DataMirror Corporation

DataMirror Corporation

March 08, 2005 16:00 ET

DataMirror Announces Results for Fourth Quarter of Fiscal 2005


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: DATAMIRROR CORPORATION

TSX SYMBOL: DMC
NASDAQ SYMBOL: DMCX

MARCH 8, 2005 - 16:00 ET

DataMirror Announces Results for Fourth Quarter of
Fiscal 2005

TORONTO, ONTARIO--(CCNMatthews - March 8, 2005) - DataMirror
(TSX:DMC)(NASDAQ:DMCX), today announced its financial results for the
fourth quarter of fiscal 2005. As has been reported each quarter this
year, the comparative figures provided for fiscal 2004 have been
restated to reflect the effect of retroactive adoption of the CICA
handbook recommendations for accounting for stock-based compensation.

Revenue for the quarter ended January 31, 2005, ("Q4 fiscal 2005") was
$13,765,000 compared to $16,355,000 for the quarter ended January 31,
2004 ("Q4 fiscal 2004"). The GAAP net income for Q4 fiscal 2005 was
$254,000 or $0.02 per basic and fully-diluted share compared to net
income of $1,342,000 or $0.12 per share for Q4 fiscal 2004. Cash, cash
equivalents, and short-term investments stood at $57,436,000 or $5.44
per common share outstanding at the end of the quarter.

The overall gross margin for Q4 fiscal 2005 was 80.5%, as compared to
81.0% for Q4 fiscal 2004. Gross margin on maintenance and services was
63.4% in Q4 fiscal 2005, as compared to 60.5% in Q4 fiscal 2004. Total
costs, including costs of revenue, were $13,290,000 for Q4 fiscal 2005,
down from $14,569,000 in Q4 fiscal 2004 and up from $12,774,000 in the
previous quarter. Total headcount was 232 at January 31, 2005, as
compared to 299 at January 31, 2004, and down from 257 at the end of the
previous quarter.

Revenue for the year ended January 31, 2005, was $53,267,000 compared to
$59,992,000 for the year ended January 31, 2004. Reported in US
currency, revenue for the year ended January 31, 2005, was $41,219,000
compared to $43,699,000 for the year ended January 31, 2004, a decrease
of 5.7%. Net income for the year was $5,789,000 or $0.53 per share as
compared to $5,173,000 or $0.46 per share for the same period in fiscal
2004.

"The Company was able to increase license revenue on a quarter over
quarter basis by over 20% despite continued pressure from a rising
Canadian dollar. In addition, we reached the new milestone of 2,000
customers by adding 43 new customers this quarter." Nigel Stokes,
DataMirror CEO commented, "Operating profitability improved by almost
60% over the previous quarter, despite the increased costs associated
with a reduction in headcount which occurred late in the quarter. As
part of the changes made during the quarter, Mr. Rean Pretorius has left
his role as Senior Vice President of Global Channels and Alliances and
our Channel and Alliance team now reports into Mr. Stewart Ritchie,
Senior Vice President World-wide Sales, and Mr. Mark Deep, previously
V.P. of Marketing, has returned to his private consulting practice. We
believe the current business model positions the Company well for
increased profitability for all quarters of the coming fiscal year.

Separately, Mr. Kirk Dixon, who is a co-founder of the company, will be
retiring and transitioning out of his operational role as Executive V.P.
Business Development by the end of May 2005. Although, Kirk will no
longer be active operationally we are pleased to announce that he will
continue to serve on the Board of Directors. On behalf of DataMirror, I
would like to thank Kirk for his continued help and for his more than 10
years of service to DataMirror."

Business Outlook:

The Company has concluded that reporting in US dollars would more
accurately reflect our true revenue growth and would improve the
comparability of our results with key US-based data integration
companies and, therefore, will begin reporting in US dollars in the
first quarter of fiscal 2006.

For the first quarter of fiscal 2006, DataMirror expects to earn GAAP
net income in the range of U.S. $0.02 to U.S. $0.07 per share.

DataMirror will hold a webcast and conference call to present the
results for the fourth quarter at 5:00 p.m. EST today, March 8, 2005.
The conference call can be accessed via audio web cast at
http://www.datamirror.com/investors. Participants are asked to call
1-800-475-3716 approximately five minutes before the call using
reservation number 2445535. Participants may also view an online
presentation during the call by visiting
https://datamirror.webex.com/datamirror and selecting the meeting
"Year-End Results for Fiscal 2005" hosted by Peter Cauley, CFO, and
Nigel Stokes, CEO, DataMirror. Alternatively, the conference call can be
accessed via audio web cast at http://www.datamirror.com/investors.

For those who are unable to attend the conference call, a replay will be
available via the DataMirror web site or by dialing 1-888-203-1112,
using the same reservation number indicated above (2445535). The replay
and online presentation will be available from March 8, 2005, at 5:00
p.m. EST.

About DataMirror

DataMirror (NASDAQ: DMCX; TSX: DMC), a leading provider of real-time
data integration, protection and audit solutions, that improve the
integrity and reliability of information across all of the systems that
create and store data. DataMirror's flexible and affordable integration
solutions allow customers to easily and continuously detect, translate,
and communicate information changes throughout the enterprise.
DataMirror helps customers make better decisions by giving their
employees the continuous, accurate and timely information they need to
move forward faster.

Over 2,000 companies have gained tangible business benefits from
DataMirror software, including Debenhams, FedEx Ground, First American
Bank, OshKosh B'Gosh, Priority Health, Tiffany & Co., and Union Pacific
Railroad. DataMirror is headquartered in Markham, Canada and has offices
around the globe. For more information, visit www.datamirror.com.

"Safe Harbour" Statement under the United States Private Securities
Litigation Reform Act of 1995:

Forward-looking statements in this press release, including statements
regarding DataMirror Corporation's business which are not historical
facts, are made pursuant to the "safe harbour" provisions of the United
States Private Securities Litigation Reform Act of 1995. Forward-looking
statements include statements of plans, objectives, strategies and
expectations. The words "anticipate", "believe", "estimate" and "expect"
and similar expressions are intended to identify forward-looking
statements. Numerous important factors affect DataMirror's operating
results and could cause DataMirror's actual results to differ materially
from the results indicated by this press release or by any
forward-looking statements made by, or on behalf of, DataMirror, and
there can be no assurance that future results will meet expectations,
estimates or projections. These factors include, but are not limited to,
the following: the difficulty of developing, marketing and selling new
products successfully; variability of quarterly operating results;
dependence upon the continued growth and success of DataMirror's
software products; competition; rapid technological change and new
product introductions; dependence upon continued growth in the database
and enterprise data integration markets; dependence upon relationships
with complementary vendors and distribution channels; the ability to
recruit and retain key personnel; risks of international operations,
including currency exchange rate fluctuations and global economic
conditions; possible software errors or defects; possible infringement
claims by third parties; and other factors discussed in the DataMirror's
Annual Information Form and other periodic filings with the United
States Securities and Exchange Commission and other regulatory
authorities. Should one or more of these risks or uncertainties
materialize, or should assumptions underlying the forward-looking
statements prove incorrect, actual results may vary materially from
those indicated in any forward-looking statements. DataMirror disclaims
and does not assume any obligation to update these forward-looking
statements.

Copyright 2004 DataMirror Corporation. All rights reserved. DataMirror,
LiveBusiness and The experience of now are trademarks or registered
trademarks of DataMirror Corporation. All other brand or product names
are trademarks or registered trademarks of their respective companies.



DataMirror Corporation
Consolidated Balance Sheets
(Thousands of CDN$)

January 31, January 31,
2005 2004
---------------------------------------------------------------------
(unaudited) (audited)

Assets
Current assets
Cash and cash equivalents $9,517 $9,286
Short-term investments 47,919 32,720
Accounts receivable 9,972 11,797
Prepaid expenses 1,644 1,803
Future income taxes 3,004 2,540
---------------------------------------------------------------------
72,056 58,146

Capital assets 3,410 3,845
Investment tax credits recoverable 0 1,019
Investments 0 12,185
Intangibles 2,902 5,853
Goodwill 5,175 5,175
---------------------------------------------------------------------
$83,543 $86,223
---------------------------------------------------------------------
---------------------------------------------------------------------

Liabilities
Current liabilities
Accounts payable and accrued liabilities $3,700 $5,544
Deferred revenue 22,083 18,839
Income taxes payable 929 1,785
Current portion of capital lease
obligations 0 32
---------------------------------------------------------------------
26,712 26,200
Future income taxes 103 1,076
---------------------------------------------------------------------
26,815 27,276
---------------------------------------------------------------------
Shareholders' Equity
Share capital
Common shares (January 31, 2005 -
10,555,453 January 31, 2004 -
11,364,952) 60,318 64,625
Deficit (4,300) (5,978)
Contributed surplus 1,208 798
CCumulative translatio adjustment (498) (498)
---------------------------------------------------------------------
56,728 58,947
---------------------------------------------------------------------
$83,543 $86,223
---------------------------------------------------------------------
---------------------------------------------------------------------


DataMirror Corporation
Consolidated Statements of Income
(Thousands of CDN$, except per share data - unaudited)

Three Months Ended Year Ended
January 31, January 31,
---------------------------------------------------------------------
2005 2004 2005 2004
---------------------------------------------------------------------
Revenue
Licence $6,619 $8,663 $22,520 $29,087
Maintenance 6,268 6,260 26,213 25,354
Services 878 1,432 4,534 5,551
---------------------------------------------------------------------
13,765 16,355 53,267 59,992
---------------------------------------------------------------------
Cost of revenue
Licence 62 68 249 234
Maintenance and services 2,618 3,041 11,862 11,389
---------------------------------------------------------------------
2,680 3,109 12,111 11,623
---------------------------------------------------------------------
Gross margin 11,085 13,246 41,156 48,369
---------------------------------------------------------------------
Operating expenses
Selling and marketing 4,615 5,689 19,653 20,524
Research and development 2,667 2,636 10,528 9,753
General and administration 2,522 2,150 8,803 7,946
Stock-based compensation 97 191 410 512
Amortization of intangibles 709 794 2,951 3,098
---------------------------------------------------------------------
10,610 11,460 42,345 41,833
---------------------------------------------------------------------
Operating income (loss) 475 1,786 (1,189) 6,536
Investment income 263 300 1,008 1,146
Gain on sale of investment in
Idion 0 0 7,611 0
Other income 0 0 0 279
---------------------------------------------------------------------
Income before income taxes 738 2,086 7,430 7,961
Income tax expense 484 744 1,641 2,788
---------------------------------------------------------------------
Net income $254 $1,342 $5,789 $5,173
---------------------------------------------------------------------
---------------------------------------------------------------------

Earnings per share
Basic $0.02 $0.12 $0.53 $0.46
Fully diluted $0.02 $0.11 $0.52 $0.44
Weighted average number of
shares outstanding (000's)
Basic 10,625 11,304 11,026 11,364
Fully diluted 10,660 11,677 11,192 11,640


DataMirror Corporation
Consolidated Statements of Cash Flows
(Thousands of CDN$ - unaudited)

Three Months Ended Year Ended
January 31, January 31,
---------------------------------------------------------------------
2005 2004 2005 2004
---------------------------------------------------------------------
Cash provided by (used in)

Operating activities
Net income $254 $1,342 $5,789 $5,173
Add (deduct) items not
affecting cash:
Amortization of capital assets 416 385 1,310 1,410
Amortization of intangibles 709 794 2,951 3,098
Stock-based compensation 97 191 410 512
Future income taxes (367) (473) (1,437) (970)
Gain on sale of investment in
Idion 0 0 (7,611) 0
Other income 0 0 0 (279)
Non-cash operating expense 0 0 0 32
Investment tax credits 0 197 1,019 645
---------------------------------------------------------------------
1,109 2,436 2,431 9,621
Changes in non-cash working
capital balances 2,226 1,849 2,528 542
---------------------------------------------------------------------
3,335 4,285 4,959 10,163
---------------------------------------------------------------------
Investing activities
Capital asset additions (230) (392) (875) (1,190)
Purchase of short-term
investments 0 0 (50,125) (32,720)
Sale of short-term
investments 2,206 0 34,926 25,802
Sale of investment in Idion 0 0 19,894 0
Investment in Idion 0 (332) (98) (2,417)
Acquisition of technology 0 0 0 (30)
Acquisition of business, net
of cash 0 (1,328) 0 (1,328)
Other income 0 0 0 279
---------------------------------------------------------------------
1,976 (2,052) 3,722 (11,604)
---------------------------------------------------------------------
Financing activities
Capital lease payments 0 (10) (32) (90)
Issuance of share capital 18 843 805 1,779
Repurchase of share capital (1,832) (243) (9,223) (3,987)
---------------------------------------------------------------------
(1,814) 590 (8,450) (2,298)
---------------------------------------------------------------------
Increase (decrease) in cash
And cash equivalents 3,497 2,823 231 (3,739)
Cash and cash equivalents
Beginning of period 6,020 6,463 9,286 13,025
---------------------------------------------------------------------
End of period $9,517 $9,286 $9,517 $9,286
---------------------------------------------------------------------
---------------------------------------------------------------------



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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    DataMirror Corporation
    Tom Giantsopoulos
    Corporate Communications
    (905) 415-0310 ext. 153
    tgiantsopoulos@datamirror.com
    or
    DataMirror Corporation
    Peter Cauley
    Chief Financial Officer
    (905) 415-0310 ext. 271
    pcauley@datamirror.com