ACE*COMM Corporation Reports Financial Results for the Second Quarter of Fiscal Year 2004.Business Editors GAITHERSBURG, Md.--(BUSINESS WIRE)--Feb. 4, 2004 ACE*COMM Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ACEC ACEC American Council of Engineering Companies (formerly American Consulting Engineers Council) ACEC American Consulting Engineers Council (now American Council of Engineering Companies) ), a global provider of advanced operations support systems Operations Support Systems (also called Operational Support Systems or OSS) are computer systems used by telecommunications service providers. The term OSS most frequently describes "network systems" dealing with the telecom network itself, supporting processes such (OSS Oss (ôs), city (1994 pop. 62,141), North Brabant prov., S Netherlands; chartered 1399. It is a significant industrial center. Manufactures include meat products, chemicals, pharmaceuticals, electrical equipment, and metalware. ) solutions for communications networks The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. , today reported financial results for the second quarter of fiscal year 2004, which ended December 31, 2003. The Company reported revenues of $2.4 million for the quarter, which compares to $4.1 million for the same quarter in fiscal year 2003. Net loss for the quarter was $1.5 million, or a net loss of $.14 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $81 thousand, or net income of $.01 per fully diluted share for the same quarter in fiscal year 2003. For the first six months of fiscal 2004, the Company recorded revenues of $4.9 million, compared to $8.2 million for the first six months of fiscal 2003. The net loss and loss per fully diluted share were $2.5 million and $.24, respectively, compared to net income and earnings per fully diluted share of $172 thousand and $.02 for the same six months of fiscal 2003. "Although these financial results do not reflect the real advances achieved in our business during these first six months, the substantial progress that has been made should be reflected in our financial results later this fiscal year," said George T. Jimenez, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of ACE*COMM. "We just announced, for example, an acquisition of the Intasys OSS solutions division of Mamma.com - a new development in the fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. of our strategy to focus on expanding our markets through the acquisition of complementary products and technologies. Ongoing Intasys revenue will appear in our fiscal year results over the next two quarters. This transaction represents another step in our growth strategy, which also includes our merger with i3 Mobile in December. Additionally, the results of this quarter do not yet reflect any revenues from the contract we won with Telecom Egypt Telecom Egypt or Telecom Egypt SAE (TE) (LSE: TEEG), is Egypt’s main Telephone company. It started in 1854 with the first telegraph line in Egypt. In 1998 it replaced the former Arab Republic of Egypt National Telecommunication Organization (ARENTO). in October 2003, for the largest data collection mediation mediation, in law, type of intervention in which the disputing parties accept the offer of a third party to recommend a solution for their controversy. Mediation has long been a part of international law, frequently involving the use of an international commission, project announced in our business sector in a two year period. All three of these events support our goal to become a stronger, more vibrant player in each of our targeted market sectors." Business highlights for the quarter include: -- The signing in late January of an agreement to purchase the Intasys OSS technologies division from Mamma.com in Montreal, Canada. -- The selection of ACE*COMM as one of the 'Top 10 Public OSS Companies to Watch' by Telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. Magazine. -- The acquisition of i3 Mobile which is providing strong support for ACE*COMM's acquisition and growth strategy. -- The signing of four new Convergent Mediation(TM) contracts in both domestic and international markets. -- The selection of ACE*COMM'S NetPlus(R) Enterprise OSS by Fairfax County - one of nation's largest counties - for key communications systems In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. performance and cost management applications. Added Steven R. Delmar, CFO See Chief Financial Officer. of ACE*COMM: "We are maintaining our cautious approach to our expense structure, and will continue to be sensitive to costs when incorporating new technologies and integrating Intasys' assets. We expect that the flat revenues of this quarter will be offset by significant third and fourth quarter increases above the first and second quarter levels, due primarily to current increases in backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. and revenue from Intasys' customers. As announced earlier, we anticipate an overall increase for fiscal year 2004 as compared to fiscal year 2003. As our revenues increase, we should see some benefits from our conservative approach on the expense side." ACE*COMM will host an earnings teleconference call this evening, Wednesday, February 4, 2004 at 5:30 pm, Eastern Standard Time, to discuss the second quarter results. To participate, please call 877-282-2315. When prompted, enter the ACE*COMM reservation number 383112. Internet users Internet user n → internauta m/f Internet user Internet n → internaute m/f can hear a simultaneous live Webcast of the teleconference at http://acecomm.com or http://www.companyboardroom.com. A taped replay of the call will be made available from the ACE*COMM Corporate Web Site after 8:30 pm, on February 4, 2004. About ACE*COMM ACE*COMM is a global provider of advanced Convergent Mediation(TM) products and Enterprise Telemanagement software applications. ACE*COMM's solutions are employed in wired and wireless networks that deliver voice, data, mixed media and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the communications. Their proven technology provides the ability to capture, secure, validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data , and enhance data from multiple networks. These operations are performed interactively with a data warehouse, and processed information is distributed in near real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. , to all types of carrier OSS (Operations Support Systems) and BSS See 802.11. BSS - Block Started by Symbol (Business Support Systems). Solutions are matched to each customer's business environment. They provide the analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. tools required to extract knowledge from operating networks - knowledge our customers use to generate more revenue, reduce costs, accelerate time-to-market for new services, and deliver more effective customer support. For more than 20 years, ACE*COMM technology has been effectively deployed in over 3500 installations in more than 65 countries world-wide - including over 100 installations in China - enabling the success of customers and partners such as AT&T, Cisco, Marconi, Motorola, Alcatel, General Dynamics General Dynamics Corporation (NYSE: GD) is a defense conglomerate formed by mergers and divestitures, and as of 2006 it is the sixth largest defense contractor in the world[1]. The company has changed markedly in the post-Cold War era of defense consolidation. , TRW TRW The Real World (TV reality show) TRW The Right Way TRW Tactical Reconnaissance Wing TRW The Retriever Weekly (University of Maryland, Baltimore, MD) TRW Thompson Ramo Wooldridge Inc , Unisys and Siemens. ACE*COMM is a registered ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 quality standard company. For more information, visit www.acecomm.com. ACE*COMM, NetPlus, the ACE*COMM logo and N*VISION are registered trademarks, and Convergent Mediation is a trademark of ACE*COMM Corporation. Except for historical information, the matters discussed in this news release include forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to certain risks and uncertainties that could cause the actual future events to differ materially from those projected, including, but not limited to: the failure of anticipated demand to materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , delays or cancellations of orders due to various factors, including business and economic conditions in the U.S. and foreign countries; industry-wide slowdowns, any limitations on customers' financial resources, the continued convergence of voice and data networks, the continuing success of the Company's strategic alliances for product development and marketing, customer purchasing and budgetary patterns or lack thereof; pricing pressures and the impact of competitive products; the timely development and acceptance of new products; the Company's ability to adequately support its operations, and other risks detailed from time to time in the Company's Report on Form 10-Q Form 10-Q See 10-Q. and other reports filed with the Securities Exchange Commission. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. or any change in events, conditions, or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which any such statements are based.
ACE*COMM CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, June 30,
2003 2003
------------- ----------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $6,564 $1,570
Accounts receivable, net 4,428 4,825
Inventories, net 791 700
Prepaid expenses and other 310 265
------------- ----------
Total current assets 12,093 7,360
Property and equipment, net 545 875
Other assets - 9
------------- ----------
Total assets $12,638 $8,244
============= ==========
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings $840 $433
Accounts payable 956 636
Accrued expenses 1,027 341
Accrued compensation 480 706
Deferred revenue 1,039 1,303
-------------- ----------
Total liabilities 4,342 3,419
-------------- ----------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000
shares authorized, none issued and
outstanding - -
Common stock, $.01 par value, 45,000,000
shares authorized, 13,719,191 and
9,807,440 shares issued and outstanding 137 98
Additional paid-in capital 27,862 21,933
Accumulated deficit (19,703) (17,206)
-------------- ----------
Total stockholders' equity 8,296 4,825
-------------- ----------
Total liabilities and stockholders'
equity $12,638 $8,244
============== ==========
ACE*COMM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
For the three months For the six months
ended ended
December 31, December 31,
---------------------- -----------------------
2003 2002 2003 2002
(Unaudited) (Unaudited)(Unaudited) (Unaudited)
----------- ---------- ----------- -----------
Revenue $ 2,414 $ 4,071 $ 4,879 $ 8,162
Cost of revenue 1,718 1,871 3,287 3,644
----------- ---------- ----------- -----------
Gross profit 696 2,200 1,592 4,518
Selling, general, and
administrative 2,112 2,058 3,850 4,240
Research and development 92 55 222 93
----------- ---------- ----------- -----------
(Loss) income from
operations (1,508) 87 (2,480) 185
Interest expense (9) (6) (17) (13)
----------- ---------- ----------- -----------
(Loss) income before
income taxes (1,517) 81 (2,497) 172
Benefit for income taxes - - - -
----------- ---------- ----------- -----------
Net (loss) income $ (1,517) $ 81 $ (2,497) $ 172
=========== ========== =========== ===========
Basic net (loss) income
per share $ (.14) $ 0.01 $ (.24) $ 0.02
=========== ========== =========== ==========
Diluted net (loss)
income per share $ (.14) $ 0.01 $ (.24) $ 0.02
=========== ========== =========== ==========
Shares used in computing
net (loss) income per
share:
Basic 10,995 9,311 10,407 9,317
=========== =========== =========== ==========
Diluted 10,995 9,334 10,407 9,329
=========== =========== =========== ==========
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