TORONTO, Feb. 13 /PRNewswire-FirstCall/ -- Softchoice Corporation (TSX: SO), a leading North American provider of technology solutions and services, today reported record financial results for the fourth quarter and 12 months ended December 31, 2007.
For the year ended December 31, 2007, Softchoice recorded record net income of US$22.0 million on revenue of US$777.1 million compared to net income of US$15.9 million on revenue of US$703.2 million recorded during the year prior. Earnings per share for the year amounted to US$1.27 per share basic (or US$1.25 per share fully diluted) compared to US$0.93 per share basic (or US$0.92 per share fully diluted) recorded in 2006.
"I am pleased to report that the Softchoice team has delivered another exceptional set of financial results," said David MacDonald, President and CEO of Softchoice. "Over the past year we have focused on consolidating market share, expanding our revenue base and diversifying the offerings we deliver to our customers. As a leading Microsoft LAR in North America, we have benefited from the very strong new product pipeline that Microsoft began bringing to market in 2007. We also seeded our own growth opportunities toward the end of the year by making a series of strategic acquisitions that are allowing us to deliver more advanced infrastructure solutions to a larger number of North American mid-market, enterprise and public sector organizations. Together, these initiatives do two very important things for Softchoice: they increase the strategic value of what we do for customers and they lay the foundation for the next phase of our growth."
For the three-month period ended December 31, the Company recorded net income of US$5.2 million compared to US$6.3 million for the same period the prior year, a decrease of 17 percent as a result of costs related to the acquisitions in the quarter. Earnings per share were US$0.30 per share basic (or US$0.30 per share fully diluted), compared to the US$0.36 per share basic (or US$0.36 per share fully diluted) recorded in the fourth quarter of 2006. Revenues for the period increased by 24 percent over the same time last year to US$266.1 million. These results include the results from the following acquisitions Softchoice made late in the year: the business of NexInnovations for the period of October 12, 2007, to December 31, 2007, and Software Plus for the period of December 13 to December 31, 2007.
On a stand-alone basis, Softchoice recorded revenues of US$225.9 million for the quarter ended December 31, 2007, representing an increase of 6 percent over the same period the year prior. Hardware sales amounted to US$57.6 million, representing an increase by 23 percent over the same quarter last year. On a stand-alone basis, operating income for the quarter remained flat year over year at US$6.1 million.
NexInnovations recorded revenues of US$25.6 million in the period following the close of this acquisition, including US$22.1 million in hardware revenues and US$3.5 million in software revenues. As expected, operating costs had yet to be fully realigned, resulting in a negative contribution from the business and a reduction in earnings of $1.3 million in the period following the acquisition, including amortization costs of US$0.3 million.
Software Plus recorded US$14.7 million in revenues in the period following the close of this acquisition; 84 percent of this revenue represents sales of software. This acquisition resulted in a slight increase in earnings of US$0.3 million.
"Over the past few months we have also made tremendous strides in the implementation of our growth strategy with our acquisitions of NexInnovations, Software Plus and Optimus Solutions," added Mr. MacDonald. "These transformational transactions are highly complementary to our business, whether by giving us the opportunity to extend our software licensing expertise to new accounts or to deepen relationships with existing customers by delivering and supporting a full spectrum of infrastructure solutions. From this broader and deeper revenue base, we plan to continue to achieve above-market growth and to pursue selective acquisition opportunities that complement our business model."
On February 12, 2008, the Directors of Softchoice declares a dividend in the amount of C$0.10 per common share payable on March 31, 2008, to shareholders of record at the close of business on March 14, 2008.
Acquisition Highlights - On October 12 and October 25, 2007, Softchoice acquired the Technology Solutions and Professional Services divisions of NexInnovations for US$12.4 million, including fees and expenses of US$0.6 million. The acquisition gives the Company the necessary capabilities to provide advanced systems infrastructure solutions to Canadian enterprise and public sector organizations. - On December 11, 2007, Softchoice completed the acquisition of Software Plus, the largest corporate Microsoft reseller in the U.S. Midwest, for a purchase price of US$47.1 million, net of cash acquired of US$1.8 million and fees and expenses of US$3.8 million. The purchase has served to bolster Softchoice's position as the fifth-largest Microsoft LAR in North America and a key provider of software licensing to U.S. small, mid-market, enterprise and public sector organizations. - On January 3, 2008, Softchoice acquired Optimus Solutions for a purchase price of US$38.1 million with a deferred payment of US$9 million payable in 2008, depending on the financial performance of the company. Optimus Solutions is a comprehensive IT products and solutions provider focused on helping U.S. enterprise and mid-market organizations plan, build and maintain their information technology systems infrastructure. Financial and Operational Highlights - Softchoice's hardware business demonstrated strong growth, increasing from 25 percent of total sales in 2006 to 30 percent of total sales in 2007. During the fourth quarter, hardware sales grew by 76 percent year over year. - During the year, sales of Microsoft Enterprise Agreements (EAs) licensing increased in Canada and the U.S. by 71 percent and 36 percent, respectively. Softchoice is the fifth-largest Microsoft LAR in North America and the number one provider of EA licensing based on the number of agreements managed. - Gross profit per employee increased by 23 percent over 2006, reflecting the proficiency of Softchoice's sales and marketing personnel in providing integrated technology solutions to North American organizations. - Over the past year Softchoice completed a total of 275 TechCheck assessments, helping a wide range of small, mid-market and enterprise organizations to reduce the cost, complexity and risk of managing their IT environment. - In 2007, Softchoice became authorized as a North American Corporate Tier reseller by VMware, the world's leading provider of virtualization software, and successfully attained Diamond Partner status in Canada for Hewlett-Packard. - Softchoice was named one of Canada's Best Workplaces by Canadian Business magazine and Canada's Top Solution Provider of the Year by Computer Dealer News magazine for the second year in a row. Fourth-Quarter Results Conference Call Details
Softchoice will hold a conference call to discuss its fourth-quarter results on February 13, 2008, at 11 a.m. EST.
Dave MacDonald, Softchoice's President and CEO, and Anne Brace, Softchoice's Chief Financial Officer, will host the call. The conference call will begin with a brief presentation followed by a question-and-answer session.
To participate in the conference: Local/international: 416-849-6185 Toll-free in North America: 1-866-443-4183 To listen to the call and view the Web presentation: http://events.onlinebroadcasting.com/softchoice/021908/index.php
To ensure participation, please dial in at least 10 minutes prior to the start of the conference at 11 a.m. EST.
For those unable to participate in the call, a link will be made available on the Softchoice website to an archived Web and audio version on February 14, 2007.
About Softchoice
As one of North America's leading providers of technology solutions and services, Softchoice helps businesses and organizations of all sizes to select, acquire and manage their software and hardware technology resources. Softchoice offers a full range of capabilities, including face-to-face consultations and IT asset management services designed to help customers save time, money and risk in IT procurement. In 2006, Softchoice was named Software Value Added Reseller (VAR) of the Year by VAR Business magazine. Softchoice currently has more than 900 employees operating from more than 40 branch offices located in major cities across the U.S. and Canada.
Softchoice stock is listed on the Toronto Stock Exchange (TSX) under the trading symbol "SO." The Common Shares of Softchoice are not registered under the U.S. Securities Act of 1933 and are not publicly traded in the United States.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, plans and timing for the introduction and enhancement of our services, and other expectations, intentions and plans contained in this press release that are not historical fact. When used in this press release, the words "anticipate," "expect" and similar expressions generally identify forward-looking statements. These statements reflect our current expectations and are subject to a number of risks and uncertainties including, but not limited to, our ability to integrate the business of Software Plus with our own, including the ability to maintain its customers, the ability to eliminate costs, and changes in technology and general market conditions, many of which are set out or incorporated by reference in the Company's latest Annual Information Form. Due to the many risks and uncertainties, Softchoice cannot assure that the forward-looking statements contained in this press release will be realized.
Softchoice Corporation Consolidated Balance Sheets (IN THOUSANDS OF U.S. DOLLARS) AS AT DECEMBER 31 2007 2006 ------------- ------------- Assets Current assets Cash $ 11,063 $ 7,328 Accounts receivable (note 4) 214,103 153,331 Inventories 172 240 Prepaids and other assets (note 5) 6,891 4,025 Future income taxes (note 6) 1,250 997 ------------- ------------- 233,479 165,921 Property, plant and equipment (note 7) 8,406 6,280 Goodwill (note 8) 44,720 12,465 Intangible assets (note 8) 31,996 4,603 Future income taxes (note 6) 1,225 1,478 ------------- ------------- $ 319,826 $ 190,747 ------------- ------------- ------------- ------------- Liabilities Current liabilities Bank indebtedness (note 9) $ 29,120 $ 10,285 Accounts payable and accrued liabilities 191,107 122,407 Deferred revenue 2,393 584 Income taxes payable 61 1,155 ------------- ------------- 222,681 134,431 Long-term liabilities Deferred lease inducements 591 189 Long-term debt (note 9) 21,854 - ------------- ------------- 22,445 189 Total liabilities 245,126 134,620 Shareholders' Equity Capital stock (note 10) 9,220 8,222 Contributed surplus (note 11) 1,343 482 Retained earnings 61,587 46,136 Accumulated other comprehensive income 2,550 1,287 ------------- ------------- 74,700 56,127 $ 319,826 $ 190,747 ------------- ------------- ------------- ------------- Commitments and contingencies (note 12) Related party transactions (note 15) See accompanying notes to consolidated financial statements. Softchoice Corporation Consolidated Statements of Earnings and Retained Earnings (IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS) FOR THE YEARS ENDED DECEMBER 31 2007 2006 ------------- ------------- Revenue Software $ 494,315 $ 494,930 Hardware 231,482 172,745 Agency Fees 51,285 35,562 ------------- ------------- 777,082 703,237 ------------- ------------- Cost of sales 651,965 604,683 ------------- ------------- Gross profit 125,117 98,554 ------------- ------------- Expenses Salaries and benefits 56,661 45,871 Selling, general and administrative 26,941 23,093 Amortization of property, plant and equipment 3,173 2,381 Amortization of intangible assets (note 8) 1,948 1,552 ------------- ------------- 88,723 72,897 Operating income 36,394 25,657 Interest expense 1,388 528 Other income - net (1,944) (956) ------------- ------------- Earnings before income taxes 36,950 26,085 ------------- ------------- Provision for income taxes (note 6) Current 14,770 9,846 Future 183 309 ------------- ------------- 14,953 10,155 ------------- ------------- Net earnings for the year 21,997 15,930 Retained earnings - Beginning of year 46,136 36,250 Dividends (note 13) (6,546) (6,044) ------------- ------------- Retained earnings - End of year $ 61,587 $ 46,136 ------------- ------------- ------------- ------------- Net earnings per common share (note 10) basic $ 1.27 $ 0.93 diluted $ 1.25 $ 0.92 Basic weighted average number of shares outstanding 17,311,251 17,217,458 Diluted weighted average number of shares outstanding 17,602,205 17,369,578 See accompanying notes to consolidated financial statements. Softchoice Corporation Consolidated Statements of Cash Flows (IN THOUSANDS OF U.S. DOLLARS) FOR THE YEARS ENDED DECEMBER 31 2007 2006 ------------- ------------- Cash provided by (used in) Operating activities Net earnings for the year $ 21,997 $ 15,930 Items not affecting cash Amortization of property, plant and equipment 3,173 2,381 Stock-based compensation (note 11) 1,166 (6) Future income taxes 183 309 Amortization of intangible assets 1,948 1,552 Unrealized foreign currency loss 1,069 17 Loss on capital assets 11 77 ------------- ------------- 29,547 20,260 Net change in non-cash working capital items relating to operations (note 16) 5,517 (8,790) ------------- ------------- 35,064 11,470 ------------- ------------- Financing activities Increase (decrease) in bank indebtedness 15,392 (3,461) Increase in long-term debt 21,854 - Payment of cash dividend (6,546) (6,044) Proceeds from issuance of common shares (note 10) 692 483 ------------- ------------- 31,392 (9,022) ------------- ------------- Investing activities Purchase of property, plant and equipment (3,854) (4,005) Proceeds on disposal of property, plant and equipment 29 - Acquisitions, net of cash acquired (note 3) (59,498) - Notes receivable - 1,920 ------------- ------------- (63,323) (2,085) ------------- ------------- Effect of exchange rate changes on cash 602 168 ------------- ------------- Increase in cash 3,735 531 Cash - Beginning of year 7,328 6,797 ------------- ------------- Cash - End of year $ 11,063 $ 7,328 ------------- ------------- ------------- ------------- See accompanying notes to consolidated financial statements. Supplemental disclosures of cash flow information (note 16) Softchoice Corporation Consolidated Statements of Comprehensive Income and Accumulated Other Comprehensive Income (IN THOUSANDS OF U.S. DOLLARS) AS AT DECEMBER 31 2007 2006 ------------- ------------- Comprehensive Income Net earnings for the period $ 21,997 $ 15,930 Foreign currency translation adjustment 1,263 201 ------------- ------------- Comprehensive Income $ 23,260 $ 16,131 ------------- ------------- ------------- ------------- Accumulated Other Comprehensive Income Balance - beginning of period $ 1,287 $ 1,086 Foreign currency translation adjustment 1,263 201 ------------- ------------- Balance - end of period $ 2,550 $ 1,287 ------------- ------------- ------------- ------------- Softchoice Corporation Notes to Consolidated Financial Statements December 31, 2007 and 2006 ------------------------------------------------------------------------- (in thousands of U.S. dollars, except per share amounts) 1. Nature of operations Softchoice Corporation (the "Company") was formed on May 15, 2002 pursuant to an amalgamation with Ukraine Enterprise Corporation (UEC). The Company was incorporated under the Canada Business Corporations Act. The Company is a North American business-to- business direct marketer of technology products. Softchoice's United States operations are carried on by Softchoice Corporation ("Softchoice U.S."), a corporation incorporated under the laws of the state of New York. On December 10, 2007, Softchoice incorporated a wholly owned subsidiary, Softchoice Holding Corporation ("Holdco"). Holdco is incorporated under the laws of Delaware. Softchoice transferred its ownership in Softchoice US into Holdco in exchange for the common shares of Holdco. Holdco is not an operating company. Softchoice U.S. has also issued preferred shares, which are entirely owned by the Company. 2. Significant accounting policies These consolidated financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles. Principles of consolidation These consolidated financial statements include the accounts of Softchoice Corporation and its wholly owned subsidiary, Holdco, and its wholly owned subsidiary Softchoice U.S. Accounting changes On January 1, 2007, the Company adopted Section 1506 of the CICA Handbook, Accounting Changes, which prescribes the criteria for changing accounting policies, together with the accounting treatment and disclosure of changes in accounting policies, changes in accounting estimates and corrections of errors. This standard did not affect the Company's consolidated financial position or results of operations. Cash Cash consists of cash on hand and cash balances with major financial institutions. Book overdrafts are included in bank indebtedness. Accounts receivable and allowance for doubtful accounts Trade accounts receivable are recorded at the invoiced amount net of provisions for doubtful accounts. The Company maintains an allowance for doubtful accounts at an amount estimated to be sufficient to provide adequate protection against losses resulting from collecting less than full payment on its accounts receivable. Individual overdue accounts are reviewed, and allowances are recorded when determined necessary to state accounts receivable at net realizable value. Additionally, the Company assesses the overall adequacy of the allowance for doubtful accounts by considering various factors including the aging of receivables, historical bad debt experience, and the general economic environment. Management's judgment is required when the Company assesses the realization of accounts receivable, including assessing the probability of collection and the current credit worthiness of each customer. Sales returns allowance At the end of each period, the Company records an estimate for sales returns based on historical experience. If actual sales returns are greater than estimated by management, additional expense may be incurred. The historical estimate is revisited twice a year to ensure it reflects the most relevant data available. Deferred revenue Deferred revenue includes revenue that is not yet earned on sales to customers with extended payment terms beyond 180 days. Revenue is recognized as the funds are received from the customer. Revenue recognition The Company generates revenue from selling technology products and licensing the rights to software products to end-users. Sales of product in which the Company acts as a principal are presented on a gross basis. As a principal, the Company obtains and validates a customer order, purchases the product from the supplier at a negotiated price, arranges for shipment of product, collects payment from customers, ensures that product reaches customers and processes returns. The Company's product is shipped directly to customers using third party carriers. Sales of product in which the Company acts as an agent are presented on a net basis. As an agent, the Company obtains the order and refers the order to a supplier for a fee. Revenue is recorded when the product is shipped to customers, FOB shipping point, or when customers acquire the right to use or copy software under license, but in no case prior to the commencement of the term of the software license agreement or service contract, and when the price is fixed and determinable and collection is reasonably assured. The Company estimates the level of anticipated returns based on historical experience and makes appropriate reserves at the time the revenue is recognized. The Company also generates revenue from providing professional services to end-users based on a pre-determined time and materials basis contract. Time incurred on the contract is tracked and billings are processed based on the percentage-of-completion method of accounting. Costs associated with the interim billings are tracked and recorded against the associated revenue. Cost of sales Rebates and market development funds received from vendors are included in cost of sales and are recorded as earned based on the contractual arrangements with the suppliers. Marketing development funds The Company receives funds from vendors to support the marketing and sale of their products. When these funds represent the reimbursement of a specific, incremental and identifiable cost, the related costs are netted against these funds and excess profits, if any, are recorded as a reduction of cost of sales. When the funds are not related to specific, incremental and identifiable costs, the amounts received are recorded as a reduction of cost of sales. Funds are recorded at the later of the date that the vendor is invoiced, according to the terms of the agreement with the vendor, or when the marketing effort is completed. Inventories Inventory is comprised of finished goods and is valued at the lower of cost and net realizable value. Cost is determined on a first-in, first-out basis. The new Section 3031, Inventories, relates to the accounting for inventories and revises and enhances the requirements for assigning costs to inventories. The new standard applies to interim and annual financial statements relating to fiscal years beginning on or after January 1, 2008. This standard is not expected to have a significant effect on the Company consolidated financial statements. Property, plant and equipment Property, plant and equipment are recorded at cost less accumulated amortization. Amortization is provided on a straight-line basis over their estimated useful lives as follows: Office equipment three years Computer equipment three years Computer software three years Leasehold improvements over the term of the related lease Property, plant, and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An estimate of undiscounted future cash flows produced by assets, or the appropriate grouping of assets, is compared with the carrying value to determine whether an impairment exists. If an impairment is determined to exist, the assets are written down to their fair value. Goodwill Goodwill represents consideration on acquisitions in excess of the fair value of tangible and identifiable intangible assets acquired. Goodwill is not amortized; however it is tested annually for impairment or more frequently if circumstances indicate goodwill may be impaired. The Company determines any impairment in value primarily on the ability to recover the balance from expected future operating cash flows on an undiscounted basis. Any permanent impairment in the value of goodwill is written off against income. Intangible assets Intangible assets are related to acquisitions and are recorded at their fair value at the acquisition date. These assets include customer relationships, non-compete agreements, and acquired contracts, which have finite lives. These intangible assets are amortized over the estimated economic lives of 5 to 10 years, unless indicated otherwise. Management reviews the carrying value of its intangible assets annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. If an impairment is determined to exist, the assets are written down to fair value. Income taxes The Company follows the asset and liability method of accounting for income taxes. Under this method, future tax assets and liabilities are determined based on the differences between the financial reporting and income tax bases of assets and liabilities and are measured using the substantively enacted tax rates and laws. The Company provides a valuation allowance for future tax assets when it is more likely than not that some portion or all of the future tax assets will not be realized. Foreign currency transactions Assets and liabilities denominated in currencies other than the respective functional currency are translated at exchange rates in effect at the balance sheet date into the functional currency. Revenue and expense items are translated at average rates of exchange for the period. Translation gains or losses are included in the determination of earnings. The Company is considered to be a self-sustaining foreign operation whose financial results are translated using the current rate, under which all assets and liabilities are translated at the exchange rate prevailing at the balance sheet date, and revenues and expenses are translated at average rates of exchange during the period. Resulting translation gains and losses are included in the Foreign Currency Translation Adjustment in the Consolidated Statements of Comprehensive Income and Accumulated Other Comprehensive Income. Capital disclosures The new Section 1535, Capital Disclosures, requires that an entity disclose information that enables users of its financial statements to evaluate an entity's objectives, policies and processes for managing capital, including disclosures of any externally imposed capital requirements and the consequences of non-compliance. The new standard applies to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007, specifically January 1, 2008 for the Company. This standard will impact the Company's disclosures provided but will not affect the Company consolidated results or financial position. Use of estimates Financial statements prepared in conformity with Canadian generally accepted accounting principles require management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and amounts of revenue and expenses reported during the reporting period. Management must also make estimates and judgments about future results of operations, related specific elements of the business and operations in assessing recoverability of assets and recorded value of liabilities. Actual results could differ from those estimates. Earnings per share Financial statements prepared in conformity with Canadian generally accepted accounting principles require management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and amounts of revenue and expenses reported during the reporting period. Management must also make estimates and judgments about future results of operations, related specific elements of the business and operations in assessing recoverability of assets and recorded value of liabilities. Actual results could differ from those estimates. Pension Plan The Company has a defined contribution plan providing retirement benefits for its employees. Employees may contribute subject to certain limits based on federal tax laws. The Company contributes 25% of the employees contribution up to 1% of the employee's base compensation. The Company contributions vest 50% after 2 years but before 3 years, 75% after 3 years but before 4 years, and 100% after 4 years. Employees that joined the Company as part of the Software Plus acquisition still remain under their existing plan as of December 31, 2007. All non-contract employees were moved onto the Company's pension plan as of January 1, 2008. Financial instruments Effective January 1, 2007 the Company adopted new recommendations from the Canadian Institute of Chartered Accountants (CICA) Handbook Section 3855, Financial Instruments - Recognition and Measurement; Section 1530, Comprehensive Income; Section 3861, Financial Instruments - Disclosure and presentation; Section 3251, Equity and Section 3865, Hedges. The adoption of these new standards resulted in changes in the accounting for financial instruments as well as the recognition of certain transition adjustments that have been recorded in opening accumulated other comprehensive income as described below. The standards are applied retroactively with prospective presentation except for adjustments relating to the cumulative translation adjustments account for foreign self-sustaining subsidiaries which are applied and presented retroactively. The principal changes in the accounting for financial instruments due to the adoption of these accounting standards are described below. The new Sections 3862 and 3863 replace CICA Handbook Section 3861 Financial Instruments - Disclosure and Presentation, revising and enhancing its disclosure requirements, and carrying forward unchanged its presentation requirements. These new sections place increased emphasis on disclosures about the nature and extent of risks arising from financial instruments and how the entity manages those risks. The new standards apply to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007, specifically January 1, 2008 for the Company. This standard will impact the Company's disclosures provided but will not affect the Company's consolidated results or financial position. (a) Financial assets and financial liabilities Under the new standards, financial assets and financial liabilities are initially recognized at fair value and are subsequently measured based on their classification as described below. The classification depends on the purpose for which the financial instruments were acquired and their characteristics. The classification generally cannot be changed subsequent to designation at initial recognition of the instruments. Held for trading Financial assets that are purchased and held with the intention of generating profits in the near term are classified as held for trading. These instruments are accounted for at fair value with the change in fair value recognized in net earnings during the period. Cash is classified as held for trading. Held-to-maturity Securities that have a fixed maturity date and which the Company has positive intention and the ability to hold to maturity are classified as held-to-maturity and accounted for at amortized cost using the effective interest rate method. No investments are classified as held-to-maturity on December 31, 2007. Receivables On the adoption of the new recommendation, accounts receivables are carried at amortized cost. This classification is consistent with the classification under the prior accounting standard. Available-for-sale Financial assets designated to be available-for-sale or not designated as one of the above categories are classified as available-for-sale. These assets are accounted for at fair value, with changes in fair value recognized in other comprehensive income. When a decline in fair value is determined to be other-than- temporary, the cumulative loss included in accumulated other comprehensive income is removed and recognized in net earnings. Gains and losses realized on disposal of available-for-sale securities are recognized in other income in net earnings. No investments are classified as available-for-sale on December 31, 2007. Financial Liabilities Bank indebtedness, accounts payable, accrued liabilities, deferred revenue and income taxes payable have been classified as other financial liabilities on the adoption of the new recommendations. Financial liabilities are initially recognized at fair value and are subsequently measured at amortized cost. (b) Embedded derivatives Derivatives may be embedded in other financial and non-financial instruments (the "host instrument"). Prior to the adoption of the new standards, embedded derivatives were not accounted for separately from the host instrument. Under the new standard, embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not clearly and closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the combined contract is not held for trading or designated at fair value. These embedded derivatives are measured at fair value with subsequent changes recognized in the Statement of Earnings and Retained Earnings as an element of administrative expenses. From time to time, the Company enters into certain contracts for the purchase or sale of non-financial items that are denominated in currencies other than the Canadian dollar. In cases where the foreign exchange component is not leveraged and does not contain an option feature and the contract is denominated in the functional currency of the counter-party, the embedded derivative is considered to be closely related and is not accounted for separately. If the contract is neither in Canadian currency nor the functional currency of the counter-party, the embedded foreign currency derivative is separated unless the non-functional item delivered under the contract is routinely denominated in the currency of the contract in international commerce or the currency the contract is denominated in is commonly used in the economic environment in which the transaction takes place. The change in accounting policy related to embedded derivatives did not result in any material changes to the December 31, 2006 financial statements. As of December 31, 2007, the fair market value of embedded derivatives was not material and did not have a significant impact on earnings. (c) Comprehensive income The Canadian Institute of Chartered Accountants (CICA) issued section 1530 of the CICA Handbook, Comprehensive Income, effective for fiscal years beginning on or after October 1, 2006. Comprehensive income is described as the change in a company's net assets that results from transactions, events and circumstances related to sources other than the company's shareholders. The CICA also made changes to section 3250 of the CICA Handbook, Surplus, and reissued it as section 3251, Equity. The section is also effective for fiscal years beginning on or after October 1, 2006. The Company has adopted these sections effective January 1, 2007. Credit risk The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of accounts receivable and other receivables. The Company performs ongoing credit evaluations of its customers' financial condition. Foreign exchange and interest rate risk The Company operates in both the U.S. and Canada, which gives rise to a risk that its earnings and cash flows may be adversely impacted by fluctuations in foreign exchange conversion rates. From time-to-time, the Company may use derivatives to manage this foreign exchange risk. The Company's policy is to use derivatives for risk management purposes only, and it does not enter into such contracts for trading purposes. The Company enters into derivatives only with high credit quality financial institutions. There is one outstanding derivative financial instrument as at December 31, 2007 relating to an interest rate swap (note 9). There were no outstanding derivative financial instruments as at December 31, 2006. This swap is classified as held for trading. Fair value of financial instruments The book values of cash, bank indebtedness, prepaids, accounts receivable, accounts payable, future income taxes, income taxes payable and accrued liabilities approximate their respective fair values due to the short-term nature of these instruments. Deferred Share Unit Plan and Long Term Incentive Plan On May 7, 2007 the shareholders approved the implementation of a Deferred Share Unit Plan (DSU) and Long Term Incentive Plan (LTIP) for directors and key employees respectively. The Company is accruing for the costs of the DSU and LTIP programs based on projected payments under the respective plans. The details of the plan are described in note 10. Share based compensation The Company has a share based compensation plan. The Company accounts for this plan, which calls for settlement by the issuance of equity instruments, using the fair value based method. Under the fair value based method, compensation cost attributed to the options to employees is measured at fair value at the grant date and amortized over the vesting period. Compensation cost attributable to awards to employees that call for settlement in cash that is measured at the intrinsic value between the grant date and measurement date results in a change in compensation cost. For options that vest at the end of a vesting period, compensation cost is recognized on a straight-line basis over the vesting period. No compensation cost is recognized for options that employees forfeit if they fail to satisfy the service requirement for vesting. 3. Acquisitions On October 12 and 26, 2007, the Company completed the acquisition of the technology solutions and products division of NexInnovations Inc., in exchange for total cash consideration of $12,428, including acquisition costs of $624. Under the terms of the Agreement, Softchoice is acquiring the records, authorizations and certifications related to NexInnovations' technology solutions and products division. The agreement does not include the NexInnovations' break-fix services division, which was subsequently sold to Brains II on October 16, 2007. The acquisition has been accounted for using the purchase method of accounting and, accordingly, the operations of Nexinnovations have been included in the consolidated financial statements since the date of acquisition. The Company expects to finalize the allocation of the purchase price during 2008 and the preliminary allocation may change. The intangibles arising form this acquisition will be amortized into income over their estimated useful life of 10 years. The following is the fair value of the assets and liabilities acquired at the date of acquisition: Intangible assets Customer relationships $ 12,428 Goodwill - --------- Total purchase consideration $ 12,428 --------- --------- On December 11, 2007, the Company completed the share purchase of Software Plus in exchange for total cash consideration of $47,070, net of cash acquired including acquisition costs of $2,093. Software Plus is the largest corporate reseller of computer software in the U.S. Midwest and the industry's ninth largest Microsoft Large Account Reseller (LAR). The acquisition has been accounted for using the purchase method of accounting and, accordingly, the operations of Software Plus have been included in the consolidated financial statements since the date of acquisition. The Company expects to finalize the allocation of the purchase price during 2008 and the preliminary allocation may change. The intangibles arising from this acquisition will be amortized into income over their estimated useful life of 10 years. The following is the fair value of the assets and liabilities acquired at the date of acquisition: Net assets acquired Accounts receivable $ 24,341 Other current assets 974 Property, plant and equipment 497 Accounts payable and accrued liabilities (24,513) Other current liabilities (1,893) (594) --------- Intangible assets Customer relationships 16,397 Goodwill 31,267 --------- Total purchase consideration, net of cash acquired $ 47,070 --------- --------- 4. Accounts receivable Accounts receivable are comprised of the following: 2007 2006 Trade accounts receivable - net of provision of $2,099 (2006 - $1,224) $ 193,439 $ 135,268 Other receivables - net of provision of $591 ( 2006 - $580 ) 20,664 18,063 --------------------------- $ 214,103 $ 153,331 --------------------------- --------------------------- 5. Prepaids and other assets Prepaids and other assets include cash deposits, deferred costs and prepaid expenses. 6. Income tax expense and future income taxes The Company's income tax provision has been determined as follows: 2007 2006 Earnings before income taxes $ 36,950 $ 26,085 --------------------------- --------------------------- Combined basic federal and provincial income tax rate 35.47% 35.48% Expected income tax expense $ 13,106 $ 9,255 Foreign tax rates differential 1,671 1,093 Items not deductible for tax purposes (permanent differences) 668 248 U.S. state tax deductible for federal purposes (626) (422) Other 134 (19) --------------------------- Provision for income taxes $ 14,953 $ 10,155 --------------------------- --------------------------- The significant components of future income tax assets and liabilities 2007 2006 Future income tax assets Amortization $ 1,225 $ 1,456 Share issue and Reverse-take-over costs 0 22 Reserves 1,250 997 --------------------------- Net future income tax assets $ 2,475 $ 2,475 --------------------------- --------------------------- Net future income tax assets are classified as follows: 2007 2006 Current $ 1,250 $ 997 Long-term 1,225 1,478 --------------------------- $ 2,475 $ 2,475 --------------------------- --------------------------- The Company has not recorded a valuation allowance against its future income tax assets because it believes it is more likely than not that sufficient taxable income will be realized during future periods to utilize the future tax assets. Realization of the future tax benefit is dependent upon many factors including the Company's ability to generate taxable income in the applicable jurisdictions in future periods. 7. Property, plant and equipment 2007 ----------------------------------------- Accumulated Cost amortization Net Office equipment $ 7,387 $ 5,669 $ 1,718 Computer equipment 4,891 2,792 2,099 Computer software 5,850 3,802 2,048 Leasehold improvements 3,197 656 2,541 ----------------------------------------- $ 21,325 $ 12,919 $ 8,406 ----------------------------------------- ----------------------------------------- 2006 ----------------------------------------- Accumulated Cost amortization Net Office equipment $ 5,589 $ 4,417 $ 1,172 Computer equipment 4,250 2,794 1,456 Computer software 5,007 3,663 1,344 Leasehold improvements 3,921 1,613 2,308 ----------------------------------------- $ 18,767 $ 12,487 $ 6,280 ----------------------------------------- ----------------------------------------- 8. Goodwill and intangible assets Goodwill Intangibles Balance as at December 31, 2006 $ 12,465 $ 4,603 --------------------------- Additions (note 3) 31,267 28,825 Amortization - (1,948) Foreign exchange 988 516 --------------------------- Balance as at December 31, 2007 $ 44,720 $ 31,996 --------------------------- --------------------------- 2007 ----------------------------------------- Accumulated Cost amortization Net Acquired contracts $ 2,144 $ 1,907 $ 237 Customer relationships 34,893 4,171 30,722 Favourable lease contract 110 110 0 Foreign exchange impact 1,709 672 1,037 ----------------------------------------- $ 38,856 $ 6,860 $ 31,996 ----------------------------------------- ----------------------------------------- 2006 ----------------------------------------- Accumulated Cost amortization Net Acquired contracts $ 2,144 $ 1,758 $ 386 Customer relationships 6,068 2,375 3,693 Favourable lease contract 110 108 2 Foreign exchange impact 558 36 522 ----------------------------------------- $ 8,880 $ 4,277 $ 4,603 ----------------------------------------- ----------------------------------------- 9. Bank indebtedness and long-term debt 2007 2006 Revolving credit facility $ 25,505 $ 10,285 Term debt - current 3,615 - Term debt - long-term 21,854 - --------------------------- $ 50,974 $ 10,285 --------------------------- --------------------------- On December 11, 2007 the Company increased its revolving credit facility to support the acquisition of Software Plus and the working capital needs of the Company. The credit facility is with a large American financial institution and its Canadian subsidiary and provides for credit to both the Company and its US subsidiary in the combined amount of $70,000. $25,000 of this amount is provided under a term loan payable in semi-annual installments over five years with interest payable monthly. Availability under the remaining facility is subject to a formula based on eligible accounts receivable. The interest charged on the facility fluctuates from prime to prime less 0.75 percent. The facility is subject to various covenant requirements that have been met for the current period. The Company had also used $1,500 of its available credit as security for letters of credit issued to various institutions. The Company has entered into an interest rate swap to convert a total of $7,500 of the floating rate credit facility to a fixed rate of interest. Under the terms of the swap, the Company receives interest based on the CAD-BA-CDOR rate and pays a fixed rate of 5.20% on a monthly basis. The swap went into effect on July 11, 2007 and will terminate on January 11, 2009. As of December 31, 2007, the interest rate swap had a negative fair market value of $82. This loss has been recorded in the Consolidated Statement of Earnings. 10. Capital stock Authorized Unlimited number of common shares Issued 2007 2006 17,407,631 (December 31, 2006 - 17,267,446) $ 9,220 $ 8,222 --------------------------- $ 9,220 $ 8,222 --------------------------- --------------------------- Class A common shares Shares Amount Balance as at December 31, 2005 17,166,499 $ 7,615 Issued for options exercised (a) 100,947 483 Transfer from contributed surplus (note 11) - 124 --------------------------- Balance as at December 31, 2006 17,267,446 $ 8,222 --------------------------- --------------------------- Issued for options exercised (a) 140,185 692 Transfer from contributed surplus (note 11) - 305 --------------------------- Balance as at December 31, 2007 17,407,631 $ 9,220 --------------------------- --------------------------- a) Common shares issued for options vested and exercised in the year were 140,185 (2006 - 100,947) at a weighted average share price of $4.94 (2006 - $4.79 ). Net earnings per common share Weighted average number of common shares: 2007 2006 Issued and outstanding - Beginning of year 17,267,446 17,166,499 Weighted average number of shares issued in the year - net of share redemptions 43,805 50,959 --------------------------- Weighted average number of shares used in computing basic earnings per share 17,311,251 17,217,458 Assumed exercise of stock options - net of shares repurchased from proceeds 290,954 152,120 --------------------------- Weighted average number of shares used in computing diluted earnings per share 17,602,205 17,369,578 --------------------------- --------------------------- Stock option plan The Board of Directors approved an Employee Stock Option Plan under which 1,706,000 common shares were reserved for issuance to employees. The options' vesting period is determined by the Board of Directors at the time of grant and expires within six to eight years after the date of grant. All options currently outstanding have vested. The Directors cancelled this plan in November 2006. A summary of the status of the Company's employee stock option plan is as follows in Canadian dollars : 2007 2006 ------------------------------------------------------- Weighted Weighted average average Number of exercise Number of exercise options price options price ------------------------------------------------------- Outstanding - Beginning of year 337,400 $ 5.87 464,294 $ 5.69 Granted - - - - Expired (1,769) 5.89 (25,947) 4.01 Exercised (140,185) 5.08 (100,947) 5.54 ------------------------------------------------------- Outstanding - End of year 195,446 $ 6.43 337,400 $ 5.87 ------------------------------------------------------- ------------------------------------------------------- Exercisable - End of year 195,446 $ 6.43 337,400 $ 5.87 ------------------------------------------------------- ------------------------------------------------------- Options held by employees 92,821 5.80 150,575 5.80 Options held by officers 102,625 5.93 186,825 5.93 ------------------------------------------------------- 195,446 $ 6.43 337,400 $ 5.87 ------------------------------------------------------- ------------------------------------------------------- Options outstanding ----------------------------------------------------------- Weighted Number average outstanding remaining Weighted Range of as at contractual average exercise December 31, life exercise prices 2007 (years) price 4.10 10,525 0.39 4.10 4.75 31,575 1.25 4.75 5.20 28,357 1.19 5.20 6.82 74,989 0.40 6.82 8.10 50,000 2.12 8.10 --------------------------- --------------------------- 195,446 1.20 $ 6.43 --------------------------- --------------------------- --------------------------- --------------------------- Options exercisable ----------------------------------------------------------- Weighted Number average outstanding remaining Weighted Range of as at contractual average exercise December 31, life exercise prices 2007 (years) price 4.10 10,525 0.39 4.10 4.75 31,575 1.25 4.75 5.20 28,357 1.19 5.20 6.82 74,989 0.40 6.82 8.10 50,000 2.12 8.10 --------------------------- --------------------------- 195,446 1.20 $ 6.43 --------------------------- --------------------------- --------------------------- --------------------------- The exercise price of stock options granted is determined by the Board of Directors, but cannot be less than 100% of the market price of the common shares at the date of grant. For the purposes of calculating the stock option expense, the fair value of each option granted for each year was estimated using the Black-Scholes option pricing model. The Company has not granted stock options during the twelve-month period ended December 31, 2007 (2006 - nil). The 2003 stock options were valued using the following assumptions: expected volatility of 75%, risk free interest rates of 5%, expected lives of 4 years; and expected dividend yields of nil percent. The weighted average grant date fair value of the options issued in 2003 is $5.57, net of cancellations. There have been no additional stock options issued since 2003. On May 7, 2007, the shareholders approved the implementation of a Deferred Share Unit Plan (DSU) and Long Term Incentive Plan (LTIP) for directors and key employees respectively, the details of each plan are as follows : Deferred Share Unit Plan The Company offers a Deferred Share Unit Plan (DSU) for members of the Board of Directors. For each calendar year, the Board of Directors shall determine the amount of compensation for non- executive directors that shall be paid in Deferred Share Units. At the beginning of each calendar quarter, the number of DSUs to be credited to the account of each eligible director will be determined by dividing one-quarter of that portion of the annual compensation that is to be paid in DSUs by the Fair Market Value of the Common Shares. The Fair Market Value is the volume weighted average trading price per common share of the Company on the Toronto Stock Exchange during the five trading days immediately preceding such quarter if the Common Shares are then traded on the Toronto Stock Exchange or the fair market value as determined by the Board. Each DSU represents the right to receive one Common Share of the Company when the holder ceases to be a non-executive director of the Company. To satisfy this obligation, the Company shall at its option either (i) issue Common Shares from treasury to the director, or (ii) direct the Plan Trustee (an independent trust company selected by the Company) to acquire Common Shares in the market at the direction of the Company for the purpose of share compensation arrangements, including the DSU Plan to deliver Common Shares to the director. The cost to the Company of the DSU's granted for the twelve month period ended December 31, 2007 was $224, respectively. Long Term Incentive Plan Under Softchoice's Long Term Incentive Plan (LTIP), executives and other senior employees are granted awards to receive Softchoice common shares as a portion of their total compensation. For each year, the participating employee shall elect the number of Common Shares he or she will agree to hold (the ""invested shares"") between a minimum number and a maximum number determined by the Human Resource and Corporate Governance Committee. At the end of a stipulated performance period (which is December 31, 2009 in the case of the initial grants), the Company will deliver a multiple of the number of invested shares that were owned by the participating employee throughout the period, where the matching multiple depends on several factors. LTIP awards will not vest until the end of the applicable performance period. The Company may fulfill its obligations to deliver Common Shares under the LTIP at its option by either (i) issuing Common Shares from treasury to the participating employee, or (ii) directing the Plan Trustee (an independent trust company selected by the Company) to acquire Common Shares in the market at the direction of the Company for the purpose of share compensation arrangements, including the LTIP to deliver Common Shares to the participating employees. As at December 31, 2007, there were no awards made from the LTIP program. The cost of the LTIP program accrued for the twelve month period ended December 31, 2007 was $941. 11. Contributed surplus For stock options granted to employees and directors after January 1, 2002, the Company records compensation expense using the fair value method. Fair values are determined using the Black-Scholes option pricing model. Compensation costs are recognized over the three year vesting period as an increase to stock-based compensation expense and contributed surplus. When options are exercised, the proceeds received by the Company, together with the fair-value amount in contributed surplus are credited to capital stock. Amount Balance of Contributed Surplus as at January 1, 2005 $ 612 Stock based compensation expense (6) Stock options exercised (note 10) (124) ------------- Balance of Contributed Surplus as at December 31, 2006 $ 482 Stock based compensation expense 1,166 Stock options exercised (note 10) (305) ------------- Balance of Contributed Surplus as at December 31, 2007 $ 1,343 ------------- ------------- 12. Commitments and contingencies During the normal course of business, there have been various claims instituted against the Company. Management is unaware of any matters that have a material adverse effect on the financial position of the Company or its results of operations. No amount has been provided in these financial statements in respect of these claims. Loss, if any, sustained upon their ultimate resolution will be accounted for prospectively in the period of settlement in the consolidated statements of earnings. The Company is obligated to make future minimum annual lease payments under operating leases for office equipment and premises as well as a commitment for the implementation of a new tax software package as follows: Amount 2008 $ 7,198 2009 5,641 2010 4,895 2011 4,307 2012 4,278 Thereafter 12,136 ------------- $ 38,455 ------------- ------------- 13. Dividend In 2006 and 2007 the Company paid an annual dividend of CAD$0.40 per common share in instalments of CAD$0.10 each quarter. 14. Defined contribution plan The Company has a defined contribution plan providing retirement benefits for its employees. Employees may contribute subject to certain limits based on federal tax laws. The Company contributes 25% of the employees contribution up to 1% of the employee's base compensation. The Company contributions vest 50% after 2 years but before 3 years, 75% after 3 years but before 4 years, and 100% after 4 years. The total pension expense for 2007 was $120 (2006 - $89). 15. Related party transactions Included in accounts receivable is an amount due from a related party: $549 (2006 - $83) due from a major shareholder for product sales with shareholder were $834 (2006 - $450). This related party transaction is in the normal course of operations and has been recorded at the exchange amount, which is the amount of consideration established and agreed between the related parties. The Company offers a Deferred Share Unit Plan (DSU) for members of the Board of Directors. Refer to note 10 for a description of this plan and the amounts recorded in the financial statements. 16. Supplemental disclosures of cash flow information 2007 2006 Interest paid $ 708 $ 308 Taxes paid 15,984 10,168 Net change in non-cash working capital items relating to operations: 2007 2006 Accounts receivable $ (25,404) $ (15,683) Inventories 112 (68) Prepaids and other assets (1,643) 1,240 Accounts payable and accrued liabilities 31,442 6,052 Deferred revenue 1,809 - Deferred lease inducements 402 - Income taxes recoverable (1,201) (331) --------------------------- $ 5,517 $ (8,790) --------------------------- --------------------------- 17. Segmented information Industry segments The Company operates in two reportable business segments: (a) software, selling technology products, consulting and licensing the rights to software products to end-users; and (b) hardware, selling computer hardware products to end-users. December 31, December 31, 2007 2006 Software revenue $ 545,600 $ 530,492 Hardware revenue 231,482 172,745 ---------------------------- Total revenue $ 777,082 $ 703,237 ---------------------------- ---------------------------- The Company's assets, operations and employees are located in Canada and the United States. Revenues are attributed to customers based on where the products are shipped. Geographic Information Geographic segments of revenue are as follows: December 31, December 31, 2007 2006 Canada(1) $ 334,451 $ 289,208 United States 442,631 414,029 --------------------------------------------------------------------- $ 777,082 $ 703,237 --------------------------------------------------------------------- --------------------------------------------------------------------- (1) Revenue for the twelve months ended December 31, 2007 and 2006, is CAD$355,209 and CAD$328,000, respectively. Geographic segments of property and equipment are located as follows: December 31, December 31, 2007 2006 Canada $ 7,166 $ 5,423 United States 1,240 857 --------------------------------------------------------------------- $ 8,406 $ 6,280 --------------------------------------------------------------------- --------------------------------------------------------------------- Geographic segments of goodwill are as follows: December 31, December 31, 2007 2006 Canada $ 6,491 $ 5,504 United States 38,229 6,961 --------------------------------------------------------------------- $ 44,720 $ 12,465 --------------------------------------------------------------------- --------------------------------------------------------------------- Geographic segments of intangible assets are as follows: December 31, December 31, 2007 2006 Canada $ 15,599 $ 4,603 United States 16,397 - --------------------------------------------------------------------- $ 31,99 $ 4,603 --------------------------------------------------------------------- --------------------------------------------------------------------- 18. Economic dependence Approximately 37% (December 31, 2006 - 43%), of the Company's sales in the period relate to products published by one software publisher. 19. Subsequent events On January 2, 2008 the Company announced that it had reached a definitive agreement to acquire Optimus Solutions for an estimated purchase price of $38,100 in cash with a deferred payment of up to $9,000 payable in 2008 depending on the financial performance of Optimus Solutions. Optimus Solutions is a comprehensive IT products and solutions company focused on helping enterprise and mid-market clients plan, build and maintain their information technology infrastructure with headquarters in Norcross Georgia, and nine offices in the United States. The acquisition has been funded by a term loan in the amount of $44,500 CAD from a major Canadian financial institution. The debt has a one year term with interest charges of prime plus 2.5% in the first quarter of 2008 and rising by 50 basis points each quarter thereafter. In order to support the working capital requirements of this acquisition the Company has increased its revolving credit facility with a major American financial institution for its U.S. subsidiary by $15,000. The total available credit under the revised facility is $85,000, including the term debt referred to in note 9. On February 12, 2008, the Directors declared a dividend in the amount of CAD$0.10 per common share payable on March 31, 2008 to shareholders of record at the close of business on March 14, 2008. 20. Comparative figures Certain figures for previous years have been reclassified to conform with the current year's financial statement presentation. Softchoice Issues Supporting Materials for 2007 Q4 Earnings Call
Toronto - Feb. 13, 2008 - Softchoice Corporation (TSX: SO), a leading North American provider of technology solutions and services, will host its annual and fourth quarter results earnings today at 11 a.m. EST. The supporting materials for the call can be accessed in advance by clicking on the following link: http://files.newswire.ca/682/2007Q4EarningsCallv9.ppt
Fourth-Quarter Results Conference Call Details
Softchoice will hold a conference call to discuss its fourth-quarter results on February 13, 2008, at 11 a.m. EST.
Dave MacDonald, Softchoice's President and CEO, and Anne Brace, Softchoice's Chief Financial Officer, will host the call. The conference call will begin with a brief presentation followed by a question-and-answer session.
To participate in the conference: Local/international: 416-849-6185 Toll-free in North America: 1-866-443-4183 To listen to the call and view the Web presentation: http://events.onlinebroadcasting.com/softchoice/021908/index.php
To ensure participation, please dial in at least 10 minutes prior to the start of the conference at 11 a.m. EST.
For those unable to participate in the call, a link will be made available on the Softchoice website to an archived Web and audio version on February 14, 2007.
About Softchoice
As one of North America's leading providers of technology solutions and services, Softchoice helps businesses and organizations of all sizes to select, acquire and manage their software and hardware technology resources. Softchoice offers a full range of capabilities, including face-to-face consultations and IT asset management services designed to help customers save time, money and risk in IT procurement. In 2006, Softchoice was named Software Value Added Reseller (VAR) of the Year by VAR Business magazine. Softchoice currently has more than 900 employees operating from more than 40 branch offices located in major cities across the U.S. and Canada.
Softchoice stock is listed on the Toronto Stock Exchange (TSX) under the trading symbol "SO." The Common Shares of Softchoice are not registered under the U.S. Securities Act of 1933 and are not publicly traded in the United States.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, plans and timing for the introduction and enhancement of our services, and other expectations, intentions and plans contained in this press release that are not historical fact. When used in this press release, the words "anticipate," "expect" and similar expressions generally identify forward- looking statements. These statements reflect our current expectations and are subject to a number of risks and uncertainties including, but not limited to, our ability to integrate the business of Software Plus with our own, including the ability to maintain its customers, the ability to eliminate costs, and changes in technology and general market conditions, many of which are set out or incorporated by reference in the Company's latest Annual Information Form. Due to the many risks and uncertainties, Softchoice cannot assure that the forward-looking statements contained in this press release will be realized.
