Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next
Author: dlasalle Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 7  
Subject: Annual Report Questions Date: 8/13/1997 6:06 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Here is Ian Reece's (PC DOCS' CFO) response to some questions I had about their latest numbers.

------------

David

The reason that S&M expenses have increased more than sales is more to
do with the disappointing level of sales increase than with the level of
our investing in infrastructure and marketing initiatives. In F97 we
had two quarters of unexpectedly low sales, for a variety of reasons
including industry slow downs, a not very effective (initially at least)
sales force reorganization and a shortage of sales people (occasioned in
part by our raising the bar for required performance).

During F97, as all our markets are expected to grow over the mid-term at
healthy rates and notwithstanding our topline performance, we continued
to invest in a higher level of market differentiation of all our
products, plus hiring more sales people. We did reduce the rate of
increase of our expenses, but did not go so far as to cut back on
resources overall. We expect that the increased number of better "feet
on the street" will stand us in good stead as the market opens up once
again for commercial (as opposed to retail) software.

The main increases in G&A year over year, other than the addition of two
new companies, were in occupancy costs - all our businesses either moved
into new space or added space, professional fees for various matters,
significant foreign exchange losses on the US$60 million funds held in
Canada from the April 96 financing, more executives on board for longer
in the year than in F96, and overall we had 88 G&A employees compared to
the 78 at year end F96.

The DataRamp sub has been absorbed into PC DOCS Inc and Canterbury
predominantly works for CMS/Data. Two of the other subs are distributors
>for the US companies. Beyond that, we have no immediate plans to
"liquidate/sell" any other sub - all of which are profitable and provide
significant cross-selling opportunities.

On the "so-called "re-pricing" of employee options", the Board approved
a plan to allow all option holders to reprice options to Cdn$8.00
(US$5.82), at the cost to the optionholder of delaying vesting for a
year, or if vested, by a year from the Board approval date. Almost
exactly half of the 3.9 million options outstanding are priced over
Cdn$8.00. Under the TSE rules, repricing options of insiders (directors
and officers) has to be approved by a majority of the "disinterested"
shareholders.

Ian Reece
CFO


>----------
>Sent: Wednesday, August 13, 1997 2:11 PM
>To: Ian Reece
>Subject: Annual Report Questions
>
>I have just gone through the Press Release on the Quarterly/Annual earnings
>and
>would like to hear your comments on the following:
>
>Why is the Selling and Marketing expense almost double what it was in the
>previous year - especially in light of the fact that revenues only went up by
>7%?
>
>Likewise, the G&A expenses are up by 64% (from $10.2m to $16.4m). What is
>the
>cause of such an excessive increase in this "overhead" item?
>
>Since PC DOCS International is effectively composed of 5 subsidiaries with
>the
>PC DOCS subsidiary being the most prestigious - both in terms of corporate
>image
>
>and in revenue dollars produced, are there any plans to liquidate/sell two or
>three of these non-producing subsidiaries. If not, why not?
>
>I would also like to have more information sent to me on the so-called
>"re-pricing" of employee options. Most importantly, does this involve the
>options of the officers and directors of the company?
>
>
>Thank you for your time,
>
>David LaSalle
>
>

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement