TIDMLEAD
Leadcom Integrated Solutions Ltd.
Financial Results of Q1 2009
Hod Hasharon, Israel, May 27, 2009 - Leadcom Integrated Solutions Ltd., ("Leadcom", or the "Company", AIM: LEAD), a leading international provider of innovative telecommunication solutions, announced today its results for the first quarter of 2009.
Financial Highlights
-- P&L main items for the first quarter of 2009:
3 months endedMarch 3 months endedMarch 31 2008
31 2009
=-------------------------------------------------------------------------
In US$ million
=-------------------------------------------------------------------------
Revenues 35.0 55.7
=-------------------------------------------------------------------------
Adjusted* Gross profit 6.1 11.8
=-------------------------------------------------------------------------
Adjusted* Gross 17% 21%
profit margin
=-------------------------------------------------------------------------
General (8.6) (8.8)
and Administrative
expenses
=-------------------------------------------------------------------------
Adjusted* Operating (3.3) 1.0
Profit (loss)
=-------------------------------------------------------------------------
Financing expenses (1.9) (0.9)
=-------------------------------------------------------------------------
Loss for the period (5.9) (1.3)
=-------------------------------------------------------------------------
-- Adjusted Gross and Operating profit - excluding amortization and
option expenses
-- Buyback of NIS 5.8 million par value of debentures in Q1/2009 (in
addition to NIS 9.5 million par value in the fourth quarter of 2008)
according to the debenture buy-back plan approved by the board of
directors in the fourth quarter of 2008, generating a one-off profit
of $US 0.7 million in Q1/2009.
-- Breach of two financial covenants contained in letters of undertaking
provided to the Company's lending banks. The Company has held
preliminary discussions with the banks, in order to seek their consent
to revise the financial covenants and/or to receive adequate waivers.
Proposed De-Listing from AIM
The Board has resolved that on or around 28 May 2009, a circular will be posted to the Company's shareholders to convene an Extraordinary General Meeting ("EGM"), at which a resolution will be proposed to approve the cancellation of the admission of the Company's ordinary shares to trading on AIM. Leadcom's ordinary shares and debentures will continue to be traded on the Tel Aviv Stock Exchange ("TASE").
In making the decision to propose to the Company's shareholders to cancel the admission of the Company's ordinary shares to trading on AIM, the Directors have considered the current low volumes of trading in the Ordinary Shares on AIM as well as the ongoing expense of maintaining a quotation on both AIM and TASE, as maintaining a quotation on AIM gives rise to significant expenses incurred by the Company, including ongoing AIM fees, Nominated Adviser (NOMAD) fees, CREST fees, share register fees and increased legal and accounting fees. In addition, the listing of the Company's shares on both AIM and TASE increases the complexity of the Company's regulatory obligations which consumes management time and exposes the Company to conflicting regulatory provisions.
The Company will take measures in order facilitate the continued trading of the Ordinary Shares currently quoted on AIM, following the cancellation. The Company has reached an agreement with a leading Israeli financial institution, which has agreed to open brokerage accounts for non-Israeli shareholders, and assist in facilitating the trading of the Leadcom shares currently held by UK holders on TASE. Furthermore, the Company will publish an extract of the Company's quarterly financial reports in English, as well as its principal announcements, on its website, for two years following the cancellation.
Arik Alcalay, Chief Executive Officer
The Company's results for the first quarter of 2009 did not meet the financial goals we expected to achieve, reflecting the continuing impact of the global economic crisis and the challenging business climate that we began to encounter in the second half of 2008.
Since the end of 2008, we have started to undertake corrective actions to adjust the Company's business focus and its cost structure to the market changes. Despite these measures, we still experienced more than expected weakness in some of our regions and therefore are continuing to take action to reduce our expense base and improve our financial results
Looking forward, our pipeline for the second half of 2009 is showing some initial encouraging signs that our customers are planning to resume their investments in infrastructure and network deployments, which should have positive consequences on the development of our business.
As mentioned in this press release we have also decided to request approval from our shareholders for the cancellation of the admission to trading on AIM of the Ordinary Shares. We believe that this will reduce significant direct and indirect expenses relating to this listing. We will continue to maintain our listing on the Tel Aviv Stock Exchange. We believe that the TASE gives adequate access to capital, both public and private, and also provides investors with an alternative platform for liquidity
Financial Results
Revenues for the first quarter of 2009 were US$35.0 million, a 37% decrease from US$55.7 million for the first quarter of 2008. The decrease is mainly attributed to decreased business activity in Africa and the Middle East (decrease of US$10.1 million), India (decrease of US$7.3 million) and the Americas (decrease of US$3.4 million), as a result of the global economic crisis and the challenging business climate. The reduction in revenues also reflects the Company's decision in 2008 to exit from less profitable business activities.
Adjusted Gross Profit for the first quarter of 2009 was US$6.1 million (17% of revenues) compared to US$11.8 million (21% of revenues) in the first quarter of 2008. The decrease in the adjusted gross profit is mainly due to the decrease in revenues as explained above, and a write-off of inventory in one of our subsidiaries.
Selling and marketing expensesfor the first quarter of 2009 were US$1.2 million (3% of revenues) compared to US$2.5 million (4% of revenues) in the first quarter of 2008. The decrease derived mainly from the decrease in the scope of activity and the Company's policy to reduce selling and marketing expenses.
General and administrative expenses for the first quarter of 2009 were US$8.6 million compared to US$8.8 million in the first quarter of 2008. This decrease is mainly the result of the Company's policy to reduce its current costs, including dismissal of employees, and the impact of the strengthening of the US Dollar compared to the Israeli Shekel, resulting in a decrease in costs associated with the Company's Israeli headquarters. The general and administrative expenses for the first quarter of 2009 include a bad debt provision related to customers in India amounting to US$0.9 million.
Adjusted operating loss for the first quarter of 2009 was US$3.3 million compared to a profit of US$1.0million for the first quarter of 2008. The decrease in the adjusted operating loss is due mainly to the decrease in revenues and a bad debt provision related to customers in India as mentioned above.
Net Finance expensesfor the first quarter of 2009 were US$1.9 million compared to US$0.9 million in the first quarter of 2008. The increase derived from the higher utilization of bank credit facilities compared to the first quarter of 2008, and the strengthening of the US Dollar which resulted in translation differences relating to the Company's foreign subsidiaries. The increase was partially offset by the currency revaluation effect of the debentures which are not hedged in addition to gains as a resulting from the buy back of Company debentures.
Net lossfor the first quarter of 2009 was US$5.9 million compared to a net loss of US$1.3 million in the first quarter of 2008.
Cash flowused in continuing operating activities for the first quarter of 2009 was negative, amounting to US$6.3 million, compared to a positive cash flow of US$0.7 million in the first quarter of 2008. The negative cash flow in the first quarter of 2009 was mainly the result of an increase in the number of customer credit days due to the impact of the global financial crisis. The negative cash flow is attributable, in addition, to a drop in the level of factoring performed by the Company due to a contraction in non-bank credit sources. The reduction in the level of factoring is a trend that began in 2008 and continued also in the first quarter of 2009.
Equity as at March 31, 2009 was US$15.6 million, equivalent to 12% of the balance sheet total, compared to 15% on December 31, 2008. The decrease in equity is mainly attributable to a loss of US$5.9 million in the first quarter of 2009, an increase in negative capital reserves from translation differences totaling US$0.6 million as a result of the weakening of subsidiaries' functional currency against the Company's functional currency (mainly the Indian Rupee at a rate of 3% and the Euro at a rate of 4%, against the US Dollar).
Accounts receivableas at March 31, 2009 was US$ 75.9 million, compared to US$87.7 million as at December 31, 2008. The decrease is mainly attributable to a decrease in the scope of activity and continued collection from customers during the first quarter of 2009
Inventory as at March 31, 2009 was US$9 million, compared to US$11.3 million as at December 31, 2008. This decrease is mainly due to a write-off of inventory in one of theCompany's subsidiaries.
The Non Current Debentures balance as at March 31, 2009 was US$19.4 million, compared to US$26 million as of December 31, 2008. The decrease is mainly attributable to the Company's repayment of the first series installment during the first quarter of 2009, and to the buyback of debentures by the Company.
Net Debt
The net debt balance as at March 31, 2009 was $46.8 million, compared to $44.3 million as at December 31, 2008. The company has utilized 83% of its credit facility as at March 31, 2009. The company had cash and cash equivalents of $13.4 million as at March 31, 2009.
Credit facilities and covenants
As stated in the Company's financial reports for full year 2008, the Company concluded an arrangement concerning the Company's credit lines and facilities with certain leading Israeli banks and a foreign bank (the "Banks"), according to which the Company is obliged to comply with certain financial covenants. Based on first quarter end testing dates, the Company is not complying with the covenant specifying the minimum tangible equity, as well as with the financial covenant specifying the minimum required ratio between the Company's tangible equity and its balance sheet total (excluding its intangible assets).
The Company has held initial negotiations with the Banks in order to amend said covenants or alternatively secure adequate waivers.
Although the Company believes it will reach a satisfactory agreement with the Banks, which would prevent the immediate repayment of the Company's outstanding balance and allow the Company to continue its operations in their current form, neither the outcome nor the length of the above negotiations can be predicted with any certainty. If the Company is not successful in reaching a satisfactory agreement with the Banks, there is a material concern regarding Company's ability to continue operations in their current form.
Forecasted cash flow
In accordance to section 10(b)(13) of the Israeli Securities Law Regulations (Periodic and Immediate Statements) - 1970, the Company should present forecasted cash flow for the next two years. Attached hereinafter is the Company's forecasted cash flow report from Q2 2009 up to and including Q1 2011 (the "Report").
The Company based its preparation of the Report on its sales forecast for the two years starting Q2 2009 up to and including Q1 2011, which reflects a decrease in the Company's sales volume, as a result of the global economic crisis. Such forecasted decrease in the Company's turnover would cause a decrease in the Company's EBITDA in 2009, compared to 2008. Nevertheless, the cash flow generated from Company's ongoing operations in 2009 is expected to be positive, mainly due to the collection of the account receivables balance that was accrued in the Company's balance sheet in 2008, and to the decrease in Company's expenditures basis in 2009.
The result of the aforesaid decrease will be reflected in the reduction of the Company's working capital balances (account receivables, account payables and inventory). In addition, the cash flow generated from ongoing operations in 2010 is expected to be positive, as a result of the increase in the forecasted EBITDA for the year 2010 compared to 2009, and an immaterial increase in the Company's working capital balances during such period.
It should be emphasized, that the aforementioned sales forecasts are not based, in their greater part, on binding orders from customers, but on assumptions and estimations which are based on negotiations between the Company and its customers, on the one hand, and on management's estimation regarding the scope of future incoming orders, on the other hand.
Additional Assumptions in the Preparation of the Report:
A. Company's Credit Facilities
1. Maintaining a policy of utilizing the majority of the Company's credit lines by the Israeli parent company, while sustaining a low level of credit utilization by the Company's subsidiaries. Receiving the banks consent to revise the financial covenants to such the Company will be able to comply with and/or securing adequate temporary waivers from them.
2. Immaterial decrease of the Company's outstanding balance owed to the banks on an ongoing basis, under the assumption of concluding an arrangement with the banks, as mentioned hereinabove.
B. Suppliers
The Company assumes that no material deviation in the payment terms currently existing vis-à-vis its main suppliers is expected.
C. Trade Receivables
The Company does not anticipate an additional extension in DSO's (days sales outstanding) vis-à-vis its customers.
D. Quality of Trade Receivables and Doubtful Debts
The Company does not predict a significant change in its customers' quality or its ability to collect their debts to the Company. The company will continue to insure itself, as possible, against its customers' risks.
E. Factoring
The Company expects a decrease of 35% in the scope of its factoring activities, compared to their current level.
Cash Flow
=----------------------------------------------------------------------
Q2-Q4 2010 Q1/
/2009 2011
=----------------------------------------------------------------------
=----------------------------------------------------------------------
EBITDA 1,920 12,164 3,041
=----------------------------------------------------------------------
Changes in Working Capital 19,126 (4,302) (1,075)
=----------------------------------------------------------------------
Finance (3,300) (5,200) (1,600)
=----------------------------------------------------------------------
Taxes (1,574) (2,200) (394)
=----------------------------------------------------------------------
Cash Flow Provided by Operating Activities 16,172 462 (28)
=----------------------------------------------------------------------
=----------------------------------------------------------------------
CF from investing activities (3,049) (3,700) (350)
=----------------------------------------------------------------------
Debentures repayment (2,768) (5,536) (2,768)
=----------------------------------------------------------------------
=----------------------------------------------------------------------
Total Change in Net Cash 10,355 (8,774) (3,146)
=----------------------------------------------------------------------
=----------------------------------------------------------------------
O.B. Banks 13,393 23,748 14,974
=----------------------------------------------------------------------
C.B. Banks 23,748 14,974 11,828
=----------------------------------------------------------------------
Enquiries:
Mr. Mike Lilo - Leadcom Integrated Solutions Ltd
Tel: +972-9-7690000
Andrew Godber - Panmure Gordon
Direct: +44 (0) 20 7614 8385
Important Notice
This press release contains historical information and forward-looking statements with respect to the business, financial condition and results of operations of Leadcom Integrated Solutions Ltd. The words "believe," "expect," "intend," "plan," "should" and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of the Company with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in the telecommunications market and in general economic and business conditions, loss of key customers and unpredictable sales cycles, competitive pressures, market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this press release. Various risks and uncertainties may affect the Company and its results of operations. Should one or more of these or other risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended, planned or projected. The Company does not intend or assume any obligation to update these forward-looking statements.
LEADCOM INTEGRATED SOLUTIONS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
AT 31 MARCH 2009
31 March 31 December
2009 2008 2008
$ in thousands
Unaudited Audited
CURRENT ASSETS:
Cash and cash equivalents 13,393 27,200 15,421
Financial assets at fair value through
profit or loss - 14,587 -
Financial derivatives - - *98
Accounts receivable and accruals:
Trade 75,899 70,071 87,720
Other 13,161 13,650 10,368
Balances associated with
discontinued operations 689 6,238 937
Inventories 8,965 14,331 11,272
T o t a l current assets 112,107 146,077 125,816
NON-CURRENT ASSETS:
Deposits with severance pay funds 1,574 1,652 1,567
Deferred income tax assets 2,144 1,688 1,908
Investment in associate - 729 -
Financial derivatives - 1,857 *390
Property and equipment 10,725 13,198 11,581
Intangible assets 5,230 8,713 5,936
T o t a l non-current assets 19,673 27,837 21,382
T o t a l assets 131,780 173,914 147,198
* Reclassified
Date of approval of the financial statements: 25 May 2009.
LEADCOM INTEGRATED SOLUTIONS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
AT 31 MARCH 2009
31 March 31 December
2009 2008 2008
$ in thousands
Unaudited Audited
Liabilities and equity
CURRENT LIABILITIES:
Loans from banks and current
maturities of
long-term loans and debentures 40,838 32,885 33,725
Accounts payable and accruals:
Trade 19,847 29,197 29,130
Other 28,620 33,659 30,752
Balances associated with
discontinued operations - 754 13
Current income tax liability 967 1,731 1,070
Financial derivatives 1,166 - 455
T o t a l current liabilities 91,438 98,226 95,145
NON-CURRENT LIABILITIES:
Unsecured debentures 19,374 35,929 26,026
Financial derivatives 1,418 - -
Other non-current liabilities 1,892 - 1,880
Deferred tax liabilities - 346 -
Severance pay obligations 2,062 2,587 2,142
T o t a l non-current liabilities 24,746 38,862 30,048
T o t a l liabilities 116,184 137,088 125,193
EQUITY:
Capital and reserves
attributable to the
equity holders of the Company:
Share capital 26 26 26
Share premium 36,690 36,690 36,690
Capital reserve 936 4,674 743
Currency translation reserve (5,133) (100) (4,493)
Accumulated losses (16,927) (4,477) (10,964)
15,592 36,813 22,002
Minority interest 4 13 3
T o t a l equity 15,596 36,826 22,005
T o t a l liabilities and equity 131,780 173,914 147,198
LEADCOM INTEGRATED SOLUTIONS LTD.
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2009
3 months ended 31March 2009 Year Ended31 December
2009 2008 2008
$ in thousands
Unaudited Audited
Continuing
operations:
Revenues 35,029 55,695 253,173
Cost of revenues (28,959) (44,318) (200,069)
Gross profit 6,070 11,377 53,104
Selling and (1,168) (2,469) (10,208)
marketing
costs
Administrative and (8,583) (8,820) (37,525)
general expenses
Other gains 60 54 (794)
(losses)
- net
Operating profit (3,621) 142 4,577
Finance income 703 4,275 4,688
Finance costs (2,653) (5,157) (13,015)
Finance cost - net (1,950) (882) (8,327)
Loss before (5,571) (740) (3,750)
income tax
Income tax expenses (391) (580) (1,883)
Loss for the (5,962) (1,320) (5,633)
period from
continuing
operations
Loss for the - - (2,184)
period from
discontinued
operations
Loss for the period (5,962) (1,320) (7,817)
Loss attributable
to:
Equity holders (5,963) (1,324) (7,811)
of the Company
Minority interest 1 4 (6)
Total (5,962) (1,320) (7,817)
$
Loss per share
attributed
to the equity
holders
of the company
during
the period:
From continuing
operations:
Basic (0.049) (0.011) (0.047)
Diluted (0.049) (0.011) (0.047)
From discontinued
operations:
Basic - - (0.018)
Diluted - - (0.018)
LEADCOM INTEGRATED SOLUTIONS LTD.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
3 months ended 31March 2009 Year ended31 December
2009 2008 2008
$ in thousands
Unaudited Audited
Loss for the period (5,962) (1,320) (7,817)
Other comprehensive
income
Currency translation (640) 444 (3,949)
differences
Total comprehensive (6,602) (876) (11,766)
loss
for the period
Total comprehensive
loss
attributable to:
Equity holders (6,603) (880) (11,760)
of the Company
Minority interest 1 4 (6)
Total (6,602) (876) (11,766)
LEADCOM INTEGRATED SOLUTIONS LTD.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2009
Attributable to equity holders of the Company
Currency
Number of Share Share Capital translation Accumulated Minority Total
shares capital premium reserve reserve losses interest equity
$ in thousands
BALANCE AT 120,389,200 26 36,690 743 (4,493) (10,964) 3 22,005
1 JANUARY
2009(audited)
CHANGES
DURING
THE
3 MONTHS
ENDED
31 MARCH
2009:
Total - - - - (640) (5,963) 1 (6,602)
comprehensive
loss
for the
period
Employee
share
purchase
plan:
Value of - - - 193 - - - 193
employee
services
BALANCE AT 120,389,200 26 36,690 936 (5,133) (16,927) 4 15,596
30 MARCH
2009(unaudited)
BALANCE AT 120,221,700 26 36,453 4,458 (544) (3,153) 9 37,249
1 JANUARY
2008(audited)
CHANGES
DURING
THE
3 MONTHS
ENDED
31 MARCH
2008:
Total - - - - 444 (1,324) 4 (876)
comprehensive
loss
for the
period
Employee
share
purchase
plan:
Value of - - - 295 - - - 295
employee
services
Proceeds 167,500 * 237 (79) - - - 158
from
shares
issued
BALANCE AT 120,389,200 26 36,690 4,674 (100) (4,477) 13 36,826
31 MARCH
2008(unaudited)
* Represents an amount less than $1,000.
LEADCOM INTEGRATED SOLUTIONS LTD.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2009
Attributable to equity holders of the Company
Number ofshares Sharecapital Sharepremium Capitalreserve Currencytranslationreserve Accumulatedlosses Minorityinterest Totalequity
$ in thousands
BALANCE AT 1 120,221,700 26 36,453 4,458 (544) (3,153) 9 37,249
JANUARY 2008
CHANGES DURING
THE YEAR ENDED
31 DECEMBER 2008:
Total comprehensive - - - - (3,949) (7,811) (6) (11,766)
loss for 2008
Purchase of an option
to exercise
shares in a consolidated
company - - - (3,780) - - - (3,780)
Employee share
option plan:
Value of employee - - - 144 - - - 144
services
Proceeds from share 167,500 * 237 (79) - - - 158
options exercised
BALANCE AT 31 DECEMBER 120,389,200 26 36,690 743 (4,493) (10,964) 3 22,005
2008
* Represents an amount less than $1,000.
LEADCOM INTEGRATED SOLUTIONS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2009
3 months ended31 March Year ended31 December
2009 2008 2008
$ in thousands
Unaudited Audited
CASH FLOWS FROM
OPERATING
ACTIVITIES:
Loss for the period (5,962) (1,320) (7,817)
Adjustments required
to
reflect the
cash flows
from operating (311) 1,987 (8,316)
activity
(see appendix)
Net cash generated (6,273) 667 (16,133)
from (used
in) operating
activities
Net cash generated
from
(used in) continuing
operating activities (6,508) 207 (18,848)
Net cash generated 235 460 2,715
from discontinued
operating activities
Net cash generated (6,273) 667 (16,133)
from (used
in) operating
activities
CASH FLOWS FROM
INVESTING
ACTIVITIES:
Acquisition of - (643) (205)
subsidiary,
net of cash acquired
Sale of financial
assets
at fair value
through profit - 1,435 14,205
or loss
Proceeds from 198 - 106
selling an
associated company
Purchases of (442) (989) (3,855)
property
and equipment
Purchase of - - (319)
intangible
assets
Proceeds from sale 153 106 297
of property
and equipment
Contribution (15) (546) (649)
to severance
pay assets
Net cash generated (106) (637) 9,580
from (used
in) investing
activities
CASH FLOWS FROM
CONTINUING
FINANCING
ACTIVITIES:
Proceed from - 158 158
employee
share
options exercised
Payment of debenture (3,193) - -
Buyback of debenture (872) - (1,416)
Purchase of - - (750)
an option
to exercise
shares
in a consolidated
company
Dividend paid
Short-term loans 8,654 5,085 2,650
- net
Repayments of (123) (160) (444)
long-term
loans
Net cash generated 4,466 5,083 198
from continuing
financing activities
NET INCREASE
(DECREASE)
IN CASH AND
CASH EQUIVALENTS (1,913) 5,113 (6,355)
Cash and cash 15,421 22,665 22,665
equivalents
at beginning
of the year
Exchange gains (115) (578) (889)
on cash
and cash equivalents
CASH AND CASH
EQUIVALENTS
AT
END OF THE PERIOD 13,393 27,200 15,421
LEADCOM INTEGRATED SOLUTIONS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2009
3 months ended Year ended 31 December
31 March
2009 2008 2008
$ in thousands
(Unaudited) (Audited)
Appendix
Adjustments required
to reflect the cash
flows from operating
activities:
Income and expenses not
involving cash flows:
Depreciation and 1,219 1,714 6,962
amortization
Net movements in severance 11 (16) (452)
pay obligations
Goodwill impairment - - 499
Loss from selling an - - 220
associate company
Changes in long-term
liabilities
from banks
and finance companies (654) 1,128 2,076
Gain from buyback (664) - (1,336)
of debentures
Fair value (gains)/losses
on financial assets at
fair value through - (1,391) 25
profit or loss
Income tax expenses (294) (575) (1,154)
Amounts charged in
respect of options
granted to employees 193 295 144
Losses from sale of property 68 18 42
and equipment
Fair value losses (gains) (32) (23) 238
on severance pay assets
(153) 1,150 7,264
Changes in operating asset
and liability items:
Decrease (increase) in
accounts receivable:
Trade 10,183 9,398 (11,380)
Other (3,240) (142) 3,333
Decrease in accounts
payable:
Trade (8,632) (5,025) (2,834)
Other (441) (2,129) (5,313)
Decrease (Increase) 1,972 (1,265) 614
in inventories
(158) 837 (15,580)
Cash generated from (used (311) 1,987 (8,316)
in) operations
1. Income tax paid in cash for the three months period ended 31 March 2009 and 2008 were $831 thousands and $708 thousands respectively, and for the year ended 31 December 2008 - $3,388 thousands.
2. Interest paid in cash for the three months period ended 31 March 2009 and 2008 were $1,803 thousands and $1,947 thousands respectively, and for the year ended 31 December 2008 - $6,974 thousands.
3. Interest received in cash for the three months period ended 31 March 2009 and 2008 were $0 thousands and $143 thousands respectively, and for the year ended 31 December 2008 - $1,636 thousands.
Non-cash transactions:
1. As for the 31 of March 2009, $206 thousands privileged to fixed assets acquisitions have not been paid.
2. As for the 31 of March 2009, proceeds from selling an associated company in the amount of $121 thousands has not been received.
LEADCOM INTEGRATED SOLUTIONS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - GENERAL INFORMATION:
Breaching financial covenants as of 31 March 2009
As part of the Company's agreements with certain leading Israeli banks and a foreign bank (hereafter - "the Banks") for the provision of credit facilities to finance the Company's ongoing operations, the Company reached a new arrangement with the Banks, during February and March of 2009, which included the Company's provision of letters of undertaking to the Banks (hereafter - "the Letters of Undertaking"). Under such Letters of Undertaking, the Company undertook to adhere to certain new financial covenants (the new financial covenants updated previous financial covenants that were valid until 31 December 2008 and were breached since 31 December 2007), the breach of which entitles the Banks to demand the immediate repayment of the outstanding balance owed to them by the Company. Additionally, the Company created a floating charge on its assets in favor of the Banks.
As of 31 March 2009, the Company is in breach of part of the financial covenants, which entitles the Banks to demand the immediate repayment of the outstanding balance owed to them.
The Company carried out initial discussions with the Banks in order to receive their consent to revise the financial covenants to such the Company will be able to comply with and/or to receive adequate waivers from them. As a result of the initial discussions with the banks the Company's management estimates that the Bank will provide the aforesaid consent, which would prevent the immediate repayment of the Company's outstanding balance owed to the Banks and allow the Company to continue its operations in their current form. Notwithstanding, there is no certainty that the Banks aforesaid consent shall be received. Whether such consent will not be received, there are significant doubts regarding the Company's ability to continue its operations in its current form. The Company's condensed consolidated financial statements do not include adjustments to the realization value, which may be required in case the aforesaid Banks' consent shall not be received.
NOTE 2 - SEGMENT INFORMATION:
AMERICAS MEA Europe APAC Other* Eliminations Consolidated
$ in thousands
3 months
ended
31 March
2009(unaudited):
Revenues:
Total 5,997 25,841 2,521 880 - (210) 35,029
Revenues
Intersegment - (210) - - - 210 -
From 5,997 25,631 2,521 880 - - 35,029
external
customers
Segment (470) 696 (71) (1,317) (2,459) - (3,621)
results-operating
profit
3 months
ended
31 March
2008(unaudited):
Revenues:
Total 9,389 35,987 2,875 8,183 (25) (714) 55,695
Revenues
Intersegment - (714) - - - 714 -
From 9,389 35,723 2,875 8,183 (25) - 55,695
external
customers
Segment 491 1,711 (219) 1,108 (2,949) - 142
results-operating
profit
Year ended
31
December
2008(audited):
Revenues:
Total 32,815 177,757 13,760 32,050 (98) (3,111) 253,173
Revenues
Intersegment - (3,111) - - - 3,111 -
From 32,815 174,646 13,760 32,050 (98) - 253,173
external
customers
Segment 1,550 11,340 (19) 3,366 (11,660) - 4,577
results-operating
profit
* Unallocated expenses and amortization.
NOTE 3 - DEBENTURES
At the balance sheet date, the unsecured debentures par value balance is NIS 98,120 thousands. During the first quarter of 2009 one out of ten principal payments of the unsecured debentures was paid in the amount of $3,193 thousands (par value of NIS 11,548 thousands). During the first quarter of 2009, the Company purchased unsecured debentures with a par value of NIS 5,814 thousands for a total consideration of $872 thousands, recording a profit of approximately $664 thousands. The unsecured debentures balance at the balance sheet date amounted to approximately $24,910 thousands and the interest payable balance amounted to approximately $372 thousands.
Leadcom Integrated Solutions (LSE:LEAD)
Historical Stock Chart
From May 2024 to Jun 2024
Leadcom Integrated Solutions (LSE:LEAD)
Historical Stock Chart
From Jun 2023 to Jun 2024
