During the three and nine months ended December 31, 2012, 31,000 and 118,000 options respectively (three and nine months ended December 31, 2011 - 88,000, and 155,000 respectively) were excluded from the computation of the weighted-average number of diluted shares outstanding because their effect was not dilutive.
9. Commitments:
(a) RESEARCH COMMITMENTS:
The Company is the operator of the DRMS research and development project (the "DRMS project"), a collaborative effort with its partners Shell International Exploration and Production BV ("Shell") and Petroleo Brasileiro S.A. ("Petrobras"), to jointly develop the newest generation of reservoir and production system simulation software. The project has been underway since 2006 and, with the ongoing support of the participants, it is expected to continue until ultimate delivery of the software. The Company's share of costs associated with the project is estimated to be $4.0 million ($2.2 million net of overhead recoveries) for fiscal 2013.
(b) LEASE COMMITMENTS:
The Company has operating lease commitments relating to its office premises with the minimum annual lease payments as follows:
Nine months ended December 31, 2012 2011(thousands of $)--------------------------------------------------------------------------------------------------------------------------------------------------------Less than one year 499 475Between one and five years 7,089 5,533---------------------------------------------------------------------------- 7,588 6,008--------------------------------------------------------------------------------------------------------------------------------------------------------
10. Line Of Credit:
The Company has arranged for a $1.0 million line of credit with its principal banker, which can be drawn down by way of a demand operating credit facility or may be used to support letters of credit. As at December 31, 2012, US $165,000 (2011 - US $165,000) had been reserved on this line of credit for the letter of credit supporting a performance bond.
11. Segmented Information:
The Company is organized into one operating segment represented by the development and licensing of reservoir simulation software. The Company provides professional services, consisting of support, training, consulting and contract research activities, to promote the use and development of its software; however, these activities are not evaluated as a separate business segment.
Revenues and property and equipment of the Company arise in the following geographic regions:
(thousands of $) Revenue Property and equipment-------------------------------------------------------------------------------------------------------------------------------------------------------- For the nine months ended December 31, As at December 31, 2012 2011 2012 2011----------------------------------------------------------------------------Canada 19,243 14,059 3,323 2,548United States 8,736 7,439 49 83South America 8,345 7,906 51 83Eastern Hemisphere(1) 13,017 14,415 44 29---------------------------------------------------------------------------- 49,341 43,819 3,467 2,743--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Includes Europe, Africa, Asia and Australia.
In the nine months ended December 31, 2012, the Company derived 7.3% (2011 - 9.5%) of its revenue from one customer.
12. Joint Venture:
The Company is the operator of a joint software development project, the DRMS project, which gives the Company exclusive rights to commercialize the jointly developed software while the other partners will have unlimited software access for their internal use. Accordingly, the Company records its proportionate share of costs incurred on the project (37.04%) as research and development costs within the condensed consolidated statements of operations and comprehensive income.
For the three and nine months ended December 31, 2012, CMG included $1.0 million and $2.8 million, respectively (2011 - $0.9 million and $2.3 million, respectively) of costs in its condensed consolidated statements of operations and comprehensive income related to this joint project.
Additionally, the Company is entitled to charge the project for various services provided as operator, which were recorded in revenue as professional services and amounted to $0.4 million and $1.3 million during the three and nine months ended December 31, 2012 (2011 - $0.4 million and $1.2 million, respectively).
13. Subsequent Events:
On February 11, 2013, the Board of Directors declared a cash dividend of $0.16 per share on its Common Shares, payable on March 15, 2013, to all shareholders of record at the close of business on March 8, 2013.
Contacts:
Computer Modelling Group Ltd.
Kenneth M. Dedeluk
President & CEO
(403) 531-1300
ken.dedeluk@cmgl.ca
Computer Modelling Group Ltd.
John Kalman
Vice President, Finance & CFO
(403) 531-1300
john.kalman@cmgl.ca
www.cmgl.ca
