2002 are $1,903,629 ($0.26 per share), compared to earnings of $1,272,470 ($0.17 per share) for the comparable period last year.
'CMG continues to demonstrate strong financial results, with this last quarter being our strongest to date,'said Ken Dedeluk, President and CEO. 'The growth in both software licensing and consulting and contract research revenues is reflective of the growing demand for CMG's technology and knowledge base in advanced processes reservoir simulation. CMG's directed research and development projects continue to push technological barriers and result in innovative and unique solutions that contribute to both current and long term value.'
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For Three Months ended
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Fiscal 2003
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$ thousands, September June
unless otherwise stated 30, 2002 30, 2002
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Annuity/maintenance licenses $ 1,486 $ 1,296
Perpetual licenses 389 299
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Software licenses $ 1,875 $ 1,595
Consulting and contract research 1,007 986
Interest and foreign exchange 119 (142)
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Revenues $ 3,001 $ 2,439
Gross Profit $ 1,916 $ 1,484
Gross Profit % 64 61
Operational earnings $ 739 $ 265
Future income tax benefit $ 660 $ 240
Settlement of research and
development agreement $ - $ -
Earnings for the quarter $ 1,399 $ 505
Cash flow for the quarter $ 877 $ 302
Earnings per share ($) - basic $ 0.19 $ 0.07
Cash flow per share ($) - basic $ 0.12 $ 0.04
Book value per share ($) $ 1.10 $ 0.91
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For Three Months ended
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Fiscal 2002
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$ thousands, March December September June
unless otherwise stated 31, 2002 31, 2001 30, 2001 30, 2001
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Annuity/maintenance licenses $ 1,582 $ 1,195 $ 1,255 $ 1,112
Perpetual licenses 265 565 425 471
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Software licenses $ 1,847 $ 1,760 $ 1,680 $ 1,583
Consulting and contract research 952 812 590 489
Interest and foreign exchange 36 63 121 (6)
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Revenues $ 2,835 $ 2,635 $ 2,391 $ 2,066
Gross Profit $ 1,856 $ 1,619 $ 1,535 $ 1,273
Gross Profit % 65 61 64 62
Operational earnings $ 585 $ 498 $ 392 $ 132
Future income tax benefit $ - $ - $ - $ -
Settlement of research and
development agreement $ - $ - $ - $ 749
Earnings for the quarter $ 585 $ 498 $ 392 $ 881
Cash flow for the quarter $ 646 $ 560 $ 420 $ 151
Earnings per share ($) - basic $ 0.08 $ 0.07 $ 0.05 $ 0.11
Cash flow per share ($) - basic $ 0.09 $ 0.08 $ 0.06 $ 0.02
Book value per share ($) $ 0.87 $ 0.79 $ 0.72 $ 0.67
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CMG's software license revenues were $3.5 million in the six months ended September 30, 2002, up $0.2 million or six percent from the $3.3 million reported for the comparable period last year. Of these revenues, $2.8 million was generated from annuity/maintenance licensing in the six months ended September 30, 2002, which is an increase of $0.4 million or 16.7% from the $2.4 million generated in the comparative period last year. Licensing under perpetual sales was $0.7 million in the six months ended September 30, 2002 compared to $0.9 million in the comparative period last year. Growth of the Company's software license sales has been and is expected to continue to be a function of the fact that CMG's simulators meet the current and developing needs of petroleum reservoir engineers worldwide.
Consulting and contract research revenues continued to be very strong in the quarter ended September 30, 2002, in part as a result of new projects awarded late in the quarter. Revenues of $2.0 million for the six months ended September 30, 2002 were up $0.9 million from the comparable period revenues of $1.1 million. Based upon the current price of oil and activity levels in client companies it is anticipated that this segment will continue to provide strong revenues.
CMG's gross profit margin for the six months ended September 30, 2002 was 62 percent and CMG realized a gross profit of $3.4 million, up $0.6 million from the $2.8 million of gross profit recorded in the six months ended September 30, 2001. Total cash expenses for the six months ended September 30, 2002 of $4.1 million were up $0.5 million from the comparative quarter levels. This was due to both a combination of planned increases in manpower as well as variable project related third-party contract costs.
'CMG has continued to post strong earnings and cash flow from operations for its twelfth consecutive quarter', said Ken Dedeluk. 'It is anticipated tha
