Kofax Releases an Interim Management Statement for the First Quarter of its 2010 Financial Year: Financial News

Kofax Releases an Interim Management Statement for the First Quarter of its 2010 Financial Year
Thursday November 5, 2:00 am ET

BASINGSTOKE, England--(BUSINESS WIRE)--Kofax plc (LSE:KFX - News), the leading provider of document driven business process automation solutions, releases an Interim Management Statement for the first quarter of its 2010 financial year, which includes the period from 1 July to 30 September 2009 and the results of operations of 170 Systems, Inc. since Kofax’s acquisition of that company in early September 2009.

Kofax’s 2010 financial year started positively with total revenues in line with and adjusted operating profit ahead of our expectations. Software business revenues were higher than expected due to strong service revenues and offset lower than expected product distribution revenues in the hardware business. Sales execution and achievement levels across all segments of the company’s software business were generally as expected and the Company continued to make good progress in executing its strategic initiatives.

Other than the decrease in cash resulting from Kofax’s acquisition of 170 Systems, there have been no significant changes in the Company’s financial position since 30 June 2009 and its balance sheet remains strong.

Reynolds C. Bish, Chief Executive Officer, commented: “I’m pleased to report that we made good progress and performed better than expected in our software business this past quarter. Market conditions have stabilized and show early signs of improving to a limited extent but continue to be challenging and difficult to predict. As a result and excluding the effect of the 170 Systems acquisition, which should contribute approximately $22m of revenues after acquisition accounting, we continue to expect low to mid single digit organic revenue growth in our software business this financial year.”

Finally, on 8 September 2009 the Company announced its intention to report Kofax’s future financial results in US dollars. To assist readers in the transition from Pounds Sterling to US dollar reporting, the Company has attached and is today posting US dollar based financial statements for the years ended 30 June 2009 and 2008 on the Investor relations page of its website at www.kofax.com/ir.

About Kofax

Kofax plc (LSE: KFX - News) is the leading provider of document driven business process automation solutions. For more than 20 years, Kofax has provided award winning solutions that streamline the flow of information throughout an organization by managing the capture, transformation and exchange of business critical information arising in paper, fax and electronic formats in a more accurate, timely and cost effective manner. Kofax solutions provide a rapid return on investment to thousands of customers in financial services, government, business process outsourcing, healthcare, supply chain and other markets. Kofax delivers these solutions through its own worldwide sales and service organizations, and a global network of more than 1,000 authorized partners in more than 60 countries throughout the Americas, EMEA and Asia Pacific.

“Kofax” is a registered trademark in the US, the EU and other countries. All other trademarks and registered trademarks belong to their respective owners.

Consolidated Income Statement

FY2009 H1 FY09 H2 FY09 FY2008 FY2007

USD USD USD USD USD

Revenue 298,195 154,474 143,721 340,691 309,702

Software 169,391 86,693 82,698 192,209 169,333

Hardware 128,804 67,781 61,023 148,482 140,369

Cost of sales 142,105 74,425 67,679 147,353 135,044

Software 39,068 21,670 17,398 30,987 22,856

Hardware 103,037 52,755 50,281 116,367 112,187

Gross profit 156,090 80,049 76,042 193,337 174,658

Software 130,323 65,022 65,302 161,222 146,477

Hardware 25,767 15,027 10,740 32,115 28,181

Operating expenses 133,514 68,722 64,792 174,491 157,617

Adjusted operating profit before 22,576 11,327 11,250 33,687 30,040

Amortisation of acquired intangible assets 4,408 2,083 2,325 4,629 4,463

Reduction in goodwill arising on the utilisation of previously unrecognised tax losses 0 0 0 0 201

Restructuring costs 5,455 0 5,455 9,639 6,185

Share-based payment expense 1,318 1,110 208 573 2,151

Operating profit 11,396 8,134 3,262 18,846 17,041

Share of result of associated undertakings 173 115 58 174 110

Finance income 1,432 1,306 126 2,265 2,630

Finance expense (1,008 ) (441 ) (567 ) (5,988 ) (228 )

Profit before tax 11,993 9,115 2,879 15,298 19,553

Tax expense 3,748 2,362 1,386 8,490 4,055

Profit after tax 8,245 6,752 1,492 6,808 16,076

Earnings per ordinary share

- Basic 10.0c 8.1c 1.9c 8.0c 17.6c

- Diluted 10.0c 8.1c 1.9c 7.8c 17.0c

- Adjusted basic 19.4c 9.1c 10.3c 28.9c 26.7c

- Adjusted diluted 19.4c 9.0c 10.4c 28.5c 25.9c

Consolidated Income Statement - Segmental Disclosure

FY09 H1 FY09 H2 FY09

USD USD USD

Software Revenue 169,391 86,693 82,698

Application Software Licenses 71,413 36,905 34,508

Application Software Services 76,115 37,738 38,377

OEM/POS 21,863 12,050 9,813

Hardware Revenue 128,804 67,781 61,023

Hardware Distribution 92,613 48,954 43,660

Hardware Services 36,191 18,827 17,363

Total Revenue 298,195 154,474 143,721

Cost of sales 142,105 74,425 67,679

Gross profit 156,090 80,049 76,042

Software 130,323 65,022 65,302

Hardware 25,767 15,027 10,740

Operating Expenses 133,514 68,722 64,792

Sales 56,568 28,144 28,425

Marketing 9,787 5,102 4,685

R + D 29,125 15,098 14,027

G + A 38,034 20,378 17,655

Adjusted operating profit before 22,576 11,327 11,250

Amortisation of acquired intangible assets 4,408 2,083 2,325

Restructuring costs 5,455 0 5,455

Share-based payment expense 1,318 1,110 208

Operating profit 11,396 8,134 3,262

Share of result of associated undertakings 173 115 58

Finance income 1,432 1,306 126

Finance expense (1,008 ) (441 ) (567 )

Profit before tax 11,993 9,115 2,879

Tax expense 3,748 2,362 1,386

Profit after tax 8,245 6,752 1,492

EBITA split

EBITA 22,576 11,327 11,250

Software 13,783 5,619 8,164

Hardware 8,793 5,708 3,086

Consolidated Balance Sheet

30.06.2009 31.12.2008 30.06.2008 30.06.2007

USD USD USD USD

Non-current assets

Intangible assets 137,500 115,734 140,074 136,399

Property, plant and equipment 9,809 10,065 9,341 7,321

Deferred tax assts 8,440 4,537 6,854 6,816

Investments 2,252 2,203 2,365 1,884

158,001 132,539 158,634 152,420

Current assets

Inventories 15,902 13,963 18,276 14,690

Trade and other receivables 95,623 77,144 80,324 73,855

Investments - current 348 596 453 357

Current tax assets 2,173 1,898 3,368 0

Cash and cash-equivalent 49,294 47,541 72,619 78,600

163,340 141,142 175,040 167,502

Total assets 321,341 273,681 333,674 319,922

Current liabilities

Trade and other payables 62,281 52,303 63,245 47,715

Deferred income - current 47,049 27,731 40,833 38,087

Other financial liabilities 2,531 2,203 3,073 2,161

Current tax liabilities 2,156 0 0 5,605

Provisions - current 5,531 2,780 5,413 5,513

119,548 85,017 112,564 99,081

Non-current liabilities

Other payables 3,051 2,888 3,936 5,597

Deferred income - non current 10,127 15,384 13,440 11,015

Deferred tax liabilities 10,274 8,552 9,543 5,078

Provisions - non current 717 0 0 0

24,169 26,824 26,919 21,690

Total liabilities 143,717 111,841 139,483 120,771

Net assets 177,624 161,840 194,191 199,151

Capital and reserves

Called up share capital 4,064 3,264 4,477 4,456

Share premium account 3,874 2,797 2,732 118,201

CTA / retained earnings 197,286 176,746 206,664 73,791

Merger reserve 2,835 2,483 3,424 3,442

ESOP shares (14,455 ) (11,239 ) (14,993 ) (1,052 )

Treasury shares (15,980 ) (12,211 ) (8,113 ) 0

Minority interests - equity 0 0 0 313

Shareholders' equity
177,624 161,840 194,191 199,151

Consolidated Cash Flow Statement

FY 09 H1 FY09 H2 FY09 FY08 FY07

USD USD USD USD USD

Cash flows from operating activities

Profit before tax 11,993 9,115 2,879 15,298 19,553

Share results of associated undertakings (173 ) (115 ) (58 ) (174 ) (110 )

Finance income (1,432 ) (1,306 ) (126 ) (2,265 ) (2,630 )

Finance expense 1,008 441 567 5,988 228

Depreciation and amortisation 8,702 4,111 4,591 9,560 9,155

Share-based payment expense 889 1,110 (220 ) 573 2,151

Reduction in goodwill arising on the utilisation of
previously unrecognised tax losses
0 0 201

Movement in provisions 5,211 1,139 4,072 2,686 4,271

Gain/(loss) on disposal of property, plant and
equipment
43 3 40 (124 ) (110 )

Movement in working capital (11,436 ) (11,091 ) (345 ) 9,101 (1,455 )

Cash generated from operations before restructuring 14,805 3,407 11,400 40,643 31,254

Payments under restructuring (5,214 ) (2,676 ) (2,538 ) (8,265 )

Cash generated from for operations 9,591 731 8,862 32,378 31,254

Income tax paid (1,926 ) (1,830 ) (97 ) (14,358 ) (6,297 )

Net cash inflow/(outflow) from operating activities 7,665 (1,099 ) 8,765 18,020 24,957

Cash flows from investing activities

Purchase of property, plant and equipment,
licences and similar rights
(12,508 ) (6,497 ) (6,011 ) (7,375 ) (3,705 )

Disposal of property, plant and equipment,
licences and similar rights
153 14 139 397 298

Acquisition of a subsidiary, net of cash acquired (2,681 ) (2,945 ) 264 (1,445 ) (2,085 )

Acquisition of subsidiaries, net of cash disposed 0 0 0 (1,251 ) (3,253 )

Disposal of subsidiaries 0 0 (36 ) (2,829 )

Sale of non-current investment 0 0 0 0 172

Movement in long term loans to non-current investments 0 0 0 0 23

Interest received 944 2,498 (1,554 ) 1,494 2,362

Net cash (outflow)/inflow from investing activities (14,092 ) (6,930 ) (7,162 ) (8,216 ) (9,017 )

Cash flows from financing activities

Issue of share capital 1,247 1,253 (5 ) 3,169 4,888

Increase/(decrease) in short term borrowings 859 (474 ) 1,333 (355 ) (282 )

Share buy back (7,023 ) (7,538 ) 515 (22,493 ) 0

Dividends paid to shareholders (2,004 ) (2,378 ) 185 (3,789 ) (3,309 )

Dividends paid to minorities interest 0 0 0 (158 ) 0

Capital element on finance lease payments 0 (5 ) 5 0 0

Currency swap 1,621 0 1,621 (3,961 ) (12 )

Interest paid (305 ) (117 ) (188 ) (283 ) (201 )

Net cash outflow from financing activities (5,605 ) (9,259 ) 3,466 (27,870 ) 1,084

Net (decrease)/increase in cash and cash-equivalents in the period (12,032 ) (17,289 ) 5,067 (18,066 ) 17,023

Cash and cash-equivalents at start of the period 70,034 70,034 45,353 76,943 57,150

Exchange rate effects (9,935 ) (7,392 ) (2,353 ) 11,156 3,136

Cash and cash-equivalents at the end of the period 48,067 45,353 48,067 70,033 77,309

Cash and cash-equivalents consists of:

Cash and cash-equivalents 49,294 47,541 49,294 72,618 78,600

Overdrafts (1,227 ) (2,188 ) (1,227 ) (2,585 ) (1,291 )

48,067 45,353 48,067 70,033 77,309

Foreign Exchange Rates

FY09 H1 FY09 FY08 FY07

Average rate Closing rate Average rate Closing rate Average rate Closing rate Average rate Closing rate

USD/GBP 0.62 0.61 0.58 0.69 0.50 0.50 0.50 0.50

USD/EURO 0.73 0.71 0.71 0.71 0.68 0.63 0.68 0.63

USD/CHF 1.12 1.08 1.12 1.06 1.11 1.02 1.11 1.02