Danka Business Systems PLC Reports Fiscal 2008 Results16 Jul, 2008
Danka Business Systems PLC Reports Fiscal 2008 Results
ST. PETERSBURG, FL (July 15, 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 million.
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 million.
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.