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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 10-Q
| |X| |
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
For
the quarterly period ended September 30, 2004 |
OR
| |_| |
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
For
the transition period from ___________________ to ______________________. |
Commission file number
0-28968
MDSI MOBILE DATA SOLUTIONS
INC.
(Exact name of registrant as specified in its charter)
CANADA
(Jurisdiction of incorporation) |
|
NOT APPLICABLE
(I.R.S. Employer Identification No.) |
10271 Shellbridge Way
Richmond, British Columbia,
Canada V6X 2W8
(604) 207-6000
(Address and telephone number of registrant’s principal executive offices)
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No
Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act.
Yes No
X
The number of
outstanding shares of the Registrant’s
common stock, no par value, at November 9, 2004 was 8,349,721
MDSI Mobile Data
Solutions Inc.
INDEX TO THE FORM 10-Q
For the quarterly period ended September 30, 2004
|
|
|
|
Page
|
| Part I—FINANCIAL INFORMATION |
|
|
ITEM 1. |
FINANCIAL STATEMENTS (UNAUDITED) |
|
|
|
|
Condensed Consolidated Balance Sheets |
|
1 |
|
|
Condensed Consolidated Statements of Operations |
|
2 |
|
|
Condensed Consolidated Statements of Cash Flows |
|
3 |
|
|
Notes to Condensed Consolidated Financial Statements |
|
4 |
ITEM 2. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|
11 |
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|
23 |
ITEM 4. |
CONTROLS AND PROCEDURES |
|
25 |
Part II—OTHER INFORMATION |
|
|
ITEM 6. |
EXHIBITS |
|
27 |
SIGNATURES |
|
29 |
Part I — FINANCIAL INFORMATIONITEM
ITEM 1. FINANCIAL STATEMENTS
MDSI MOBILE DATA SOLUTIONS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in United States Dollars)
(Unaudited)
|
As at |
|
September 30,
2004 |
December 31,
2003 |
|
|
|
| ASSETS |
|
|
|
|
|
| CURRENT ASSETS | |
| Cash and cash equivalents | |
$ 18,880,380 |
|
$ 15,827,043 |
|
| Accounts receivable, net trade (net of allowance for doubtful | |
8,880,315 |
|
8,610,846 |
|
| accounts of $302,284; 2003 - $2,792,415) | |
| Unbilled | |
1,488,308 |
|
2,446,271 |
|
| Prepaid expenses and other assets | |
1,345,188 |
|
1,838,425 |
|
|
|
|
| | |
30,594,191 |
|
28,722,585 |
|
| | |
| CAPITAL ASSETS, NET | |
7,090,610 |
|
7,990,457 |
|
| DEFERRED TAXES | |
358,640 |
|
357,628 |
|
|
|
|
| TOTAL ASSETS | |
$ 38,043,441 |
|
$ 37,070,670 |
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY | |
| CURRENT LIABILITIES | |
| Accounts payable | |
$ 3,622,689 |
|
$ 1,786,665 |
|
| Accrued liabilities | |
5,336,996 |
|
3,725,357 |
|
| Accrued restructuring charges (note 4) | |
1,540,388 |
|
952,623 |
|
| Income taxes payable | |
1,290,658 |
|
917,183 |
|
| Deferred revenue | |
10,316,552 |
|
11,560,446 |
|
| Current obligations under capital lease | |
1,299,742 |
|
1,204,269 |
|
|
|
|
| | |
23,407,025 |
|
20,146,543 |
|
| | |
| OBLIGATIONS UNDER CAPITAL LEASES | |
-- |
|
982,016 |
|
|
|
|
| TOTAL LIABILITIES | |
23,407,025 |
|
21,128,559 |
|
| | |
| Commitments and Contingencies (note 5) | |
| | |
| STOCKHOLDERS' EQUITY | |
| Common Stock | |
44,737,861 |
|
44,329,182 |
|
| Additional paid-up capital | |
2,406,049 |
|
2,222,128 |
|
| Deficit | |
(31,817,390 |
) |
(29,919,095 |
) |
| Accumulated other comprehensive loss | |
(690,104 |
) |
(690,104 |
) |
|
|
|
| | |
14,636,416 |
|
15,942,111 |
|
|
|
|
| TOTAL LIABILIES AND STOCKHOLDERS' EQUITY | |
$ 38,043,441 |
|
$ 37,070,670 |
|
|
|
|
See Notes to
Condensed Consolidated Financial Statements
-1-
MDSI MOBILE DATA
SOLUTIONS INC.
Condensed Consolidated Statements of Operations
(Expressed in United States Dollars)
(Unaudited)
|
Three months ended September 30, |
Nine months ended September 30, |
|
|
|
|
2004 |
2003 |
2004 |
2003 |
|
|
|
|
|
| REVENUE |
|
|
|
|
|
|
|
|
|
| Software and services | |
$ 7,604,844 |
|
$ 6,975,745 |
|
$ 22,336,770 |
|
$ 21,568,365 |
|
| Maintenance and support | |
4,466,617 |
|
3,560,460 |
|
13,127,267 |
|
9,746,355 |
|
| Third party products and services | |
624,800 |
|
1,474,247 |
|
1,683,784 |
|
3,938,929 |
|
|
|
|
|
|
| | |
12,696,261 |
|
12,010,452 |
|
37,147,821 |
|
35,253,649 |
|
| | |
| DIRECT COSTS | |
5,867,101 |
|
6,054,868 |
|
17,279,644 |
|
17,621,328 |
|
|
|
|
|
|
| GROSS PROFIT | |
6,829,160 |
|
5,955,584 |
|
19,868,177 |
|
17,632,321 |
|
|
|
|
|
|
| | |
| OPERATING EXPENSES | |
| Research and development | |
1,924,431 |
|
1,324,314 |
|
5,057,121 |
|
4,022,265 |
|
| Sales and marketing | |
2,209,246 |
|
2,436,260 |
|
6,661,498 |
|
8,268,439 |
|
| General and administrative | |
1,639,836 |
|
1,865,251 |
|
5,364,157 |
|
5,048,174 |
|
| Bad Debts expense | |
-- |
|
110,000 |
|
73,586 |
|
110,000 |
|
| Strategic expenses (note 7) | |
220,000 |
|
-- |
|
2,340,299 |
|
825,120 |
|
| Restructuring charge (note 4) | |
1,500,000 |
|
-- |
|
1,500,000 |
|
-- |
|
|
|
|
|
|
| | |
7,493,513 |
|
5,735,825 |
|
20,996,661 |
|
18,273,998 |
|
|
|
|
|
|
| | |
| OPERATING LOSS | |
(664,353 |
) |
219,759 |
|
(1,128,484 |
) |
(641,677 |
) |
| | |
| OTHER EXPENSES | |
(265,100 |
) |
(81,283 |
) |
(50,202 |
) |
(542,393 |
) |
|
|
|
|
|
| LOSS FROM OPERATIONS | |
| BEFORE TAX PROVISION | |
(929,453 |
) |
138,476 |
|
(1,178,686 |
) |
(1,184,070 |
) |
| | |
| PROVISION FOR INCOME TAXES | |
248,875 |
|
168,115 |
|
719,609 |
|
392,373 |
|
|
|
|
|
|
| NET LOSS FOR THE PERIOD | |
(1,178,328 |
) |
(29,639 |
) |
(1,898,295 |
) |
(1,576,443 |
) |
| | |
| DEFICIT, BEGINNING OF PERIOD | |
(30,639,062 |
) |
(27,823,156 |
) |
(29,919,095 |
) |
(26,276,352 |
) |
|
|
|
|
|
| DEFICIT, END OF PERIOD | |
$(31,817,390 |
) |
$(27,852,795 |
) |
$(31,817,390 |
) |
$(27,852,795 |
) |
|
|
|
|
|
| Loss per common share (note 3) | |
| | |
| Net Loss per common share | |
| Basic and diluted | |
$ (0.14 |
) |
$ (0.00 |
) |
$ (0.23 |
) |
$ (0.19 |
) |
|
|
|
|
|
See Notes to
Condensed Consolidated Financial Statements
-2-
MDSI MOBILE DATA
SOLUTIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited)
|
Three months ended September 30, |
Nine months ended September 30, |
|
|
|
|
2004 |
2003 |
2004 |
2003 |
|
|
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
| Net Loss | |
$(1,178,328 |
) |
$ (29,639 |
) |
$(1,898,295 |
) |
$(1,576,443 |
) |
| Items not affecting cash: | |
| Depreciation | |
412,170 |
|
647,405 |
|
1,687,146 |
|
2,150,019 |
|
| Deferred taxes | |
-- |
|
-- |
|
(1,012 |
) |
170,000 |
|
| Stock based compensation charge | |
48,921 |
|
-- |
|
183,921 |
|
-- |
|
| Changes in non-cash operating working capital | |
| items (note 6) | |
1,335,877 |
|
1,169,510 |
|
4,346,740 |
|
5,070,886 |
|
|
|
|
|
|
| Net cash provided by operating activities | |
618,640 |
|
1,787,276 |
|
4,318,500 |
|
5,814,462 |
|
|
|
|
|
|
| | |
CASH FLOWS FROM FINANCING
ACTIVITIES | |
| Issuance of common shares | |
25,983 |
|
2,867 |
|
408,679 |
|
79,900 |
|
| Repayment of capital leases | |
(240,132 |
) |
(596,988 |
) |
(886,543 |
) |
(1,386,460 |
) |
|
|
|
|
|
| | |
(214,149 |
) |
(594,121 |
) |
(477,864 |
) |
(1,306,560 |
) |
| | |
CASH FLOWS FROM INVESTING
ACTIVITIES | |
| Acquisition of capital assets | |
(275,101 |
) |
(198,083 |
) |
(787,299 |
) |
(824,159 |
) |
|
|
|
|
|
| Net cash used in investing activity | |
(275,101 |
) |
(198,083 |
) |
(787,299 |
) |
(824,159 |
) |
|
|
|
|
|
| NET CASH INFLOW | |
129,390 |
|
995,072 |
|
3,053,337 |
|
3,683,743 |
|
| | |
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD | |
18,750,990 |
|
13,705,616 |
|
15,827,043 |
|
11,016,945 |
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS,
END OF PERIOD | |
$ 18,880,380 |
|
$ 14,700,688 |
|
$ 18,880,380 |
|
$ 14,700,688 |
|
|
|
|
|
|
See Notes to
Condensed Consolidated Financial Statements
-3-
MDSI MOBILE DATA
SOLUTIONS INC.
Notes to the Condensed
Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 1. |
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES |
| |
(a) |
|
Basis
of presentation |
| |
These
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial reporting and
pursuant to the instructions of the United States Securities and Exchange Commission (“SEC”)
Form 10-Q and Article 10 of Regulation S-X. |
| |
While
these financial statements reflect all normal recurring adjustments which are, in the
opinion of management, necessary for fair presentation of the results of the interim
period, they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. For further
information, refer to the financial statements and footnotes thereto included in the
Annual Report of MDSI Mobile Data Solutions Inc. (the “Company” or “MDSI”)
filed on Form 10-K for the year ended December 31, 2003. |
| |
The
preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the
reporting periods. Estimates are used for, but not limited to, the accounting for
doubtful accounts, amortization, determination of the net recoverable value of assets,
revenue recognized on long term contracts, taxes and contingencies. Actual results could
differ from those estimates. |
| |
We
recognize revenue in accordance with the American Institute of Certified Public
Accountants Statement of Position (“SOP”) 97-2, “Software Revenue
Recognition,” as amended by SOP 98-9, “Modification of SOP 97-2,
Software Revenue Recognition, with Respect to Certain Transactions,” SOP 81-1,
“Accounting for Performance of Construction-type and Certain Production-type
Contracts,” the SEC’s Staff Accounting Bulletin (“SAB”) No. 104 (“SAB
104”), “Revenue Recognition,” and other authoritative accounting
literature. We derive revenues from the following sources: license fees, professional
services, maintenance and support fees and third party products and services. |
| |
We
generally provide services with our supply agreements that include significant
production, modification, and customisation of the software. These services are not
separable and are essential to the functionality of the software, and as a result we
account for these licence and service arrangements under SOP 81-1 using the percentage of
completion method of contract accounting. |
| |
License
Fees and Professional Services |
| |
Our
supply agreements generally include multiple products and services, or “elements.” We
use the residual method to recognize revenue when a supply agreement includes one or more
elements to be delivered at a future date and vendor specific objective evidence of the
fair value of all undelivered elements exists. The fair value of the undelivered elements
is determined based on the historical evidence of stand-alone sales, or renewal terms of
these elements to customers. Under the residual method, the fair value of the undelivered
elements is deferred and the remaining portion of the arrangement fee, which relates to
the license and implementation services, is recognized as revenue on a percentage of
completion basis. If evidence of the fair value of one or more undelivered elements does
not exist, the total revenue is deferred and recognized when delivery of those elements
occurs or when fair value is established. |
-4-
MDSI MOBILE DATA
SOLUTIONS INC.
Notes to the Condensed
Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 1. |
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
| |
(c) |
|
Revenue
recognition (continued) |
| |
We
estimate the percentage of completion on contracts with fixed fees on a monthly basis
utilizing hours incurred to date as a percentage of total estimated man-days to complete
the project. If we do not have a sufficient basis to measure progress towards completion,
revenue is recognized when we receive final acceptance from the customer. When the total
cost estimate for a project exceeds revenue, we accrue for the estimated losses
immediately. The complexity of the estimation process and issues related to the
assumptions, risks and uncertainties inherent with the application of the
percentage-of-completion method of accounting affect the amounts of revenue and related
expenses reported in our consolidated financial statements. A number of internal and
external factors can affect our estimates, including labor rates, utilization and
efficiency variances and specification and testing requirement changes. |
| |
We
are engaged on a continuous basis in the production and delivery of software under
contractual agreements. As a result we have developed a history of being able to estimate
costs to complete and the extent of progress toward completion of contracts, which
supports the use of the percentage of completion method of contract accounting. |
| |
Professional
services revenue primarily consists of consulting and customer training revenues, which
are usually charged on a time and materials basis and are recognized as the services are
performed. Revenue from certain fixed price contracts is recognized on a proportional
performance basis, which involves the use of estimates related to total expected man-days
of completing the contract derived from historical experience with similar contracts. If
we do not have a sufficient basis to measure the progress towards completion, revenue is
recognized when the project is completed or when we receive final acceptance from the
customer. |
| |
Generally,
maintenance is initially sold as an element of a master supply arrangement, with
subsequent annual renewals, and is priced as a percentage of new software license fees.
Maintenance revenue is recognized ratably over the term of the maintenance period, which
typically is one year. Maintenance and support revenue includes software license updates
that provide customers with rights to unspecified software product upgrades, maintenance
releases and patches released during the term of the support period. Product support
services also include Internet and telephone access to technical support personnel. |
| |
Historically,
we have provided a warranty phase during the supply agreement. Services provided during
this warranty phase include elements of maintenance and support. As a result we defer a
portion of the supply agreement fee, based on vendor specific objective evidence of the
value of these services, and recognize the deferred amount as revenue pro rata over the
warranty period. |
| |
Third
party products and services |
| |
Revenue
from sales of third party products and services is recognized on delivery of the
products. Services are recognized on a percentage-complete basis. When software licenses
are sold incorporating third-party products or sold with third-party products, we
recognize as revenue the gross amount of sales of third-party product. The recognition of
gross revenue is in accordance with criteria established in Emerging Issues Task Force
Issue (“EITF”) No. 99-19, “Reporting Revenue Gross as a
Principal versus Net as an Agent”. |
| |
On
occasion, we utilize third-party consultants to assist in implementations or
installations originated by the Company. In these cases, in accordance with criteria
established in EITF No. 99-19 (as described above), the revenue for these implementations
and installations is typically recognized on a gross basis. In these cases, we ultimately
manage the engagement. |
-5-
MDSI MOBILE DATA
SOLUTIONS INC.
Notes to the Condensed
Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 1. |
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
| |
(d) |
|
Recently
issued accounting standards |
| |
In
June 2004, the Financial Accounting Standards Board (“FASB”) issued an exposure
draft of a proposed Statement, “Fair Value Measurements”, to provide guidance
on how to measure the fair value of financial and non-financial assets and liabilities
when required by other authoritative accounting pronouncements. The proposed statement
attempts to address concerns about the ability to develop reliable estimates of fair
value and inconsistencies in fair value guidance provided by current US GAAP, by creating
a framework that clarifies the fair value objective and its application in GAAP. In
addition, the proposal expands disclosures required about the use of fair value to
remeasure assets and liabilities. The standard would be effective for financial
statements issued for fiscal years beginning after June 15, 2005. The Company is
currently assessing the impact this standard will have on the Company’s consolidated
financial statements. |
| |
In
March 2004, the FASB ratified consensuses reached by the EITF with respect to EITF Issue
No. 03-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to
Certain Investments.” EITF Issue No. 03-1 addresses recognition, measurement and
disclosure of other-than-temporary impairment evaluations for securities within the scope
of Statement of Financial Accounting Standard (“SFAS”) No. 115, “Accounting
for Certain Investments in Debt and Equity Securities,” and equity securities that
are not subject to the scope of SFAS No. 115 and are not accounted for under the equity
method according to Accounting Principles Board Opinion No. 18, “The Equity Method
of Accounting for Investments in Common Stock.” The recognition and measurement
guidance is effective for reporting periods beginning after June 15, 2004. Disclosures
for cost method investments are required to be included in annual financial statements
prepared for fiscal years ending after June 15, 2004. The Company does not have any
significant cost method investments and therefore adoption is not expected to have a
significant impact on its consolidated financial statements. |
| |
In
December 2003, the SEC issued SAB No. 104, “Revenue Recognition”, which
supercedes SAB No. 101, “Revenue Recognition in Financial Statements.” The
primary purpose of SAB 104 is to rescind accounting guidance contained in SAB 101 related
to multiple element revenue arrangements, which was superceded as a result of the
issuance of EITF No. 00-21, “Accounting for Revenue Arrangements with Multiple
Deliverables.” SAB 104 also incorporated certain sections of the SEC’s “Revenue
Recognition in Financial Statements – Frequently Asked Questions and Answers” document.
While the wording of SAB 104 has changed to reflect the issuance of EITF 00-21, the
revenue recognition principles of SAB 101 remain largely unchanged by the issuance of SAB
104. The adoption of SAB 104 did not have an impact on the consolidated financial
statements. |
| |
(e) |
|
Stock-based
compensation |
| |
The
Company accounts for stock-based compensation using the intrinsic value based method
whereby compensation cost is recorded for the excess, if any, of the quoted market price
of the common share over the exercise price of the common stock option at the date
granted. |
| |
The
following pro forma financial information presents the net loss for the quarter and loss
per common share had the Company adopted SFAS No. 123 “Accounting for Stock-based
Compensation.” |
|
Three months ended September 30, |
Nine months ended September 30, |
|
|
|
|
2004 |
2003 |
2004 |
2003 |
|
|
|
|
|
| Net loss for the period |
|
$ (1,251,162 |
) |
$ (400,831 |
) |
$ (2,406,961 |
) |
$ (2,643,765 |
) |
|
|
|
|
|
| Basic and diluted loss per | |
| common share | |
$ (0.15 |
) |
$ (0.05 |
) |
$ (0.29 |
) |
$ (0.32 |
) |
|
|
|
|
|
-6-
MDSI MOBILE DATA
SOLUTIONS INC.
Notes to the Condensed
Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 1. |
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
| |
Using
the fair value method for stock-based compensation, additional compensation costs of
approximately $72,834 would have been recorded for the three months ended September 30,
2004 (2003 — $371,192), and $508,666 would have been recorded for the nine months
ended September 30, 2004 (2003 — $1,067,322). This amount is determined using an
option pricing model assuming no dividends are to be paid, an average vesting period of
four years, average life of the option of 5 years, a weighted average annualized expected
volatility of the Company’s share price of 47% and a weighted average annualized
risk free interest rate at 1.1%. |
| |
The
Company operates in a single business segment, the Field Service business segment. |
| |
The
Company earned revenue from sales to customers in the following geographic locations: |
|
Three months ended September 30, |
Nine months ended September 30, |
|
|
|
|
2004 |
2003 |
2004 |
2003 |
|
|
|
|
|
| Canada |
|
$ 269,528 |
|
$ 434,708 |
|
$ 1,236,149 |
|
$ 1,247,574 |
|
| United States | |
8,182,654 |
|
6,549,094 |
|
21,699,729 |
|
17,830,282 |
|
| Europe, Middle East and Africa | |
4,159,947 |
|
4,917,261 |
|
13,821,124 |
|
15,639,439 |
|
| Asia and other | |
84,132 |
|
109,388 |
|
390,819 |
|
536,354 |
|
|
|
|
|
|
| | |
$12,696,261 |
|
$12,010,452 |
|
$37,147,821 |
|
$35,253,649 |
|
|
|
|
|
|
| |
During
the three months ended September 30, 2004 revenue from two customers accounted for
approximately 20.9% and 5.4% (2003 – 15.6% and 15.1%), respectively, of total
revenue. During the nine months ended September 30, 2004 revenue from two customers
accounted for approximately 18.8% and 10.7% (2003 – 16.8% and 13.8%), respectively,
of total revenue. |
| |
Basic
loss per common share is calculated by dividing net income (loss) by the weighted average
number of common shares outstanding during the period. Diluted earnings (loss) per share
is calculated by dividing net income (loss) by the sum of the weighted average number of
common shares outstanding plus all additional common shares that would have been
outstanding if potentially dilutive common shares had been issued. In periods for which
there is a reported net loss, potentially dilutive securities have been excluded from the
calculation, as their effect would be anti-dilutive. |
| |
The
following table reconciles the number of shares utilized in the loss per common share
calculations for the periods indicated: |
|
Three months ended September 30, |
Nine months ended September 30, |
|
|
|
|
2004 |
2003 |
2004 |
2003 |
|
|
|
|
|
| Basic weighted average shares |
|
8,325,147 |
|
8,204,691 |
|
8,276,085 |
|
8,197,650 |
|
| outstanding | |
| Effect of dilutive securities; | |
| Stock options | |
-- |
|
-- |
|
-- |
|
-- |
|
| Diluted weighted average shares | |
8,325,147 |
|
8,204,691 |
|
8,276,085 |
|
8,197,650 |
|
| outstanding | |
|
|
|
|
|
-7-
MDSI MOBILE DATA
SOLUTIONS INC.
Notes to the Condensed
Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| |
During
the three months ended September 30, 2004 the Company announced a restructuring plan
approved by the Company’s Board of Directors to enable the Company to operate in a
more effective and efficient manner and reduce costs. The Company recorded a charge of
$1.5 million in connection with this restructuring. The $1.5 million charge relates to
costs of workforce reduction for approximately 30 affected employees, stock based
compensation charges and other related costs. |
| |
As
at September 30, 2004 a provision of approximately $290,000 remained from a restructuring
charge taken in 2001. The remaining provision relates to excess space the Company has
under lease. |