TIE: 2010 Annual Result 1,7 million euro negative

TIE Holding N.V. (“TIE”) reports the following highlights with regard to the fiscal year 2010 (October 1, 2009 – September 30, 2010) and the 4th quarter 2010 (July 1, 2010 – September 30, 2010)

Hoofddorp, The Netherlands

Business Results

During the fourth Quarter 2010 Total Income amounts to € 2,613k (Q4_2009: 2,802k). Operating Income Q4 amounts to € -1,103k (Q4_2009: € 219k) and Total Comprehensive Income to € -1,534k (Q4_2009: € 166k).
Total Income for the year amounts to € 11,013k (2009: € 11,190k), Operating Income amounts to € -1,393k (2009: € 759k) and Total Comprehensive Income amounts to € -1,763k (2009: € 540k). The net cash flow from operating activities for the year amounts to € -677k (2009: € 568k).

Our strategic investment in additional staff for the E-commerce and Content Syndication platforms needs more time to generate profit, also because of the increasing component of Software as a Service (Saas) generating an ongoing revenue stream as an annuity. We are in the process of reviewing our product portfolio, resulting for this reporting period in an amortization of Goodwill of € 171k for the software obtained in 2005 by the acquisition of Nspyre. Finally the company was engaged in two lawsuits. The costs associated with these suits amounted to € 987k. Additional onetime costs are € 250k. Thus the combined costs of the total onetime expenses for 2010 amounted to € 1,237k. The net cash flow for 2010 normalized for onetime expenses amounted to € 560k (2009: € 568k).

CEO Jan Sundelin said: “We have taken major steps to focus more clearly on the growing E‑commerce, Content Syndication and SaaS for Business Integration.  Our relationships with our two most important partners, CNET (a division of CBS), and Epicor have been strengthened considerably.  We have invested in sales, marketing, development and support staff in the E-commerce and the emerging Content Syndication businesses. For 2011, we expect limited growth of our Business Integration revenue for both license and SaaS. However, we are confident to further grow our E-commerce and Content Syndication business, through a combination of SaaS and Consultancy. TIE’s competitive advantage is the ability to merge its three platforms, resulting in a Total Integrated E-commerce solution”.

Starting fiscal year 2010 and up to this moment, the Company reported the following highlights:

Customers and Products

  • October 7, 2009: TIE reported that it entered into a partnership agreement with Intertrade Systems Inc. as well the sale of the Edge desktop business in the US to Intertrade Systems Inc. The income of this sale was realized in 2010.
  • October 21, 2009: TIE reports that it releases version 4.0 of the Translator, TIE’s any-to-any business document translation tool.
  • December 8, 2009: TIE reports that it appoints Siebe van Ineveld to promote the development of TIE’s business in EMEA.
  • February 23, 2010: TIE announces the release of version 3.0 of their Content Syndication Platform.
  • June 10, 2010: TIE reported that Capgemini Retail Solutions has exclusively selected Freeconnect as part of TIE’s Business Integration Platform.
  • June 17, 2010: TIE reported the selection of the TIE Kinetix Business Integration Platform by the Royal Malaysian Customs in cooperation with TIE’s partner Edaran IT Services Sdn Bhd.
  • June 24, 2010: TIE reported that TIE’s global strategic partner CNET Content Solution, a division of CBS Interactive, has teamed up with Lenovo to syndicate the PC maker’s content worldwide through ContentCast™ using the TIE Content Syndication Platform.
  • July 1, 2010: TIE reported that Microsoft was able to increase the online conversion rate of their office products with selected retailers by using the TIE Kinetix Content Syndication Platform.
  • August 3, 2010: TIE reported that Siemens Enterprise Communications GmbH (SEN) introduced their worldwide Digital Channel partner program, powered by the TIE Kinetix Content Syndication Platform, in China.
  • August 16, 2010: TIE reported the launch of the first online specialty shop for daily fresh food: Culinaireversmarkt.nl.
  • September 28, 2010: TIE reported that T-Mobile has implemented the TIE Kinetix E‑commerce Platform for its new online phone shop.
  • October 26, 2010: TIE reported that the ‘EDI managed services on demand’ is available for Epicor customers.
  • November 15, 2010: TIE reported that it is engaged in the European Unions Omelette project which aims at improving the internet as a global delivery platform with a specific focus on converged services in the telecom domain.

Legal and Financial

  • October 14, 2009: TIE announced that it has obtained a credit facility and that Rabobank becomes the new banker of TIE.
  • November 20, 2009: TIE announced that it is investigating a potential infringement on its Content Syndication Platform.
  • January 5, 2010: TIE reported the launch of 1.62M options under the Annual Stock Option plan.
  • January 29, 2010: TIE announces that it has published the Company’s 2009 Annual Report.
  • February 17, 2010: TIE reports Q1 trading update and announcement Annual General Meeting of Shareholders.
  • March 1, 2010: TIE reported the conversion of Convertible Bonds into shares of the Company for an amount of € 476k, representing 4,760,000 ordinary shares.
  • March 30, 2010: TIE reported the independent value proposition of the Company as made by Investablish B.V.
  • April 6, 2010: TIE reported that it exercised the 24.5% option on the shares of MamboFive B.V., TIE holds 100% of the shares in MamboFive B.V.
  • May 25, 2010: TIE publishes its first half year 2010 for the 6 months ended March 31, 2010.
  • July 9, 2010: TIE reported that the court has come to a ruling in the Samar case. All claims by Samar have been granted and TIE is ordered to pay full damages.
  • August 18, 2010: TIE reports the third quarter 2010.
  • August 31, 2010: TIE reported the issue of Convertible Bonds amounting to € 870k. The proceeds will be reserved for the outcome of current legal proceedings of the Samar case.
  • November 10, 2010: TIE reported that the credit facility with Rabobank will not be extended.

Financial and Cash Position

During Q4 2010 an amount of € 870k was added to the equity position of the Company as result of the issue of Convertible Bonds. CEO Jan Sundelin participated for an amount of 
€ 30k, Supervisory Board members Peter van Schaick, through Alto Imaging Group NV participated for an amount of € 400k and Erik Honée for an amount of € 100k.

Shareholders’ Equity amounts to € 2,661k on September 30, 2010 (€ 2,417k on September 30, 2009). Equity per September 30, 2010 amounts to € 4,026k (€ 4,078k per September 30, 2009) including Convertible Bonds amounting to € 1,365k (€ 1,661k per September 30, 2009).

On September 30, 2010 the Company held a positive cash and cash equivalents position of € 327k (September 30, 2009 € 457k). The credit facility of € 350k was used for an amount of € 316k (September 30, 2009 nil). 
The credit facility with Rabobank will not be extended. As a result of this, the credit facility will be reduced in steps and ends on February 28, 2011.
TIE is in the process of preparing documentation allowing financial institutions to make their Sales Pitch for facilitating TIE with credit. TIE expects that the repayment of the current credit facility will not lead to cash flow issues, due to the limited size of the facility.

Due to the onetime expenses the cash flow from operating activities was € -677k (2009: € 568k), if adjusted for the for the one time (cash) expenses, amounting to € 1,237k, the 2010 normalized operating cash flow was € 560k.

Amortization of Goodwill

The Company decided not to make longer use of the products obtained in 2005 through the acquisition of Nspyre B.V. Resulting from this decision an amount of €171k was amortized during Q4_2010.

Annual Accounts

The financial results of the Company are unaudited. The audit of the Company's Financial Statements will not be completed until the publication thereof in January 2011.

Samar claim

On July 7, 2010 the court granted unexpected all claims to Samar and TIE was ordered to pay full damages. On August 31, 2010 the Company paid to Samar an amount of € 804k consisting of the claim, legal interest and legal costs. The hit to our Q4_2010 results amounted to € 697k, net off the Companies own legal costs. As the Company has filed an appeal, the Company has set up a provision for the foreseeable legal costs.

Pending Litigations

Since December 2007 the Company has been involved in discussions and subsequently in legal proceedings with Samar. All claims in the summary proceedings were instantly dismissed at the court hearing of February 15, 2008. On July 7, 2010, the court of Haarlem unexpectedly granted all claims by Samar. In Q4_2010 TIE has paid damages, this amount may be adjusted upwards or downwards in the procedure regarding the assessment of the damages. TIE has filed an appeal.

On November 20, 2009, TIE initiated an investigation on a potential infringement on the Content Syndication Platform. On May 7, 2010 the judge pronounced a ruling in summary proceedings, dismissing TIE’s claim and ruling payment of the costs of litigation of the defendants. TIE has lodged an appeal against the ruling.

 

Consolidated Balance Sheet

At September 30

Assets     
(EUR x 1,000) 2010 2009 
  (unaudited)  
Non Current Assets     
   Intangible fixed assets      
    Goodwill       2.402 2.546 
    Other intangible fixed assets       1.492 1.334 
      
         3.894       3.880
   Tangible fixed assets      
    Property, Plant and Equipment          164 180 
            164          180
   Financial fixed assets      
    Deferred Tax Asset       1.477 1.780 
    Loans and Receivables           38 40 
         1.515       1.820
Total Non Current Assets       5.573      5.880
      
Current Assets     
    Non Current Assets hold for sale            -           198
    Trade Debtors and Other Receivables:      
    Trade Debtors       1.839 1.817 
    Taxation and Social Security             4 10 
    Other Receivables and Prepayments          795 714 
         2.638       2.541
      
    Cash and Cash Equivalents            327          457
Total Current Assets       2.965      2.998
      
Total Assets       8.538      9.076
      

 

Consolidated Balance Sheet

At September 30

Liabilities     
(EUR x 1,000) 2010 2009 
  (unaudited)  
      
Equity     
    Shareholders’ Equity       2.661 2.417 
    Convertible Bonds       1.365 1.661 
    Capital and Reserves attributable      
    to equity holders of TIE        4.026       4.078
    Minority Interest            -             -  
Total Equity       4.026      4.078
      
Non Current Liabilities     
    Provisions           11 8 
Total Non Current Liabilities            11             8
      
Current Liabilities      
    Provisions short term           -   19 
    Settlement Liabilities short term           -   94 
    Short Term Debt          100 805 
    Credit Facility used          316           -   
    Trade Creditors          435 494 
    Deferred Revenue       1.911 1.981 
    Affiliated Companies           -   4 
    Taxation and Social Security          229 201 
    Other Payables and Accruals       1.510 1.392 
Total Current Liabilities       4.501      4.990
      
      
Total Equity and Liabilities       8.538      9.076

 

Consolidated Income Statement

For the year ended September 30

(EUR x 1,000) 20102009
   (unaudited)  
Revenues     
Licenses 1497 1212 
Maintenance and Support 2963 3243 
Consultancy 2378 2458 
Software as a Service 3377 3472 
Total Revenues         10.215      10.385
Other Income             798          805
 Total Income         11.013      11.190
Direct Purchase Costs         (1.307)      (1.367)
Income Net of Direct Purchase Costs         9.706      9.823
      
Operating Expenses     
Employee Benefits 6.769       6.496 
      Onetime expenses 1.237           -   
      Depreciation and Amortization 503          360 
      Amortization of Goodwill 171           -   
Other Operating Expenses 2419       2.208 
Total Operating Expenses        11.099      9.064
      
Operating Income        (1.393)         759
      
Interest and other Financial Income                2           15
Interest and other Financial Expense             (64)          (48)
Income before Tax        (1.455)         726
Corporate Income Tax            (471)         (196)
Income after Tax        (1.926)         530
Other Comprehensive Income     
Exchange differences on translating of foreign operations             163           10
Total Comprehensive Income        (1.763)         540
Attributable to Shareholders:     
Income after Tax         (1.926)          530
Comprehensive Income             163           10
      
Net result per share – basic           (0,02) 0,01
Weighted average shares outstanding – basic (thousands)  77.486 58.346
Net result per share – diluted           (0,02) 0,01
Weighted average number of shares fully diluted (thousands)  80.060 72.397

 

Consolidated Cash Flow Statement

For the 12 months ended 30 September

(EUR x 1,000)20102009
 (unaudited)  
Income before tax     (1.455)         726
     
Non Cash Adjustments:    
Share based payments expense         292          292 
Depreciation and amortization         503          360 
Amortization of Goodwill         171           -   
Increase (decrease) provisions for redundancy, legal and rent building         (94)         (635) 
Increase (decrease) provisions         (23)           24 
Other movements            5             2 
           854           43
     
Working Capital Movements    
(Increase) decrease in debtors         (43)         (281) 
(Decrease) increase in deferred revenue        (156)          147 
     
(Decrease) increase in current liabilities         102          (69) 
           (97)         (203)
     
Cash generated (applied) in operations         (698)          566
Interest paid          (34)          (13)
Interest received             2           15
Income taxes paid           53           -  
Net Cash flow from operating activities        (677)         568
     
Disinvestments in intangible fixed assets         198           -   
Disinvestment in financial fixed assets            2          (18) 
Investments in intangible fixed assets        (608)         (572) 
Disinvestments tangible fixed assets          -             -   
Investments in tangible fixed assets         (88)          (87) 
Acquisition of a subsidiary net of cash acquired          -           (332) 
Dividend paid MamboFive to old shareholders          -           (191) 
Net Cash flow generated / (used) in investing activities        (496)     (1.200)
     
Increase (decrease) bank overdrafts/loans short term          50         (439) 
Issue of Convertible bonds         870          361 
Costs of shares and bonds issued          -             -   
Shares issued and share premium         107           80 
Net Cash flow generated / (used) by financing activities      1.027             2
     
Net increase (decrease) in Cash and Cash Equivalents         (146)         (630)
Currency Exchange Rate Difference on opening balance Cash and Cash Equivalents           16            (1)
Opening balance Cash and Cash Equivalents          457       1.088
Closing balance Cash and Cash Equivalents         327         457
     
     
Net Cash flow from operating activities 677- 568
Onetime expenses1.237           -   
Cash Flow from onetime expenses      1.237           -  
Normalized Net Cash Flow from operating activities         560         568

 

Consolidated Income Statement

For the 3 months ended September 30

(EUR x 1,000)20102009
  (unaudited)  
Revenues    
Licenses245 381 
Maintenance and Support751 775 
Consultancy566 596 
Software as a Service941 861 
Total Revenues       2.503       2.613
Other Income          110          189
 Total Income       2.613       2.802
Direct Purchase Costs         (354)         (326)
Income Net of Direct Purchase Costs      2.259      2.476
     
Operating Expenses    
Employee Benefits1.645       1.571 
      Onetime expenses837           -   
      Depreciation and Amortization136          112 
      Amortization of Goodwill171           -   
Other Operating Expenses573          574 
Total Operating Expenses      3.362      2.257
     
Operating Income     (1.103)         219
     
Interest and other Financial Income             2             4
Interest and other Financial Expense          (22)          (30)
Income before Tax     (1.123)         193
Corporate Income Tax         (189)           73
Income after Tax     (1.312)         266
Other Comprehensive Income    
Exchange differences on translating of foreign operations         (222)        (100)
Total Comprehensive Income     (1.534)         166
Attributable to Shareholders:    
Income after Tax      (1.312)          266
Comprehensive Income         (222)         (100)
     
Net result per share – basic        (0,02)         0,00
Weighted average shares outstanding – basic (thousands) 82.202 64.907
Net result per share – diluted        (0,02) 0,00
Weighted average number of shares fully diluted (thousands) 83.160 84.424

 

Segment info

For the three months ended September 30, 2010

 The
Netherlands
North
America
Rest of WorldHolding and EliminationsTotal
Revenues     
Licenses4910690-245
Maintenance and Support211431109-751
Consultancy29817197-566
Software as a Service403298240-941
Total Revenue9611.006536-2.503
Other Income12112-1-110
Total Income1.082994537-2.613
Direct Purchase Costs15813264-354
Income Net of Direct Purchase Costs924862473-2.259
      
Operating Expenses     
Employee Benefits6246232421561.645
Onetime expenses697--140837
Depreciation and Amortization 883567136
Amortization of Goodwill--171-171
Other Operating Expenses211134117111573
Total Operating expenses1.6207925364143.362
      
Operating Income696-7063-              (414)1.103-
Interest and Other Financial Income2-1122
Interest and other Financial Expense                 (11)                  (5)-                  (6)                 (22)
Income before Tax709-6662-              (418)1.123-
Corporate Income Tax12-               (165)                  (2)10-               (189)
Income after Tax721-                (99)                (64)              (428)            (1.312)

 

For the three months ended September 30, 2009

 The
Netherlands
North
America
Rest of WorldHolding and EliminationsTotal
Revenues     
Licenses2557848-381
Maintenance and Support220440115-775
Consultancy277142177-596
Software as a Service465221175-861
Total Revenue1.217881515-2.613
Other Income189---189
Total Income1.406881515-2.802
Direct Purchase Costs2171036-326
Income Net of Direct Purchase Costs1.189778509-2.476
      
Operating Expenses     
Employee Benefits6725222351421.571
Depreciation and Amortization Expense and Impairment Losses62471-4112
Other Operating Expenses2971018789574
Total Operating expenses1.0316703212352.257
      
Operating Income158108188(235)219
      
Interest and Other Financial Income4---4
Interest and other Financial Expense-  --(30)(30)
Income before Tax162108188(265)193
Corporate Income Tax2(166)(6)24373
Net Income164(58)182(22)266

 

Profile TIE

TIE (NYSE Euronext: TIE Holding) delivers innovative web centric, software based solutions that enable all trading partners in the supply chain to work seamlessly together on the major E-commerce processes of marketing, sales and fulfillment. With its TIE Kinetix concept, it provides a Total Integrated E-commerce process, embracing three innovative platforms for Business Integration (including e-invoicing, XML/EDI data synchronization), Content Syndication and E-commerce. The Total Integrated E-commerce solutions minimize the energy needed for a transaction lifecycle throughout the supply chain giving organizations the advantage to reduce cost and maximize revenue and profit. 
TIE has more than two decades of experience in developing and implementing global E‑commerce standards. TIE is a listed company with offices in the United States, Australia, France and the Netherlands.

Further information:                                                

TIE Holding N.V.

Jan Sundelin, CEO

Antareslaan 22-24
2132 JE Hoofddorp
The Netherlands

T:      +31-20-658 93 33
F:       +31-20-658 90 01
E:       info@TIEHolding.com
W:      www.TIEHolding.com

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