Softchoice Announces Third-Quarter Earnings


    --  Third quarter adjusted net income grows 47 percent
    --  Net sales for the third quarter up 7 percent year-over-year
    --  Margins continue to improve, reflecting impact of growing
        Services business
    --  Softchoice declares third-quarter dividend in the amount CAD
        $0.07 per common share

TORONTO, Nov. 13, 2012 /CNW/ - Softchoice Corporation (TSX: SO), a North 
American provider of technology solutions and services, today reported 
earnings for the third quarter of 2012.

For the three-month period ended September 30(th) 2012, Softchoice reported 
net income of US$5.5 million compared to a net loss of US$0.5 million for the 
same period in the prior year. Eliminating the impact of foreign exchange 
gains and losses, adjusted net income grew 47 percent in the period, 
increasing to US$4.0 million, or US$0.20 per share (basic and fully diluted), 
compared to adjusted net income of US$2.7 million, or US$0.14 per share (basic 
and fully diluted) recorded in the third quarter of 2011.

Third quarter net sales grew 7 percent to US$243.6 million. Sales of 
Enterprise Software, Servers, Storage and Networking solutions made steady 
gains in the period, increasing 15 percent year-over-year while sales of 
Microsoft grew by 7 percent. Reflecting the impact of the acquisition of UNIS 
LUMIN, the Company's Services business continued to record strong growth, 
increasing 59 percent compared to the same quarter in the prior year.

"Our solid earnings performance reflects our focus on productivity, managing 
expense growth and expanding the proportion of high value solutions and 
services in our revenue mix," said David MacDonald, President and CEO of 
Softchoice. "Moreover, we are now starting to realize the anticipated 
synergies of our acquisition of UNIS LUMIN, which includes leveraging key 
assets to bring game-changing offerings to market like the successful 
introduction of Softchoice Cloud and Keystone Managed Services."

Third quarter earnings before interest, taxes, depreciation and amortization 
("EBITDA") margin increased 20 basis points to 3.7 percent, reflecting the 
first year-over-year improvement following the acquisition of UNIS LUMIN.

"While we are aware of the existing macroeconomic uncertainty, our focus on 
high growth areas of technology like Microsoft solutions, cloud, networking 
and mobile computing positions us well to outpace the industry growth rate for 
the balance of the year," added Mr. MacDonald. "With the most significant 
impact of Microsoft's fee changes largely behind us, warm reception to new 
product releases like System Center and Windows 8, and our expanded coverage 
of the small and medium-size business segment, we are also confident in our 
ability to continue to grow our business and market share with Microsoft while 
leveraging these opportunities to drive incremental solutions and Services 
revenue."

On August 8, 2012, the Company reinstated its quarterly dividend in the amount 
of CAD $0.07 per common share. The declaration of the third quarter's dividend 
will be the second dividend declared since this reinstatement. This dividend 
will be payable on December 14, 2012 to shareholders of record as of November 
30, 2012.

At the end of the quarter, Softchoice had cash on hand of US$51.6 million 
compared to $44.0 million ending the third quarter of 2011 and total debt of 
nil. Cash flow generated from operations increased by $2.5 million from the 
third quarter of 2011 to approximately US$6 million.

Operating Highlights
    --  Reported net income for the third quarter increased to $5.5
        million or $0.28 per share from a net loss of $0.5 million or
        $0.02 per share in 2011, principally driven by strong sales
        generated through Microsoft solutions, Enterprise Software,
        Servers, Storage and Networking solutions and Services.
    --  Adjusted net income amounted to almost $4 million or $0.20 per
        share in the third quarter of 2012 compared to $2.7 million or
        $0.14 per share, representing growth of 47 percent or 43
        percent per share.
    --  Total revenue, including imputed revenue, grew to US$0.5
        billion, representing a year-over-year increase of 23 percent.
    --  Gross profit increased by $5.3 million or 13 percent in the
        third quarter of 2012 when compared to the same period in
        2011. 
    --  Driven by strong growth in gross profit, consolidated third
        quarter EBITDA were almost $9 million in the third quarter, an
        increase of $1.0 million or 12 percent from the same period in
        the prior year.
    --  Revenues from Softchoice's Canadian operations increased by 20
        percent in the quarter when expressed in Canadian dollars,
        reflecting the positive contribution of the acquisition of UNIS
        LUMIN.
    --  On July 18, 2012 the Company launched Softchoice Cloud - a
        secure online platform that simplifies the purchase,
        deployment, management and support of Software-as-a-Service
        (SaaS) applications.

Softchoice Third Quarter Earnings Call Details

Softchoice Corporation will host its third-quarter earnings call on November 
14, 2012 at 8:00 am ET.

The call will be moderated by David MacDonald, Softchoice's President and CEO 
and Chief Financial Officer, David Long. The conference call will begin with a 
brief web presentation followed by a question-and-answer session.

Participant Information:

Local Dial in number:416 800 1066

Toll Free Dial in number:1 866 212 4491

Webcast URL:

http://www.snwebcastcenter.com/custom_events/softchoice-20121114/site/

To ensure participation, please dial in at least 10 minutes prior to the start 
of the conference at 8:00 am ET.

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 November 15, 2012.

About Softchoice

As a leading North American provider of technology solutions and services, 
Softchoice combines the efficiency and reliability of a national IT supplier 
with the personal touch and technical expertise of a local solutions provider. 
Softchoice's holistic approach to technology includes solution design, 
implementation and asset management services, as well as access to one of the 
most comprehensive and cost-effective technology distribution networks in 
North America. With over 1,200 employees, Softchoice manages the technology 
needs of thousands of corporate and public sector organizations across the 
United States 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.

Interim Consolidated Financial Statements
(Expressed in U.S. dollars)

SOFTCHOICE CORPORATION

Three-month and nine-month periods ended September 30, 2012 and 2011
(Unaudited)

SOFTCHOICE CORPORATION

Interim Condensed Consolidated Statements of Financial Position

(In thousands of U.S. dollars)

(Unaudited)
                                        September 30,    December 31,
                                                 2012            2011

Assets                                                               

Current assets:                                                      

  Cash                                $         51,607 $       32,993

  Trade and other receivables                  227,789        306,434

  Inventory                                      4,018          8,407

  Work-in-progress                                 568            465

  Deferred costs                                   919          2,591

  Prepaid expenses and other assets              6,790          6,158

  Income taxes receivable                        1,735              -

  Total current assets                         293,426        357,048

Non-current assets:                                                  

  Long-term accounts receivable                    279            643

  Long-term prepaid expenses                     2,019          1,821

  Property and equipment                         5,900          6,309

  Goodwill                                      16,830         16,441

  Intangible assets                             42,722         46,203

  Deferred tax assets                           18,758         19,224

  Total non-current assets                      86,508         90,641

Total assets                          $        379,934 $      447,689

Liabilities and Shareholders' Equity                                 

Current liabilities:                                                 

  Trade and other payables            $        207,297 $      290,267

  Deferred lease inducements                       229            243

  Deferred revenue                               8,800         10,627

  Income taxes payable                               -          2,279

  Total current liabilities                    216,326        303,416

Non-current liabilities:                                             

  Deferred lease inducements                       502            648

  Deferred revenue                               3,855          3,307

  Total non-current liabilities                  4,357          3,955

Total liabilities                              220,683        307,371

Shareholders' equity:                                                

  Capital stock                                 26,971         26,548

  Contributed surplus                            3,894          3,274

  Retained earnings                            129,571        111,689

  Accumulated other comprehensive              (1,185)        (1,193)
  loss  

  Total shareholders' equity                   159,251        140,318

Total liabilities and shareholders'   $        379,934 $      447,689
equity   

The accompanying notes are an integral part of these unaudited interim 
condensed consolidated financial statements.

SOFTCHOICE CORPORATION

Interim Condensed Consolidated Statements of Comprehensive Income

(In thousands of U.S. dollars, except per share information)

(Unaudited)
                    Three-month periods   Nine-month periods ended
                          ended 
                       September 30,              September 30,
                        2012       2011       2012            2011

Net sales         $  243,591 $  227,364 $  756,874 $       730,028

Cost of sales        197,541    186,649    605,283         589,887

Gross profit          46,050     40,715    151,591         140,141

Operating                                                         
expenses

  Selling and         29,069     23,666     88,743          76,665
  marketing 

  Administrative      11,008     11,259     35,874          33,171
                      40,077     34,925    124,617         109,836

Income from
operating              5,973      5,790     26,974          30,305
activities 

Finance costs            122      5,121        394           5,607

Finance income       (2,057)        (2)    (1,805)            (47)

Other expenses            14        254      (207)             176
(income) 
                     (1,921)      5,373    (1,618)           5,736

Income before          7,894        417     28,592          24,569
income taxes 

Income tax             2,384        889      9,316           8,933
expense 

Net income             5,510      (472)     19,276          15,636
(loss) 

Other
comprehensive                                                     
income:

  Foreign
  currency               197        487          8              76
  translation
  adjustment 

Total
comprehensive     $    5,707 $       15 $   19,284 $        15,712
income 

Net earnings
(loss) per common                                                 
share:

  Basic (note 5)  $     0.28 $   (0.02) $     0.97 $          0.79

  Diluted (note   $     0.28 $   (0.02) $     0.96 $          0.79
  5) 

The accompanying notes are an integral part of these unaudited
interim condensed consolidated financial statements.

SOFTCHOICE CORPORATION

Interim Condensed Consolidated Statements of Changes in Equity

(In thousands of U.S. dollars, except for number of share amounts)

(Unaudited)

Nine-month period     Number   Capital   Contributed    Cumulative   Retained           Total
ended                                                  translation              shareholders'

September 30,      of shares     stock       surplus       account   earnings          equity
2011 

Balance, January  19,780,039 $  26,016 $       2,054 $     (1,142) $   89,569 $       116,497
1, 2011 

Total
comprehensive                                                                                
income:

  Net income               -         -             -             -     15,636          15,636

  Other
  comprehensive                                                                              
  income:
    Foreign
    currency               -         -             -            76          -              76
    translation
    adjustment 

  Total
  comprehensive            -         -             -            76     15,636          15,712
  income 

Transactions with
shareholders                                                                                 
recorded directly
in equity:

  Contributions
  by and                                                                                     
  distributions
  to owners:
    Share options      8,599       108          (41)             -          -              67
    exercised 
    Share-based
    payment                -         -         1,261             -          -           1,261
    transactions 
    Transfer from
    contributed       52,573       461         (461)             -          -               -
    surplus  
                      61,172       569           759             -          -           1,328

Balance,
September 30,     19,841,211 $  26,585 $       2,813 $     (1,066) $  105,205 $       133,537
2011 
                                                                                 
                                                       Cumulative                       Total

Nine-month period     Number   Capital   Contributed   translation   Retained   shareholders'
ended 

September 30,      of shares     stock       surplus       account   earnings          equity
2012 

Balance, January  19,837,211 $  26,548 $       3,274 $     (1,193) $  111,689 $       140,318
1, 2012 

Total
comprehensive                                                                                
income:

  Net income               -         -             -             -     19,276          19,276

  Other
  comprehensive                                                                              
  income:
    Foreign
    currency               -         -             -             8          -               8
    translation
    adjustment

  Total
  comprehensive            -         -             -             8     19,276          19,284
  income 

Transactions with
shareholders                                                                                 
recorded directly
in equity:

  Contributions
  by and                                                                                     
  distributions
  to owners:
    Share options     40,151       515         (193)             -          -             322
    exercised 
    Share           (68,200)      (92)        (716)              -          -           (808)
    repurchase  
    Share-based
    payment                -         -         1,529             -          -           1,529
    transactions
    Dividends              -         -             -             -    (1,394)         (1,394)
    declared
                    (28,049)       423           620             -    (1,394)           (351)

Balance,
September 30,     19,809,162 $  26,971 $      3,894  $     (1,185) $  129,571 $       159,251
2012 

The accompanying notes are an integral part of these unaudited interim 
consolidated financial statements.

SOFTCHOICE CORPORATION

Interim Condensed Consolidated Statements of Cash Flows

(In thousands of U.S. dollars)

(Unaudited)
                     Three-month periods    Nine-month periods ended
                            ended
                         September 30,              September 30,
                        2012        2011        2012            2011

Cash provided by:                                                   

Operating                                                           
activities:

  Net income       $   5,510   $  (472)   $   19,276  $       15,636
  (loss)

  Adjustments                                                       
  for:
    Depreciation
    of property          799        663        2,356           2,392
    and
    equipment 
    Share-based
    payment              526         224       1,529           1,261
    transactions 
    Income tax         2,384         889       9,316           8,933
    expense 
    Amortization
    of                 2,189       1,528       6,424           4,305
    intangible
    assets 
    Unrealized
    foreign           (1,899)      3,460     (1,688)           2,154
    currency
    (gain) loss 
    Interest
    expense on             2         434          52           1,442
    financial
    liabilities 
    Amortization
    of deferred            -          369          -           1,096
    financing
    costs 

  Change in
  non-cash
  operating            1,718       (555)     (1,104)        (11,681)
  working capital
  (note 7) 
                      11,229       6,540      36,161          25,538

  Interest paid          (2)       (442)        (52)         (1,443)

  Income taxes       (5,206)     (2,538)    (12,553)         (9,510)
  paid 
                                                                    

  Cash provided
  by                   6,021       3,560      23,556          14,585
  operating
  activities 

Financing                                                           
activities:

  Repayment of
  loans and                -       (278)           -         (2,696)
  borrowings 

  Repurchase of
  common shares        (243)           -       (808)               -
  (note 4) 

  Payment of          (1,394)          -     (1,394)               -
  dividends 

  Proceeds from
  issuance of            138          57          322             67
  common shares 

  Cash used in
  financing          (1,499)       (221)     (1,880)         (2,629)
  activities 

Investing                                                           
activities:

  Purchase of
  property and         (225)       (299)     (1,775)         (1,716)
  equipment 

  Purchase of
  intangible           (473)       (651)     (2,250)         (1,666)
  assets 

  Restricted               -          500          -             500
  cash 

  Cash used in
  investing            (698)        (450)     (4,025)        (2,882)
  activities  

Increase in cash        3,824       2,889      17,651          9,074

Cash, beginning        46,764      42,510      32,993         35,752
of period 

Effect of
exchange rate           1,019     (1,387)         963          (814)
changes on cash 

Cash, end of       $   51,607  $  44,012  $   51,607  $       44,012
period 

The accompanying notes are an integral part of these unaudited interim 
consolidated financial statements.

SOFTCHOICE CORPORATION
Notes to Interim Condensed Consolidated Financial Statements
(In thousands of U.S. dollars, except per share information)

Three-month and nine-month periods ended September 30, 2012 and 2011

1. Nature of operations

Softchoice Corporation (the "Company") was formed on May 15, 2002 pursuant to 
an amalgamation with Ukraine Enterprise Corporation. The Company was 
incorporated under the Canada Business Corporations Act. The Company is a 
North American business-to-business direct marketer of information technology 
("IT") hardware, software and services to small, medium and large businesses 
and public sector institutions.

The Company's United States operations are carried on by a subsidiary 
("SoftchoiceU.S."), a corporation incorporated under the laws of the State 
of New York. On December 10, 2007, the Company incorporated a wholly owned 
subsidiary, Softchoice Holdings Corporation ("Holdco"). Holdco is 
incorporated under the laws of the State of Delaware.

The consolidated financial statements of the Company comprise the Company and 
its subsidiaries (together referred to as the "Company").

The Company's registered office is located at 173 Dufferin Street, Suite 200, 
Toronto, Ontario.

2. Basis of preparation

(a)Statement of compliance

These unaudited condensed consolidated interim financial statements for the 
three-month and nine-month periods ended September 30, 2012 have been prepared 
in accordance with IAS 34, Interim Financial Reporting a basis consistent with 
the accounting policies disclosed in the annual audited consolidated financial 
statements for the year ended December 31, 2011. They do not include all of 
the information required for full annual audited financial statements and 
should be read in conjunction with the consolidated financial statements of 
the Company for the year ended December 31, 2011.

The policies applied in these interim consolidated financial statements are 
based on International Financial Reporting Standards ("IFRS") issued and 
outstanding as of November 13, 2012, the date the Board of Directors approved 
the interim consolidated financial statements for issue.

(b)Basis of presentation

The unaudited condensed interim consolidated financial statements include the 
accounts of the Company and its subsidiaries. Intercompany transactions and 
balances are eliminated on consolidation.

The unaudited condensed interim consolidated financial statements have been 
prepared primarily under the historical cost convention. The following items 
are carried at fair value:

(i)Financial instruments carried at fair value through profit or loss 
("FVTPL").

(ii)Liabilities for cash-settled share-based payment awards.

The Company's financial year corresponds to the calendar year. The unaudited 
condensed interim consolidated financial statements are prepared in thousands 
of U.S. dollars except per share information.

The unaudited interim consolidated statements of comprehensive income are 
presented using the functional classification for expenses.

3. Significant accounting policies

The same accounting policies and methods of computation are followed in the 
unaudited condensed consolidated interim financial statements as compared with 
the Company's most recent audited consolidated financial statements including 
the notes, for the year ended December31, 2011.

(a)New standards and interpretations yet to be adopted:

A number of new standards, and amendments to standards and interpretations, 
are not yet effective for the nine-month period ended September 30, 2012, and 
have not been applied in preparing these condensed consolidated interim 
financial statements. The following is a summary of recent accounting 
pronouncements that may affect the Company:

(i)In November 2009, the International Accounting Standards Board ("the 
IASB") issued IFRS 9 Financial Instruments ("IFRS 9") as part of the first 
phase of its project to replace IAS 39 Financial Instruments: Recognition and 
Measurement. The standard released in 2009 establishes the classification 
and measurement of financial assets: amortized cost and fair value.  In 
October 2010, the IASB amended IFRS 9 for added disclosures about investments 
in equity instruments measured at fair value in Other Comprehensive Income, 
and included guidance on the classification and measurement of financial 
liabilities. In December 2011, the IASB issued an amendment to IFRS 9 to 
defer the mandatory effective date to annual periods beginning on or after 
January 1, 2015, with early adoption permitted. The Company intends to adopt 
IFRS9 in its financial statements for the annual period beginning on 
January1, 2015. The Company is currently assessing the impact of adoption 
of IFRS 9.

(ii)IFRS 13, Fair Value Measurement ("IFRS 13"), which is applicable to 
annual reporting periods beginning on or after January 1, 2013, defines fair 
value, sets out in a single IFRS framework for measuring fair value, and 
requires disclosures about fair value measurements. The Company intends to 
adopt IFRS 13 prospectively in its interim consolidated financial statements 
for the annual period beginning on January 1, 2013. The extent of the impact 
of adoption of IFRS 13 has not yet been determined.

(iii)In June 2011, the IASB published amendments to IAS 1, Presentation of 
Financial Statements: Presentation of Items of Other Comprehensive Income 
("IAS 1"), which are effective for annual periods beginning on or after July 
1, 2012. The amendments require that an entity present separately the items 
of other comprehensive income that may be reclassified to profit or loss in 
the future from those that would never be reclassified to profit or loss. 
The Company intends to adopt the amendments in the interim consolidated 
financial statements for the annual period beginning on January1, 2013. As 
the amendments only require changes in the presentation of items in other 
comprehensive income, the Company does not expect the amendment to IAS1 to 
have material impact on the interim consolidated financial statements.

(iv)IFRS 10, Consolidated Financial Statements ("IFRS 10"), and amended 
IAS27 (2011), Separate Financial Statements:

IFRS 10 requires an entity to consolidate an investee when it is exposed, or 
has rights, to variable returns from its involvement with the investee and has 
the ability to affect those returns through its power over the investee. 
Under existing IFRS, consolidation is required when an entity has the power to 
govern the financial and operating policies of an entity so as to obtain 
benefits from its activities. The Company intends to adopt this standard and 
amendment in the interim consolidated financial statements for the annual 
period beginning on January 1, 2013. The Company is currently assessing what 
impact the application of these standards or amendments will have on the 
consolidated financial statements of the Company.

4. Normal course issuer bid ("NCIB")

On August 13, 2012, the Company renewed its NCIB for an additional one-year 
period, expiring on August 12, 2013. As approved by the TSX, the Company is 
authorized to purchase up to 1,585,403 shares, representing approximately 8 
percent of the 19,813,500 common shares that were issued and outstanding as of 
July 31, 2012, or up to 10 percent of the Company's public float for the same 
period. Any daily repurchase will be limited to a maximum of 6,191 common 
shares, representing 25 percent of the average daily trading volume of the 
common shares on the TSX for the six month period ended July 31, 2012.

During the third quarter and the first nine months of 2012, the Company 
repurchased 21,900 shares at a weighted average price of $11.32 per share and 
68,200 shares at a weighted average price of $11.69 per share for cancellation 
under the NCIB. The Company recorded $30 and $92 for the three-month and 
nine-month periods ended September 30, 2012, as a reduction of share capital, 
respectively. The net excess of the repurchase price over the carrying value 
per share is allocated to contributed surplus. No common shares were 
repurchased for cancellation during the comparable periods in 2011.

5. Net earnings per common share

(a)  Weighted average number of shares:
                       Three-month periods     Nine-month periods ended
                              ended
                            September 30,              September 30,
                          2012          2011         2012          2011
     Issued,
     beginning of   19,813,500    19,833,862   19,837,211    19,780,039
     period  
     Effect of
     stock               3,512         1,960       13,924        37,940
     options
     exercised 
     Effect of
     repurchase
     of                (3,186)             -     (21,471)             -
     common
     shares 
     Weighted
     average
     number         19,813,826    19,835,822   19,829,664    19,817,979
     of shares -
     basic 
     Dilutive
     effect of
     assumed           180,854             -      194,704        30,387
     exercise of
     stock
     options 
     Weighted
     average
     number         19,994,680    19,835,822   20,024,368    19,848,366
     of shares -
     diluted 
     Net income   $      5,510  $      (472) $     19,276 $      15,636
     (loss) 
     Net earnings
     (loss) per                                                        
     common
     share:
       Basic      $       0.28  $     (0.02) $       0.97 $        0.79
       Diluted    $       0.28  $     (0.02) $       0.96 $        0.79

(b)Diluted earnings per share

Diluted earnings per share is determined by adjusting the net income 
attributable to common shareholders and the weighted average number of common 
shares outstanding, for the effects of all dilutive potential common shares, 
which comprise deferred share units and stock options granted to executives 
and employees. The market value of the dilutive options is determined using 
the average closing price of the shares during the period.

The total number of anti-dilutive stock options that were out of the money and 
contingently issuable shares in which performance achievement conditions had 
not been met, were excluded from the calculation for the three-month and 
nine-month periods ended September 30, 2012, was 623,753 (2011 - 500,000).

6. Operating segments

The Company has one reportable segment in which the assets, operations and 
employees are located in Canada and the United States. Net sales are 
attributed to customers based on where the products are shipped or where the 
services are provided.

(a) Geographic information 



Geographic segments of net sales are as follows:
              Three-month periods ended  Nine-month periods ended
                          September 30,          September 30,
                    2012            2011        2012         2011

Canada((1))   $   98,473  $       82,814  $  317,452  $   309,692

United States    145,118         144,550     439,422      420,336
              $  243,591  $      227,364  $  756,874  $   730,028

((1)) In Canadian dollars net sales for the three-month periods ended
September 30, 2012 and 2011 are $97,830 and $81,228 respectively and
for the nine-month periods ended September 30, 2012 and 2011 are
$318,045 and $302,871 respectively.

Geographic segments of property and equipment are located as follows:
                                        
              September 30, December 31,
                       2012         2011

Canada           $    5,099  $     5,272

United States           801        1,037
                 $    5,900  $     6,309

Geographic segments of goodwill are as follows:
                   September 30,  December 31,
                         2012          2011

Canada          $      11,895  $     11,506

United States           4,935         4,935
                $      16,830  $     16,441

Geographic segments of intangible assets are as follows:
                   September 30,  December 31,
                         2012          2011

Canada          $      20,677  $     20,997

United States          22,045        25,206
                $      42,722  $     46,203

(b)Economic dependence

Approximately 32% and 32% of the Company's net sales for the three-month 
periods ended September30, 2012 and 2011, respectively and approximately 32% 
and 34% of the Company's net sales for the nine-months periods ended September 
30, 2012 and 2011, respectively, relate to products published by one software 
publisher, Microsoft Corporation.

7. Change in non-cash operating working capital
                      Three-month periods ended  Nine month periods ended
                               September 30,             September 30,
                          2012          2011         2012         2011

Trade and other     $   35,811  $     12,408  $    81,676  $    12,764
receivables

Inventory              (1,379)           131        4,467        (393)

Work-in-progress          (13)             -         (83)            -

Deferred costs           (266)         6,143        1,674        5,418

Prepaid expenses           508            46        (784)        (410)
and other assets

Long-term accounts       (277)           340          172        1,993
receivable

Long-term prepaid        (137)             -        (137)            -
expenses

Trade and other       (32,457)      (18,846)     (86,269)     (31,240)
payables

Deferred revenue          (20)         (742)      (1,644)          330

Deferred lease            (52)          (35)        (176)        (143)
inducements
                    $    1,718  $      (555)  $   (1,104)  $  (11,681)

8. Seasonality

The Company's sales tend to follow a quarterly seasonality pattern that is 
typical of many companies in the IT industry. In the first quarter of the 
year, sales to the Canadian government tend to be higher as March 31 marks the 
fiscal year end for the federal government. A significant portion of the 
Company's revenue is derived from the sale of Microsoft products. 
Historically, the Company has benefited from the sales and marketing drive 
that has been generated by Microsoft sales representatives in the second 
quarter of the year leading up to Microsoft's fiscal year end on June 30. 
Sales in the third quarter of the year tend to be lower than other quarters 
due to the general reduction in activity resulting from summer holiday 
schedules. This slowdown is offset somewhat by the fiscal year end of the 
U.S. federal government on September 30. In the fourth quarter of the year, 
the Company typically experiences higher sales as many customers complete 
their IT purchases in advance of their fiscal year end of December31.

9. Subsequent event

On, November 13, 2012, the Board of Directors declared a dividend of Canadian 
dollar $0.07 per common share. Total dividends of approximately Canadian 
dollar $1.4 million will be distributed on December 14, 2012 to shareholders 
of record at the close of business on November 30, 2012.

10. Comparative figures

Certain 2011 figures have been reclassified to conform with the financial 
statement presentation adopted in 2012.





Media Contact

Eric Gardiner Manager of Communications 416.588.9002 Ext. 2358 
eric.gardiner@softchoice.com

SOURCE: Softchoice Corporation

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/November2012/13/c7582.html

CO: Softchoice Corporation
ST: Ontario
NI: SOF ERN 

-0- Nov/13/2012 22:50 GMT


 
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