Transics International NV (EURONEXT Brussels: TRAN), today announced its results for FY 2008. The financial information reported in this release is presented in Euro and has been prepared in accordance with the recognition and measurement criteria of IFRS.
- Total revenue reached €43,679k, an increase of 0.4% compared to the same period last year.
- Gross profit amounted to €30,085k or 68.9% of revenue, compared to €29,718k and 68.3% of revenue for the same period last year. This represents an increase in gross profit of 1.2% over the same period last year.
- EBITDA amounted to €8,915k or 20.4% of revenue, a decrease of 32.3% compared to the same period last year.
- Operating Result amounted to €5,700k or 13.0% of revenue, a decrease of 46.8% compared to the same period last year.
- A net result of €2,175k for FY2008 or €0.27 basic earnings per share compared to €0.75 last year.
- New product suite launched in Q2 and Q3 including completely revamped on-board computer incorporating numerous new features.
- Milestone of 57.700 total units shipped end of the year.
- First major customer wins in several new European markets including Italy, Romania and Czech Republic.
- Sharp loss of sales momentum in Q3 resulting from the lack of availability of leasing for customers and the general slowdown of the economy.
- Business activity stabilised in Q4 with a slight quarter-on-quarter increase in revenues.
- Cost of international roll-out caused lower EBITDA margin.
- Cost reduction programme initiated in Q4.
- Revenue visibility is limited to the near term. Management expects Q1 revenues to remain in line with the run-rate achieved during the second half of 2008, or approximately €9m.
- Assuming no further deterioration in the transport sector and no recovery in the leasing market, Management anticipates the level of activity for 2009 to remain in line with the level observed during the second half of 2008.
- Cost reduction measures have been implemented during Q4 2008 and will continue during Q1 2009.
Consolidated Results 2008
Consolidated key figures
|Transics International NV
|Basic earnings per share||0.27||0.75|
Consolidated income statement
|Transics International NV
|Cost of sales (-)||(13,594)||(5,613)||(7,981)||(13,801)|
|Research and development expenses||(2,151)||(1,184)||(967)||(1,454)|
|Sales and marketing expenses||(16,316)||(8,169)||(8,147)||(11,607)|
|General and administration expenses||(5,845)||(2,980)||(2,865)||(5,446)|
|Other Operating Income/(expenses)||(73)||(93)||20||(495)|
|RESULT BEFORE TAX||3,768||(1,054)||4,822||6,886|
|Tax income (expense)||(1,593)||(62)||(1,531)||(1,672)|
Consolidated revenue for FY 2008 reached €43,679k, representing a 0.4% growth over the same period last year.
After a strong start of the year, which saw sales increase by 34% in the first half of 2008 over the same period in 2007, Transics experienced a sharp slowdown in sales starting in August. This slowdown is attributable to the lack of availability of lease financing for transport companies and the general slowdown of the economy. Sales in the second half of 2008 were 25% below the same period in 2007.
The solid base of recurring revenues of the company has served as a shock absorber as evidenced by the change in the revenue mix of Transics observed during FY 2008. Product sales accounted for 67% of total revenue, recurring sales for 28% and field services for 5%, compared with 76%, 20% and 4% respectively in 2007.
- Gross profit
Gross profit reached €30,085k or 68.9% of revenue in FY 2008, representing an increase over the same period last year (€29,718k and 68.3% of revenue). Following a recommendation of its audit committee and after approval of its statutory auditors, the company has amended its accounting treatment of hosting and telecom costs. These costs used to be entirely treated as operating expenses; starting with financial year 2008, the company will include in its cost of sales the hosting and telecom costs associated with the delivery of recurring revenues. Under the previous accounting rules, gross margin would have been 76,1% in 2008 to be compared to 73% in 2007.
- Operating expenses
Operating expenses increased from €18,507k in FY 2007 to €24,312k in FY 2008. This 31% increase reflects the need for the company to develop its infrastructure and its strategy to invest in sales and marketing to support its international expansion. Sales and Marketing expenses have increased by 40% over the same period last year. Between January 1, 2008 and December 31, 2008 the sales and marketing headcount increased by 26. General and Administration expenses have grown by 7.3%.
- Financial income/expenses
Financial charges decreased from €4,192k in 2007 to €2,198k in 2008 as a result of the substantial reduction of the financial debt from €28,189k as of year-end 2007 to €9,994k as of year-end 2008 and thanks to the non-recurrence of the one-off effect of the recognition in 2007 of the charges associated with the MBO of the company in 2006.Financial charges are attributable to a net interest expense of €1,539k and to the €659k impact of the change in market-to-market value of the interest rate swaps. These interest rate swaps cover two thirds of the debt of the company. As of year-end the 3-month EURIBOR was below the fixed rate of these floating-fixed rate swaps of 4.80% and 4.77% and, consequently, they are out-of-the money and carry a negative value. The company has no intention at present to unwind or buy back these swaps given that any mark-down has no cash effect.
- Income taxes
Effective tax rate amounts to 38% of net income before taxes. The tax asset of Transics Deutschland GmbH, amounting to €322k, has not been recognised as there is no history of profit making for this entity.
- Net result
Net result for 2008 was €2,175k, a 58% reduction compared to 2007 net result.
|Transics International NV
|Property, plant and equipment||3,307||3,165||3,119|
|Deferred tax assets||1,545||1,406||1,634|
|Non Current Assets||45,702||45,162||44,582|
|Cash and cash equivalents||2,930||3,827||17,762|
|Other current assets||84||139||65|
|Result of the year||2,175||3,291||5,214|
|Deferred tax liabilities||1,560||1,586||1,720|
|Non Current Liabilities||9,947||13,463||27,130|
|Current interest-bearing borrowings||2,453||90||3,743|
|Other current liabilities||239||194||296|
|TOTAL EQUITY AND LIABILITIES||68,749||68,618||82,414|
- Non Current Assets
During 2008, €2,952k of development costs was capitalised.
- Current Assets
Whilst Transics managed to considerably improve its receivables (excl VAT) position from 107 days to 77 at 2008 year-end, inventory at 2008 year-end stood at the unusually high level of 213 days of cost of sales compared to 69 days as of December 2007. This excess inventory stems from two main factors: the introduction of a new hardware platform in September 2008, which temporarily creates the need to carry inventory for two product lines, and the unanticipated slowdown in sales observed during the second half of the year.
- Shareholders’ Equity
Profit incorporated amounted to €2,175k.
- Non current liabilities
As of December 31, 2008, the non-current bank borrowings amounted to €7,542k.
- Current liabilities
At year-end 2008, trade payables (excl VAT) stood at 103 days compared to 99 days last year.
|Transics International NV
|Cash and cash equivalents, beginning balance||17,762||8,548|
|Profit of the year||2,175||5,214|
|Interest income (-)||(266)||(362)|
|Income tax expense (income)||1,593||1,672|
|Profit (loss) from operations||5,700||10,716|
|Depreciation and amortisation||3,111||2,444|
|Writ off inventory||31||14|
|Increase (decrease) in provisions||(67)||88|
|Other non cash adjustments||(659)||(252)|
|Non cash adjustments||2,489||2,294|
|Decrease (increase) in inventories||(3,883)||(833)|
|Decrease (increase) in trade and other receivables||3,702||(7,195)|
|Increase (decrease) trade and other payables||2,986||4,104|
|Other increase (decrease) in working capital||0||0|
|Decrease (increase) in working capital||2,805||(3,924)|
|Income tax (paid)/refunded||(2,355)||(3,010)|
|Cash flows relating to operations||8,639||6,076|
|Internally developed R&D||(1,878)||(1,209)|
|Externally developed R&D||(1,074)||(584)|
|Purchases of other intangibles||(451)||(359)|
|Purchases of property, plant and equipment||(1,023)||(745)|
|Government grants received||0||0|
|Cash flows relating to investing activities||(4,038)||(8,998)|
|Repayment of finance leases (-)||(105)||(105)|
|Repayment of loans (-)||(18,480)||(36,842)|
|Bank overdrafts increased (decreased)||800||0|
|Interest paid (-)||(1,568)||(3,590)|
|Cash flows relating to financing activities||(19,432)||12,135|
|Net increase in cash and cash equivalents||(14,832)||9,213|
|Cash and cash equivalents, ending balance||2,930||17,761|
« The statutory auditor of Transics International NV, BDO Atrio Bedrijfsrevisoren Burg. Ven. CVBA, represented by Veerle Catry, has confirmed that his audit work, which is substantially complete, has not revealed any significant matters requiring adjustments of the 2008 consolidated income statement, balance sheet and cashflow statement included in this press release. »
Transics International NV, established in 1991, develops and commercialises high-end fleet management solutions for the transport and logistics sector. Thanks to many years of experience, thorough R&D efforts and an intensive focus on the customer experience, Transics has become the leading European player in its sector. At the start of 2007, the company acquired DIS (France), a specialist in IT solutions for driving time management based on tachographs. With this takeover, Transics was able to extend its product offering. In addition to its headquarters in Ypres (Belgium), Transics is active throughout Europe. The company has been quoted on the stock exchange (Euronext Brussels) since June 2007.