Year 2006:
- Consolidated net sales: EUR 14.3 million (EUR 11.5 million in 2005).
- Consolidated operating profit: EUR 1.5 million (EUR 0.9 million), or 10.3
percent of net sales (8.2 percent).
Q4/2006:
- Consolidated net sales: EUR 4.1 million (EUR 3.1 million in Q4/2005).
- Consolidated operating profit: EUR 0.5 million (EUR 0.3 million), or 12.1
percent of net sales (9.4 percent).
- Net profit from continuing operations for 2006 totaled EUR 3.5 million (EUR
0.8 million in 2005), or 24.2 percent of net sales (7.1 percent), including EUR
1.9 million (EUR 0.0 million) in deferred tax assets on confirmed losses.
- Earnings per share from continuing operations for 2006 were EUR 0.056 (EUR
0.016). On December 31, 2006, equity ratio stood at 63.7 percent (47.5
percent).
- Year-end cash and cash equivalents totaled EUR 2.4 million (EUR 3.7 million).
- The Board proposes that per-share dividend of EUR 0.01 is distributed.
- The Group predicts that its consolidated net sales and operating profit for
2007 will exceed the previous year's levels.
BUSINESS ENVIRONMENT
Demand for multilingual documentation and visualization services within the
Services segment remained steady in 2006, the segment's net sales rising
steadily, as predicted.
2006 saw a marked increase in deliveries ordered for automation systems within
the Systems segment. Over the financial year, the segment's net sales
accumulated more slowly than anticipated, remaining at lower levels than a year
ago, due to orders becoming concentrated towards the end of the year. Demand
for software deliveries remained healthy throughout 2006.
In 2006, the Health Care segment adopted a sales-focused organization, as a
result of organizational restructuring, and made efforts to provide foundations
for opening new markets and sales channels. Although tonometer sales remained
stable, demand did not yet show any major increase due to new markets opening
more slowly than expected. In December 2006, Tiolat Oy submitted an import
licence application of its
iCare tonometer to the U.S Food and Drug Administration.
NET SALES AND PROFITABILITY
Consolidated net sales for 2006 came to EUR 14.3 million (EUR 11.5 million), up
by 24.8 percent year on year. Like-for-like net sales for 2005 were EUR 14.2
million. According to the unaudited, like-for-like net sales in 2005, Tiolat's
income was included in continuing operations as if it had been acquired on 1
January 2005.
Consolidated operating profit amounted to EUR 1.5 million, accounting for 10.3
percent of consolidated net sales (EUR 0.9 million, or 8.2 percent of
consolidated net sales). Like-for-like operating profit for 2005 was EUR 1.8
million, representing 12.7 percent of net sales. According to the unaudited,
like-for-like operating profit in 2005, Tiolat's income and expenses were
included in continuing operations as if it had been acquired on 1 January 2005.
The Health Care segment's profit margin is affected by EUR 0.3 million in
expenses resulting from purchase price allocation to inventories.
Net profit from continuing operations totaled EUR 3.5 million, accounting for
24.2 percent of net sales (EUR 0.8 million, or 7.1 percent of net sales). Net
profit from discontinued operations for 2006 totaled EUR 0.0 (EUR 1.5 million).
In 2006, the Group recognized EUR 1.9 million in deferred tax assets on the
previous years' confirmed losses to the extent that it is probable that future
taxable profit will be available against which the unused tax losses and
credits may be utilized. Deferred tax assets will be utilized over the next
years, during which confirmed losses will be available to the Group. The
Group's shareholding in Tiolat Oy rising to 100 percent in 2006 has improved
the Group's opportunity to utilize deferred tax assets. A reduction in
provisions did not have any effect on net profit for the period.
Earnings per share from continuing operations were EUR 0.056 (EUR 0.016) and
equity per share came to EUR 0.165 (EUR 0.067). Earnings per share from
discontinued operations were EUR 0.000 (EUR 0.029 million). Diluted earnings
per share equaled undiluted earnings per share.
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 in 2005 includes neither income nor
expenses from the Health Care segment due to its acquisition in late December
2005. Net sales and profit by segment:
Net sales Net sales Segment Segment
profit profit
2006 2005 2006 2005
MEUR Share MEUR Share MEUR % MEUR %
Services 5.0 35% 4.6 41% 0.7 14 0.7 16
Systems 6.4 45% 6.8 59% 0.7 11 0.9 13
Health Care 2.9 20% - - 0.7 23 - -
Total 14.3 100% 11.5 100% 2.1 15 1.6 14
Parent company expenses -0.6 -4 -0.6 -6
Operating profit 1.5 10 0.9 8
Consolidated net sales and profit by quarter:
MEUR Q1/2006 Q2/2006 Q3/2006 Q4/2006 Total
Net sales 3.8 3.6 2.9 4.1 14.3
Operating profit 0.4 0.3 0.3 0.5 1.5
Operating margin % 10.9% 8.6% 9.4% 12.1% 10.3%
MEUR Q1/2005 Q2/2005 Q3/2005 Q4/2005 Total
Net sales 2.9 3.0 2.5 3.1 11.5
Operating profit 0.1 0.2 0.3 0.3 0.9
Operating margin % 4.8% 6.8% 12.1% 9.4% 8.2%
FINANCIAL POSITION
The year-end consolidated balance-sheet total amounted to EUR 17.2 million (EUR
10.8 million on December 31, 2005). Shareholders' equity came to EUR 11.0
million (EUR 4.0 million). Group interest-bearing liabilities totaled EUR 2.2
million (EUR 2.1 million) and gearing stood at -1.8 percent (-33.4 percent). At
the year-end, equity ratio was 63.7 percent (47.5 percent) and cash and cash
equivalents stood at EUR 2.4 million (EUR 3.7 million).
MAJOR EVENTS AND BUSINESS DEVELOPMENTS IN 2006
On August 22, 2006, Done Solutions Corporation acquired Eyemaker's Finland Oy's
(19.51 percent holding in Tiolat Oy), Jukka Lunden's (19.51 percent) and Lauri
Soratie's (3.83 percent) holdings in Tiolat Oy. The transaction with Eyemaker's
Finland Oy was based on a share swap, according to which Done Solutions
Corporation offered 6 million new shares for subscription for EUR 0.30 per
share. The transactions with Jukka Lunden and Lauri Soratie were based on cash.
The purchase price of shares held by Jukka Lunden and Lauri Soratie was EUR
1.80 million and EUR 0.35 million, respectively. As a result of these
transactions, Done Solutions Corporation increased its direct and indirect
holding in Tiolat Oy from 57.1 percent to 100.0 percent and the Group is now
also able to utilize deferred tax assets on confirmed losses against profits
shown by Tiolat Oy over the next years.
Of Tiolat Oy's (Health Care segment) acquisition cost, EUR 3.4 million was
allocated to the acquiree's intangible rights and EUR 0.2 million to
inventories. Intangible assets of EUR 3.4 million will be amortized over their
estimated useful lives of ten years. The resulting goodwill of EUR 1.9 million
is based on expected favorable business development, synergies and the 100
percent shareholding in the segment providing the opportunity for the segment's
dedicated business development. The recoverable amount of CGUs exceeds the
value of goodwill.
MAJOR EVENTS AFTER THE BALANCE SHEET DATE
Pekka Pystynen, President and CEO of Done Solutions Corporation, entered sick
leave on January 23, 2007 until further notice. Juha Kujala, General Counsel,
is deputizing for him.
OTHER EVENTS AFTER THE BALANCE SHEET DATE
The Group had an obligation to purchase a real property, effective until
December 31, 2006, based on a sale and leaseback agreement concluded in 2000
for the capital stock of Kiinteistöyhtiö Hakasivuntie 1, a real-estate company,
which administers the property on Hakasivuntie 1 in Kauhajoki. Based on an
agreement, this purchase obligation was extended until 14 February 2007, when
the Group bought the real estate company's capital stock. Before this
acquisition, the real property was already recognized as property, plant and
equipment under buildings and structures, in accordance with IFRS. On December
31, 2006, the real property's value after accumulated depreciation totaled EUR
0.4 million in the consolidated balance sheet. The real property's purchase
price of EUR 1.0 million was recognized as interest-bearing liabilities on the
same date. This acquisition had no effect on net profit.
PRODUCT DEVELOPMENT
Product development costs for 2006 came to EUR 0.3 million (EUR 0.1 million)
and were expensed as incurred.
HUMAN RESOURCES
On December 31, 2006, the Group had a staff of 133 (129), two of whom worked
abroad (2). The number of employees averaged 133 (135). The personnel by
segment averaged during the financial year:
2006 2005
Services 66 65
Systems 58 56
Health Care 6 0
Logistics (discont. business) 0 10
Parent company 3 4
Total 133 135
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 Team comprises Pekka Pystynen, President and CEO;
Elina Karjalainen, Managing Director, Done Information, a subsidiary; Juha
Mikkola, Managing Director, Done Logistics, a subsidiary, Kari Serjamaa,
Managing Director, Tiolat, a subsidiary; and Mika Söyring, CFO. Juha Kujala,
General Counsel, acts as the secretary of the Corporate Management Team.
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, 2006.
SHARE CAPITAL AND SHARES
Between January 1 and December 31, 2006, the Company increased its share
capital from EUR 4,757,398.72 to EUR 5,314,918.72, corresponding to 6,969,000
shares.
Date of
Period Increase (no.) registration Rights issue
Jan-Feb/2006 135,000 6 Feb 2006 2002 stock-option scheme
Feb-March/2006 240,000 14 March 2006 2002 stock-option scheme
March/2006 100,000 23 March 2006 2002 stock-option scheme
March-April/2006 494,000 12 May 2006 2002 stock-option scheme
Aug 22, 2006 6,000,000 1 Sept 2006 Eyemaker's Finland Oy
The share subscription period for all stock options, based on the 2002 stock
option plan, expired on April 30, 2006. The Company had no effective
stock-option schemes on December 31, 2006.
On December 31, 2006, Done Solutions Corporation's share capital came to EUR
5,314,918.72 and the number of shares totaled 66,436,484.
The unexercised share-issue authorization given by the Annual General Meeting
of March 31, 2006 to the Board of Directors applied to 5,988,496 shares on
December 31, 2006. The Board of Directors is not authorized to buy back
treasury shares, and the company did not hold any treasury shares during the
financial year.
The reported share turnover of Done Solutions Corporation in 2006 was EUR 9.1
million, representing 26.8 million shares and 43.1 percent of the total number
of company shares. The highest share quotation for 2006 was EUR 0.45 and the
lowest EUR 0.24. The share price averaged EUR 0.34 and closed at EUR 0.28 on
December 31, 2006. The company's market capitalization on December 31, 2006
totaled EUR 18.6 million.
SHAREHOLDERS
On December 31, 2006, the number of company shareholders totaled 1,944 (1,748).
The fiscal year saw three flagging notifications related to shareholdings. Jyri
Merivirta's shareholding in Done Solutions Corporation decreased to less than a
quarter (1/4) of the shares and the voting rights on May 12, 2006, as a result
of the Trade Register registration of the subscribed shares based on Done
Solutions Corporation's stock option scheme. Eyemaker's Finland Oy's
shareholding in Done Solutions Corporation increased to more than one twentieth
(1/20) of the shares and the voting rights on September 1, 2006, as a result of
the Trade Register registration of the subscribed shares based on a private
placement with Eyemaker's Finland Oy. Eyemaker's Finland Oy's shareholding in
Done Solutions Corporation increased to more than one tenth (1/10) of the
shares and the voting rights on December 20, 2006, as a result of the share
purchase.
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, 2006, the Board of Directors and the President and CEO held
22.8 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
17.3 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
The Board of Directors approves the general risk management guidelines, and the
Group's President and CEO and financial department are responsible for their
practical implementation at Group level and the management of each segment at
segment level.
The Group's strategic risks are associated with potentially toughening market
competition and the threat of rival products. The Group is continuously
monitoring strategic risks and, whenever necessary, will revise its strategy to
minimize risks. Operational risks are associated with the retention of major
customers and their development within the Services segment and the Systems
Segment, and success in widening the customer base. The Health Care segment's
major risk is associated with any delayed opening of new markets. All Group
segments are exposed to risk associated with any potential production breakdown
within subcontractor and supplier networks.
The Group is not exposed to any significant financial risks and its hazard
risks have extensive insurance cover.
STOCK EXCHANGE RELEASES
The company's stock exchange releases and the related list can be found on its
website at www.donesolutions.com, Investors / Stock Exchange Releases.
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 and has prepared for any litigation costs through
provisions.
PROSPECTS
Forecasts predict that economic development will remain favorable during 2007.
Demand for the Services segment's multilingual documentation services is
expected to remain steady and segment net sales are anticipated to show
moderate growth. Since demand for the Systems segment's solutions is expected
to remain strong, it is predicted that the segment will post higher net sales
than in 2006. The Health Care segment is expected to increase its net sales due
to increased focus on sales and expanding markets. The net sales growth rate
depends on how quickly the sales license application process will proceed and
new markets open. Consolidated net sales are expected to be higher than in
2006. With no major cost pressures within the segments, costs are anticipated
to show moderate growth. Consolidated operating profit is expected to be higher
than in 2006.
BOARD PROPOSAL FOR PROFIT ALLOCATION
Consolidated net profit for 2006 totaled EUR 3.5 million and parent company net
profit EUR 0.2 million.
The parent company's distributable earnings on December 31, 2006 totaled EUR
2.1 million.
The Board of Directors will propose to the Annual General Meeting on April 3,
2007 that the parent company's distributable earnings be allocated as follows:
- Distributing a per-share dividend of EUR 0.01, or a total of EUR 0.7
million.
- Entering EUR 1.4 million in equity.
Done Solutions Corporation
Board of Directors
For further information, please contact:
Juha Kujala, acting CEO, gsm +358(0)40-7349017,
juha.kujala@donesolutions.com
Mika Söyring, CFO, gsm +358(0)40-7770033,
mika.soyring@donesolutions.com
http://www.donesolutions.com
Distribution
Helsinki Stock Exchange
Financial Supervision Authority
Major media
With its shares having been quoted on the Helsinki Stock Exchange since 2001,
Done Solutions is organized into three business areas: Services (Done
Information) provides multilingual documentation and visualization services;
Systems (Done Logistics) provides comprehensive intralogistics 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) 2006 2005
Net sales 14.3 11.5
Operating profit/loss 1.5 0.9
Operating margin, % 10.3 8.2
Pre-tax profit/loss 1.5 0.8
Pre-tax profit/loss, % 10.5 7.1
Net profit/loss 3.5 2.3
Net profit/loss, % 24.2 19.8
Gross capital expenditure 5.4 3.0
Gross capital expenditure, % of net sales 37.7 25.8
R&D costs 0.3 0.1
R&D costs, % 2.0 0.4
Gearing, % -1.8 -33.4
Equity ratio, % 63.7 47.5
Return on investment (ROI), % 17.1 21.6
Return on equity (ROE), % 43.3 34.3
Earnings per share, cont. operations EUR 0.056 0.016
Earnings per share, discont. operations EUR 0.000 0.029
Equity per share, EUR 0.165 0.067
Dividend per share, EUR 0.00 0.00
Payout ratio, % 0.0 0.0
Effective dividend yield, % 0.0 0.0
Price-earnings ratio 5 15
Average no. of issue adjusted shares 62,179,161 49,796,251
Issue adjusted no. of shares at period-end 66,436,484 59,467,484
Average no. of employees 133 135
Cash flow from operating activities 0.6 1.0
Cash flow from investing activities -2.1 1.6
Net cash used in financing activities 0.2 -0.4
Total cash flow -1.3 2.2
CONSOLIDATED INCOME STATEMENT (MEUR) 2006 2005
NET SALES 14.3 11.5
Other operating income 0.1 0.1
Materials and services -4.3 -3.6
Employee benefits -6.0 -5.1
Depreciation -0.4 -0.2
Other operating expenses -2.2 -1.7
OPERATING PROGIT 1.5 0.9
Share of associates' results 0.1 0.0
Financial expenses (net) -0.0 -0.1
PRE-TAX PROFIT 1.5 0.8
Income tax charge 2.0 -0.0
Minority interest 0.0 0.0
NET PROFIT, continuing operations 3.5 0.8
Net profit, discontinued operations 0.0 1.5
NET PROFIT 3.5 2.3
Earnings per share, continuing operations
undiluted EUR 0.056 0.016
Earnings per share, continuing operations
diluted EUR 0.056 0.016
Earnings per share, discontinued operations
undiluted EUR 0.000 0.029
Earnings per share, discontinued operations
diluted EUR 0.000 0.029
CONSOLIDATED INCOME STATEMENT (MEUR) Q4/2006 Q4/2005
NET SALES 4.1 3.1
Other operating income 0.0 0.0
Materials and services -1.3 -0.9
Employee benefits -1.5 -1.5
Depreciation -0.2 -0.0
Other operating expenses -0.6 -0.4
OPERATING PROFIT 0.5 0.3
Share of associates' results 0.0 0.0
Financial expenses (net) -0.0 0.0
PRE-TAX PROFIT 0.5 0.3
Income tax charge 2.1 -0.0
Minority interest 0.0 0.0
NET PROFIT, continuing operations 2.6 0.3
Net profit/loss, discontinued operations 0.0 -0.0
NET PROFIT 2.6 0.3
CONSOLIDATED BALANCE SHEET (MEUR) Dec. 31, 2006 Dec. 31, 2005
ASSETS
NON-CURRENT ASSETS
Tangible assets 0.6 0.5
Goodwill 3.1 1.2
Intangible assets 4.9 1.8
Shares in associates 0.4 0.4
Available-for-sale assets 0.0 0.0
Receivables 0.4 0.5
Deferred tax assets 2.2 0.0
TOTAL NON-CURRENT ASSETS 11.5 4.4
CURRENT ASSETS
Inventories 0.2 0.3
Account and other receivables 3.1 2.3
Cash and cash equivalents 2.4 3.7
TOTAL CURRENT ASSETS 5.7 6.4
TOTAL ASSETS 17.2 10.8
LIABILITIES AND SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY
Share capital 5.3 4.8
Share premium 2.4 1.0
Fair value reserve 0.3 0.3
Revaluation reserve 1.5 0.0
Retained earnings/loss 1.4 -2.0
TOTAL SHAREHOLDERS' EQUITY 11.0 4.0
MINORITY INTEREST 0.0 1.0
LIABILITIES
LONG-TERM LIABILITIES
Deferred tax liabilities 1.3 0.5
Provisions 0.5 0.7
Interest-bearing liabilities 1.2 1.0
Other payables 0.0 0.1
TOTAL LONG-TERM LIABILITIES 3.1 2.3
SHORT-TERM LIABILITIES
Account and other payables 2.1 2.3
Provisions 0.1 0.1
Interest-bearing liabilities 1.0 1.0
TOTAL SHORT-TERM LIABILITIES 3.1 3.5
TOTAL LIABILITIES 6.3 5.7
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 17.2 10.8
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (MEUR)
Share Share pre- Other Retained Minority Total
capital mium reserves earnings inter. equity
Equity Jan. 1, 2005 4.0 0.4 0.2 -4.8 0.0 -0.3
Private placement 0.8 0.9 0.3 0.0 0.0 2.0
Loss covering 0.0 -0.3 -0.2 0.5 0.0 0.0
Net profit 0.0 0.0 0.0 2.3 0.0 2.3
Equity Dec. 31, 2005 4.8 1.0 0.3 -2.0 1.0 5.0
Equity Jan. 1, 2006 4.8 1.0 0.3 -2.0 1.0 5.0
Paid dividends to
minority shareholders 0.0 0.0 0.0 -0.0 0.0 -0.0
Share subscriptions based
on stock options 0.1 0.1 0.0 0.0 0.0 0.2
Private placement 0.5 1.4 1.5 0.0 0.0 3.5
Net profit 0.0 0.0 0.0 3.5 0.0 3.5
Equity Dec. 31, 2006 5.3 2.4 1.8 1.4 0.0 11.0
CONSOLIDATED CASH FLOW STATEMENT (MEUR) 2006 2005
Net profit 3.5 0.8
Adjustments to net profit -1.6 0.4
Change in working capital -1.3 -0.1
Interest paid -0.1 -0.1
Interest received 0.2 0.0
CASH FLOW FROM OPERATING ACTIVITIES 0.6 1.0
Acquisition of subsidiary -2.2 0.3
Disposal of operations 0.0 1.3
Purchase of PPE and intangible assets -0.1 -0.0
Payments of other investments 0.1 0.0
NET CASH USED IN INVESTING ACTIVITIES -2.1 1.6
Rights issue 0.2 0.0
Repayments of long-term borrowings 0.0 -0.4
Finance lease principal payments -0.0 -0.1
NET CASH USED IN FINANCING ACTIVITIES 0.2 -0.4
Net change in cash and equivalents -1.3 2.2
Cash and equivalents, Jan.1 3.7 1.6
Cash and equivalents, Dec. 31 2.4 3.7
CONTINGENT LIABILITIES (MEUR) 2006 2005
Mortgages given 0.3 0.3
Pledges given 2.7 3.0
Securities given 1.3 0.7
Finance lease liabilities 0.1 0.1
Operating lease liabilities 0.3 0.2
The figures (inc. comparatives) in this report are in compliance with IFRS. The
data in this report are based on audited figures.