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MKS Announces Third Quarter Fiscal 2010 Results and Quarterly Dividend
By Benzinga Staff
February 23, 2010 1:51 PM
February 23, 2010 1:51 PM
WATERLOO, ONTARIO--(Marketwire - Feb. 23, 2010) - MKS Inc. (MKS) (TSX:MKX) the global application lifecycle management (ALM) technology leader, today announced its financial results for the third quarter of fiscal year 2010 and a quarterly cash dividend of US$0.15 per share. All amounts are reported in US dollars under United States Generally Accepted Accounting Principles.
Financial & Operational Highlights:
Q3 2010 (compared with Q3 2009)
- Total revenue of $15.3 million compared to $13.2 million, an increase of
16%
- License revenue increased 34% to $5.0 million from $3.7 million
- Maintenance revenue increased 11% to $7.8 million from $7.0 million
- Service revenue increased 3% to $2.6 million from $2.5 million
- Operating income increased to $1.7 million compared to $0.4 million, a
310% increase
- Net income increased 240% to $1.1 million or $0.11 per share compared to
$0.3 million, or $0.03 per share.
Closing cash balance at January 31, 2010 was $22.1 million, a $5.0 million increase from the $17.1 million balance at April 30, 2009. During the quarter, MKS paid $1.5 million in dividends.
"We were pleased to see strong growth in our ALM licensing this quarter" said Michael Harris, President and CEO. "As the need for comprehensive management of software engineering and quality processes for advanced manufacturing customers becomes more and more evident, and as capital budgets are restored from the depths of the recession we continue to increase our investment in field operations as the driver to license revenue growth."
"We continue to see steady improvement in financial measures across the board" said Philip C. Deck, Executive Chairman. "Along with rebounding licensing, we saw steady improvements in services and maintenance contributing to strong year to date profitability."
MKS also announced today that its Board of Directors has declared a quarterly cash dividend of US$0.15 per share on the Company's outstanding common shares in accordance with its dividend policy.
The cash dividend on MKS common shares will be payable on April 15, 2010 to shareholders of record at the close of business on March 31, 2010. The dividend is designated as an eligible dividend for the purposes of section 89 of the Income Tax Act (Canada).
Financial Review
Total revenue for the third quarter of fiscal 2010 was $15.3 million, up 16 percent from $13.2 million for the third quarter of fiscal 2009. Net income for the third quarter of fiscal 2010 increased 240 percent to $1.1 million, or $0.11 per share, compared to $0.3 million or $0.03 per share in the third quarter of fiscal 2009.
Nine month revenues for fiscal 2010 increased 2 percent to $45.7 million compared with revenue of $44.8 million for the same period in fiscal 2009. Nine month net income was $4.1 million, or $0.41 per share, an increase of 80 percent from the net income of $2.3 million, or $0.23 per share, for the same period in fiscal 2009.
Third quarter fiscal 2010 ALM revenues were $13.3 million, up 15 percent from ALM revenues reported in the third quarter of fiscal 2009. Nine month ALM revenues for fiscal 2010 increased 4 percent to $40.7 million from $39.2 million for the first nine months of fiscal 2009.
Outlook
MKS is committed to profitable organic growth in its primary operating segment, ALM. The Company strives to maintain a balance between increasing current shareholder returns and funding research and field force investments for long-term growth. The Company is making investments in its field force to meet anticipated increases in demand as the mandates received from major customers mature and the availability of capital to fund those mandates improves.
The Company expects a long term decline in the Interoperability business of approximately 10 percent annually.
Conference Call Details
The Company will hold a conference call February 23, 2010 at 4:00 p.m. EST to discuss its third quarter performance. Interested parties may access the call by dialing 800-215-1640 or 1-416-620-2418. A digital recording of the call will be available for seven (7) days following the call and may be accessed by dialing 800-558-5253 or 416-626-4100 and by entering reservation #21442609.
About MKS
MKS Inc., the global application lifecycle management (ALM) technology leader, enables software engineering and IT organizations to seamlessly manage their worldwide software development activities. With its flagship product, MKS Integrity, MKS offers support for all software development activities through a single enterprise application, resulting in better global collaboration and higher productivity. MKS supports customers worldwide with offices across North America, Europe and Asia. For more information about MKS, visit our Web site at http://www.mks.com.
Copyright (C) 2010 MKS Inc. MKS and MKS Integrity are trademarks of MKS Inc. All other trademarks mentioned in this release are the property of their respective owners.
This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions are intended to identify forward-looking statements. Such statements reflect the Company's current views with respect to future events and are subject to such risks and uncertainties. Although the Company believes the expectations represented by such forward looking statements are reasonable, there can be no assurance that those expectations will prove to be correct. Many factors could cause our actual results to differ materially from the statements made including those factors detailed from time to time in filings made by the Company with Canadian securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. The Company does not intend and does not assume any obligation to update these forward-looking statements.
MKS Inc.
Consolidated Balance Sheets
(US dollars, thousands, unaudited)
January 31 2010 April 30 2009
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Assets:
Current assets:
Cash and cash equivalents $ 22,142 $ 17,098
Accounts receivable, net of allowances for
doubtful accounts
of $118 (April 30, 2009 - $89) 7,743 7,404
Deferred income taxes 1,378 1,378
Deferred gain on forward contracts 63 83
Prepaid expenses and other assets 1,329 1,152
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Total current assets 32,655 27,115
Fixed assets 3,889 4,252
Intangible assets 17 69
Goodwill 2,424 2,424
Deferred income taxes 1,400 3,243
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Total assets $ 40,385 $ 37,103
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Liabilities and shareholders' equity:
Current liabilities:
Accounts payable $ 973 $ 1,083
Accrued liabilities 3,287 2,566
Income taxes payable 407 657
Deferred revenue 16,698 16,170
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Total current liabilities 21,365 20,476
Shareholders' equity:
Share capital 56,926 55,627
Accumulated other comprehensive loss (1,067) (2,076)
Accumulated deficit (36,839) (36,924)
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Total shareholders' equity 19,020 16,627
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Total liabilities and shareholders' equity $ 40,385 $ 37,103
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MKS Inc.
Consolidated Statements of Operations
(US dollars, thousands, except per share data, unaudited)
Three months ended Nine months ended
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January 31 January 31 January 31 January 31
2010 2009 2010 2009
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Revenue:
License $ 4,963 $ 3,702 $ 14,508 $ 16,283
Maintenance 7,750 6,980 22,962 21,066
Service 2,599 2,521 8,259 7,487
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15,312 13,203 45,729 44,836
Operating expenses:
Cost of product and
support 1,433 1,242 3,803 3,679
Cost of service 1,865 1,628 5,427 5,371
Sales and marketing 4,976 4,782 14,963 16,038
Research and development 3,010 3,182 8,944 9,310
General and
administrative 2,145 2,022 6,051 5,852
Foreign exchange (gain)
loss 16 (213) (209) 340
Stock-based compensation 153 142 504 721
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13,598 12,785 39,483 41,311
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Operating income 1,714 418 6,246 3,525
Interest income, net 2 11 9 72
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Income before income
taxes 1,716 429 6,255 3,597
Income tax provision:
Current 124 (122) 264 (88)
Deferred 486 226 1,867 1,388
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Income tax provision 610 104 2,131 1,300
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Net income $ 1,106 $ 325 $ 4,124 $ 2,297
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Earnings per share:
Basic $ 0.11 $ 0.03 $ 0.41 $ 0.23
Diluted $ 0.11 $ 0.03 $ 0.41 $ 0.23
Weighted average number of
shares outstanding 10,110 9,933 10,077 10,105
Diluted weighted average
number of shares
outstanding 10,240 9,940 10,189 10,172
MKS Inc.
Consolidated Statements of Cash Flows
(US dollars, thousands, unaudited)
Three months ended Nine months ended
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January 31 January 31 January 31 January 31
2010 2009 2010 2009
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Cash flows provided by (used
for) operating activities:
Net income $ 1,106 $ 325 $ 4,124 $ 2,297
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation of fixed assets 355 358 1,038 1,019
Amortization of intangible
assets 9 22 52 65
Stock-based compensation 153 142 504 721
Deferred income taxes 486 226 1,867 1,388
Loss on disposal of fixed
assets 36 21 110 62
Change in operating assets
and liabilities:
Accounts receivable (156) 2,845 (339) 7,278
Prepaid expenses and other
assets (21) (21) (177) 237
Accounts payable (7) (1,052) (110) (23)
Accrued liabilities 382 (388) 721 (2,441)
Income taxes payable 287 (131) (250) (289)
Deferred revenue 2,172 3,881 528 1,160
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Net cash provided by
operating activities 4,802 6,228 8,068 11,474
Cash flows (used for)
investing activities:
Purchase of fixed assets (292) (235) (744) (935)
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Net cash (used for)
investing activities (292) (235) (744) (935)
Cash flows provided by (used
for) financing activities:
Proceeds on issuance of
common shares 154 71 795 514
Cash paid for shares
repurchased for
cancellation - - - (3,534)
Payment of dividends (1,518) (995) (4,039) (3,035)
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Net cash (used for)
financing activities (1,364) (924) (3,244) (6,055)
Effect of exchange rate
changes on cash and cash
equivalents (13) 570 964 (1,163)
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Change in cash and cash
equivalents balances 3,133 5,639 5,044 3,321
Cash and cash equivalents,
beginning of period 19,009 10,615 17,098 12,933
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Cash and cash equivalents,
end of period $ 22,142 $ 16,254 $ 22,142 $ 16,254
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