Brainpower N.V. (Deutsche Börse, Prime Standard: BPW), provider of analytic applications, technology and data management solutions to the investment management community, announces results for the Fourth Quarter and Full Year ended December 31, 2005.
Revenues for the quarter equaled 2.02 million Euros, up 18% from Q4 2004 and up 42% from Q3 2005. Full-year 2005 revenues equaled 6.99 million Euros, up 10% from previous year's results. In the fourth quarter operating expenses were 1.6 million Euros, in line with the same period one year ago, including restructuring costs.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the fourth quarter, before restructuring costs, was positive for 109,321 Euros, compared to a loss of 323,489 Euros recorded in the third quarter 2005. For the full year EBITDA before restructuring costs is negative for 312,973 Euros compared to a negative EBITDA before restructuring costs of 1,462,758 Euros in 2004.
The revenues growth and the EBITDA improvement for the Q4 2005, as well as for the full year, highlight the progress of the company in executing the anticipated financial turn around.
Revenues & Gross Profit
Recognized revenue in the quarter ended December 31, 2005 leveled at more than 2 million Euros with an increase of 0.3 million Euros in respect of the same quarter 2004. On a full year basis revenues were 7 million Euros, 10.3% higher than the 6.3 million euros recognized in 2004.
Gross profit in the fourth quarter was 1.7 million Euros, or 84.6% of revenue, it was 1.42 million Euros in the year-ago period. For the twelve months ended December 2005 gross profit levels at 5.75 million Euros, with 10.5% increase in respect of the year-ago period.
For the quarter ended December 31, 2005, Brainpower's operating expenses were 1.6 million Euros, in line with the same quarter one year ago, including restructuring costs.
In the fourth quarter 2005 the Company capitalized software development costs - mainly labour costs - of two new products for 244,000 Euros. On a full year basis development costs capitalized level at 472,000 Euros. The Company believes that the criteria for capitalization of development costs listed under the International Accounting Standard n. 38, Intangible Assets, have been met.
Sales & Marketing
Sales and marketing costs in the fourth quarter 2005 levelled at 0.78 million Euros, with a 10.6% increase in respect of the 0.71 million Euros recorded one year ago. There were a total of 20 employees in sales and marketing functions at December 31, 2005, a decrease of 1 compared to December 31, 2004.
Research & Development
R&D costs equalled to 0.54 million Euros in the fourth quarter 2004, which were 0.28 million Euros in the quarter ended December 31, 2005: in the quarter the company incurred in development costs for 0.24 million Euros, which were capitalized. There were a total of 26 employees in R&D functions at December 31, 2005, a decrease of 1 compared to December 31, 2004,
General & Administrative
G&A costs levelled at 0.51 million Euros in the quarter ended December 31, 2005, it was 0.13 million Euros in the same period one year ago; on a full year basis costs levelled at 1.6 million Euros, which was 1.5 million Euros in 2004. There were 11 employees in general and administrative roles at December 31, 2005, a decrease of 1 from December 31, 2004.
Stock based compensation
Starting from the first quarter 2005 the Company applies the International Accounting Reporting Standard (IFRS) 2, Share-Based Payments; according to IFRS 2, stock options issued after November 7, 2002 which vest after December 31, 2004, are booked in the profit & loss. In the fourth quarter 2005, stock based compensation costs level at 24,370 Euros; it was 5,967 Euros in same period one year ago (restated P&L). Stock based compensation is a non cash item for the Company.
EBITDA before restructuring costs
EBITDA before restructuring costs - but after the stock based compensation - is positive in the quarter for 109,000 Euros; it was positive for 37,000 in the fourth quarter 2004. On a full year basis EBITDA losses decreased from 1,463,000 Euros one year ago to 313,000 Euros at the end of 2005.
The Company did not recorded any restructuring cost in the fourth quarter of the year. On a full year basis restructuring costs were 253,000 Euros, which were 434,000 Euros one year ago.
Depreciation and Amortization
Total depreciation and amortization expenses decreased from 629,200 Euros at the end of December 2004 to 227,104 Euros at the end of December 2005. Decrease mainly relates to the full amortization of goodwill in Q1 2005.
The net loss for the fourth quarter was 26,201 Euros, a reduction of 448,100 Euros in respect of same period of the previous year. On a full year basis the net loss decreased from 2.8 million Euros at the end of 2004 to 1 million Euros at the end of 2005.
Brainpower's net financial position was 0.9 million Euros "credit" at the end of December 2005, in line with the previous year. At the end of 2005 the 70% of the net financial position was represented by medium term loans. Net cash out flow for operating and investing activities was 1.2 million Euros in 2005, which was 2.8 million Euros in 2004. At December 31, 2005 the company had cash on hand for 0.3 million Euros.
Brainpower employed a total of 62 people at December 31, 2005, an increase of 1 from the total as at December 31, 2004.
The company expects to release the full set of financial statements before the end of April.Download the document now 58.5 kb (Adobe Acrobat Document)