Record year Growth on all levels

Transcription

1 IMAGE RECOGNITION INTEGRATED SYSTEMS GROUP sa (abbreviated I.R.I.S. Group ) Results of Fiscal Year 2004 Record year Growth on all levels Sales +9.28% Income from operations (EBIT) % Net current income (before goodwill) % Net profit % Proposed dividend: 0.35 per share (+40%) 31/12/ /12/ /12/2002 CONSOLIDATED RESULTS ( ) Sales 46,695,918 42,729,660 41,646,974 Gross margin 28,156,251 24,750,196 24,175,791 Cash flow from operations (EBITDA) 4,155,805 3,547,743 3,073,198 Income from operations (EBIT) 3,334,977 2,708,942 2,047,759 Financial income before goodwill -466, , ,851 amortization Amortization of goodwill on acquisitions -766, , ,237 Net financial income -1,233,742-1,509,313-1,687,088 Current income before income tax 2,101,235 1,199, ,671 Net current income before goodwill 2,139,531 1,493, ,049 Extraordinary income (1) -119, ,423-1,864,572 Income before income tax 1,981,959 1,085,206-1,503,901 Income tax -728, , ,859 Net result (after income tax) 1,253, ,072-1,950,760 Cash flow (2) 3,616,109 2,426,261 1,251,413 CONSOLIDATED BALANCE ( ) Net equity 25,738,761 24,735,913 24,422,029 Net cash (3) 7,372,699 2,752, ,917 KEY FIGURES PER SHARE ( ) Number of shares at end of fiscal year 1,495,668 1,483,234 1,480,791 Income from operations (EBIT) per share Net current income per share Net income per share Cash flow per share Net equity per share Dividend per share (4) (1) In 2002, I.R.I.S. exceptionally amortized a major part of the goodwill for the acquisition of Amos; an extraordinary reserve (of 587,487 ) was created that year because of litigation in the USA. (2) Net income increased by amortizations, depreciations and provisions. (3) Available cash + investments - financial debt. (4) For the year 2004 we mention the dividend as we submit it to the approval of the annual general meeting. I.R.I.S. Group sa Notice of the results for the Fiscal Year 2004 Press release 1

2 The activity of I.R.I.S. I.R.I.S. is a major international player that handles the processing of the life cycle of electronic documents think of scanning and indexing, intelligent document recognition, the establishment of filing plans, the consulting, managing, searching, archiving and storing of documents. I.R.I.S. is a hi-tech company that dedicates substantial resources to the development of proprietary technology, specifically for the recognition of printed text (in 118 languages, amongst others Russian, Greek, Hebrew, Chinese, Japanese and Korean), for the recognition of handwritten text, the intelligent recognition of forms, invoices, banking documents and incoming correspondence. I.R.I.S. has signed numerous license agreements (OEM contracts) and partnerships for its technologies and products with such key IT companies as HP, Kodak, Apple, Samsung, Panasonic, Microsoft, Fujitsu, Plustek, LaserFiche etc. I.R.I.S. also develops custom solutions that combine intelligent document recognition (IDR) with electronic document management (EDM). The project teams design and develop integrated applications; to optimize the power of the installed application, these can include scanning and character recognition (OCR), automated form reading, recognition of invoices, the generation of electronic press reviews, electronic document management and content management, archiving and infrastructure (scanners, servers and storage). I.R.I.S. handles all software and hardware components and takes care of any services, starting with the system analysis and design of the architecture of a solution up to the operational start-up of a site, over the custom development, installation and set-up, the education of operators and users, the maintenance and after-sales support. I.R.I.S. has established an international presence with subsidiaries in France, the Grand- Duchy of Luxembourg and the United States of America. Almost 20% of the company s turnover is generated by the development and sales of office products that address the occasional and corporate user office automation or professional OCR software, pen scanners, business card readers and recognition of invoices. These office products are sold worldwide through license agreements, the IT distribution channels, Internet e-shops and VARs ( Value-Added Resellers ). More than 80% of the sales figure originates with professional applications developed for large accounts enterprises, government agencies and international institutions. I.R.I.S. is a preferred partner on the various home markets its covers thanks to the experience of its consultants, developers, documentalists, project leaders and system engineers. Repeating the objectives for 2004 Summary of the results for the fiscal year I.R.I.S. strategy is to make the company a major player on the Document to Knowledge market worldwide. The specific objectives of the year 2004 were: Strengthen organic growth and increase the resources of those teams with a strong potential for growth. Integrate the team of Omnis ECMS, a business that was acquired by I.R.I.S. in January 2004: take over the client roster and search for synergies that allow to explore new markets. Maintain the considerable R&D effort in character recognition and document management and bring major new products to market. Cost-control effort: improve the company s organization and streamline the teams to increase productivity. Improve the nominal and relative gross margin: create new customers and give priority to added value. I.R.I.S. Group sa Notice of the results for the Fiscal Year 2004 Press release 2

3 Improve the profitability and give priority to the bottom-line. Analyzing the results of the fiscal year 2004 Higher sales and gross margin The increase (by 9.28%) of the company s sales figure in 2004 takes places in the midst of a moderate revival of the IT market. The gross margin increased to 60.3% (vs % in 2003). The group s gross margin was 28,156,251 in 2004 (which constitutes a 13.76% increase). For the activity professional solutions, the gross margin on the various local markets went up to 21,578,668 (a 9.89% increase). I.R.I.S. continues its sales strategy as a one-stop shop by executing projects for enterprises and government agencies that cover all aspects consultancy, development, supply of software and hardware, support and maintenance. In 2004, the component licenses and services (that generates large added value) grew faster than the supply of hardware. The gross margin for the office products was 6,577,583 (a 28.61% increase). This fast growth rhythm manifested itself in both Europe and the United States (where the continuing weakness of the dollar depressed the results expressed in euro). The year 2004 was marked by a record number of product launches, the renewed confidence of large IT companies and an ever growing installed base of users. The turnover of the activity of Omnis ECMS the business of this Luxemburg company was acquired on January was 2,103,298 in 2004 (about 4.5% of the group s overall sales). The contribution of Omnis ECMS to the group s gross margin was 1,653,216 (5.87% of the group s gross margin). Strong growth of the cash flow and the income from operations The income from operations soared to 3,334,977 (a 23.11% increase). The cash flow from operations (EBITDA) increased by 17.14% to 4,155,805. This strengthens the group s cash position (see below). Substantial improvement of the financial income The amortization of the goodwill on acquisitions was 766,886. The further downfall of the dollar in 2004 caused some exchange losses and negative conversion differences to the amount of 188,993 (compared to 351,513 in 2003). An active management of the available cash allowed to decrease the interests and expenses for financial institutions (107,011 in 2004 vs. 200,155 in 2003); the revenue from investments went up somewhat (from 16,109 to 40,504 ). Very limited impact of extraordinary income For the year 2004, we record an extraordinary loss of 119,276. This loss was mainly caused by: - Direct expenses caused by the move of I.R.I.S. France: 76,293 - Direct expenses caused by the acquisition of Omnis ECMS: 17,886. Very strong increase of the net profit The net profit soared to 1,253,369 (a 97.05% increase). The average tax rate (income tax/profit before income tax) is 36.76%. I.R.I.S. Group sa Notice of the results for the Fiscal Year 2004 Press release 3

4 Healthy balance sheet The company disposes of a strong solvency and an equally strong cash position: - Ratio net equity/total balance: 55.72% - Ratio current assets/current liabilities (short-term debt with maturity less than 1 year): 1,75 I.R.I.S. has no long-term debt (with a maturity over 1 year); the company has strengthened its liquidity once more. The net cash position (available cash + investments financial debt) is 7,372,699 - a 4.6 million euro improvement compared to January The company still disposes of a 12 million euro credit line (to be used as roll-over credit), 8.75 million euro of which cannot be revoked before mid Commenting the activity Major events of 2004 When we discuss I.R.I.S. as a software developer, we see a record number of products launches in the year These products were developed by the company s R&D teams; generally speaking, they are entirely part of I.R.I.S. intellectual property. The following product introductions should be mentioned: o IRIS Capture for Invoices: the first flexible solution for scanning and recognizing suppliers invoices automatically. This solution addresses both the SME and the large account ; it is characterized by its user-friendliness (one does not have to design templates for the invoices) and will be sold internationally by I.R.I.S. o IRISCapture 6: a new release of I.R.I.S. solution for form and document reading. This version uses such technologies as the intelligent sorting and form recognition in many new languages, and processes electronic forms as it already did with paper forms. o IRISPdf 3: a solution for production OCR that converts paper documents into PDF files. IRISPdf converts scanned documents into entirely indexed (as full-text ) PDF files in no less than 108 languages. This solution is available in a Server version (that can also be integrated in third-party applications) and in a version that complements Kodak Capture Software. o Readiris Pro 10 Corporate Edition: this professional version of I.R.I.S. best-selling OCR product contains many novelties that appeal to corporate users and government agencies. Think for instance of the possibility to generate very small PDF files that contain the scanned (color) image and recognized text a huge advantage for archiving projects. o Technology for the recognition of Hebrew: this technology is available as a software option for Readiris Pro, Readiris Pro Corporate Edition and IRISPdf. o The IRIS Business Card Reader II for Mac OS X: handles the automatic scanning of business cards, the archiving of the color image, the recognition of the business cards and the export of the resulting contacts to the address books of numerous devices thanks to isync, Apple s synchronization software. o idrs 10: a new release of I.R.I.S. toolkit for image processing and recognition (OCR, ICR, MICR, bar code reading etc.) that VARs, integrators, developers and scanner manufacturers use to integrate optical recognition in any application. I.R.I.S. Group sa Notice of the results for the Fiscal Year 2004 Press release 4

5 o The integration of the full-text search engine Convera RetrievalWare in the software for electronic document management I.R.I.S. DocCenter. Says Pierre De Muelenaere, chairman and CEO of I.R.I.S. Group: I.R.I.S. has increased its R&D effort substantially the last years. The objective is to broaden the company s product range and to prepare the products for their international distribution. This effort covers both the professional and office products, and strengthens our growth potential on the international market and on the home markets. Some examples of commercial accomplishments we had with the I.R.I.S. products are: o A world-wide agreement with Eastman Kodak to bundle Readiris Pro Corporate Edition with the new Kodak scanners i30 and i40. o A license agreement where Samsung purchases I.R.I.S. OCR technology for the Korean language. o The extension of the relationship with Apple Computers: the new products Readiris Pro and the IRISPen Executive are sold by the AppleStores. o A partnership with Microsoft in 6 countries. I.R.I.S. supplies a special version of its business card reader to Microsoft. Microsoft bundles this I.R.I.S. product with Office 2003 Professional as part of a Microsoft advertising campaign. o Numerous new distribution agreements throughout the world allow I.R.I.S. to broaden its international presence significantly. The company has also supplied numerous integrated solutions to large accounts in the year We ll quote for instance these projects for document reading, document management (at department or company level), archiving or storage implemented for many enterprises, government agencies and international institutions: o In Belgium: on the financial market (Dexia, ING, Euroclear, Degroof, Generali etc.), at government agencies (RIZIV-INAMI, the Ministries of Finance and Economy, the Federal Police etc.) and large professional federations (INI, Plastic Europe, FEBEG etc.). o In France: now that the first regional centre for tax collection of the French Ministry of Finance in Lille has become operational, I.R.I.S. France has set up a second centre at Rennes. The I.R.I.S. product ScanChecks is used to read and process bank checks automatically. There also were successful installations of applications for form reading and electronic document management in four new French counties ( préferectures ), two new agencies for child allowance ( Caisses d Allocations Familiales ), at the company Damart etc. o In the Grand-Duchy of Luxembourg: major customers were the European Court, BGL-Fortis, Kredietbank, Dexia-BIL and the Caisse d Epargne. CEO Etienne Van de Kerckhove comments: The acquisition of Omnis ECMS in the beginning of 2004 allowed to accelerate the growth of the professional applications; I.R.I.S. instantly added some key customers to its client roster in Luxembourg. Most financial institutions and government agencies of the Grand-Duchy are now I.R.I.S. customers. We have for instance sold and set up a company-wide system for electronic document management at the bank Dexia-BIL; the I.R.I.S. product ClientFolder is used to manage files, amongst others to manage the assets of the private banking activity of Dexia-BIL. Major events after the fiscal year 2004 I.R.I.S. Group has entered a contract with Delta Lloyd Securities as market maker as of January Delta Lloyd Securities operates as Liquidity Provider as understood in the guidelines of the Euronext stock exchange. I.R.I.S. has purchased a new building close to its current headquarters in Louvain-la-Neuve. This building disposes of extra offices and will house I.R.I.S. warehouse, a necessity given I.R.I.S. Group sa Notice of the results for the Fiscal Year 2004 Press release 5

6 the company s growing need for space. (We add that in the course of 2004 the teams of I.R.I.S. Luxembourg and Omnis were brought together on a single site, and that the various teams of I.R.I.S. France are now located on a single site in Orly.) Outlook for the year 2005 Pierre De Muelenaere comments: In the beginning of 2005 the list of on-going projects we execute for companies and government agencies is longer than was the case in the beginning of The demand for office products is equally strong as 2005 starts. Given the available information we established a business plan for the year 2005 that expects an increased turnover while the gross margin should remain stable at about 60%. Our focus on cost control will be maintained in the year 2005, even as we have to strengthen the company s resources in some areas to be able to fulfill the demand. If the underlying hypotheses of this business plan are confirmed as the year unfolds, the company s profitability should increase once more. Proposed dividend Given the good results for the fiscal year 2004 and the outlook for the current year 2005, the Board of Directors will submit to the approval of the Annual General Meeting on 17 May 2005 that a (gross) dividend increased by 40% to 0.35 per share be paid out. Auditors report The company auditors Ernst & Young, represented by Eric Golenvaux, auditor, have confirmed that their in-depth auditing was completed but did not yield any significant corrections that should be added to the financial information of this press release. Adoption of the IFRS standard The note on the impact of the adoption of the international bookkeeping standard (IAS/IFRS) is available on the I.R.I.S. web site ( and should be construed as an integral part of this press release. Financial calendar Financial information Ordinary annual general meeting: May at 2 p.m. Availability of the annual report: last week of April 2005 Notice of the half-year results for 2005: 3rd week of September 2005 Visit the investor pages on the I.R.I.S. web site (to be found under to receive the press releases (in real-time) and to subscribe to I.R.I.S. Investor s newsletter. For extra information, contact: Etienne Van de Kerckhove, CEO IMAGE RECOGNITION INTEGRATED SYSTEMS GROUP sa Rue du Bosquet 10 Parc Scientifique of Louvain-la-Neuve B 1435 Mont Saint-Guibert Tel: Fax: [email protected] I.R.I.S. Group sa Notice of the results for the Fiscal Year 2004 Press release 6