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We will continue to extend our reach globally and focus our efforts on increasing our license sales to both existing and new clients. Our newest effort towards this expansion includes opening a branch office in Colombia which will help us to grow our presence in the South American market.
The excellent reputation behind our Company and its product suite offering will continue to enable us to grow and sustain a healthy market share while generating solid software license revenue. With our strong working capital position, we are well positioned to continue to invest in all aspects of our business in order to continue to grow and diversify our revenue base and to ultimately return value to our shareholders in the form of regular quarterly dividend payments and growth in share value.
Finally, I regret to report that John Kalman, our Vice President, Finance and CFO, has informed the Company of his intention to retire effective August 31, 2013. The Company is currently reviewing its options regarding John's replacement and it is expected that his responsibilities will be gradually transitioned once a successor is in place.
Kenneth M. Dedeluk, President and Chief Executive Officer
February 11, 2013
COMPUTER MODELLING GROUP LTD.CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONUNAUDITED (thousands of Canadian $) December 31, 2012 March 31, 2012--------------------------------------------------------------------------------------------------------------------------------------------------------AssetsCurrent assets: Cash 52,236 55,374 Trade and other receivables 10,636 15,494 Prepaid expenses 1,007 1,195 Prepaid income taxes 510 ----------------------------------------------------------------------------- 64,389 72,063Property and equipment 3,467 2,829----------------------------------------------------------------------------Total assets 67,856 74,892--------------------------------------------------------------------------------------------------------------------------------------------------------Liabilities and Shareholders' EquityCurrent liabilities: Trade payables and accrued liabilities 4,809 5,358 Income taxes payable - 1,404 Deferred revenue 15,510 21,693---------------------------------------------------------------------------- 20,319 28,455Deferred tax liability (note 7) 297 358----------------------------------------------------------------------------Total liabilities 20,616 28,813----------------------------------------------------------------------------Shareholders' equity: Share capital 37,705 31,751 Contributed surplus 4,450 3,535 Retained earnings 5,085 10,793----------------------------------------------------------------------------Total shareholders' equity 47,240 46,079----------------------------------------------------------------------------Total liabilities and shareholders' equity 67,856 74,892--------------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to condensed consolidated financial statements.COMPUTER MODELLING GROUP LTD.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME Three months ended Nine months ended December 31 December 31UNAUDITED (thousands of Canadian $ except per share amounts) 2012 2011 2012 2011--------------------------------------------------------------------------------------------------------------------------------------------------------Revenue (note 4) 16,802 15,898 49,341 43,819----------------------------------------------------------------------------Operating expenses Sales, marketing and professional services 3,778 3,536 11,333 9,703 Research and development (note 5) 3,136 2,747 9,061 7,635 General and administrative 1,612 1,522 4,534 4,070---------------------------------------------------------------------------- 8,526 7,805 24,928 21,408----------------------------------------------------------------------------Operating profit 8,276 8,093 24,413 22,411Finance income (note 6) 280 123 422 1,109Finance costs (note 6) - (32) - -----------------------------------------------------------------------------Profit before income and other taxes 8,556 8,184 24,835 23,520Income and other taxes (note 7) 2,437 2,394 7,266 6,749----------------------------------------------------------------------------Net and total comprehensive income 6,119 5,790 17,569 16,771--------------------------------------------------------------------------------------------------------------------------------------------------------Earnings Per ShareBasic (note 8(e)) 0.16 0.16 0.47 0.46Diluted (note 8(e)) 0.16 0.15 0.45 0.44--------------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to condensed consolidated financial statements.COMPUTER MODELLING GROUP LTD.CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY CommonUNAUDITED (thousands of Share Contributed Retained Total Canadian $) Capital Surplus Earnings Equity--------------------------------------------------------------------------------------------------------------------------------------------------------Balance, April 1, 2011 24,801 2,655 8,314 35,770Total comprehensive income for the period - - 16,771 16,771Dividends paid - - (15,651) (15,651)Shares issued for cash on exercise of stock options (note 8(b)) 4,344 - - 4,344Common shares buy-back (notes 8(b) & (c)) (25) - (413) (438)Stock-based compensation: Current period expense - 1,433 - 1,433 Stock options exercised 812 (812) - -----------------------------------------------------------------------------Balance, December 31, 2011 29,932 3,276 9,021 42,229--------------------------------------------------------------------------------------------------------------------------------------------------------Balance, April 1, 2012 31,751 3,535 10,793 46,079Total comprehensive income for the period - - 17,569 17,569Dividends paid - - (21,806) (21,806)Shares issued for cash on exercise of stock options (note 8(b)) 5,061 - - 5,061Common shares buy-back (notes 8(b) & (c)) (80) (1,471) (1,551)Stock-based compensation: Current period expense - 1,888 - 1,888 Stock options exercised 973 (973) - -----------------------------------------------------------------------------Balance, December 31, 2012 37,705 4,450 5,085 47,240--------------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to condensed consolidated financial statements.COMPUTER MODELLING GROUP LTD.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended Nine months ended December 31 December 31UNAUDITED (thousands of Canadian $) 2012 2011 2012 2011--------------------------------------------------------------------------------------------------------------------------------------------------------Cash flows from operating activities Net income 6,119 5,790 17,569 16,771Adjustments for: Depreciation 411 321 1,122 877 Income and other taxes (note 7) 2,437 2,394 7,266 6,749 Stock-based compensation (note 8(d)) 656 566 1,888 1,433 Interest income (note 6) (133) (123) (409) (341)---------------------------------------------------------------------------- 9,490 8,948 27,436 25,489Changes in non-cash working capital: Trade and other receivables 1,775 (1,151) 4,855 1,594 Trade payables and accrued liabilities 660 1,306 (549) (17) Prepaid expenses 179 102 188 (174) Deferred revenue (2,731) 146 (6,183) (2,009)----------------------------------------------------------------------------Cash generated from operating activities 9,373 9,351 25,747 24,883 Interest received 132 120 412 332 Income taxes paid (2,785) (1,960) (9,241) (6,542)----------------------------------------------------------------------------Net cash from operating activities 6,720 7,511 16,918 18,673----------------------------------------------------------------------------Cash flows from financing activitiesProceeds from issue of common shares 1,273 1,675 5,061 4,344Dividends paid (6,050) (4,079) (21,806) (15,651)Common shares buy-back (note 8(c)) - - (1,551) (438)----------------------------------------------------------------------------Net cash used in financing activities (4,777) (2,404) (18,296) (11,745)----------------------------------------------------------------------------Cash flows used in investing activitiesProperty and equipment additions (401) (802) (1,760) (1,066)----------------------------------------------------------------------------Increase (decrease) in cash 1,542 4,305 (3,138) 5,862Cash, beginning of period 50,694 43,310 55,374 41,753----------------------------------------------------------------------------Cash, end of period 52,236 47,615 52,236 47,615--------------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to condensed consolidated financial statements.
