DOCC Docucorp Intl (MM)

Docucorp� International (Nasdaq:DOCC), a leading provider of Customer Communication Management (CCM) solutions, today announced record first quarter revenues of $21.7 million for the quarter ended October 31, 2006, a four percent increase as compared to $20.8 million for the first quarter of the prior year. Net income increased 40 percent for the quarter to $765,000, or $0.07 per diluted share, compared to net income of $546,000, or $0.05 per diluted share, for the same period a year ago. Compared to the first quarter of fiscal 2006, professional services revenue increased 11 percent to $6.0 million, maintenance revenue increased five percent to $5.6 million, and ASP hosting revenue increased two percent to $8.2 million. Software license revenue decreased eight percent to $1.9 million. �Record first quarter revenues and a 40 percent improvement in profitability are a solid start for the fiscal year,� said Michael D. Andereck, president and chief executive officer, Docucorp International. �Our challenge and focus for fiscal 2007 is to increase software license sales.� About Docucorp Docucorp markets Customer Communication Management (CCM) solutions via a portfolio of information software, business process outsourcing and professional services, which enables companies to create, publish, manage and archive complex, high-volume, personalized information in-house or fully outsource to Docucorp. The company has an installed base of more than 1,300 customers, including some of the world�s largest insurance, utility, financial services and health care organizations. Headquartered in Dallas, Docucorp has facilities in Atlanta, Silver Spring, Md., Bedford, N.H., and London, as well as an international presence in the Benelux, Switzerland, Central and Eastern Europe, Middle East, Africa and Asia Pacific regions. Certain information contained in this news release may include �forward-looking� statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than historical facts, included herein are forward-looking statements. These statements involve risks and uncertainties, such as competition, technological developments, loss of significant customers and the other factors discussed in the Company�s periodic reports filed with the Securities and Exchange Commission, that could cause the Company�s actual results to differ materially from those expressed or implied by these forward-looking statements. Docucorp is a registered trademark of Docucorp International. Consolidated Statements of Operations and Balance Sheet follow. � 2006 Docucorp International. All Rights Reserved. Company, organization and product names mentioned herein are trademarks or registered trademarks of their respective owners. Docucorp and its symbol are trademarks of Docucorp International. DOCUCORP INTERNATIONAL, INC. Consolidated Statements of Operations (in thousands except per share amounts) (unaudited) � � Three Months Ended October 31, 2006� 2005� � Revenues ASP hosting $ 8,218� $ 8,048� Professional services 5,987� 5,372� License 1,876� 2,035� Maintenance 5,621� 5,363� Total revenues 21,702� 20,818� � Cost of revenues ASP hosting 7,367� 7,360� Professional services 4,531� 4,134� License 1,440� 1,174� Maintenance 279� 359� Total cost of revenues 13,617� 13,027� � Gross profit 8,085� 7,791� � Operating expenses Product development 2,283� 2,193� Sales and marketing 2,618� 2,569� General and administrative 2,032� 2,155� Total operating expenses 6,933� 6,917� � Income from operations 1,152� 874� � Interest expense (70) (113) Other income, net 142� 106� � Income before income taxes 1,224� 867� Provision for income taxes 459� 321� � Net income $ 765� $ 546� � Basic net income per share $ 0.07� $ 0.05� � Weighted average basic shares outstanding 11,071� 10,900� � Diluted net income per share $ 0.07� $ 0.05� � Weighted average diluted shares outstanding 11,634� 11,505� DOCUCORP INTERNATIONAL, INC. Consolidated Balance Sheets (in thousands except share and per share amounts) (unaudited) � October 31, July 31, Assets 2006� 2006� Current assets: Cash and cash equivalents $ 8,920� $ 9,829� Accounts receivable, net of allowance of $398 and $479, respectively 16,486� 16,918� Current portion of deferred taxes 363� 363� Income tax receivable 248� 248� Other current assets 2,732� 2,905� Total current assets 28,749� 30,263� � Property and equipment, net of accumulated depreciation of $25,121 and $24,156, respectively 9,527� 9,674� Software development costs, net of accumulated amortization of $31,480 and $30,274, respectively 14,487� 14,301� Goodwill 9,842� 9,842� Identifiable intangibles, net of accumulated amortization of $331 and $290, respectively 689� 730� Other assets 487� 499� Total assets $ 63,781� $ 65,309� � Liabilities and stockholders' equity Current liabilities: Accounts payable $ 2,630� $ 3,322� Accrued liabilities: Accrued compensation 3,495� 3,453� Other 1,403� 1,625� Income taxes payable 443� 531� Current portion of lease obligations 1,730� 1,845� Current portion of long-term debt 2,438� 3,324� Deferred revenue 10,725� 11,709� Total current liabilities 22,864� 25,809� � Deferred taxes 4,772� 4,772� Long-term lease obligations 1,242� 1,588� Long-term debt 120� 137� Other long-term liabilities 1,513� 1,501� � Commitment and contingencies � Stockholders' equity: Preferred stock, $0.01 par value, 1,000,000 shares authorized; none issued -� -� Common stock, $0.01 par value, 50,000,000 shares authorized; 16,593,849 shares issued 166� 166� Additional paid-in-capital 45,499� 45,915� Treasury stock at cost, 4,921,584 and 5,185,109 shares, respectively (27,517) (28,991) Retained earnings 15,684� 14,948� Foreign currency translation adjustment (562) (536) Total stockholders' equity 33,270� 31,502� Total liabilities and stockholders' equity $ 63,781� $ 65,309� Docucorp(R) International (Nasdaq:DOCC), a leading provider of Customer Communication Management (CCM) solutions, today announced record first quarter revenues of $21.7 million for the quarter ended October 31, 2006, a four percent increase as compared to $20.8 million for the first quarter of the prior year. Net income increased 40 percent for the quarter to $765,000, or $0.07 per diluted share, compared to net income of $546,000, or $0.05 per diluted share, for the same period a year ago. Compared to the first quarter of fiscal 2006, professional services revenue increased 11 percent to $6.0 million, maintenance revenue increased five percent to $5.6 million, and ASP hosting revenue increased two percent to $8.2 million. Software license revenue decreased eight percent to $1.9 million. "Record first quarter revenues and a 40 percent improvement in profitability are a solid start for the fiscal year," said Michael D. Andereck, president and chief executive officer, Docucorp International. "Our challenge and focus for fiscal 2007 is to increase software license sales." About Docucorp Docucorp markets Customer Communication Management (CCM) solutions via a portfolio of information software, business process outsourcing and professional services, which enables companies to create, publish, manage and archive complex, high-volume, personalized information in-house or fully outsource to Docucorp. The company has an installed base of more than 1,300 customers, including some of the world's largest insurance, utility, financial services and health care organizations. Headquartered in Dallas, Docucorp has facilities in Atlanta, Silver Spring, Md., Bedford, N.H., and London, as well as an international presence in the Benelux, Switzerland, Central and Eastern Europe, Middle East, Africa and Asia Pacific regions. Certain information contained in this news release may include "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than historical facts, included herein are forward-looking statements. These statements involve risks and uncertainties, such as competition, technological developments, loss of significant customers and the other factors discussed in the Company's periodic reports filed with the Securities and Exchange Commission, that could cause the Company's actual results to differ materially from those expressed or implied by these forward-looking statements. Docucorp is a registered trademark of Docucorp International. -0- *T Consolidated Statements of Operations and Balance Sheet follow. *T (C) 2006 Docucorp International. All Rights Reserved. Company, organization and product names mentioned herein are trademarks or registered trademarks of their respective owners. Docucorp and its symbol are trademarks of Docucorp International. -0- *T DOCUCORP INTERNATIONAL, INC. Consolidated Statements of Operations (in thousands except per share amounts) (unaudited) Three Months Ended October 31, ----------------- 2006 2005 --------- ------- Revenues ASP hosting $8,218 $8,048 Professional services 5,987 5,372 License 1,876 2,035 Maintenance 5,621 5,363 --------- ------- Total revenues 21,702 20,818 --------- ------- Cost of revenues ASP hosting 7,367 7,360 Professional services 4,531 4,134 License 1,440 1,174 Maintenance 279 359 --------- ------- Total cost of revenues 13,617 13,027 --------- ------- Gross profit 8,085 7,791 --------- ------- Operating expenses Product development 2,283 2,193 Sales and marketing 2,618 2,569 General and administrative 2,032 2,155 --------- ------- Total operating expenses 6,933 6,917 --------- ------- Income from operations 1,152 874 Interest expense (70) (113) Other income, net 142 106 --------- ------- Income before income taxes 1,224 867 Provision for income taxes 459 321 --------- ------- Net income $765 $546 ========= ======= Basic net income per share $0.07 $0.05 ========= ======= Weighted average basic shares outstanding 11,071 10,900 ========= ======= Diluted net income per share $0.07 $0.05 ========= ======= Weighted average diluted shares outstanding 11,634 11,505 ========= ======= *T -0- *T DOCUCORP INTERNATIONAL, INC. Consolidated Balance Sheets (in thousands except share and per share amounts) (unaudited) October 31, July 31, Assets 2006 2006 ----------- -------- Current assets: Cash and cash equivalents $8,920 $9,829 Accounts receivable, net of allowance of $398 and $479, respectively 16,486 16,918 Current portion of deferred taxes 363 363 Income tax receivable 248 248 Other current assets 2,732 2,905 ----------- -------- Total current assets 28,749 30,263 Property and equipment, net of accumulated depreciation of $25,121 and $24,156, respectively 9,527 9,674 Software development costs, net of accumulated amortization of $31,480 and $30,274, respectively 14,487 14,301 Goodwill 9,842 9,842 Identifiable intangibles, net of accumulated amortization of $331 and $290, respectively 689 730 Other assets 487 499 ----------- -------- Total assets $63,781 $65,309 =========== ======== Liabilities and stockholders' equity Current liabilities: Accounts payable $2,630 $3,322 Accrued liabilities: Accrued compensation 3,495 3,453 Other 1,403 1,625 Income taxes payable 443 531 Current portion of lease obligations 1,730 1,845 Current portion of long-term debt 2,438 3,324 Deferred revenue 10,725 11,709 ----------- -------- Total current liabilities 22,864 25,809 Deferred taxes 4,772 4,772 Long-term lease obligations 1,242 1,588 Long-term debt 120 137 Other long-term liabilities 1,513 1,501 Commitment and contingencies Stockholders' equity: Preferred stock, $0.01 par value, 1,000,000 shares authorized; none issued - - Common stock, $0.01 par value, 50,000,000 shares authorized; 16,593,849 shares issued 166 166 Additional paid-in-capital 45,499 45,915 Treasury stock at cost, 4,921,584 and 5,185,109 shares, respectively (27,517) (28,991) Retained earnings 15,684 14,948 Foreign currency translation adjustment (562) (536) ----------- -------- Total stockholders' equity 33,270 31,502 ----------- -------- Total liabilities and stockholders' equity $63,781 $65,309 =========== ======== *T