Avery Communications Inc. Reports 2000 Year-End Results; Company Reports Record Revenue for the Year.Business Editors CHICAGO--(BUSINESS WIRE)--April 6, 2001 Avery A·ver·y , Oswald 1877-1955. American bacteriologist noted for establishing (1944) that DNA is responsible for the transmission of heritable characteristics. 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 (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. ) clearing house billing services for inter-exchange long-distance long-dis·tance adj. 1. Covering a long distance: a long-distance runner; operating under long-distance supervision. 2. telephone service companies (IEC (International Electrotechnical Commission, Geneva, Switzerland, www.iec.ch) An organization that sets international electrical and electronics standards founded in 1906. It is made up of national committees from over 60 countries. IEC - International Electrotechnical Commission ) and Internet service providers Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. (ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. ) today announced financial and operational results for the year ended Dec. 31, 2000. The company reported record annual revenues for the year ended Dec. 31, 2000, of $36.5 million, an increase of 54%, compared with $23.7 million for the prior year period. The revenue increase is primarily attributed to an increase in the number of telephone calls processed and billed on behalf of its customers. ATEX's gross profit reached $10.7 million for calendar 2000, an increase of 69.2%, compared with $6.3 million for the prior twelve month period. Gross profit as a percentage of revenues increased to 29.3% for calendar 2000 vs. 26.7% for 1999. The substantial improvement in gross profit was principally due to lower LEC billing A form of billing for internet based or other usually electronic services where the user is charged through his account with the local telephone company (also known as the Local Exchange Carrier), rather than directly from the provider of the service. costs as a percent of sales and higher margins in the customer service department. Avery's 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. for calendar 2000 increased 106% to $3.3 million vs. $1.6 million reported for 1999. In addition, the company reported expenses of $1.5 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. its Primal pri·mal adj. 1. Being first in time; original. 2. Of first or central importance; primary. pri·mal  i·ty n. Solutions Inc. subsidiary. This contributed
to the $2.2 million increase in operating expenses Operating expensesThe amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. from $5.3 million during calendar 1999 to $7.5 million during calendar year 2000. The $1.5 million of expenses relating to the Primal transaction consisted of a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $800,000 that was associated with the exercise of employee options and approximately $700,000 of professional fees. The company realized 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 of $0.22 in 2000 vs. $0.17 in 1999, an increase of 29%. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of from continuing operations were $0.14 in both 2000 and 1999. Eliminating the effects of the Primal distribution in the calendar 2000 continuing operations earnings per share calculations, yields basic earnings per share from continuing operations of $0.31 and diluted earnings per share from continuing operations of $0.22. These amounts generated increases over the prior year figures of 88% and 57%, respectively. The adjustments made to the continuing operations earnings per share calculations were adding back the tax effected $1.5 million of expenses discussed above and a net reduction in the 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. weighted average shares outstanding of 1.6 million shares, relating principally to eliminating the five million shares of Series G preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. that were redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. from the former Primal owners on Feb. 12, 2001. Basic and diluted shares outstanding as reported in the 2000 10-KSB at Dec. 31, 2000, were 9.3 million and 16.4 million, respectively, vs. 8.6 million and 10.6 million basic and diluted shares outstanding at Dec. 31, 1999, respectively. "Year 2000 was an outstanding success for Avery; we fulfilled 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. our commitment to shareholders by completing the Primal Solutions spin-off and continued to increase revenues from operations in our clearinghouse clearinghouse Institution established by firms engaged in similar activities to enable them to offset transactions with one another in order to limit payment settlements to net balances. billing operation. The increase in pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income from continuing operations of $2.6 million confirms our continued improvement," stated Patrick J. Haynes Haynes refers to: Persons named Haynes
About Avery Communications Avery is a telecommunications service In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. company engaged in providing billing and collection clearinghouse services for inter-exchange carriers (communications) inter-exchange carrier - (IXC) A company allowed to handle long-distance calls following the break-up of the Bell system in the US by anti-trust regulators. and long-distance resellers through its operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. 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) Billing Services Inc. HBS Billing Services' customers consist primarily of direct-dial long-distance telephone companies. The company's clearinghouse 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. , where it maintains billing arrangements with approximately 1,300 telephone companies that provide access lines to, and collect for services from, end-users of telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. services. HBS Billing Services processes transaction records and collects the related end-user (job) end-user - The person who uses a computer application, as opposed to those who developed or support it. The end-user may or may not know anything about computers, how they work, or what to do if something goes wrong. charges from Local Exchange Carriers for its customers. HBS also provides enhanced billing services for transactions related to providers of premium services or products that can be billed through the local exchange telephone companies, such as Internet access See how to access the Internet. , voice mail services and other telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. charges. 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. 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, risks as detailed from time to time in Avery's Securities and Exchange Commission reports, including its Registration Statements 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. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dec. 31,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $ 6,719,888 $ 5,744,069
Trade accounts receivable, net of
allowance for doubtful accounts
of $242,901 and $188,901,
respectively 1,414,249 813,589
Advance payment receivables 1,797,634 6,810,249
Other receivables 210,227 681,526
Deferred tax asset 565,562 374,086
Other 29,661 27,527
Net current assets of
discontinued operations 669,620 285,029
Total current assets 11,406,841 14,736,075
Property and equipment:
Computer equipment and software 1,282,988 1,063,674
Furniture and fixtures 322,023 334,944
Accumulated depreciation and amortization (784,168) (506,535)
Total property and equipment, net 820,843 892,083
Other assets:
Goodwill, net of accumulated
amortization of $1,001,725 and
$732,869, respectively 2,753,892 3,022,748
Investments 1,519,000 -
Net long-term assets of
discontinued operations 7,746,836 4,443,827
Deposits 2,759,604 185,514
Purchased contracts, net of
accumulated amortization of $328,225
and $276,208, respectively 26,038 70,555
Notes receivable due from related parties 4,046,772 400,000
Other 1,819 17,649
Total other assets 18,853,961 8,140,293
Total assets $31,081,645 $23,768,451
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current notes payable $ 6,667 $ 6,667
Trade accounts payable 4,117,671 4,369,562
Accrued liabilities 3,323,874 2,576,753
Income taxes payable 314,547 255,673
Deposits and other payables
related to customers 14,033,186 10,908,168
Total current liabilities 21,795,945 18,116,823
Long-term notes payable due to
related parties 333,475 325,195
Redeemable preferred stock Series
A through E (see description below) 2,671,667 -
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock (20 million shares authorized):
Series A; $0.01 par value, 391,667
and 400,000 shares authorized, issued and
outstanding at Dec. 31, 2000 and 1999,
respectively (liquidation preference
of $391,667 and $400,000 at Dec. 31,
2000 and 1999, respectively) - 4,000
Series B; $0.01 par value, 390,000
shares authorized, issued and outstanding
at Dec. 31, 2000 and 1999, respectively
(liquidation preference of $390,000) - 3,900
Series C; $0.01 par value, 40,000 and
70,000 shares authorized, issued and
outstanding at Dec. 31, 2000 and 1999,
(liquidation preference of $40,000 and
$70,000 at Dec. 31, 1999 and 2000,
respectively) - 700
Series D; $0.01 par value, 1,500,000
authorized, issued and outstanding
at Dec. 31, 2000 and 1999 (liquidation
preference of $1,500,000) - 15,000
Series E; $0.01 par value, 350,000
authorized, issued and outstanding at
Dec. 31, 2000 and 1999 (liquidation
preference of $350,000) - 3,500
Series F; $0.01 par value, 0 and
3,890,373 shares authorized, issued and
outstanding at Dec. 31, 2000 and 1999,
respectively (liquidation preference of
$0 and $38,904 at Dec. 31, 2000 and 1999,
respectively) - 38,904
Series G; $0.01 par value, 7,126,894 and 0
shares authorized, issued and outstanding
at Dec. 31, 2000 and 1999, respectively
(liquidation preference of $71,269 and $0
at Dec. 31, 2000 and 1999, respectively 71,269 -
Common stock, $0.01 par value, 20 million
shares authorized, 12,461,230 and 9,803,949
shares issued at Dec. 31, 2000 and 1999,
respectively 124,613 98,039
Additional paid-in capital 15,752,226 12,306,164
Accumulated deficit (6,539,013) (5,161,775)
Treasury stock, 1,215,216 and 1,176,916
shares at Dec. 31, 2000 and 1999,
respectively, at cost (2,036,801) (1,981,999)
Subscription notes receivable (1,091,736) -
Total stockholders' equity 6,280,558 5,326,433
Total liabilities and
stockholders' equity $31,081,645 $23,768,451
AVERY COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended Dec. 31,
2000 1999
Revenues $ 36,475,177 $ 23,702,748
Cost of revenues (25,783,816) (17,385,337)
Gross profit 10,691,361 6,317,411
Selling, general and administrative
expenses (7,496,469) (5,330,244)
Charge in connection with
terminated customers - 226,219
Advance funding program income 257,737 609,950
Advance funding program costs (131,082) (268,656)
Total (7,369,814) (4,762,731)
Operating income 3,321,547 1,554,680
Other income (expense):
Interest expense (133,120) (292,258)
Financing fees and debt issuance
costs - (321,736)
Other, net 448,340 129,045
Total other income (expense), net 315,220 (484,949)
Income from continuing operations
before income taxes 3,636,767 1,069,731
Income tax (expense) benefit (1,313,518) 648,573
Income from continuing operations 2,323,249 1,718,304
Income (loss) from discontinued
operations, net of income tax
benefit (expense) of $1,429,970 and
($667,809), respectively (3,700,487) 958,759
Net income (loss) $ (1,377,238) $ 2,677,063
Per share data:
Basic net income (loss) per share:
Continuing operations $ 0.22 $ 0.17
Discontinued operations (0.40) 0.11
Net income (loss) $ (0.18) $ 0.28
Diluted net income (loss) per share:
Continuing operations $ 0.14 $ 0.14
Discontinued operations (0.23) 0.09
Net income (loss) $ (0.09) $ 0.23
Weighted average number of common shares:
Basic common shares 9,281,128 8,643,526
Diluted common shares 16,352,656 10,617,821
AVERY COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended Dec. 31,
2000 1999
Cash flows from operating activities:
Net income (loss) $ (1,377,238) $ 2,677,065
(Income) loss from discontinued
operations 3,700,487 (958,759)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities from
continuing operations:
Bad debt expense 54,000 188,901
Charge in connection with
terminated customers - (226,219)
Amortization of loan discounts 8,280 8,280
Deferred tax benefit (191,476) (374,086)
Depreciation and amortization 598,506 550,546
Compensation in connection with
exercise of options 848,288 -
Warrants issued in connection
with services performed 239,819 -
Compensation and services
paid in stock 158,750 693,400
Treasury stock received in
settlement (54,802) -
Change in operating assets and liabilities:
Trade accounts receivable (654,660) 88,182
Advance payment receivables 5,012,615 5,082,897
Other current assets 469,165 (210,476)
Deposits (2,574,090) 1,384,765
Trade accounts payable and
accrued liabilities 495,230 670,427
Income taxes payable 58,874 255,673
Deposits and other payables
related to customers 3,125,018 1,598,688
Other assets 15,830 177,201
Net cash provided by continuing
operations 9,932,596 11,606,485
Net cash used in discontinued
operations (3,813,087) (366,020)
Net cash provided by operations 6,119,509 11,240,465
Cash flows from investing activities:
Purchase of contracts (7,500) (60,000)
Purchase of property and equipment (206,393) (174,188)
Purchase of investments (1,519,000) -
Amounts loaned for notes receivable (3,646,772) -
Net cash used in investing activities (5,379,665) (234,188)
Cash flows from financing activities:
Proceeds from notes payable - 160,000
Principal payments on notes
payable -- line of credit, net - (5,924,749)
Payment of preferred stock dividends (284,892) (468,300)
Issuance of shares of common stock
for cash 520,867 -
Cash paid for treasury stock - (115,632)
Net cash provided by (used in)
financing activities 235,975 (6,348,681)
Increase in cash 975,819 4,657,596
Cash and cash equivalents at
beginning of year 5,744,069 1,086,473
Cash and cash equivalents at
end of year $ 6,719,888 $ 5,744,069
Supplemental disclosures:
Interest paid $ 138,508 $ 372,360
Income taxes paid $ 174,588 $ -
Schedule of non-cash financing and
investing transactions:
Preferred stock issued in
acquisition of Primal $ - $ 3,404,076
Net liabilities assumed in
acquisition of Primal $ - $ 971,300
Release of HBS escrow shares-employment
and earn-out-agreements $ 90,000 $ 991,300
Issuance of common stock for
services $ 68,750 $ -
Issuance of notes receivable for
common stock $ 1,091,736 $ -
Issuance of preferred stock in
connection with Primal Systems Inc.
settlement and related
anticipated spin-off $ 3,575,000 -
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