Avery Communications Inc. Announces Third Quarter Results.Business Editors CHICAGO--(BUSINESS WIRE)--Nov. 13, 2000 Avery Communications Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ATEX ATEX ATmosphere EXplosibles (French: Explosive Atmospheres) ATEX Anti-Terrorism Exercise ATEX ATM Tributary Extension (Tellabs) ), a provider of local exchange carrier billing services to long distance re-sellers and Internet-enabled customer management and intelligence solutions to communications and Internet operators, today announced fiscal 2000 third quarter and first nine month financial and operational results. The reported revenues and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. results for Avery's third quarter and first nine months of fiscal 2000 reflect the results of both its HBS HBS Harvard Business School HBs Hepatitis B Surface HBS Heinrich Boell Stiftung (German Political Foundation) HBS Household Budget Survey HBS Hogere Burgerschool HBS Hawaii Biological Survey (Bishop Museum) subsidiary, and Avery's corporate office for these periods. After-tax net income for Avery's Primal pri·mal adj. 1. Being first in time; original. 2. Of first or central importance; primary. pri·mal  i·ty n. Solutions
subsidiary has been reported separately as a discontinued operation discontinued operationA segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. because Avery has elected to spin off this unit to Avery's shareholders. No figures are shown for discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for the third quarter and first nine months of fiscal 1999 because Avery's acquisition of Primal did not become effective until Oct. 1, 1999, and as such, Avery owned Primal for only the fourth quarter of 1999. Avery's basic earnings per share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the third quarter of 2000 of $ 0.11 increased 267% over the third quarter of 1999 figure of $ 0.03. Basic earnings per share from continuing operations for the first nine months of 2000 increased to $ 0.26 from $ (0.02) for the same period in 1999. The substantial improvement in earnings per share is primarily attributable to revenue growth. Avery's reported revenues of $9,665,863 for the third quarter were 46% higher than revenues for the comparable period in the prior year, and Avery's revenues of $27,443,282 for the first nine months of fiscal 2000 were 68% higher than the first nine months of fiscal 1999. These figures reflect the revenues generated by HBS for fiscal 2000, but exclude Primal Solutions revenues in accordance with discontinued operations reporting requirements. The substantial growth in revenues is due primarily to a 32% increase in the number of telephone records processed from 66.2 million in the third quarter of 1999 to 87.2 million in the third quarter of 2000, and a 70% increase for the first nine months of 2000 to 265.1 million records from 155.7 million records in the first nine months of 1999. Avery's gross profit as a percentage of revenues increased to 28.5% for the quarter and to 28% for the first nine months from 23.7% in the third quarter of 1999 and 25.6% in the first nine months of 1999. These increases were due to lower local exchange carrier billing fees as a percentage of revenue and higher margins in the customer service department. Avery's operating income for the third quarter of fiscal 2000 was $1,226,000 versus $373,000 for the third quarter of fiscal 1999 and was $3,322,000 for the first three quarters of fiscal 2000 versus $477,000 for the same period in fiscal 1999. The substantial increases in operating income result from the significant increases in call records processed. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. (including net funding program income) declined to 16% of revenues for the third quarter from 18% in the third quarter of 1999. For the nine month period, operating expenses declined to 16% of revenues from 23% for the 1999 period. Operating expenses were reduced as a percentage of revenues despite slight increases in their dollar amounts due to higher revenues in 2000. "We are pleased to report these outstanding financial results from our continuing operations at HBS and Avery. Sustained revenue growth combined with improved operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: continues to drive our earnings. "Primal has made exceptional progress this year in repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. and updating its products into an integrated suite targeting the emerging telecommunications markets. We are very optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the future of Avery and management is dedicated to enhancing shareholder value," stated Patrick Haynes, III, chairman of Avery Communications. Primal Spin Off On Aug. 1, 2000, Avery's Board voted to spin off its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. Primal Solutions to Avery's stockholders. The decision to spin off Primal revised Avery's plan announced on Feb. 29, 2000 to spin off HBS. The decision to spin off Primal rather than HBS was motivated primarily by the expectation that Avery shareholders will pay less in taxes under a spin off of Primal than would have been the case with a spin off of HBS. The Primal spin off will be a taxable transaction Taxable transaction Any transaction that is not tax-free to the parties involved, such as a taxable acquisition. for federal income tax purposes. Commenting on the Primal spin off, Patrick Haynes, III, chairman of Avery's Board of Directors, said, "The SEC's review of the Primal spin off is progressing and we will inform our shareholders when the Primal registration statement becomes effective. We are working diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to obtain the potential increase in shareholder value which may be created by the spin off." About Avery Communications Avery Communications is the public parent of two wholly owned subsidiaries. Based in Irvine, Calif., Primal Solutions Inc. (which is the subject of a pending spin off to shareholders) is a provider of customer relationship management and intelligence solutions to the communications industries communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. worldwide, including Web-enabled customer acquisition and retention, billing, switch 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, and decision support. Its Outfront(TM) Customer Relationship Management (CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. ) software utilizes some of the newest Java-based technology to provide telecommunications and Internet providers Internet provider - Internet Service Provider with powerful business intelligence for customer retention, valuation and executive decision-making. HBS Billing Services provides local exchange carrier (LEC (1) (LAN Emulation Client) A software driver that provides LAN emulation (LANE) in an ATM network. It resides in an ATM end station or in a computer system that provides the LAN to ATM conversion, often known as a LAN access device. See LANE. ) clearinghouse billing services to domestic long-distance telephone companies and other third party billers who desire their charges to appear on the local telephone bill. The company's operations are based in San Antonio, Texas “San Antonio” redirects here. For other uses, see San Antonio (disambiguation). San Antonio is the second most populous city in Texas, the third most populous metropolitan area in Texas, and is the seventh most populous city in the United States. As of the 2006 U.S. . For more information, contact Bill E. Young at bill_young@earthlink.net. Certain statements contained in this document may be deemed to be 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. under federal securities laws, and Avery intends that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include, but are not limited to, expectations that regulatory approval will be granted for Avery's planned special dividend to shareholders of common stock in its subsidiary Primal Solutions. Avery cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements contained herein. Such factors include, but are not limited to, (a) the failure of Avery successfully to obtain necessary regulatory approvals for its distribution of Primal Solutions, and (b) other risks as detailed from time to time in Avery SEC reports, including its Registration Statement on Form SB-2, Quarterly Reports on Form 10-QSB, Current Reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. and Annual Reports on Form 10-KSB.
Avery Communications Inc.
Financial Highlights
Balance Sheet Data September 30, 2000 December 31, 1999
(unaudited)
Cash and Cash Equivalents $ 12,762,196 $ 5,744,069
Total Current Assets 17,382,078 14,736,075
Total Assets 33,243,688 23,768,451
Total Liabilities 24,690,802 18,442,018
Total Shareholders' Equity 8,552,886 5,326,433
Statement of Operations Data
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ 9,665,863 $ 6,607,559 $ 27,443,282 $ 16,335,812
Cost of Revenues (6,911,393) (5,045,296) (19,763,332) (12,158,093)
Gross Profit 2,754,470 1,562,263 7,679,950 4,177,719
S,G & A Expense (1,529,423) (1,292,754) (4,455,205) (3,960,174)
Advance Funding
Program Income 36,987 150,680 227,111 452,273
Advance Funding
Program Costs (35,564) (47,646) (130,046) (192,772)
Total (1,528,000) (1,189,720) (4,358,140) (3,700,673)
Operating
Income 1,226,470 372,543 3,321,810 477,046
Other Income (expense)
Interest
Expense (14,464) (78,354) (50,240) (254,036)
Financing
Fees and Debt
Issuance Costs -- -- -- (321,736)
Other, Net 126,299 39,328 297,961 100,723
Total Other
Income
(expense) 111,835 (39,026) 247,721 (475,049)
Income From
Continuing
Operations
Before Taxes 1,338,305 333,517 3,569,531 1,997
Income Tax
Expense (332,718) -- (1,095,289) --
Income From
Continuing
Operations 1,005,587 333,517 2,474,242 1,997
Loss From
Discontinued
Operations
(Primal) (855,813) -- (2,654,707) --
Net of Income Tax
Net Income
(loss) $ 149,774 $ 333,517 $ (180,465) $ 1,997
Per Share Data:
Basic Net Income
(loss) Per Share:
Continuing
Operations $ 0.11 $ 0.03 $ 0.26 $ (0.02)
Discontinued
Operations (0.10) 0.00 (0.30) 0.00
Net Income
(loss) $ 0.01 $ 0.03 $(0.04) $ (0.02)
Diluted Net Income
(loss) Per Share:
Continuing
Operations $ 0.06 $ 0.03 $ 0.16 $ (0.02)
Discontinued
Operations (0.05) 0.00 (0.17) 0.00
Net Income
(loss) $ 0.01 $ 0.03 $(0.01) $ (0.02)
Weighted Average
Number of Common
Shares:
Basic Common
Shares 8,753,919 8,628,482 8,730,734 8,649,084
Diluted Common
Shares 16,791,723 9,509,878 15,865,627 8,649,084
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