Done Solutions Corporation
Interim report August 12, 2008, at 9:00 am
BRISK GROWTH IN Q2
Done Solutions Corporation's Interim Report Q1-Q2/2008 (IFRS)
Q2/2008:
- Consolidated net sales: EUR 12.3 million (EUR 4.8 million in Q2/2007), up by
156 percent.
- Consolidated operating profit: EUR 1.2 million (EUR 0.6 million), or 9.4
percent of net sales (12.8 percent), up by 89 percent.
Q1-Q2/2008:
- Consolidated net sales: EUR 24.5 million (EUR 10.0 million in Q1-Q2/2007), up
by 146 percent.
- Consolidated operating profit: EUR 2.6 million (EUR 1.6 million), or 10.4
percent of net sales (15.6 percent), up by 64 percent.
- Pre-tax profit: EUR 2.5 million (EUR 1.6 million), or 10.0 percent of net
sales (15.6 percent).
- Earnings per share: EUR 0.024 (EUR 0.017). Equity ratio of 55.1 percent (63.4
percent).
- Equity per share: EUR 0.22 (EUR 0.11).
- Cash flow from operating activities: EUR 1.3 million (EUR 1.5 million).
- Despite the weakening business trend, Done Solutions is still seeking growth
through business purchases and arrangements.
- As previously forecast, the Group's projected total net sales and operating
profit for 2008 should see a significant increase on the previous year's level.
SEGMENTS AND MARKET SITUATION
In the Group's Services segment, demand and net sales for multilingual content
production was good in Q2, which was reflected in a higher segment profit and
net sales compared to Q1.
Contact Center services, integrated into the Services segment in December 2007,
experienced strong demand in Q2 as in Q1. Some of the acquired new contact
center service's agreements should accumulate growing net sales, for which
invoicing will begin, after the initial phase in Q2.
The Systems segment posted an exceptional profit and net sales for Q2 on
account of the strong order backlog created last year. The predicted weakening
overall economic trends are clearly reflected in this segment's operating
environment, hampering the securing of new orders.
In Q2, net sales in the Health Care segment were at the same level as in Q1.
Investments in marketing resulted in a somewhat lower segment profit in Q2
compared to Q1.
In the Defense segment, net sales and profit remained low. Since the customer
base for this segment remains narrow, individual orders are highly significant
in terms of net sales development. Therefore, the segment is striving to expand
its customer base beyond the Baltic Sea area.
The Technology segment posted outstanding Q2 net sales and segment profit.
Demand for price display systems has remained high, and new parking display
systems are being tested in the market.
NET SALES, PROFITABILITY, AND PROFIT
Consolidated net sales in Q1-Q2/2008 came to EUR 24.5 million (EUR 10.0 million
in Q1-Q2/2007), up by 146 percent year on year.
Consolidated operating profit before depreciation (EBITDA) came to EUR 3.3
million, accounting for 13.3 percent of consolidated net sales (EUR 1.7 million
or 17.0 percent of consolidated net sales), up by 93 percent from the previous
year's level.
Consolidated operating profit amounted to EUR 2.6 million, accounting for 10.4
percent of consolidated net sales (EUR 1.6 million, or 15.6 percent of
consolidated net sales), up by 64 percent from the previous year's figure.
Pre-tax profit totaled EUR 2.5 million, accounting for 10.0 percent of net
sales (EUR 1.6 million, or 15.6 percent of net sales), up by 58 percent year on
year.
Net profit for the period came to EUR 1.8 million, accounting for 7.4 percent
of net sales (EUR 1.2 million, or 11.6 percent of net sales), up by 58 percent
from the previous year's level.
Undiluted and diluted earnings per share rose to EUR 0.024 (EUR 0.017) Equity
per share improved to EUR 0.22 (EUR 0.11).
Services (Done Information and Midas Touch), Systems (Done Logistics), Health
Care (Tiolat), Defense (Boomeranger Boats), and Technology (Finnish Led-Signs)
form the Group's primary, IFRS-compliant segment reporting format. The Defense
segment has been consolidated since August 1, 2007; the Technology segment
since September 1, 2007; and Midas Touch with the Services segment since
January 1, 2008.
Net sales Net sales Segment profit
Q1−Q2/2008 Q1−Q2/2007 Q1−Q2/2008 Q1−Q2/2007
MEUR share MEUR share MEUR % MEUR %
Services
Done Information 2.9 12% 2.9 29% 0.24 8 0.46 16
Midas Touch 8.0 33% - - 0.41 5 - -
Systems 8.4 34% 5.2 52% 1.25 15 0.69 13
Health Care 2.0 8% 1.9 19% 0.69 34 0.72 37
Defense 1.3 5% - - 0.06 5 - -
Technology 1.9 8% - - 0.41 22 - -
Total 24.5 100% 10.0 100% 3.06 13 1.87 19
Parent company costs -0.50 -2 -0.31 -3
Operating profit 2.56 10 1.56 16
Consolidated net sales, profit by segment, and consolidated operating profit by
quarter were:
MEUR Q2/08 Q1/08 Q4/07 Q3/07 Q2/07 Q1/07
Net sales:
Services
Done Information 1.6 1.3 1.5 1.3 1.4 1.5
Midas Touch 3.8 4.2 - - - -
Systems 4.3 4.0 3.6 3.0 2.6 2.6
Health Care 1.0 1.0 1.6 0.8 0.9 1.1
Defense 0.5 0.8 0.8 1.5 - -
Technology 1.0 0.9 0.5 0.2 - -
Total 12.3 12.2 8.0 6.7 4.8 5.2
Segment profit:
Services
Done Information 0.17 0.07 0.17 0.16 0.17 0.28
Midas Touch 0.01 0.40 - - - -
Systems 0.63 0.61 0.34 0.31 0.36 0.33
Health Care 0.29 0.41 0.56 0.19 0.23 0.49
Defense 0.03 0.04 0.12 0.19 - -
Technology 0.32 0.08 0.01 0.02 - -
Total 1.45 1.61 1.20 0.88 0.76 1.10
Parent co. costs -0.29 -0.21 0.08 -0.18 -0.15 -0.16
Operating profit 1.16 1.39 1.27 0.70 0.61 0.94
Oper. profit % 9.4% 11.4% 16.0% 10.4% 12.8% 18.2%
BALANCE SHEET AND FINANCIAL POSITION
On June 30, 2008, the consolidated balance-sheet total amounted to EUR 31.0
million (EUR 11.7 million on June 30, 2007). Shareholders' equity came to EUR
17.0 million (EUR 7.1 million). Interest-bearing liabilities totaled EUR 3.4
million (EUR 0.3 million), and gearing stood at 15.2 percent (-12.5 percent).
At the period end, the equity ratio was 55.1 percent (63.4 percent) and cash
and cash equivalents stood at EUR 0.8 million (EUR 1.2 million).
MAJOR EVENTS IN Q2/2008
On April 2, 2008, Done Solutions Corporation published a stock exchange release
dealing with decisions made by the Annual General Meeting (AGM) on the same
date. The AGM's decisions requiring registration in the Trade Register were
registered on April 15, 2008.
The Chinese Food and Drug Administration approved an import license application
on April 16, 2008, for the iCare tonometer filed by Tiolat Oy, a Group
subsidiary that is part of the Health Care segment. This license is valid in
its first phase for four years, in line with regular Chinese official
practices.
Boomeranger Boats Oy, a subsidiary in the Group's Defense segment, received a
total of EUR 1.9 million for an order delivery from West European military
forces on April 18, 2008. The rigid inflatable boats ordered will be of a new
type, for which the company will apply for SOLAS FRB qualification approval.
The delivery will be implemented in 2008-2009.
HUMAN RESOURCES
During the period, the number of employees averaged 812 (136), two of whom
worked abroad (2). At the end of the period, the company's personnel by segment
were as follows:
June 30, 2008 June 30, 2007
Services 758 67
Systems 74 62
Health Care 9 7
Defense 26 -
Technology 14 -
Parent company 3 2
Total 884 138
MANAGEMENT AND AUDITORS
Done Solutions Corporation's Board of Directors is made up of the following
members: Jyri Merivirta (Chairman), Matti Nevalainen, and Pekka Tammela.
PricewaterhouseCoopers Oy, Authorized Public Accountants, acted as the
company's auditor, with Juha Tuomala, Authorized Public Accountant, as the
chief auditor.
From October 1, 2008, the new CFO and corporate management group member will be
M.Sc. (Econ. & Business Adm.) Pekka Raatikainen (38).
Ernst & Young Oy, Authorized Public Accountants, conducts the internal audit.
SHARE CAPITAL AND SHARES
On June 30, 2008, Done Solutions Corporation's share capital came to EUR
5,314,918.72 and the number of shares totaled 76,115,594.
The Board has not exercised its valid authorizations to issue 30,000,000 shares
and buy back 7,593,648 own shares, approved by the AGM of April 2, 2008. The
company had no treasury shares on June 30, 2008.
The reported share turnover of Done Solutions Corporation for January 1 - June
30, 2008, was EUR 5.9 million, representing 9.3 million shares and 12.2 percent
of the total number of the company's shares. The highest share quotation for
the period was EUR 0.78 and the lowest EUR 0.44. The share price averaged EUR
0.64 and closed at EUR 0.56 on June 30, 2008. The company's market
capitalization on June 30, 2008, totaled EUR 42.6 million.
SHAREHOLDERS
On June 30, 2008, the number of shareholders in the company totaled over 2,700.
The company's largest shareholders are listed on Done's website, at
www.donesolutions.com (Investors / Financial Information / Largest
shareholders).
OPTION RIGHTS
On the basis of the rights issue authorization approved by the shareholders'
meeting of April 3 2007, the Executive Board of Done Solutions Oyj decided, on
November 23, 2007, on a new corporate option plan, comprising a maximum of
3,684,365 option rights. The option plan and its terms can be found in the
company's stock exchange release of November 23, 2007.
MANAGEMENT SHAREHOLDINGS
On June 30, 2008, the Board of Directors and the President and CEO held 20.3
percent of the company's shares, totaling 15,447,346 shares, and 18.6 percent
of stock options. Moreover, on the same date, Gateway Finland Oy held 15.1
percent of the company's shares: 11,500,000 shares. Matti Nevalainen, a Board
member, holds 50 percent of Gateway Finland Oy shares.
INSIDER ISSUES AND CORPORATE GOVERNANCE
Done Solutions Corporation complies with the Guidelines for Insiders, effective
as of June 2, 2008, set forth by the Helsinki Stock Exchange and, to the
applicable extent, the Corporate Governance Recommendation for Listed Companies
effective as of July 1, 2004. The company's Corporate Governance Statement is
available in the ‘Investors' section of the company's website.
SIGNIFICANT NEAR-TERM RISKS
The increasing overall uncertainty in the world economy is also affecting
demand for Done Solutions' products and services. These effects can be most
clearly seen in the Systems segment, specifically affecting the timing and
implementation of large customer projects.
The stock exchange release of March 5, 2008, on the financial statements for
2007 provides information on the major business risks to which the company is
exposed. There have been no relevant changes in the company's major business
risks subsequent to this release.
LITIGATION
The company is involved in no litigation or legal proceedings that, according
to the Board's view, would have a significant bearing on the Group's financial
position.
SHORT-TERM PROSPECTS
Increasing uncertainty in world economic trends is becoming evident in the
Group companies' operating environment. The related external factors, which the
company cannot influence, may rapidly affect its financial development and
require changes to the forecast presented hereafter, which is based on
information currently available.
In the Services segment, demand for multilingual content production (Done
Information) is expected to remain stable, and net sales to increase
moderately. The business prospects for Contact Center services (Midas Touch)
are good. Customer solicitation has succeeded in expanding the customer base
and deepening existing customer relationships.
Economic fluctuation is intense in the Systems segment (Done Logistics).
Because of the solid backlog of orders from last year, this segment is expected
to post higher net sales than in 2007. However, the latter half of the year
will see lower net sales than the first half. The effect of business cycle
fluctuation is visible in this segment, with substantial falls in demand.
In the Health Care segment (Tiolat), demand is expected to remain stable and
net sales will increase moderately. This segment will invest heavily in R&D
towards the end of the year.
The Defense segment's (Boomeranger Boats) order volume varies from one year to
the next, and it is anticipated that its order book and net sales will fall
short of the previous year's on account of this annual variation.
Meanwhile, the Technology segment (Finnish Led-Signs) has seen an increase in
product demand, and net sales are expected to show considerable year-on-year
growth.
As previously estimated, marked growth is expected in the Group's total net
sales compared to the previous year's figures.
Maintaining profitability in the current uncertain business trend and
competitive climate will be challenging, e.g. due to increasing raw material,
subcontracting and labor costs. However, as previously estimated, the Group's
operating profit is expected to increase significantly from that of the
previous year.
Done Solutions Corporation
Board of Directors
For further information, please contact:
Olli-Pekka Salovaara, President and CEO: +358 (0)40 567 5520 (mobile),
olli-pekka.salovaara@donesolutions.com
Mika Söyring, CFO: +358 (0)40 777 0033 (mobile),
mika.soyring@donesolutions.com
http://www.donesolutions.com/
Distribution:
Helsinki Stock Exchange
Financial Supervision Authority
Major media
Done Solutions Corporation, listed on the OMX Nordic Exchange Helsinki, is the
parent company of Done Group. Done's subsidiaries focus on the provision of
advanced Finnish specialist expertise and export-based operations.
GROUP KEY FIGURES AND RATIOS (MEUR) Q1-Q2/2008 Q1-Q2/2007 Q1-Q4/2007
Net sales 24.5 10.0 24.7
Operating profit 2.6 1.6 3.5
Operating profit, % 10.4 15.6 14.3
Pre-tax profit 2.5 1.6 3.5
Pre-tax profit, % 10.0 15.6 14.1
Net profit 1.8 1.2 5.7
Net profit, % 7.4 11.6 23.0
Gross capital expenditure 0.3 0.1 14.5
Gross capital expenditure, % of net sales 1.4 0.7 58.8
R&D costs 0.3 0.2 0.8
R&D costs, % 1.1 1.6 3.2
Gearing, % 15.2 -12.5 4.1
Equity ratio, % 55.1 63.4 52.6
Return on investment (ROI), % 24.4 39.9 21.9
Return on equity (ROE), % 20.9 33.8 45.9
Undiluted earnings per share, EUR 0.024 0.017 0.084
Diluted earnings per share, EUR 0.024 0.017 0.084
Equity per share, EUR 0.22 0.11 0.24
Average number of employees 812 136 155
Cash flow from operating activities 1.3 1.5 3.3
Cash flow from investment activities -0.1 -0.1 -2.5
Cash flow from financing activities -3.8 -2.7 0.2
Total cash flow -2.6 -1.2 1.0
CONSOLIDATED INCOME STATEMENT (MEUR) Q2/2008 Q2/2007
NET SALES 12.3 4.8
Changes in inventory 0.0 0.0
Other operating income 0.0 0.0
Materials and services -4.2 -1.8
Employee benefits -5.1 -1.6
Depreciation/amortization -0.4 -0.1
Other operating expenses -1.6 -0.7
OPERATING PROFIT 1.2 0.6
Share of associates' results -0.0 0.0
Financial expenses (net) -0.1 0.0
PRE-TAX PROFIT 1.1 0.6
Income tax expenses -0.3 -0.2
NET PROFIT 0.8 0.5
CONSOLIDATED INCOME STATEMENT (MEUR) Q1-Q2/2008 Q1-Q2/2007 Q1-Q4/2007
NET SALES 24.5 10.0 24.7
Changes in inventory -0.1 0.0 -0.2
Other operating income 0.1 0.0 0.0
Materials and services -8.0 -3.8 -10.1
Employee benefits -10.3 -3.2 -7.5
Depreciation/amortization -0.7 -0.1 -0.4
Other operating expenses -2.9 -1.2 -2.9
OPERATING PROFIT 2.6 1.6 3.5
Share of associates' results 0.0 0.0 0.0
Financial expenses (net) -0.1 -0.0 -0.1
PRE-TAX PROFIT 2.5 1.6 3.5
Income tax expenses -0.6 -0.4 2.2
NET PROFIT 1.8 1.2 5.7
Earnings per share, undiluted (EUR) 0.024 0.017 0.084
Earnings per share, diluted (EUR) 0.024 0.017 0.084
CONSOLIDATED BALANCE SHEET (MEUR) June 30, June 30, Dec. 31,
2008 2007 2007
ASSETS
NON-CURRENT ASSETS
Property, plant, and equipment 2.2 0.6 2.3
Goodwill 11.5 1.3 11.4
Intangible assets 3.6 1.3 4.0
Shares in associates 0.5 0.4 0.4
Available-for-sale assets 0.0 0.0 0.0
Receivables 0.3 0.4 0.4
Deferred tax assets 3.6 1.7 4.4
TOTAL NON-CURRENT ASSETS 21.6 5.8 22.9
CURRENT ASSETS
Inventories 1.3 0.3 1.2
Trade and other receivables 7.3 4.4 8.3
Cash and cash equivalents 0.8 1.2 3.4
TOTAL CURRENT ASSETS 9.4 5.9 12.8
TOTAL ASSETS 31.0 11.7 35.7
LIABILITIES AND SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY
Share capital 5.3 5.3 5.3
Share premium 2.4 2.4 2.4
Fair value reserve 0.3 0.3 0.3
Invested unrestricted capital reserve 6.5 0.0 6.4
Retained earnings/loss 2.4 -1.0 3.6
TOTAL EQUITY attributable to holders
of parent company equity 17.0 7.1 18.1
MINORITY INTEREST 0.0 0.0 0.0
TOTAL SHAREHOLDERS' EQUITY 17.0 7.1 18.1
LIABILITIES
LONG-TERM LIABILITIES
Deferred tax liabilities 1.0 0.4 1.2
Provisions 0.0 0.5 0.0
Interest-bearing liabilities 2.5 0.3 2.9
Other payables 2.5 0.0 2.4
TOTAL LONG-TERM LIABILITIES 6.1 1.2 6.5
SHORT-TERM LIABILITIES
Advance payments 0.2 0.5 1.3
Trade and other payables 6.8 2.8 8.5
Provisions 0.2 0.0 0.2
Interest-bearing liabilities 0.8 0.0 1.2
TOTAL SHORT-TERM LIABILITIES 7.9 3.4 11.1
TOTAL LIABILITIES 14.0 4.6 17.6
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 31.0 11.7 35.7
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (MEUR)
Share Share Other Retained Min. Total
capital premium reserves earnings int. equity
Balance on Jan. 1, 2007 5.3 2.4 0.3 -1.5 0.0 6.6
Net profit 0.0 0.0 0.0 1.2 0.0 1.2
Dividend distribution 0.0 0.0 0.0 -0.7 0.0 -0.7
Balance on June 30, 2007 5.3 2.4 0.3 -1.0 0.0 7.1
Private placements 0.0 0.0 6.4 0.0 0.0 6.4
Net profit 0.0 0.0 0.0 5.7 0.0 5.7
Balance on Dec. 31, 2007 5.3 2.4 6.7 3.6 0.0 18.1
Private placements 0.0 0.0 0.1 0.0 0.0 0.1
Dividend distribution 0.0 0.0 0.0 -3.0 0.0 -3.0
Net profit 0.0 0.0 0.0 1.8 0.0 1.8
Balance on June 30, 2008 5.3 2.4 6.8 2.4 0.0 17.0
CONSOLIDATED CASH FLOW STATEMENT (MEUR)
Q1-Q2/2008 Q1-Q2/2007 Q1-Q4/2007
Net profit 1.8 1.2 5.7
Adjustments to net profit 1.4 0.6 -1.7
Change in working capital -1.9 -0.2 -0.3
Interest paid -0.3 -0.0 -0.3
Interest received 0.3 0.0 0.1
Taxes paid 0.0 0.0 -0.2
CASH FLOW FROM OPERATING ACTIVITIES 1.3 1.5 3.3
Acquisition of subsidiary 0.0 0.0 -2.3
Acquisition of associates 0.0 -0.0 -0.0
Purchase of PPE -0.0 -0.1 -0.2
Purchase of intangible assets -0.1 -0.0 -0.0
Payments of other investments 0.1 0.0 0.0
NET CASH USED IN INVESTMENT ACTIVITIES -0.1 -0.1 -2.5
Rights issue 0.0 0.0 0.0
Dividends paid -3.0 -0.7 -0.7
Long-term borrowing 0.0 0.0 3.0
Repayments of long-term borrowing -0.7 -2.0 -2.1
Finance lease principal payment -0.0 -0.0 -0.1
NET CASH USED IN FINANCING ACTIVITIES -3.8 -2.7 0.2
Net change in cash and cash equivalents -2.6 -1.2 1.0
Cash and cash equivalents, period-start 3.4 2.4 2.4
Cash and cash equivalents, period-end 0.8 1.2 3.4
CONTINGENT LIABILITIES (MEUR) June 30, June 30, Dec. 31,
2008 2007 2007
Mortgages given 3.3 0.3 3.3
Pledges given 7.4 2.7 8.8
Securities given 1.9 2.2 3.3
Operating lease liabilities 0.4 0.1 0.4
Other rental liabilities 1.5 0.1 1.3
NET SALES AND OPERATING PROFIT BY QUARTER (MEUR)
MEUR Q2/08 Q1/08 Q4/07 Q3/07 Q2/07 Q1/07
Net sales 12.3 12.2 8.0 6.7 4.8 5.2
Oper. profit 1.2 1.4 1.3 0.7 0.6 0.9
Oper. profit, % 9.4% 11.4% 16.0% 10.4% 12.8% 18.2%
The figures (incl. comparatives) in this report are in compliance with the IAS
34 Interim Reports standard. Moreover, the accounting principles of this report
are the same as those of the financial report 2007. Information in this report
is based on unaudited figures.