Comtex Reports 2nd Quarter Fiscal 2004 Financial Results
February 17 2004 - 7:15AM
PR Newswire (US)
Comtex Reports 2nd Quarter Fiscal 2004 Financial Results
ALEXANDRIA, Va., Feb. 17 /PRNewswire-FirstCall/ -- Comtex News
Network, Inc., (BULLETIN BOARD: CMTX) , a leading wholesaler of
electronic real-time news and content, today announced the
financial results for the three and six-month periods ended
December 31, 2003. For the quarter ended December 31, 2003, the
Company's revenues were $2 million compared to $2.4 million for the
second quarter of fiscal 2003. The decline in revenues primarily
results from business closures and consolidation among clients. The
Company reported an operating loss of $708,000 and a net loss of
$1,035,000, or $0.08 loss per share, for the second quarter of
fiscal 2004, versus last year's second quarter operatingprofit of
$228,000 and net profit of $182,000, or $0.01 per share. The
operating and net losses are primarily due to the termination of an
operating lease for office space, the disposal of assets related to
office and data center moves, and increased legal fees, as
discussed below. The terminated operating lease had $2.6 million in
remaining lease obligations and was terminated for $463,000 in
settlement-related expenses and additional rent payments. As a
result of the lease termination, during thesecond quarter, the
Company reduced its leased office space from one location,
comprising approximately 17,000 square feet, to two locations
totaling approximately 5,000 square feet. Leased office expense was
thereby reduced to $11,000 per month from $40,000 per month, a
decrease of 73%. Operating expenses in the comparable period of the
prior year included the recovery of accrued legal fees of $394,000
related to a favorable litigation settlement. The recovery of those
legal fees reduced the prior year expenses in comparison to this
year. Excluding the expenses associated with the terminated lease
settlement and legal expense recovery, operating expenses for the
second quarter and the six-month periods, respectively, decreased
$266,000, or 17%, and $483,000, or 15%, from the comparable prior
year periods. In conjunction with the above lease termination and
the move of its data center to a third-party hosting facility, the
Company also disposed of related furniture and equipment assets.
Expenses related to these disposals total approximately $300,000,
reported in other expense. C.W. Gilluly, Comtex's Chairman and
Interim CEO, said, "The turnaround of Comtex is proceeding,
although settling our former office space lease and writing-off
various assets increased non-cash expenses and losses during the
quarter." Dr. Gilluly also noted, "During this quarter, Comtex
opened an office in New York City, expanded relationships with key
distributors and established a new banking relationship. All of
these factors contribute to increasing the strength of the
Company." Revenues for the six months ended December 31, 2003 were
$4.2 million, the operating loss was $936,000 and the net loss was
$1.3 million, or $0.10 loss per share. Revenues for the prior year
six-month period were $4.9 million, the operating loss was $15,000
and the net loss was $85,000, or a loss of $0.01 per share. As with
the quarter, the increase in operating and net losses for the six
month period are due primarily to the settlement of the liability
on the office space lease, the loss on disposal of assets related
to office and data center moves, the relative increase in legal
fees, and a decrease in revenues and gross profit margins, all
partially offset by decreased operating expenses. About Comtex
Comtex is a leading wholesaler of real-time news and related
content for the world's leading financial and business information
distributors. With a specialization in the financial news and
content marketplace, Comtex receives, enhances, combines, filters
and distributes news and content received from more than 10,000
national and international news bureaus, agencies and publications.
The resulting news and content products -- with embedded stock
tickers, key words,standardized metadata, uniform formatting and
custom filters -- are all designed to meet the exacting standards
required by investment professionals. More information on the
company can be found at http://www.comtex.com/. Financial Table
Follows Comtex News Network, Inc. Selected Financial Data
(unaudited) (amounts in thousands, except per share amounts) Three
Months Ended Six Months Ended December 31 December 31 2003 2002
2003 2002 Revenues $ 2,014 $ 2,430 $ 4,187 $ 4,862 Operating (Loss)
Income (708) 228 (936) (15) Net (Loss) Income $ (1,035) $ 182 $
(1,287) $ (85) Net (Loss) Earnings Per Share Basic and Diluted $
(0.08) $ 0.01 $ (0.10) $ (0.01) Weighted Avg. # Shares: Basic
13,583 13,142 13,545 13,141 Diluted 13,583 13,296 13,545 13,141
Reconciliation to EBITDA: Net (Loss) Income $ (1,035) $ 182$
(1,287) $ (85) Stock-based compensation 24 2 52 2 Depreciation
& Amortization 230 304 483 608 Interest/Other Expense 327 45
350 70 Income Taxes -- -- -- -- EBITDA $ (454) $ 533 $ (402) $ 595
Please Note: EBITDA is not a term defined by generally accepted
accounting principles, and as a result, our measure of EBITDA might
not be comparable to similarly titled measures used by other
companies. However, we believe that EBITDA is relevant and useful
information, which is often reported and widely used byanalysts,
investors and other interested parties in our industry.
Accordingly, we are disclosing this information to permit a more
comprehensive analysis of our operating performance. Also note,
except for the historical information contained herein,this press
release contains forward-looking statements within the meaning of
Section 21E of the Securities and Exchange Act of 1934, as amended,
that involve a number of risks and uncertainties. These
forward-looking statements may be identified by reference to a
future period by use of forward-looking terminology such as
"anticipate," "expect," "could," "intend," "may" and other words of
a similar nature. These statements involve risks and uncertainties
that could cause actual results to differ materially from those
contemplated herein, including the occurrence of unanticipated
events or circumstances relating to the fact that Comtex is in a
highly competitive industry subject to rapid technological, product
and price changes. Other factors include the possibility that
demand for the Company's products may not occur or continue at
sufficient levels, changing global economic and competitive
conditions, technological risks and other risks and uncertainties,
including those detailed in the Company's filings with the
Securities and Exchange Commission. Comtex undertakes no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. DATASOURCE:
Comtex News Network, Inc. CONTACT: Amber Gordon of Comtex News
Network, +1-703-820-2000 Web site: http://www.comtexnews.com/
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