DataMirror Corporation
TSX : DMC

DataMirror Corporation

November 20, 2006 16:01 ET

DataMirror Releases Results for Third Quarter of Fiscal 2007

- Revenue increases by 14% over Q3 fiscal 2006 - Licence revenue increases by 25% over Q3 fiscal 2006 - Net income increases by 152% over Q3 fiscal 2006

TORONTO, ON. and SANTA CLARA, Calif.--(CCNMatthews - Nov. 20, 2006) - DataMirror® (TSX:DMC), a leading provider of real-time data integration, protection and event driven solutions, today announced its results for the third quarter of fiscal 2007.

Revenue for Q3 fiscal 2007 was $11,867,000 compared to $10,442,000 for Q3 fiscal 2006, an increase of 13.6%. License revenue in Q3 fiscal 2007 was $4,710,000 compared to $3,756,000 for Q3 fiscal 2006, an increase of 25.4%. Net income for Q3 fiscal 2007 was $1,325,000 or $0.21 per basic and fully diluted share, compared to net income of $535,000 or $0.06 per basic and fully diluted share for Q3 fiscal 2006. Cash flow from operations for Q3 fiscal 2007 was $134,000 compared to ($51,000) in Q3 fiscal 2006. Cash, cash equivalents and short-term and long-term investments stood at $15,700,000 at the end of the quarter.

The overall gross margin for Q3 fiscal 2007 was 83.1%, compared to 79.5% for Q3 fiscal 2006. Gross margin on maintenance and services was 72.6% in Q3 fiscal 2007, compared to 68.5% in Q3 fiscal 2006. Total costs, including costs of revenue, were $9,997,000 for Q3 fiscal 2007, up 0.9% from $9,906,000 in Q3 fiscal 2006. Total headcount was 241 at October 31, 2006, compared to 225 at October 31, 2005 and up from 236 at the end of the previous quarter.

Revenue for the first nine months of fiscal 2007 was $33,193,000, an increase of 3.4% from $32,109,000 for the same period in fiscal 2006. YTD net income was $3,148,000 or $0.42 per share, compared to $2,912,000 or $0.33 per share at the same point last year.

DataMirror Q3 Fiscal 2007 Highlights

The third quarter was particularly notable for DataMirror, with the Company announcing many important technological and business advances:

- Renewal of normal course issuer bid - DataMirror renewed its normal course issuer bid, allowing the Company to purchase up to 314,610 of its common shares between September 21, 2006 and September 20, 2007.

- Release of iReflect for AIX on System i - DataMirror iReflect now enables real-time, bi-directional replication of Oracle applications running IBM's AIX 5L operating system for the System i environment. Customers get high availability and 24/7 business continuity for their mission-critical Oracle applications and can optimize system performance with iReflect's workload balancing features.

- Release of PointBase 5.5 - This new version features a high availability solution for the PointBase Embedded database so mobile users can automatically synchronize data with the secondary PointBase Embedded database if the primary is unavailable.

- Release of Transformation Server/ES 5.2.5 - New features of DataMirror's powerful event detection solution include JMS topics, configurable retry mechanism, as well as alarms and alerts.

"We are pleased to report that year-over-year growth accelerated this quarter," commented Nigel Stokes, CEO, DataMirror Corporation. "Pipelines for the balance of fiscal 2007 are strong. Record levels of profitability are expected for the year as a whole. While sales execution can still be improved, the investments we have made to grow customer interest in DataMirror solutions are leading to improved revenue growth and profitability."

Future Outlook

During the fourth quarter of fiscal 2007, the Company expects revenue of between $13.0 million and $14.0 million, with net income in the range of $0.25 to $0.32 per share. For the 2008 fiscal year, the Company expects revenue of between $52.0 million and $55.0 million, with net income of between $1.10 and $1.35 per share.

DataMirror management will hold a webcast and conference call to present the results for the third quarter and to outline the prospects for the business going forward at 5:00 p.m. EST today, November 20, 2006. Conference call participants are asked to dial 1-800-967-7141 approximately five minutes before the call using reservation number 7620547. Participants may also view an online presentation during the call by visiting https://datamirror.webex.com/datamirror and selecting the meeting "DataMirror Announces Third Quarter Results." Alternatively, the conference call can be accessed via audio webcast at http://www.datamirror.com/investors.

For those who are unable to attend the conference call, a replay will be available via the DataMirror website or by dialing 1-888-203-1112, using the same reservation number indicated above. The replay and online presentation will be available from November 20, 2006, at 8 p.m. EST until November 26, 2006, at 12 midnight EST.

About DataMirror

DataMirror (TSX:DMC), a leading provider of real-time data integration, protection and event detection solutions, improves 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 all information changes throughout the enterprise. DataMirror helps customers make better decisions by providing access to the continuous, accurate information they need to take timely action and move forward faster. More than 2,100 companies have gained tangible competitive advantage from DataMirror software. DataMirror is headquartered in Markham, Canada, and has offices around the globe. For more information, visit www.datamirror.com

Note to Readers: This press release contains certain statements that constitute forward-looking information or statements within the meaning of applicable securities laws ("forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results or performance to differ from the projected results or performance contained in such forward-looking statements. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. DataMirror cautions you not to place undue reliance upon such forward-looking statements, which speak only as of the date they are made. 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 DataMirror's Annual Information Form and other periodic filings with applicable securities regulators. 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 2006 DataMirror Corporation. DataMirror and the DataMirror family of related marks are registered trademarks of DataMirror Corporation. DataMirror and the DataMirror logo are registered in the U.S. Patent and Trademark office, the Canadian Intellectual Property Office, and may be pending or registered in other countries. All other products and services mentioned are trademarks of their respective companies.



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

Three Months Ended Nine Months Ended
October 31, October 31,
------------------ -----------------
2006 2005 2006 2005
------- ------ ------- -------
Revenue
Licence $4,710 $3,756 $12,494 $12,086
Maintenance 6,300 5,828 18,210 17,642
Services 857 858 2,489 2,381
------- ------ ------- -------
11,867 10,442 33,193 32,109
------- ------ ------- -------

Cost of revenue
Licence 43 37 132 126
Maintenance and services 1,963 2,108 5,609 6,225
------- ------ ------- -------
2,006 2,145 5,741 6,351
------- ------ ------- -------
Gross margin 9,861 8,297 27,452 25,758
------- ------ ------- -------

Operating expenses
Selling and marketing 3,950 3,356 11,173 9,305
Research and development 2,252 2,116 6,494 5,974
General and administration 1,642 1,816 5,154 5,236
Stock-based compensation 78 54 181 215
Amortization of intangibles 69 419 206 1,224
------- ------ ------- -------

7,991 7,761 23,208 21,954
------- ------ ------- -------

Operating income 1,870 536 4,244 3,804

Investment income, net 114 178 657 571
------- ------ ------- -------

Income before income taxes 1,984 714 4,901 4,375

Income tax expense 659 179 1,753 1,463
------- ------ ------- -------

Net income $1,325 $535 $3,148 $2,912
------- ------ ------- -------
------- ------ ------- -------

Earnings per share
Basic $0.21 $0.06 $0.42 $0.33
Fully diluted $0.21 $0.06 $0.41 $0.33
Weighted average number of
shares outstanding (000's)
Basic 6,252 8,478 7,561 8,883
Fully diluted 6,362 8,509 7,640 8,949



DataMirror Corporation
Consolidated Balance Sheets
(Thousands of US$ - unaudited)

October 31, January 31,
2006 2006
----------- -----------

Assets

Current assets
Cash and cash equivalents $3,794 $5,115
Short-term investments 9,884 29,832
Accounts receivable 6,241 9,040
Prepaid expenses 999 1,195
Future tax assets 3,126 3,401
----------- -----------
24,044 48,583

Capital assets, net 2,337 2,471
Long-term investments 2,022 2,058
Future tax assets 1,537 1,798
Intangibles, net 605 802
Goodwill 4,488 4,426
----------- -----------
$35,033 $60,138
----------- -----------
----------- -----------

Liabilities

Current liabilities
Accounts payable and accrued liabilities $3,008 $4,685
Deferred revenue 15,689 19,651
Income taxes payable 144 342
----------- -----------
18,841 24,678

Long-term deferred revenue 7,568 9,389
----------- -----------
26,409 34,067
----------- -----------

Shareholders' Equity
Share capital
Common shares (October 31, 2006 - 6,195,175
January 31, 2006 - 8,281,280) 21,231 31,657
Deficit (19,956) (12,687)
Contributed surplus 1,322 1,141
Cumulative translation adjustment 6,027 5,960
----------- -----------

8,624 26,071
----------- -----------
$35,033 $60,138
----------- -----------
----------- -----------



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

Three Months Ended Nine Months Ended
------------------ -------------------
October 31, October 31,
------------------ -------------------
2006 2005 2006 2005
------- -------- -------- --------

Cash provided by (used in)

Operating activities
Net income $1,325 $535 $3,148 $2,912
Add (deduct) items not
affecting cash:
Amortization of capital assets 223 274 629 729
Amortization of intangibles 69 419 206 1,224
Stock-based compensation 78 54 181 215
Future income taxes 350 359 612 (9)
------- -------- -------- --------
2,045 1,641 4,776 5,071

Changes in non-cash working
capital balances (1,911) (1,692) (4,998) (2,177)
------- -------- -------- --------

134 (51) (222) 2,894
------- -------- -------- --------

Investing activities
Additions to capital assets (158) (55) (462) (480)
Sale of investments 4,976 0 49,819 38,749
Purchase of investments (3,598) (25,689) (29,284) (25,689)
------- -------- -------- --------
1,220 (25,744) 20,073 12,580
------- -------- -------- --------

Financing activities
Issuance of share capital 319 2 619 171
Repurchase of share capital (2,038) 0 (21,462) (17,811)
------- -------- -------- --------
(1,719) 2 (20,843) (17,640)
------- -------- -------- --------

Effect of exchange rate changes
on cash and cash equivalents 37 1,544 (329) 2,085
------- -------- -------- --------
Net decrease in cash & cash
equivalents (328) (24,249) (1,321) (81)

Cash and cash equivalents

Beginning of period 4,122 31,855 5,115 7,687
------- -------- -------- --------

End of period $3,794 $7,606 $3,794 $7,606
------- -------- -------- --------
------- -------- -------- --------


Contact Information

  • DataMirror Corporation
    Peter Cauley
    Chief Financial Officer
    (905) 415-0310, ext. 271
    Email: pcauley@datamirror.com
    or
    DataMirror Corporation
    Suzanne Wintrob
    Corporate Communications
    (905) 415-0310, ext. 173
    Email: swintrob@datamirror.com