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 user 2004-01-26 at 9:57:00 am Views: 105
  • #4824

    Third Quarter Revenues Up 11 Percent;
    EPS Again Tops Analyst Consensus

    TAMPA, Fla., Jan. 22-Global Imaging Systems, Inc. (Nasdaq:GISX) today announced record-high revenues, operating income and net income for the third fiscal quarter ended December 31, 2003. Revenues were up 11 percent to $187.5 million versus $169.2 million a year ago. Operating income increased 13 percent to $21.9 million from $19.4 million in the third quarter last year.

    Net income increased 33 percent to $11.8 million from $8.9 million earned in the third quarter last year, reflecting continued strong operating performance and substantially lower interest expense, primarily the result of lower rates and lower debt levels compared to a year ago. Again exceeding the analyst consensus estimate, third quarter diluted earnings per share were 50 cents versus 41 cents a year ago. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter reached $25.8 million, up 12 percent from $23.0 million in the third quarter a year ago.

    For the nine months ended December 31, 2003, net income rose to $27.5 million compared with $25.1 million earned in the first nine months last year. Year-to-date net income was up 10 percent after recording a prepayment premium and other pretax charges totaling $8.4 million related to the company’s comprehensive debt refinancing in the first quarter. The refinancing penalized 2004 diluted EPS by 29 cents. Diluted earnings per share were $1.19 versus $1.16 for the first nine months a year ago. Revenues increased 12 percent to $556.7 million from $496.2 million in the first nine months last year. Earnings before interest, taxes, depreciation, amortization and loss on early extinguishment of debt (adjusted EBITDA) for the first nine months reached $74.6 million, up 11 percent from $67.2 million in the similar period a year ago.

    Tom Johnson, chairman and CEO of Global Imaging Systems, summarized the strong third quarter performance in one word: “Discipline.” He said, “The entire Global team executed with precision and discipline despite the distraction of holiday-related vacations and office closings. Continuing our disciplined asset management program, we further reduced inventories by $3.7 million in the third quarter and reached our inventory reduction target for the fiscal year. Our accounts receivable improved to a low 35 days sales outstanding.

    He said, “Our operating management delivered strong results in a challenging quarter, allowing senior management to focus on working with our lenders to reduce the already low interest rate on our $140 million term loan and to negotiate a three-year extension of our customer leasing agreement with GE. The lower interest rate was announced on December 10, 2003, and the leasing agreement extension was signed yesterday.”

    Mr. Johnson stated, “Facing a tough comparison with the strong third quarter a year ago, we achieved a combined internal growth rate for the fiscal 2004 third quarter of 7.5 percent, the same as in the previous fiscal quarter. Automated office equipment, primarily copiers, posted a modest three percent increase for the latest quarter, but the technology side of our business marked four consecutive quarters of positive comparisons, growing at a 23 percent rate in the third quarter.”

    He added, “Our balance sheet continues to strengthen, something that has not gone unnoticed by our lenders. Our healthy $21.3 million cash position, after funding previously announced acquisitions, results from our strong operating performance and also reflects our disciplined acquisition program. We stick to our benchmarks, evaluate many potential acquisition candidates and proceed only with those that meet our high standards. We continue to anticipate acquiring, on average, $60 to $100 million in annualized revenues each year for the three-year period ending March 2006.”

    Looking forward, Mr. Johnson said, “We remain optimistic about the remainder of our fiscal year. We expect revenue growth, not including potential additional acquisitions, to be in the 7-to-11 percent range for the fourth quarter of our fiscal 2004. In light of our third quarter performance, we now believe that diluted earnings per share for our fiscal 2004 fourth quarter should be in the range of 49 to 51 cents, which would compare with diluted EPS of 42 cents in the corresponding quarter last year. This guidance puts our diluted EPS for fiscal 2004 in the range of $1.68 to $1.70.”

    The company’s third quarter conference call is scheduled for this morning, January 22, at 10:00 a.m. ET. You may access the call through a live webcast by using the link provided on the company’s Internet home page at The webcast will be archived and available on the investor relations page of the company’s website.

    Global Imaging Systems offers thousands of middle-market customers a one-stop shop for office technology solutions from a network of 149 offices in 28 states and the District of Columbia. The company provides a broad line of office technology solutions including the sale and service of automated office equipment, network integration services and electronic presentation systems. The company is also a disciplined, profitable consolidator in the highly fragmented office technology solutions industry