ACE*COMM Corporation Reports Improved Financial Results for the First Quarter of Fiscal Year 2005.GAITHERSBURG, Md. -- 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) ) Highlights of the Quarter: --Revenue increase of 89% over same period last year and 18% over previous quarter --New mobile 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. contract win for GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. network in Bangladesh --New senior management added to drive corporate growth strategy --New contract to provide real-time rating solution to leading global VoIP carrier --New IP 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, contract win with next-generation service provider in Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. --New customer win for NetPlus(R) EOSS EOSS Expeditionary Operations Support Squadron (US Air Force) EOSS Engineering Operational Sequencing System EOSS Edge of Space Sciences, Inc (Denver, Colorado) EOSS Electro-Optic Sensor System in the public power utilities sector ACE*COMM Corporation (NASDAQ:ACEC), 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) technologies 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 quarter ended September 30, 2004, which is the first quarter of its 2005 fiscal year. The Company reported revenues of $4.7 million for the quarter, which compares to $2.5 million for the comparable quarter of fiscal year 2004. Net loss for the quarter was $383,000, or a net loss of $0.03 per share, compared to a net loss of $980,000, or a net loss of $0.10 per share, for same quarter of the prior year. The $2.2 million increase in revenue was comprised of: a) an increase of $1 million in revenue from core ACE*COMM business, and b) $1.2 million in revenue from business generated as a result of the purchase of the assets from Intasys. Sequentially, revenues increased by 18 percent and the net loss decreased by $1.6 million, as compared to the fourth quarter of fiscal 2004. (These sequential results for both quarters include comparable operating results from the Intasys asset acquisition in February 2004.) "I am pleased to be able to report a number of significant business accomplishments along with these improved first quarter results," 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 added important new customers to our roster including the incumbent government wireless carrier in Bangladesh, a leading next-generation service provider in Eastern Europe, and a major US public power utility. We also secured a new order from a major global VoIP carrier, to provide real-time rating and costing applications that will support the carrier's revenue assurance objectives. These recent contract awards underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. our capabilities to help service providers deliver next-generation services profitably." Continued Mr. Jimenez: "To ensure we continue to build market-leading technologies that match emerging customer needs, we recently added Chris Couch People named Chris Couch include:
"This quarter's results were consistent with our overall expectations," said Steve Delmar, ACE*COMM's CFO See Chief Financial Officer. . "We are delivering on our plan to increase sales outside of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. to offset the domestic downturn. This quarter, 67 percent of our revenues were derived from international markets. We continue to manage our costs conservatively to match the lack of sustained improvements in market demand in our space, and remain committed to our goal of keeping costs low until we see sustained improvements. Our OSS solutions portfolio is performing as planned, and we continue to deliver on the strategic roadmap we put forth over a year ago; building a company that is positioned to capture new opportunities in our target market arenas." Annual Shareholder's Meeting The Company has scheduled its Annual Shareholder's Meeting for Friday, December 3rd, 10:00 AM, Eastern Standard Time, at ACE*COMM Corporate headquarters, Gaithersburg, MD. Earnings Call ACE*COMM will host an earnings teleconference call this evening, Monday, October 25, 2004 at 5:30 pm, Eastern Time, to discuss the first quarter results. To participate, please call (866) 835-8904. When prompted, enter the ACE*COMM reservation number 583248. 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://www.acecomm.com or http://www.fulldisclosure.com. A taped replay of the call will be made available from the ACE*COMM Corporate Web Site after 8:30 pm, on Monday, October 25, 2004. About ACE*COMM ACE*COMM is a global provider of advanced operations support systems (OSS) solutions for telecom service providers and enterprises. ACE*COMM's solutions are applicable to a range of legacy through next-generation networks that include wired, wireless ,voice, data, multi-media, and Internet communications networks. These solutions include 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 customers use for revenue recovery, reduction of costs, acceleration of time-to-market for new services, and more effective customer care. ACE*COMM also offers interoperable The ability for one system to communicate or work with another. See interoperability. wireless billing and electronic payment solutions, in addition to mediation and OSS solutions, for operators in both developed and emerging markets around the world. For over 20 years, ACE*COMM technology has been effectively deployed for more than 300 customers, spanning over 4000 installations, in 70 countries world-wide. ACE*COMM-installed products are presently enabling the success of customers and partners such as AT&T, Cisco, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , 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. , Northrop-Grumman, 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 results to differ materially from those projected, including, but not limited to: the failure of anticipated orders 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. ; the failure to manage risks of potential acquisitions; 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 or delays in payment, 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 growth of its operations, and other risks detailed from time-to-time in the Company's Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended June 30, 2004 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 on which any such statements are based. For further information, please contact ACE*COMM Investor Relations Investor relations The process by which the corporation communicates with its investors. at (301) 721-3123 or investor@acecomm.com.
ACE*COMM CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, June 30,
2004 2004
-------------- ----------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 2,603 $ 2,881
Accounts receivable, net 4,205 4,246
Inventories, net 559 573
Deferred contract costs 443 571
Prepaid expenses and other 519 257
Other current assets 306 304
-------------- ----------
Total current assets 8,635 8,832
Property and equipment, net 572 592
Other assets, principally acquired
intangibles 951 907
-------------- ----------
Total assets $ 10,158 $ 10,331
============== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings $ 1,072 $ 545
Accounts payable 541 591
Accrued expenses 1,712 1,484
Accrued compensation 597 724
Deferred revenue 1,137 1,519
-------------- ----------
Total liabilities 5,059 4,863
-------------- ----------
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, 13,768,380 and
13,761,182 shares issued and outstanding 138 138
Additional paid-in capital 28,488 28,475
Other comprehensive loss (40) (41)
Accumulated deficit (23,487) (23,104)
-------------- ----------
Total stockholders' equity 5,099 5,468
-------------- ----------
Total liabilities and stockholders'
equity $ 10,158 $ 10,331
============== ==========
ACE*COMM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
For the three months
ended
September 30,
-----------------------
2004 2003
(Unaudited) (Unaudited)
----------- -----------
Revenue $ 4,661 $ 2,464
Cost of revenue 2,145 1,539
----------- -----------
Gross profit 2,516 925
Selling, general, and administrative 2,341 1,768
Research and development 545 129
----------- -----------
Loss from operations (370) (972)
Interest (income) expense - 8
----------- -----------
Loss before income taxes (370) (980)
Income tax provision 13 -
----------- -----------
Net loss $ (383) $ (980)
=========== ===========
Basic net loss per share $ (.03) $ (0.10)
=========== ===========
Diluted net loss per share $ (.03) $ (0.10)
=========== ===========
Shares used in computing net loss per share:
Basic 13,768 9,818
=========== ===========
Diluted 13,768 9,818
=========== ===========
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