Island Pacific (AMEX:IPI), a leading global provider of multi-channel application software technology and services for the retail industry, announced fiscal results for the third quarter ended December 31, 2003.
For the third fiscal quarter ended December 31, 2003, the Company reported revenues of $5.1 million compared to the $7.1 million reported in the same period of the prior fiscal year. For the three months ended December 31, 2003, the company reported a loss from continuing operations of ($346,000), compared to income from continuing operations of $391,000 for the same period of the prior fiscal year. The Company reported a net loss available to common stockholders of ($530,000) or ($0.01) per diluted share versus net income of $131,000 or $0.01 per share for the year earlier quarter. For the fiscal 2004 period, the company recorded EBITDA of $438,000 compared to $1.6 million in the same period of the prior fiscal year. The Company reported gross profit of $3.7 million for the period ended December 31, 2003 versus $4.9 million for the year-earlier period.
For the nine months ended December 31, 2003, the Company reported revenues of $17.3 million compared to $15.8 million reported for the same period last year; EBITDA of $3.4 million versus an EBITDA of $581,000 and income from continuing operations of $638,000 compared to a loss from continuing operations of ($4.0) million for the same period last year.
"We are disappointed with the results of our sales and marketing initiatives and the fact that several significant orders we expected to receive in the third quarter were delayed," said Harvey Braun, Island Pacific's Chairman and CEO. "Our results for the quarter were somewhat impacted by the acquisition and integration of Page Digital and the negotiations to acquire Retail Technologies International (RTI), but we believe that these combinations will make Island Pacific a formidable provider of technology solutions to small and mid-sized retailers in the future as well as strengthen our management team. Our expectations are that with the integration of Page Digital and RTI and their corresponding sales and marketing teams, our ability to penetrate new and existing markets will significantly enhance our ability to sell and market all of our products more effectively. In fact, the response from RTI’s reseller channel has exceeded our expectations for potential sales of IP Express.”
“Next week, over 40 RTI distribution partners will be attending training at our Irvine facility, which will enable them to not only sell IP Express, but a number of our alliance products as well. We are dedicating a considerable amount of time integrating products and personnel so that the transition for our customers and resellers will be as seamless as possible. We should also benefit from a rationalization of overhead. I am pleased to report that the customer response, as demonstrated at our recent User's Conference, was overwhelmingly positive to our strategic direction.”
“The strategy that we have been executing over the last 12 months has now enabled us to become a fully integrated multi-channel retail solutions provider to small through large specialty retailers,” continued Mr. Braun. “While revenue growth has been slower than expected, we are confident that we have all of the pieces in place to generate significant revenue and earnings growth over time. We believe in the coming months that customers, partners and shareholders will see the power of this combination.”
Some of the highlights of the third quarter included: · Acquisition of Page Digital. Island Pacific announced the acquisition of Page Digital, a leading provider of open systems-based end-to-end multi-channel commerce solutions. The acquisition closed in early February. Each company has already successfully cross-marketed products to the other company’s respective client-base. · Letter of Intent. Subsequent to the end of the third quarter, the Company announced that it had entered into a Letter of Intent to acquire RTI. RTI is a leading provider of retail management store solutions, via an international network of resellers, to small through mid-tier retailers. Shortly after the announcement, Island Pacific signed its first customer, Tadashi Shoji and Associates, Inc. Tadashi is an upscale women’s apparel company. · New customer wins. The Perfume Shop, a leading European retailer, signed a contract to license Island Pacific's Merchandising Solution product running on an IBM iSeries platform, as well as implementation services and client training. · Signing of key value added reseller. The company announced the signing of an agreement with i2 Technologies Inc., a leading provider of end-to-end supply chain management solutions. Island Pacific will market, sell, install, interface to, and support i2's Merchandise Planning, INFOREM Forecasting and Replenishment, and Demand Profiling solutions. · New product sales. We had a positive response to newly released IP Viewpoint, a report generating tool based on the iSeries platform. Additionally, many new customers deployed IP Synaro WebStore, providing real-time integration between online storefront and fulfillment systems. · Improved balance sheet. The Company cancelled a convertible note with a face value of $1.4 million and warrants to purchase 2.5 million shares of the company’s common stock held by Toys "R" Us, in accordance with an agreement which provided, inter alia, for providing software and services to the toy retailer.
Business Outlook Island Pacific expects to report fourth quarter revenue, for the period ending March 31, 2004, of $7 to $8 million, and to generate net income of $0.02 to $0.03 per diluted share. This outlook includes revenue from the Page Digital acquisition, but excludes any revenue from RTI.
The company's executives will hold a conference call. The conference call will take place at 9 a.m. EST. Interested participants should call 800-867-0938. There will be a playback available as well, beginning two hours after the call. To listen to the playback, please call 800-405-2236. Use pass code 569817# for the replay. Web users may hear the conference via the internet by going to www.actioncast.acttel.com and entering the event id 20431.
About Island Pacific For more than 25 years, Island Pacific has developed a reputation for delivering high-quality, high-reliability software to the retail industry. Recently, the company has transformed itself into the low-cost, high-value provider of retail enterprise solutions by developing breakthrough technologies, and by partnering with leading consulting organizations to provide next-generation services. In addition, Island Pacific leverages its years of experience with emerging and established retailers to craft creative solutions tailored for each customer’s needs. As a result, Island Pacific is the definitive resource for scalable, flexible and affordable solutions for retailers around the world.
With nearly 200 customers, Island Pacific and its solutions are represented in more than 30,000 stores worldwide, and manage more than 1.5 billion transactions annually. Founded in 1978, the company is headquartered in Irvine, California, and has offices in the United States and the United Kingdom. For more information, please visit www.islandpacific.com.
Certain statements contained in this news release regarding matters that are not historical facts are forward-looking statements. These statements relate to future events or the Company's future performance. These statements are only predictions. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the risk factors listed in the Company's (SVI) Form 10-KA for the fiscal year ended March 31, 2003 and other risk factors identified from time to time in the Company's filings with the Securities and Exchange Commission. IPI undertakes no obligation to release publicly any revisions to the forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events.
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