RUTHERFORD, N.J., March 1 /PRNewswire-FirstCall/ -- AXS-One Inc.
(AMEX:AXO), a leading provider of high performance Records
Compliance Management (RCM) software solutions today announced its
financial results for the fourth quarter and fiscal year ended
December 31, 2006. As a result of AXS-One's sale of its Enterprise
Financials line of business at the end of October 2006, the
financial statements classify the Enterprise Financials product
line as a discontinued operation and, unless specified, amounts
reflect only the RCM product line. License revenues for the fourth
quarter decreased 46.3 percent to $0.7 million from $1.3 million in
the fourth quarter of 2005, and increased 48.0 percent sequentially
when compared with the $0.5 million for the third quarter of 2006.
Total revenues for the fourth quarter were $2.5 million, a decrease
of $0.5 million from the fourth quarter 2005 revenues of $3.0
million. Total operating expenses for the quarter were $7.7
million, an increase of 33.0 percent compared to the fourth quarter
of 2005. Increased expenses resulted from headcount additions and
the redeployment of certain Enterprise Financials employees to
focus on building the RCM business. Additionally, the cost of
certain resources previously shared by the Enterprise Financials
and RCM businesses are now borne solely by the RCM business. These
costs have been reduced by approximately $5.0 million per year as
part of the Company's cost reduction efforts in the fourth quarter,
although the impact of these cost reductions will not be reflected
until 2007. The Company reported a net income of $13.6 million for
the fourth quarter, or $0.39 per diluted share compared to a net
loss of $1.6 million in the fourth quarter of last year, or $(0.05)
per diluted share. Net income for the fourth quarter included a
gain of $17.2 million related to the sale of the Enterprise
Financials product line, and $0.9 million of net income from the
results of the Enterprise Financials business during the 2006
period prior to its sale. Revenues for fiscal 2006 were $10.3
million compared to $11.3 million for fiscal 2005 a decrease of 8.8
percent. Operating expenses increased 17.5 percent to $30.6 million
compared to $26.0 million reported for fiscal 2005. The company
reported a net income of $5.5 million or $0.16 per diluted share,
compared to a net loss of $9.0 million, or $(0.28) per diluted
share in 2005. The Company had $7.5 million in cash and equivalents
at December 31, 2006 compared to the $3.6 million reported at
December 31, 2005. Highlights from the Fourth Quarter include: - 15
new customer wins for the AXS-One Compliance Platform(TM) on three
continents, including eight closed with partners representing key
wins against competitors. Wins were recorded in the government,
financial services, education, manufacturing and utilities markets.
- Additional license revenues from existing RCM customers around
the world. - Announcement of a major new release of the AXS-One
Compliance Platform, featuring advanced functionality for risk
management and cost containment. - Announcement of the AXS-One Data
Archive Translator at the Microsoft Ready Summit in Australia -
Significantly increased levels of press coverage, resulting from
AXS-One commentary on the implications of the new Federal Rules of
Civil Procedure. Highlights from the 2006 Year include: - Sale of
the Company's Enterprise Financials product line on October 31,
2006 for $12 million in cash and potential future contingent
consideration to Computron Software, a subsidiary of Parallax
Capital Partners, LLC, allowing full focus on the RCM product line
and significantly improving AXS-One's financial position. - An
almost 25% growth in the Company's RCM customer base worldwide and
a more than 50% increase in new e-mail archiving customers,
including direct customers as well as customers licensed through
partners. - Industry recognition, including Lotus Advisor Editors
Choice Award for Compliance and Best Public Company from Byte and
Switch. Commenting on the Company's results and the outlook for
2007 Bill Lyons, Chairman and CEO of AXS-One stated: "While our
results improved during the fourth quarter, they were impacted by a
number of delayed purchasing decisions by prospective customers,
similar to prior quarters, some of which have now closed. As of
today, we already have orders approximating $1 million of license
revenue which we expect to recognize as revenue in the first
quarter, subject to revenue recognition criteria. Further, the sale
of our Enterprise Financials business has allowed us to resize the
organization and focus on growing our RCM business worldwide. Our
RCM products continue to prove themselves to be technically
superior and our distribution channel is showing exponential
success worldwide. Changes in regulations for litigation readiness
and e-discovery, fuelled in great part by recent changes to the
Federal Rules of Civil Procedure (FRCP) in the US, are already
accelerating buying decisions for litigation readiness software.
These changes may be the tipping point that moves electronic
records management into a 'must have' solution for corporations
under Federal jurisdiction. FRCP applies to all Electronically
Stored Information (ESI): the AXS-One Compliance Platform, with its
single archiving and records management platform to manage all
electronic records, uniquely positions us to exploit the potential
represented by this market." Conference call information Management
will conduct a conference call to discuss these results at 5 p.m.
Eastern time on March 1, 2007. 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 during
the conference call by e-mail to . Interested parties may listen to
the call via a live 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 high performance 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 award-winning
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," and AXSPoint
are registered trademarks of, and AXS-One Compliance Platform,
AXS-One Central, AXS-One Retention Manager, AXS-One Rapid-AXS,
AXS-Link for Desktop, AXS-Link for SAP, AXS-Link for Lotus Notes,
AXS-Link for Microsoft Exchange, AXS-One Data Archive Translator,
AXS-Link for File System Archiving, AXS-Link for .PST Management,
AXS-One Supervision, AXS-One Case Management, "The Records
Compliance Management Company" and AXS-Link 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 improve financial
and sales performance; 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 most current Form 10-K and other Securities and Exchange
Commission filings. Company Contact: IR Contact: Joseph Dwyer Brett
Maas or Matthew Hayden AXS-One Inc. Hayden Communications (201)
935-3400 (646) 536-7331 - Tables Follow - AXS-ONE INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
December 31, December 31, 2006 2005 (*) ASSETS (unaudited) Current
assets: Cash and cash equivalents $7,492 $3,613 Accounts
receivable, net of allowance for doubtful accounts 2,258 5,153
Prepaid expenses and other current assets 1,262 775 Total current
assets 11,012 9,541 Equipment and leasehold improvements, net of
accumulated depreciation 419 395 Capitalized software development
costs, net of accumulated amortization -- 1,038 Other assets 102 92
Total assets $11,533 $11,066 LIABILITIES AND STOCKHOLDERS' EARNINGS
(DEFICIT) Current liabilities: Accounts payable and accrued
expenses $4,503 $4,843 Bank debt -- -- Due to joint venture -- 52
Deferred revenue 2,594 8,224 Liabilities held for sale 981 -- Total
current liabilities 8,078 13,119 Long-term deferred revenue 44 63
Stockholders' equity (deficit) 3,411 (2,116) Total liabilities and
stockholders' equity (deficit) $11,533 $11,066 (*) The 2005 balance
sheet includes both RCM and Enterprise Financials business segments
The 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 and to be 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.
AXS-ONE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data) (Unaudited) Three Months
Ended Twelve Months Ended December 31, December 31, 2006 2005 2006
2005 Revenues: License fees $700 $1,303 $2,432 $4,109 Services
1,839 1,669 7,864 7,179 Total revenues 2,539 2,972 10,296 11,288
Operating expenses: Cost of license fees 289 267 1,181 1,081 Cost
of services 1,883 1,310 8,219 6,837 Sales and marketing 2,362 1,782
9,623 7,425 Research and development 1,570 1,409 6,454 5,978
General and administrative 1,155 1,014 4,649 4,360 Restructuring
costs and other costs 432 -- 432 322 Total operating expenses 7,691
5,782 30,558 26,003 Operating loss (5,152) (2,810) (20,262)
(14,715) Other income (expense): Interest income 73 51 229 156
Interest expense (52) (38) (149) (44) Other income (expense), net
545 (119) 567 (483) Total other income (expense), net 566 (106) 647
(371) Loss before income taxes (4,586) (2,916) (19,615) (15,086)
Income tax benefit -- -- -- 25 Loss from continuing operations
(4,586) (2,916) (19,615) (15,061) Income from discontinued
operations: Income from discontinued operations net of tax
provision of $ - for all periods 920 1,269 7,875 6,063 Gain on sale
of discontinued operations net of tax provision of $ 200 for 2006
and $ - for 2005 17,241 -- 17,241 -- Net income (loss) $13,575
$(1,647) $5,501 $(8,998) Basic & diluted net income (loss) per
common share: (Loss) from continuing operations $(0.13) $(0.09)
$(0.57) $(0.47) Income from discontinued operations $0.02 $0.04
$0.23 $0.19 Gain on sale of discontinued operations $0.50 $-- $0.50
$-- Net loss $0.39 $(0.05) $0.16 $(0.28) Weighted average basic
& diluted common shares outstanding 34,527 34,205 34,405 31,629
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 and to be 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. DATASOURCE: AXS-One Inc. CONTACT: Joseph Dwyer of
AXS-One Inc., +1-201-935-3400, ; or IR, Brett Maas, , or Matthew
Hayden, both of Hayden Communications, +1-646-536-7331, for AXS-One
Inc. Web site: http://www.axsone.com/
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