Financial Models Company Inc. (FMC), a leading provider of technology solutions and services to the investment world, today announced its results of operations for the fiscal 2005 first quarter ended May 31, 2004. All results are in accordance with Canadian generally accepted accounting principles and are reported in Canadian dollars, except EBITDA which is defined below.
Revenue for the first quarter increased 2.9% to $18.1 million from $17.6 million in the first quarter of the prior year. First quarter cost of revenue and operating expenses declined 4.4% to $15.5 million from $16.2 million.
First quarter EBITDA increased 91.3% to $2.6 million from $1.3 million. First quarter net earnings increased to $1.0 million, or $0.09 per share, from a net loss of $0.2 million, or $0.02 loss per share, in the first quarter of the prior year.
"We are pleased to start the year with a significant increase in EBITDA and net earnings," said Stamos D. Katotakis, President and Chief Executive Officer of FMC. "We have continued to grow our recurring revenue base from application services and licence maintenance and are encouraged with the increase in total revenue."
In the first quarter, we introduced the first version of FMCPortfolio(TM), our eventual replacement for FMCPacer(TM). This followed the previous release of FMCNet(TM) and FMCModel(TM), as members of FMCSuite(TM), our web-based applications suite. The FMCSuite development project is continuing and is now focused on adding functionality and applications, as most of the infrastructure has been completed. It is expected that FMCSuite products will generate additional revenue for FMC commencing with fiscal 2006.
First quarter cash flow from operations was $1.8 million before changes in non-cash operating working capital and $1.1 million subsequent to such changes. Cash decreased to $27.4 million, or $2.49 per share outstanding at the end of the quarter, as compared to $28.7 million at the end of the prior year. The decrease in cash was primarily attributable to increased purchases of common shares under FMC's normal course issuer bid.
While we are encouraged by indicators within our markets, we remain guarded in our outlook. We continue to expect an increase in revenue and relatively constant cost of sale and operating expenses for full fiscal 2005 compared to 2004.
For the second quarter of 2005, we expect total revenue to be in the range of $17.5 million to $18.5 million. Cost of revenue and operating expenses are expected in the range of $15.5 million to $16.0 million.