AXS-One Reports Financial Results for First Quarter of 2005
April 27 2005 - 5:00PM
PR Newswire (US)
AXS-One Reports Financial Results for First Quarter of 2005
RUTHERFORD, N.J., April 27 /PRNewswire-FirstCall/ -- AXS-One Inc.
(AMEX:AXO), a leading provider of Records Compliance Management
(RCM) software solutions today announced its financial results for
the first quarter ended March 31, 2005. Total revenues for the
first quarter were $8.1 million, a decrease of 26 percent, compared
with revenues of $10.9 million in the first quarter of 2004.
License revenues for the first quarter decreased to $1.0 million
from $2.5 million in the first quarter of 2004, and decreased $1.0
million sequentially when compared with $2.0 million for the fourth
quarter of 2004. Records Compliance Management (RCM) license
revenues were $0.5 million, a decrease of $0.5 million from those
reported in the fourth quarter of 2004. Total expenses increased 9
percent to $11.0 million compared to $10.1 million in the first
quarter of 2004, and remained flat compared with the fourth quarter
of 2004. The increase in expenses resulted 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 $3.0 million
for the first quarter, resulting in a net loss of $3.2 million, or
$(0.11) per diluted share compared to income from operations and
net income of $0.8 million in the first quarter of last year or
$0.03 per diluted share. "While we are disappointed at our revenue
performance for the quarter, we are also encouraged by the progress
made in many areas of our business and remain optimistic about our
ability to grow revenues and return to profitability in 2005," said
Bill Lyons, chairman and CEO of AXS-One. "During the first quarter,
despite receiving executive-level approval for new license
agreements from prospects, a number of significant contracts were
delayed but not lost. We expect our expanding distribution channels
and deepening qualified prospect pipeline to help bring more
predictability to license revenue in the future. Furthermore, our
qualified pipeline is the largest the company has ever known in
terms of number of opportunities and potential revenue." Mr. Lyons
continued, "We are continuing to aggressively execute against our
strategy of partnering with world class technology vendors to
obtain the necessary credibility and leverage to maximize sales
opportunities for our RCM solutions with Global 2000 customers.
Building a top-tier channel required us to first pass our partners'
stringent tests for functionality, scale and integration. We have
successfully completed that phase. We are now in the second phase
of channel development which includes building and rolling out
joint value propositions, training our partners' world-wide sales
organizations and developing joint marketing activities. This is an
ongoing initiative, but one in which we have already made great
progress. Our partner pipeline is growing weekly with prospects in
all stages of the sales process and we expect to realize the
results of these efforts in the upcoming months." Mr. Lyons
concluded, "We also believe that our professional services business
is back on track. With the March release of our new Enterprise
Financials 9.0 -- Compliance Edition, our Enterprise Financials
professional services engagement backlog has increased and we are
seeing an increased demand for RCM professional services as a
result of our RCM channels growing. We therefore anticipate
improvement in our services business over the year and we expect
license revenue growth to resume in the second quarter." Highlights
from the First Quarter include: * Global Technology Development and
Licensing Agreement announced in January with Sun Microsystems with
active field engagements in all markets. * Global TekAlliance
partnership with StorageTek announced in March with active field
engagements in all markets. * Release of Enterprise Financials
Version 9.0 -- Compliance Edition in March with upgrades already
scheduled at a significant number of our current customers. *
Completion of extensive testing of the Travel Bill Presentment
application (T4); it went live, generating recurring revenue
beginning the first week of April. * Winner of two industry awards:
KMWorld's 100 Companies That Matter and Lotus Advisor Editors
Choice Gold Award for Compliance. Conference call information
Management will conduct a conference call to discuss these results
at 4:30 p.m. Eastern on April 27, 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 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 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: our ability to return to profitability in 2005; our
ability to grow license and service revenue in 2005; 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: Joseph Dwyer
Matthew Hayden AXS-One Inc. Hayden Communications (201) 935-3400
(858) 704-5065 AXS-ONE INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands) (Unaudited) March 31, December 31,
2005 2004 ASSETS Current assets: Cash and cash equivalents $3,137
$4,809 Accounts receivable, net of allowance for doubtful accounts
5,633 6,084 Due from joint venture 75 68 Prepaid expenses and other
current assets 1,000 1,283 Total current assets 9,845 12,244
Equipment and leasehold improvements, net of accumulated
depreciation 486 509 Capitalized software development costs, net of
accumulated amortization 1,704 1,886 Other assets 113 142 Total
assets $12,148 $14,781 LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities: Accounts payable and accrued expenses 4,567
5,687 Due to joint venture -- 29 Deferred revenue 10,641 9,786
Total current liabilities 15,208 15,502 Long-term deferred revenue
157 303 Stockholders' deficit (3,217) (1,024) Total liabilities and
stockholders' deficit $12,148 $14,781 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 CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands, except per share data)
(Unaudited) Three Months Ended March 31, 2005 2004 Revenues:
License fees $1,022 $2,460 Services 7,016 8,411 Other-related
parties 20 51 Total revenues 8,058 10,922 Operating expenses: Cost
of license fees 364 411 Cost of services 4,659 4,269 Sales and
marketing 2,588 1,970 Research and development 2,101 1,899 General
and administrative 1,348 1,567 Total operating expenses 11,060
10,116 Operating income (loss) (3,002) 806 Other income (expense):
Interest income 30 25 Interest expense -- (12) Equity in losses of
joint ventures (24) (33) Other expense, net (173) (33) Other
expense, net (167) (53) Net income (loss) $(3,169) $753 Basic and
diluted net income (loss) per common share $(0.11) $0.03 Weighted
average basic common shares outstanding shares 28,576 25,250
Weighted average diluted common shares outstanding 28,576 28,782
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. DATASOURCE: AXS-One Inc. CONTACT: Joseph
Dwyer of AXS-One Inc., +1-201-935-3400, ; or IR, Matthew Hayden of
Hayden Communications, +1-858-704-5065, , for AXS-One Inc. Web
site: http://www.axsone.com/
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