AXS-One Reports Fourth Quarter and Year-End Financial Results
RUTHERFORD, N.J., Feb. 10 /PRNewswire-FirstCall/ -- AXS-One Inc.
(AMEX:AXO), a leading provider of Records Compliance Management
(RCM) software solutions today announced its financial results for
the fourth quarter and fiscal year ended December 31, 2004. Total
license revenues for the fourth quarter increased 45 percent to
$2.0 million from $1.4 million in the fourth quarter of 2003, and
54 percent sequentially when compared with $1.3 million for the
third quarter of 2004. Records Compliance Management (RCM) license
revenues were $1.0 million, an 8.8 percent sequential increase from
those reported in the third quarter. Total revenues for the fourth
quarter were $8.9 million, a decrease of 15.2 percent, compared
with revenues of $10.4 million in the fourth quarter of 2003. Total
expenses increased 15 percent to $11.1 million compared to $9.6
million in the fourth quarter of 2003, resulting from management's
ongoing commitment to enhance sales, marketing and research and
development functions related to the Company's RCM product
strategy. The Company reported an operating loss of $2.2 million
for the fourth quarter, resulting in a net loss of $1.7 million, or
$(0.06) per diluted share compared to income from operations of
$830,000 in the fourth quarter of last year and to net income of
$816,000, or $0.03 per diluted share. The revenue decline in the
fourth quarter is attributable to a decrease in services revenue
resulting from the Company's strategic shift to RCM products and
the completion in 2004 of several large enterprise implementation
projects. The Company believes that both consulting and maintenance
revenues will stabilize with the expected growth in RCM
implementations going forward. "Since I joined AXS-One in April of
last year, we have focused on leveraging the Company's core
competencies in compliance, archiving and workflow to become the
leader in Records Compliance Management, which will enable us to
provide consistent and predictable growth into the future," said
Bill Lyons, Chairman and CEO of AXS-One. "As discussed in previous
quarters, a priority has been to repackage our products for a
channel sales model. We delivered Version 3 of our AXS-One
Compliance Platform(TM) suite to plan and have been able to put the
quality of our solution to the test, with new customers signed in
all territories. Our relationship with Sun Microsystems was
significantly expanded to become a full blown global "Technology
Development and License Agreement," under which Sun is marketing,
licensing, selling, implementing and supporting our entire AXS-One
Compliance Platform product suite worldwide both directly and
through their global reseller network. By the time we announced
this much anticipated agreement on January 19th, we were concluding
our first joint sale, which has since been signed." Revenues for
fiscal 2004 were $38.4 million, a decrease of 3.2 percent from the
$39.7 million reported in the corresponding prior year period.
License revenues for the year increased 5.2 percent to $6.8 million
from $6.4 million in 2003. Operating expenses increased 18.5
percent to $44.0 million compared to $37.1 million reported for
fiscal 2003, including $1.0 million in restructuring and other
costs. The Company reported a net loss of $5.2 million, or $(0.19)
per diluted share, compared to net income of $2.3 million, or $0.09
per diluted share last year. Mr. Lyons continued, "Our channel
business model is firmly established, the sales pipeline is healthy
and growing and the first successes from partners have been
realized, validating our strategy. The costs associated with
expanding our management team, implementing our sales and marketing
strategy, and finalizing development of our major software
offerings, AXS-One Compliance Platform Version 3 and AXS-Link for
SAP are now complete. Today, we believe AXS-One possesses both the
capital and human resources necessary to deliver substantial
operating improvements, including both licensing growth and
profitability in 2005." Highlights from the Fourth Quarter include:
* Technology Development and Licensing Agreement signed with Sun
Microsystems. Under the terms of this agreement, Sun will market,
license, implement and support the AXS-One Compliance Platform
worldwide. * First joint sale signed with StorageTek and formal
partnership plans in process. * General Availability of AXS-One
Compliance Platform Version 3.0 including Retention Manager,
providing new functionality for electronic Records Management.
Licenses of Version 3.0 were reported in all territories this
quarter. * General Availability of AXS-Link for SAP Version 1.5
with eight new customer licenses across the geographies including
Mantrack, Tenaga and BPB Gypsum. * Continued channel development
with revenues coming from partners and resellers including
StorageTek, Sector and IMlogic. The Company had $4.8 million in
cash and cash equivalents at December 31, 2004, a 63 percent
increase compared to the $2.9 million reported at December 31,
2003. Conference Call Information Management will conduct a
conference call to discuss these results at 5 p.m. Eastern on
February 10, 2005. Interested parties can participate in the call
by dialing 706-645-0399 or can access the webcast at
http://www.axsone.com/. The webcast will be archived for 30 days
following the call. Interested parties may submit questions that
they would like answered during the conference call by e-mail to .
Interested parties may listen to the call via a live CCBN webcast
that will be available via the company website
http://www.axsone.com/. Interested parties should access the
webcast approximately 10-15 minutes before the scheduled start
time. 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 1978, 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 website 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. AXS-ONE INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
December 31, December 31, 2004 2003 ASSETS Current assets: Cash and
cash equivalents $4,809 $2,946 Accounts receivable, net of
allowance for doubtful accounts 6,084 5,541 Due from joint venture
68 107 Prepaid expenses and other current assets 1,283 659 Total
current assets 12,244 9,253 Equipment and leasehold improvements,
net of accumulated depreciation 509 336 Capitalized software
development costs, net of accumulated amortization 1,886 2,364
Other assets 142 197 Total assets $14,781 $12,150 LIABILITIES AND
STOCKHOLDERS' DEFICIT Current liabilities: Current portion of
long-term debt $-- $547 Accounts payable and accrued expenses 5,687
4,848 Due to joint venture 29 4 Deferred revenue 9,786 8,946 Total
current liabilities 15,502 14,345 Long-term deferred revenue 303
1,504 Stockholders' deficit (1,024) (3,699) Total liabilities and
stockholders' deficit $14,781 $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 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 CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data) Three Months Ended Twelve
Months Ended December 31, December 31, 2004 2003 2004 2003
Revenues: License fees $2,011 $1,389 $6,781 $6,443 Services 6,825
9,018 31,446 32,948 Other-related parties 28 40 209 300 Total
revenues 8,864 10,447 38,436 39,691 Operating expenses: Cost of
license fees 444 434 1,923 1,524 Cost of services 4,160 4,050
17,086 15,832 Sales and marketing 2,869 1,762 9,565 7,297 Research
and development 1,982 1,883 7,999 6,832 General and administrative
1,600 1,488 6,411 5,634 Restructuring and other costs -- -- 1,020
-- Total operating expenses 11,055 9,617 44,004 37,119 Operating
income (expense) (2,191) 830 (5,568) 2,572 Other income (expense):
Interest income 39 24 144 73 Interest expense -- (30) (14) (197)
Gain on sale of subsidiary -- -- -- 71 Equity in losses of joint
venture (40) (148) (162) (114) Other income (expense), net 239 (16)
171 (188) Other income (expense), net 238 (170) 139 (355) Net
income (loss) before income taxes (1,953) 660 (5,429) 2,217 Income
tax benefit (expense) 227 156 217 99 Net income (loss) $(1,726)
$816 $(5,212) $2,316 Basic net income (loss) per common share
$(0.06) $0.03 $(0.19) $0.09 Weighted average basic common shares
outstanding 28,293 24,995 27,395 24,945 Diluted net income (loss)
per common share $(0.06) $0.03 $(0.19) $0.09 Weighted average
diluted common shares outstanding 28,293 27,279 27,395 26,264 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 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.
Company Contact: IR Contact: Joseph Dwyer Matthew Hayden AXS-One
Inc. Hayden Communications (201) 935-3400 (858) 456-4533
DATASOURCE: AXS-One Inc. CONTACT: Joseph Dwyer of AXS-One Inc.,
+1-201-935-3400, ; or Investor Relations, Matthew Hayden of Hayden
Communications, +1-858-456-4533, , for AXS-One Inc. Web site:
http://www.axsone.com/
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