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 user 2008-07-17 at 12:15:52 pm Views: 33
  • #20127

    Danka Business Systems PLC Reports Fiscal 2008 Results
    PETERSBURG, Fla., Jul  2008 — Danka Business Systems PLC has today
    filed with the Securities and Exchange Commission its Annual Report on
    Form 10-K for year ended March 31, 2008.

    For the year ended March 31, 2008:

    Danka incurred a net loss from continuing operations of $29.3 million
    in fiscal year 2008 compared to a net loss from continuing operations
    of $48.7 million in fiscal year 2007. The net loss available to common
    shareholders was $0.83 per American Depositary Share (“ADS”) during the
    current period compared to a net loss of $1.11 per ADS in the year-ago
    period. For the fiscal year 2008, Danka’s revenue decreased by $32.0
    million, or 7.1%, to 418.2 million. Retail equipment, supplies and
    related sales declined $10.5 million, or 5.3%, to $189.6 million.
    Retail service revenue declined $19.0 million, or 8.0%, to $217.1
    million and rental revenue was down $2.5 million, or 17.8%, to $11.5
    million for fiscal year 2008. Total gross profit margin decreased to
    33.9% during fiscal year 2008 from 34.6% in the year-ago period.
    Selling, general and administrative expenses (“SG&A”) in the
    current year decreased by $15.7 million or 9.9% from the year-ago
    period to $143.8 million from $159.5 million. Operating loss from
    continuing operations was $4.3 million for fiscal year 2008 compared to
    a loss of $13.0 million in the prior year period.

    – Total
    assets as of March 31, 2008 decreased $194.9 million or 46.7% from
    March 31, 2007 to $222.1 million. Total liabilities decreased $159.8
    million from March 31, 2007, or 41.1% to $229.2 million.

    Danka’s net cash flow used in operating activities for continuing
    operations during fiscal year 2008 and 2007 was $29.8 million and $25.9
    million respectively. Net cash flow used in investing activities from
    continuing operations during fiscal years 2008 and 2007 was $4.2
    million and $11.2 million respectively. Net cash flow used in financing
    activities was $141.5 million for fiscal year 2008 while net cash flow
    provided by financing activities during fiscal year 2007 was $5.0

    On June 27, 2008, Danka completed the sale of its U.S.
    operating subsidiary, Danka Office Imaging Company (“DOIC”). Pursuant
    to a stock purchase agreement, Danka sold its U.S. operations to Konica
    Minolta Business Solutions U.S.A., Inc. (“Konica Minolta”) in a sale of
    all the outstanding capital stock of DOIC for a purchase price of U.S.
    $240 million in cash, subject to an upward or downward adjustment of
    U.S. $10 million. The purchase price adjustment cannot exceed $10

    In addition, the sum of $10 million was held back by
    Konica Minolta from the amount paid at closing as security for Danka’s
    purchase price adjustment obligations. $25 million of the purchase
    price paid by Konica Minolta at closing will be held in escrow for a
    period of four years following closing to satisfy any and all claims by
    Konica Minolta which may be made under the stock purchase agreement.The
    Board of Directors of the Company is evaluating the alternatives
    available with respect to the net proceeds from the sale of DOIC to
    Konica Minolta – primarily how such proceeds may be distributed to
    Danka shareholders. There is no guarantee that any future alternative
    chosen by the board of directors will result in any return to holders
    of Danka’s ordinary shares (including holders of ADSs). In addition,
    there is no guarantee that the holders of the Company’s 6.50% senior
    convertible participating shares will not take action(s) available to
    them under applicable law, for example seeking a winding up of the
    Company, to recover amounts to which they are entitled pursuant to the
    Company’s articles of association. Such amounts exceed the amount of
    the net proceeds from the sale of DOIC.