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TXT E-Solutions — Earnings Release 2017
Nov 7, 2017
4061_10-q_2017-11-07_02ffccd9-78db-4808-aafd-36057e5edea9.pdf
Earnings Release
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| Informazione Regolamentata n. 0439-35-2017 |
Data/Ora Ricezione 07 Novembre 2017 19:11:42 |
MTA - Star | |
|---|---|---|---|
| Societa' | : | TXT e-SOLUTIONS | |
| Identificativo Informazione Regolamentata |
: | 95575 | |
| Nome utilizzatore | : | TXTN01 - Matarazzo | |
| Tipologia | : | REGEM | |
| Data/Ora Ricezione | : | 07 Novembre 2017 19:11:42 | |
| Data/Ora Inizio Diffusione presunta |
: | 07 Novembre 2017 19:11:42 | |
| Oggetto | : | TXT approved Financial Results as of September 30, 2017 |
|
| Testo del comunicato |
Vedi allegato.
TXT e-solutions: first nine months 2017 Revenues Continuing Operations € 26.0 million (+10.9%), EBITDA before Stock Options € 2.7 million (+4.5%). Net Income, including Discontinued Operations, € 2.2 million (€ 3.6 million in first nine months 2016)
- Revenues Continuing Operations € 26.0 million (+10.9%). Software Revenues € 2.4 million (+30.6%) and Service Revenues € 23.6 million (+9.2%).
- R&D expenses € 1.9 million (+33.2%) and Commercial expenses € 3.5 million (+38.5%) due to Pace acquisition and organic growth.
- Net Income from Continuing Operations € 1.4 million (€ 1.6 million in first nine months 2016) and Net Income from Discontinued Operations € 0.8 million (€ 2.0 million in first nine months 2016).
- Net Income € 2.2 million (€ 3.6 million in first nine months 2016).
- Net Financial Position: € 3.2 million positive as of September 30, 2017 (€ 5.4 million as of December 31, 2016).
Milan – November 7, 2017
The Board of Directors of TXT e-solutions Spa, chaired by Alvise Braga Illa, today approved the financial results for the period ended September 30, 2017.
On July 24th 2017 TXT signed an agreement for the transfer of its TXT Retail Division to Aptos, Inc. (USA) and on October 2nd finalized the disposal and received € 85.0 million in cash.
The price, which is not subject to future financial and economic performance, will be adjusted based on net working capital; in addition, TXT shall receive payment for any net cash in the TXT Retail Division at the closing date.
The agreement also provides that following an initial public offering of Aptos (an "IPO"), TXT shall be entitled to exercise an option to purchase up to 10% of shares sold in the IPO at the IPO price.
P R E S S R E L E A S E
The Chairman Alvise Braga Illa has commented: "The Company completed closing of the sale of TXT Retail division to Aptos Inc. in only two months from signing of Sale & Purchase Agreement and simultaneously received € 85 million in cash. Efficiency of our Finance team was exceptional. In first 9 months 2017 Financial results of TXT Next, core of future profitable development of TXT, showed a good continuing growth".
The business of Division TXT Retail sold at the beginning of October has been reclassified to Discontinued Operations in Financial results as of 30 September 2017, in compliance to IFRS 5. Main Economic and Financial Results of Continuing Operations in first nine months 2017 were:
Revenues from Continuing Operations were € 26.0 million in first nine months 2017, up +10.9% compared to 2016 (€ 23.5 million). Software revenues from licences, subscriptions and maintenance were € 2.4 million, up +30.6% compared to first nine months 2016. Service revenues were € 23.6 million, up +9.2% compared to first nine months 2016.
International Revenues rose from € 5.8 million in first nine months 2016 to € 8.8 million (+51.6%) or 34% of total sales (25% in 2016).
Net of direct costs, Gross Margin came to € 11.1 million, up +14.3% over first nine months 2016. The margin on revenues was 42.7%, compared to 41.5% in first nine months 2016, due to Pace acquisition.
EBITDA before Stock Options was € 2.7 million, up +4.5% compared to first nine months 2016 (€ 2.6 million). R&D expenses rose +33.2% and Commercial expenses rose +38.5%.
Operating Income (EBIT) was € 2.1 million, down -2.9% compared to first nine months 2016, after expensing depreciation of Pace assets and amortization of Intellectual Property of Software and Customer List from Pace acquisition.
Net Income from Continuing Operations was € 1.4 million (€ 1.6 million in first nine months 2016). Income tax charges were € 0.6 million (31% of pre-tax income, compared to 24% in 2016 which took advantage of tax losses in some countries).
Net Income from Discontinued Operations was € 0.8 million (€ 2.0 million in first nine months 2016), due to investments in Operations, R&D and Commercial teams.
Net Income was € 2.2 million (€ 3.6 million in first nine months 2016), down € 1.4 million, of which € 0.2 million due Continuing Operations and € 1.2 million to Discontinued Operations.
Net Financial Position as at 30 September 2017 was positive by € 3.2 million, compared to € 5.4 million as at 31 December 2016, due to cash generated by operations which partially financed payment of dividends (€ 3.5 million).
Shareholders' Equity as of 30 September 2017 was € 33.1 million (€ 34.3 million as of December 31, 2016), down € 1.2 million mainly due payment of dividends (€ 3.5 million), Net income in the period (€ 2.2 million) and Stock Options (€ 0.2 million).
As of September 30, 2017, TXT owned 1,354,133 treasury shares or 10.41% of issued shares (unchanged compared to end 2016), purchased at an average price of € 2.44
The Board of Directors of TXT e-solutions has appointed Andrea Lanciani, non-executive director, member of the Internal Control Committee and Remuneration Committee.
Third Quarter 2017
Revenues from Continuing Operations were € 8.1 million in Q3 2017, up +0.7% compared to Q3 2016.
EBITDA before Stock Options was € 0.7 million, down -17.1% compared to Q3 2016 (€ 0.9 million). In third quarter 2017 R&D expenses rose +9.2% and Commercial expenses rose +13.2% due to development of International operations and investment for the startup of Division TXT Sense. G&A expenses decreased by 10.4%. Profitability on Revenues was 9.2%, compared to 11.2% in Q3 2016.
Net Income from Continuing Operations was € 0.4 million (€ 0.6 million in Q3 2016). Income tax charges were € 0.2 million (tax rate 32%).
Net Income from Discontinued Operations was € 0.2 million (€ 1.1 million in Q3 2016), due to investments in Operations, R&D and Commercial teams.
Net Income was € 0.7 million (€ 1.6 million in Q3 2016), down € 0.9 million, of which € 0.1 million due Continuing Operations and € 0.8 million to Discontinued Operations.
Subsequent Events and Outlook
On 2nd October 2017 TXT e-solutions signed the transfer of TXT Retail Division to Aptos Inc, following the completion of all conditions precedent in the preliminary agreement. The transaction has been executed after completing contribution of the Italian TXT Retail business as going concern to Thinking Retail Srl, granting of authorization from antitrust authorities, completion of trade union consultation procedures and fulfilment of certain other statutory corporate requirements.
At closing TXT has received EUR 85.0 million in cash.
The price, which is not subject to future financial and economic performance, will be adjusted based on net working capital; in addition TXT shall receive payment for any net cash in the TXT Retail Division at the closing date.
On 2nd October TXT incorporated TXT Next Sarl, for the split of business TXT Retail and TXT Next in France.
In Q4 2017 Net Profit will show a very important capital gain on the sale of TXT Retail. As announced on the 24th of July, the Board of Directors of TXT e-solutions will propose the distribution of an extraordinary dividend at the annual shareholders' meeting to be convened in April 2018.
The Company will continue to invest in R&D, International commercial teams and search of acquisitions, maintaining a good profitability. The Company foresees in Q4 2017 a fair development of software and service revenues and profits of Continuing Operations.
Declaration of the designated officer in charge of drafting the company's accounting documents
The Designated Officer in charge of drafting the company's accounting documents, Paolo Matarazzo, herein declares, pursuant to Article 154-bis, Paragraph 2 of Legislative Decree no. 58 of 24 February 1998 that the accounting information contained in this press release corresponds to the documentary records, books and accounting entries.
As from today, this press release is available also on the company's website www.txtgroup.com
TXT e-solutions is an international software products and solutions vendor. Specialized in the most dynamic and agile markets with the highest degree of innovation and renewal that require state-of-the art solutions, TXT is focused on two main business areas: specialized software products and advanced Software-related Engineering Services for companies in the Aerospace, Aviation and Automotive; testing and quality services in Banking. Through its newly created internal start-up TXT Sense, it also develops and market innovative applications of Augmented Reality to other service & industrial sectors. The company has been listed on the Italian Stock Exchange - STAR segment (TXT.MI) - since July 2000. TXT is based in Milan and has subsidiaries in Italy, Germany, United Kingdom, France, Switzerland and USA.
For information:
TXT e-solutions SpA Paolo Matarazzo CFO Tel. +39 02 25771.355 [email protected]
Management Income Statement as of 30 September 2017
| € thousand | 9m 2017 | % | 9m 2016 | % | Var % |
|---|---|---|---|---|---|
| REVENUES | 26.032 | 100,0 | 23.469 | 100,0 | 10,9 |
| Direct costs | 14.906 | 57,3 | 13.731 | 58,5 | 8,6 |
| GROSS MARGIN | 11.126 | 42,7 | 9.738 | 41,5 | 14,3 |
| Research and Development costs | 1.864 | 7,2 | 1.399 | 6,0 | 33,2 |
| Commercial costs | 3.456 | 13,3 | 2.495 | 10,6 | 38,5 |
| General and Administrative costs | 3.114 | 12,0 | 3.268 | 13,9 | (4,7) |
| EBITDA before Stock Options | 2.692 | 10,3 | 2.576 | 11,0 | 4,5 |
| Stock Options | 69 | 0,3 | - | - | n.m. |
| EBITDA | 2.623 | 10,1 | 2.576 | 11,0 | 1,8 |
| Amortization, depreciation | 512 | 2,0 | 401 | 1,7 | 27,7 |
| OPERATING PROFIT (EBIT) | 2.111 | 8,1 | 2.175 | 9,3 | (2,9) |
| Financial income (charges) | (95) | (0,4) | (33) | (0,1) | n.m. |
| EARNINGS BEFORE TAXES (EBT) | 2.016 | 7,7 | 2.142 | 9,1 | (5,9) |
| Taxes | (625) | (2,4) | (524) | (2,2) | 19,3 |
| NET PROFIT CONTINUING OPERATIONS | 1.391 | 5,3 | 1.618 | 6,9 | (14,0) |
| Net Profit Discontinued Operations | 838 | 2.006 | (58,2) | ||
| NET PROFIT | 2.229 | 3.624 | (38,5) |
TXT e-solutions S.p.A. Via Frigia, 27 - 20126 Milano (Italy) Tel. +39 02 25771.1 Fax +39 02 2578994 www.txtgroup.com
Income Statement as of 30 September 2017
| Amounts in Euro | 30.09.2017 | 30.09.2016 |
|---|---|---|
| TOTAL REVENUES AND INCOME | 26.030.532 | 23.469.211 |
| Purchases of materials and services | (4.724.240) | (4.341.635) |
| Personnel costs | (17.798.311) | (15.565.233) |
| Other operating costs | (886.287) | (675.549) |
| Amortizations, depreciation and write downs | (511.755) | (400.796) |
| OPERATING RESULT | 2.109.939 | 2.485.998 |
| Financial income/charges | (95.318) | (32.627) |
| PRE-TAX RESULT | 2.014.621 | 2.453.371 |
| Income Taxes | (624.548) | (523.857) |
| NET PROFIT CONTINUING OPERATIONS | 1.390.073 | 1.929.514 |
| Net Profit Discontinued Operations | 839.358 | 1.694.856 |
| NET PROFIT | 2.229.430 | 3.624.371 |
| NET PROFIT PER SHARE (Euro) | 0,19 | 0,31 |
| NET PROFIT PER SHARE DILUTED (Euro) | 0,19 | 0,31 |
Net Financial Position as of 30 September 2017
| € thousand | 30.9.2017 | 31.12.2016 | Var |
|---|---|---|---|
| Cash - Continuing Operations Cash - Discontinued Operations |
2.307 2.750 |
5.291 2.279 |
(2.984) 471 |
| Cash | 5.057 | 7.570 | (2.513) |
| Short term Debt - Continuing Operations | (171) | (808) | 637 |
| Short term Financial Resources | 4.886 | 6.762 | (4.389) |
| Non current Financial Debt - Continuing Operations Non current Financial Debt - Discontinued Operations Non current Financial Debt |
(1.651) (10) (1.661) |
(1.378) (13) (1.391) |
(273) 3 (270) |
| Net Available Financial Resources | 3.225 | 5.371 | (2.146) |
Consolidated Balance Sheet as of 30 September 2017
| ASSETS (Amounts in Euro) | 30.09.2017 | 31.12.2016 |
|---|---|---|
| NON-CURRENT ASSETS | ||
| Goodwill | 5.369.231 | 17.830.693 |
| Definite life intangible assets | 2.049.795 | 3.465.058 |
| Intangible Assets | 7.419.026 | 21.295.751 |
| Buildings, plants and machinery owned | 780.616 | 1.598.260 |
| Tangible Assets | 780.616 | 1.598.260 |
| Other non-current assets | 176.793 | 160.498 |
| Deferred tax assets | 1.724.845 | 2.373.623 |
| Other non-current assets | 1.901.638 | 2.534.121 |
| TOTAL NON-CURRENT ASSETS | 10.101.280 | 25.428.132 |
| CURRENT ASSETS | ||
| Inventories | 3.786.613 | 3.146.362 |
| Trade receivables | 10.412.465 | 23.739.800 |
| Other current assets | 2.730.766 | 2.629.183 |
| Cash and other liquid equivalents | 2.306.456 | 7.570.479 |
| TOTAL CURRENT ASSETS | 19.236.300 | 37.085.825 |
| Assets Discontinued Operations | 29.267.295 | 0 |
| TOTAL ASSETS | 58.604.875 | 62.513.957 |
| EQUITY AND LIABILITIES (Amounts in Euro) | 30.09.2017 | 31.12.2016 |
| SHAREHOLDERS' EQUITY | ||
| Share capital | 6.503.125 | 6.503.125 |
| Reserves | 14.375.169 | 14.091.119 |
| Retained earnings | 10.037.854 | 8.133.150 |
| Profit (Loss) for the year | 2.229.430 | 5.555.363 |
| TOTAL SHAREHOLDERS' EQUITY | 33.145.578 | 34.282.757 |
| NON-CURRENT LIABILITIES | ||
| Non-current fiancial liabilities | 1.680.174 | 1.391.140 |
| Severance and other personnel liabilities | 2.561.502 | 3.945.640 |
| Deferred tax liabilities | 562.723 | 1.843.436 |
| TOTAL NON-CURRENT LIABILITIES | 4.804.399 | 7.180.216 |
| CURRENT LIABILITIES | ||
| Current financial liabilities | 171.343 | 808.225 |
| Trade payables | 665.810 | 1.625.740 |
| Tax payables | 646.516 | 688.428 |
| Other current liabilities | 7.425.775 | 17.928.590 |
| TOTAL CURRENT LIABILITIES | 8.909.444 | 21.050.983 |
| TOTAL LIABILITIES | 13.713.842 | 28.231.199 |
| Liabilities Discontinued Operations | 11.745.456 | 0 |
| TOTAL EQUITY AND LIABILITIES | 58.604.875 | 62.513.957 |
Consolidated Statement of Cash Flows as of 30 September 2017
| 30.09.2017 | 30.09.2016 |
|---|---|
| 2.229.430 | 3.624.371 |
| 242.888 | 6.455 |
| 480.396 | 907.349 |
| (200.547) | (187.711) |
| 1.027.296 | 869.896 |
| 3.779.463 | 5.220.360 |
| 3.410.670 | |
| (743.647) | (1.328.329) |
| (810.725) | (684.272) |
| 28.578 | 41.169 |
| (2.976.936) | (1.331.764) |
| (2.023.314) | 107.474 |
| 1.756.149 | 5.327.834 |
| (453.532) | (384.753) |
| (88.510) | - |
| - | (5.442.817) |
| (542.042) | (5.827.570) |
| (337.728) | 1.767.888 |
| (3.495.636) | (2.931.492) |
| - | (529.858) |
| (3.833.364) | (1.693.462) |
| (2.619.257) | (2.193.198) |
| 105.316 | (258.344) |
| 9.079.975 | |
| 6.628.433 | |
| 2.479.416 7.570.479 5.056.538 |
Discontinued Operations Management Income Statement as at 30 September 2017
| € thousand | 9m 2017 | % | 9m 2016 | % | Var % |
|---|---|---|---|---|---|
| REVENUES | 27.266 | 100,0 | 26.633 | 100,0 | 2,4 |
| Direct costs | 10.291 | 37,7 | 9.864 | 37,0 | 4,3 |
| GROSS MARGIN | 16.975 | 62,3 | 16.769 | 63,0 | 1,2 |
| Research and Development costs | 3.481 | 12,8 | 3.255 | 12,2 | 6,9 |
| Commercial costs | 7.689 | 28,2 | 7.244 | 27,2 | 6,1 |
| General and Administrative costs | 3.455 | 12,7 | 3.106 | 11,7 | 11,2 |
| EBITDA before Stock Options | 2.350 | 8,6 | 3.164 | 11,9 | (25,7) |
| Stock Options | 174 | 0,6 | - | - | n.m. |
| EBITDA | 2.176 | 8,0 | 3.164 | 11,9 | (31,2) |
| Amortization, depreciation | 515 | 1,9 | 469 | 1,8 | 9,8 |
| OPERATING PROFIT (EBIT) | 1.661 | 6,1 | 2.695 | 10,1 | (38,4) |
| Financial income (charges) | (447) | (1,6) | (40) | (0,2) | n.s. |
| EARNINGS BEFORE TAXES (EBT) | 1.214 | 4,5 | 2.655 | 10,0 | (54,3) |
| Taxes | (376) | (1,4) | (649) | (2,4) | (42,1) |
| NET PROFIT DISCONTINUED OPERATIONS |
838 | 3,1 | 2.006 | 7,5 | (58,2) |
Income Statement – Management Reporting Third Quarter as of 30 September 2017
| € thousand | Q3 2017 | % | Q3 2016 | % | Var % |
|---|---|---|---|---|---|
| REVENUES | 8.113 | 100,0 | 8.053 | 100,0 | 0,7 |
| Direct costs | 4.795 | 59,1 | 4.645 | 57,7 | 3,2 |
| GROSS MARGIN | 3.318 | 40,9 | 3.408 | 42,3 | (2,6) |
| Research and Development costs | 606 | 7,5 | 555 | 6,9 | 9,2 |
| Commercial costs | 1.040 | 12,8 | 919 | 11,4 | 13,2 |
| General and Administrative costs | 927 | 11,4 | 1.035 | 12,9 | (10,4) |
| EBITDA before Stock Options | 745 | 9,2 | 899 | 11,2 | (17,1) |
| Stock Options | 23 | 0,3 | - | - | n.m. |
| EBITDA | 722 | 8,9 | 899 | 11,2 | (19,7) |
| Amortization, depreciation | 169 | 2,1 | 178 | 2,2 | (5,1) |
| OPERATING PROFIT (EBIT) | 553 | 6,8 | 721 | 9,0 | (23,3) |
| Financial income (charges) | 58 | 0,7 | 40 | 0,5 | n.m. |
| EARNINGS BEFORE TAXES (EBT) | 611 | 7,5 | 761 | 9,4 | (19,7) |
| Taxes | (193) | (2,4) | (203) | (2,5) | (4,9) |
| NET PROFIT CONTINUING OPERATIONS |
418 | 5,2 | 558 | 6,9 | (25,1) |
| Net Profit Discontinued Operations | 244 | 1.051 | (76,8) | ||
| NET PROFIT | 662 | 1.609 | (58,9) |