RUTHERFORD, N.J., Oct. 28 /PRNewswire-FirstCall/ -- AXS-One
Inc. (Amex: AXO), a leading provider of Records Compliance
Management (RCM) software solutions today announced its
financial results for the third quarter and nine-month period
ended September 30, 2004.
Revenues for the quarter were $9.1 million, a 10 percent
decrease from the $10.2 million reported in the corresponding
prior year period. License revenues were $1.3 million,
including $0.9 million (70 percent) related to e-mail
management and archiving products, an increase of 30 percent
from the previous quarter but a decrease of 47 percent from
the $2.5 million in total license revenues reported in the
same quarter last year. Operating expenses increased 18
percent from the same quarter last year as a result of
management's focus on improving key aspects of the
organization, including sales, marketing and research and
development, to better position the company to exploit the
opportunities for long term success created by global
compliance and governance drivers. As a result of these
initiatives, sales and marketing expenses increased 28 percent
and R&D expenses increased 23 percent from the same
quarter last year. The Company reported an operating loss of
$1.7 million versus operating income of $1.1 million in the
third quarter of 2003. The Company reported a net loss of $1.7
million, or ($0.06) per diluted share, versus net income of
$918,000, or $0.04 per diluted share last year.
For the quarter, 54 percent of the license revenue
recognized was with customers inside the United States, while
46 percent was recognized internationally.
For the first nine months of 2004, revenues increased 1.1
percent to $29.6 million, compared to $29.2 million reported
for the first nine months of 2003. License fees decreased 5.6
percent to $4.8 million compared to license fees of $5.1
million for the first nine months of 2003. Total operating
expenses, including the restructuring and other costs,
increased 20 percent to $32.9 million compared to $27.5
million for the first nine months of 2003. The Company
reported an operating loss of $3.4 million compared to
operating income of $1.7 million for the first nine months of
2003. The net loss for the nine-month period was $3.5 million,
or ($0.13) per diluted share, compared to net income of $1.5
million, or $0.06 per diluted share, for the first nine months
of 2003.
The Company's balance sheet reported $6.7 million in cash
and cash equivalents as of September 30, 2004, an increase
from $2.9 million as of December 31, 2003, primarily as a
result of the $7.7 million private placement completed in
April 2004. The Company carries no long-term debt.
Highlights from the Third Quarter include:
* Initial sales of AXS-Link(TM) for SAP,
AXS-One's SAP archiving solution
certified by SAP in March 2004 and the
establishment of a pipeline
* Additional business for Records
Compliance Management software with
marquee Financial Services accounts in
North America
* Major wins for Enterprise Financials
including one of Australia's largest
retailers
* Significant wins for AXS-One's
e-delivery solution within the
European travel industry, including
five out of the top ten tour
operators and one of the largest
ferry operators. These agreements
give AXO a recurring transaction fee
from the organizations that account
for nearly 50 percent of all
passenger bookings made by Civil
Aviation Authority (CAA)-regulated
travel agents.
* An alliance with NuTech Integrated
Systems, a systems integrator of
enterprise-level messaging solutions
with focus on the
financial services sector.
"During the third quarter, we were able to deliver wins
across our entire product portfolio, including our new
products such as AXS-Link for SAP, where we won business
against an entrenched market leader," commented Bill Lyons,
chairman and chief executive officer of AXS-One. "The
predictable revenue stream that our e-delivery solutions will
provide in addition to our ability to significantly expand the
number and size of opportunities within our installed accounts
worldwide provides a solid foundation, coupled with optimism
about our growth prospects both in the fourth quarter and
2005. The opportunities to develop agreements with partners,
including major global organizations such as Sun Microsystems
and SAP, remain substantial. We continue to be extremely
confident in our ability to leverage these opportunities
worldwide, which should enable us to achieve our strategic
objectives -- grow the business and deliver enhanced
shareholder value."
About AXS-One Inc.
AXS-One (Amex: AXO) is a leading provider of Records
Compliance Management solutions. The AXS-One Compliance
Platform enables organizations to implement secure, scalable
and enforceable policies that address records management for
corporate governance, legal discovery and industry regulations
such as SEC17a-4, NASD 3010, Sarbanes-Oxley, HIPAA, The
Patriot Act and Gramm-Leach Bliley. AXS-One's technology has
been critically acclaimed as best of class and delivers
digital archiving, business process management, electronic
document delivery and integrated records disposition and
discovery for e-mail, instant messaging, images, SAP and other
corporate records. Founded in 1979, and headquartered in
Rutherford, NJ, AXS-One has offices worldwide including in the
United States, Australia, Singapore, United Kingdom and South
Africa. For further information, visit the AXS-One web site at
http://www.axsone.com.
AXS-One, the AXS-One logo, "Access Tomorrow Today,"
AXSPoint, and TransAXS are registered trademarks of, and
AXS-One Compliance Platform, AXS-One Retention Manager, "The
Records Compliance Management Company," e-Cellerator, AXS
Desk, "AXS-One Collaboration FrameWorks," SMART, AXS-Link and
Tivity are trademarks of, AXS-One Inc., in the U.S. All other
company and product names are trademarks or registered
trademarks of their respective companies.
Special Note Regarding Forward-Looking Statements: A number
of statements contained in this release are forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve risks and
uncertainties that could cause actual results to differ
materially from those expressed or implied in the applicable
statements. These risks and uncertainties include, but are not
limited to: potential vulnerability to technological
obsolescence; the risks that its current and future products
may contain errors or defects that would be difficult and
costly to detect and correct; potential difficulties in
managing growth; dependence on key personnel; the possible
impact of competitive products and pricing; and other risks
described in more detail in AXO's Securities and Exchange
Commission filings.
Company Contact: IR Contact:
William Levering Matthew Hayden
AXS-One Inc. Hayden Communications
wlevering@axsone.com matt@haydenir.com
(201) 935-3400 (858) 456-4533
AXS-ONE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Revenues:
License fees $1,306 $2,459 $4,770 $5,054
Services 7,759 7,681 24,621 23,930
Other-related parties 80 71 181 260
Total revenues 9,145 10,211 29,572 29,244
Operating expenses:
Cost of license fees 693 371 1,479 1,090
Cost of services 4,129 3,815 12,926 11,782
Sales and marketing 2,271 1,780 6,696 5,535
Research and development 2,081 1,697 6,017 4,949
General and
administrative 1,714 1,483 4,811 4,146
Restructuring costs (83) -- 1,020 --
Total operating
expenses 10,805 9,146 32,949 27,502
Operating income (expense) (1,660) 1,065 (3,377) 1,742
Other income (expense):
Interest income 40 17 105 49
Interest expense -- (48) (14) (167)
Gain on sale of
subsidiary -- -- -- 71
Equity in income
(losses) of
joint ventures (40) (81) (122) 34
Other income (expense),
net (17) (6) (68) (172)
Other expense, net (17) (118) (99) (185)
Net income (loss) before
income taxes $(1,677) $947 $(3,476) $1,557
Income tax benefit
(expense) 18 (29) (10) (57)
Net income (loss) $(1,659) $918 $(3,486) $1,500
Basic net income
per common share $(0.06) $0.04 $(0.13) $0.06
Weighted average basic
common shares
outstanding 28,106 24,960 27,094 24,929
Diluted net income
per common share $(0.06) $0.04 $(0.13) $0.06
Weighted average diluted
common shares
outstanding 28,106 26,228 27,094 25,932
The unaudited financial information included in this
document is intended only as summary provided for your
convenience, and should be read in conjunction with the
complete consolidated financial statements of the Company
(including the Notes thereto, which set forth important
information) contained in its Reports on Form 10-K and 10-Q
filed by the Company with the U.S. Securities and Exchange
Commission (SEC). Such reports are available on the public
EDGAR electronic filing system maintained by the SEC.
This press release contains forward-looking statements.
Such statements are only predictions, and actual events or
results may differ materially. All forward-looking statements
involve risks and uncertainties, including, without
limitation, the risks detailed in the Company's documents and
reports filed from time to time with the Securities and
Exchange Commission.
AXS-ONE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2004 2003
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $6,681 $2,946
Accounts receivable, net of allowance
for doubtful accounts 5,788 5,541
Due from joint venture 127 107
Prepaid expenses and other current assets 876 659
Total current assets 13,472 9,253
Equipment and leasehold improvements,
net of accumulated depreciation 411 336
Capitalized software development costs,
net of accumulated amortization 2,106 2,364
Other assets 185 197
Total assets $16,174 $12,150
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt $-- $547
Accounts payable and accrued expenses 5,515 4,848
Due to joint venture -- 4
Deferred revenue 9,258 8,946
Total current liabilities 14,773 14,345
Long-term deferred revenue 505 1,504
Stockholders' equity (deficit): 896 (3,699)
Total liabilities and
stockholders' equity (deficit) $16,174 $12,150
The unaudited financial information included in this
document is intended only as summary provided for your
convenience, and should be read in conjunction with the
complete consolidated financial statements of the Company
(including the Notes thereto, which set forth important
information) contained in its Reports on Form 10-K and 10-Q
filed by the Company with the U.S. Securities and Exchange
Commission (SEC). Such reports are available on the public
EDGAR electronic filing system maintained by the SEC.
This press release contains forward-looking statements.
Such statements are only predictions, and actual events or
results may differ materially. All forward-looking statements
involve risks and uncertainties, including, without
limitation, the risks detailed in the Company's documents and
reports filed from time to time with the Securities and
Exchange Commission.
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