updated 5/10/2010 4:10:01 PM ET 2010-05-10T20:10:01

Softchoice Corporation (TSX: SO), a leading North American provider of IT solutions and services, today reported financial results for the first quarter of 2010.

For the three-month period ended March 31, 2010, Softchoice reported net earnings of US$4.5 million or US$0.23 per basic and fully diluted share, compared to a net loss of US$2.4 million or US$0.14 per basic and fully diluted share for the same period last year. Adjusting for foreign exchange gains/losses on the cash, inter-company debt and external debt denominated in a non-functional currency, earnings were US$2.9 million or US$0.15 per share (basic and fully diluted) compared to a loss of US$1.0 million or a loss of US$0.06 per share (basic and fully diluted) for the first quarter of 2009.

During the quarter Softchoice reported revenue of US$282.7 million compared to revenues of US$218.3 million recorded for the same period last year, representing an increase of 30 percent. Revenue increased in Canada and the United States by 30 percent and 28 percent, respectively.

Microsoft revenue increased by 56 percent in the quarter, due primarily to a single large transaction that was completed within the U.S. federal government sector. Sales of other software showed modest growth of six percent while hardware sales jumped by 26 percent over the same period last year.

"We are encouraged by the very positive reception that Windows 7 has received in the marketplace," said David MacDonald, President and CEO of Softchoice. "We believe that customers who delayed infrastructure refresh cycles are now considering the benefits of upgraded PC's and virtualization options which will improve Microsoft EA renewals going forward."

Gross profit for the first quarter was US$36.4 million, representing an increase of 19 percent compared to gross profit of US$30.7 million reported in the first quarter of the prior year. Expenses as a percentage of revenue were 10 percent compared to 13 percent reported for the same period of the prior year, reflecting the results of the productivity and cost management activities that were undertaken in late 2008 and 2009. EBITDA increased from US$2.3 million in the first quarter of 2009 to US$7.3 million in the current period.

"The 224 percent growth in EBITDA goes to the heart of our business model which is structured to deliver a greater contribution to the bottom line from each additional dollar of revenue," added Mr. MacDonald. "Moreover, our solutions and services capability means that we are positioned to identify software and hardware transaction opportunities early in the planning and design stage which gives us a strong competitive advantage as the rebound in IT spending continues to take hold."

Total debt of the Company was US$15.7 million and Softchoice had US$32.2 million in cash on hand at the end of the quarter. The reduction in debt of US$24.7 million compared to the end of the first quarter of the prior year is primarily a result of positive cash generated from earnings and the proceeds from the equity offering executed on November 20, 2009.

First-Quarter Business Highlights

First Quarter Conference Call Details

Softchoice will host a conference call and web presentation to review its first quarter earnings call the evening before on Monday May 10th starting at 5:00 pm EDT. The conference call will begin with a brief presentation followed by a question and answer period.

416-800-1066 (Local / International)

1-866-966-5335 (Toll Free)

Webcast URL:


To ensure participation, please dial in at least 10 minutes prior to the start of the conference at 5:00 pm EDT.

For those unable to attend the call, a link will be made available on the Softchoice website to an archived web and audio version on May 11th, 2010.

Annual General Meeting Information

Softchoice will host its Annual General Meeting of Shareholders on Tuesday May 11, 2010.

Located at 225 Front Street West in Toronto, the AGM will take place at the Intercontinental Hotel in Ballroom A in the lower lobby and will run from 10:00 am to 12:00 pm. Presenters will include Lawrence Tapp, Chairman of the Board for Softchoice, David MacDonald, Softchoice's President and CEO, and Chief Financial Officer, David Long.

About Softchoice

As one of North America's leading providers of technology solutions and services, Softchoice helps businesses and organizations of all sizes to select, acquire and manage their software and hardware technology resources. Softchoice offers a full range of capabilities, including face-to-face consultations and IT asset management services designed to help customers save time, money and risk in IT procurement. Softchoice currently has 872 employees operating from more than 40 branch offices located in major cities across the U.S. and Canada. Softchoice stock is listed on the Toronto Stock Exchange (TSX) under the trading symbol "SO." The common shares of Softchoice are not registered under the U.S. Securities Act of 1933 and are not publicly traded in the United States.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to expectations, intentions and plans contained in this press release that are not historical fact. When used in this press release, the words "anticipate," "expect," "will" and similar expressions generally identify forward-looking statements. These statements reflect our current expectations and are subject to a number of risks and uncertainties including, but not limited to, change in technology and general market conditions, many of which are set out or incorporated by reference in the Company's latest Annual Information Form. Due to the many risks and uncertainties, Softchoice cannot assure that the forward-looking statements contained in this press release will be realized.

© Marketwire 2013


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