Underlying earnings from continuing operations before income taxes for the first quarter of 2005 were $4.6 million or $0.19 per diluted share compared to a loss of $3.4 million or $0.23 per share in the first quarter of 2004. Compared to the quarter ended December 31, 2004, underlying earnings increased by 10% from $4.2 million. Net earnings for the quarter ended March 31, 2005 was $0.0 million or $0.00 per diluted share, which includes amortization of stock-based compensation of $1.9 million or $0.08 per share. For the quarter ended March 31, 2004, the net loss was $3.2 million or $0.21 per share, which did not include any stock-based compensation expense. Underlying earnings from continuing operations before income taxes is a non-GAAP (Generally Accepted Accounting Principles) financial measure that excludes amortization of intangibles, amortization of property and equipment, inventory write-downs, stock-based compensation, restructuring costs, foreign exchange, income taxes and discontinued operations. Optimal believes that underlying earnings from continuing operations before income taxes is useful to investors as a measure of Optimals earnings because it is an important measure of the Companys growth and performance, and provides a meaningful reflection of underlying trends of its business. A reconciliation of Optimals underlying earnings from continuing operations before income taxes is included in Annex A to the Companys interim consolidated financial statements attached below. The financial results for the quarter ended March 31, 2005 include the financial results resulting from the acquisition of the operating assets of Merchant Card Acceptance Corp and its affiliated companies on January 1, 2005. As at March 31, 2005, cash, cash equivalents, short-term investments and settlement assets net of bank indebtedness, customer reserves and security deposits were $102.2 million. Working capital, excluding cash and short-term investments held as reserves and cash held in escrow, as at March 31, 2005 was $70.1 million. Shareholders equity at quarter end was $181.3 million. Financial Outlook for the Second Quarter of 2005 The following statements are based on current expectations, which are forward-looking and actual results may differ materially. These statements do not include the potential impact of any future mergers, acquisitions, divestitures or other business combinations. For the second quarter of 2005, Optimal anticipates underlying earnings from continuing operations before income taxes to be approximately $5.4 million.
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