Omtool Reports Fourth Quarter and Fiscal Year 2005 Results.SALEM Salem, in the Bible Salem (sā`ləm) [Heb.,=peace], in the Bible, royal city of Melchizedek, traditionally identified with Jerusalem. Salem, city, India Salem, city (1991 pop. , N.H. -- Ongoing investment in sales and marketing helps AccuRoute claim 50% of the company's software license revenue for year ended December December: see month. 31, 2005 Omtool OMTool - A graphical tool from General Electric Advanced Concepts Center for design and analysis of systems with the OMT methodology. Generates C++ and SQL code. , Ltd. (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 : OMTL), a leading provider of document routing products and services, today reported results of operations for the fourth quarter and year ended December 31, 2005. Total revenue for the quarter was approximately $3.7 million compared with revenue of approximately $3.9 million for the fourth quarter of 2004, representing a 6% decrease. Software license revenue from Omtool's AccuRoute product accounted for 57% of software license revenue for the quarter ended December 31, 2005 as compared to 44% for the same time period in the previous year. For the 12-month periods ended December 31, 2005 and 2004, total revenue was $14.3 million and $14.8 million, respectively, representing a decrease of 3%. Software license revenue from Omtool's AccuRoute product increased by 36% for the 12 months ended December 31, 2005 as compared to the same period in 2004 and represented 50% of overall software license revenue for the year ended 2005 as compared to 38% for the same period in 2004. On the strength of AccuRoute sales, total software license revenue increased by 5% during the 12 months of 2005 as compared to the 2004 fiscal year despite continued decreases in fax software license revenue of approximately 10%. Additionally, fiscal year 2005 hardware revenue decreased by approximately 15% and fax-related maintenance decreased by approximately 19% compared to the previous year. "While we continued to grow our AccuRoute product line and while AccuRoute now represents 50% of our software license revenue, we continued to face a decline in our fax business," said Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. L. Voelk, Omtool's chairman, president, and chief executive officer. "During the fourth quarter of 2005, we dramatically increased our sales and marketing spending, as called for in our strategic plan. As expected, these investments in sales and marketing had no material impact on our revenue in 2005. However, we do anticipate we will start seeing the impact of these investments in growing our business during 2006." "As expected, 2005 was a near break-even year. During 2006, we will continue our campaign to expand the market for our AccuRoute product through sales, marketing and business development investments. In fiscal year 2005, we expanded our presence and penetration of the legal vertical market through the development of reference accounts and by proving AccuRoute's viability. In parallel, we built a firm base upon which to launch AccuRoute in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. marketplace. In the legal vertical market, we achieved a significant milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. when we licensed AccuRoute to over 110 law firms This list of the world's largest law firms by revenue is taken from The Lawyer and The American Lawyer and is ordered by 2006 revenue:[1]
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. for the quarter ended December 31, 2005 were approximately $2.8 million as compared to approximately $2.2 million for the quarter ended December 31, 2004. Consistent with the guidance provided in 2005, Omtool continues to implement its strategic plan to increase market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" of its AccuRoute product in the legal vertical market, while also expanding its focus to encompass the financial services and healthcare markets. As a result of these strategic initiatives, sales and marketing expenses for the quarter ended December 31, 2005 were 50% higher than for the quarter ended December 31, 2004. Net loss for the quarter ended December 31, 2005 was approximately $(120,000) or $(0.03) per share, on a basic and 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. basis, as compared to a net profit of approximately $548,000 or $0.14 per share, on a basic and diluted basis for the same quarter of 2004. Omtool plans to continue its expansion into the financial services and healthcare markets in 2006, while also strengthening its partner and channel relationships as an additional means to increase AccuRoute sales. Operating expenses for the 12 months ended December 31, 2005 increased by $1.7 million, or 20%, as compared to the 2004 fiscal year, led primarily by planned increases in sales and marketing expenses and Sarbanes-Oxley compliance related expenses. For fiscal year 2005, Omtool recorded a net loss of approximately $(310,000) or $(0.08) per basic share and diluted share, as compared to net income of approximately $1.6 million or $0.41 per fully diluted share and $0.42 per basic share for the 2004 fiscal year. In lieu of Instead of; in place of; in substitution of. It does not mean in addition to. holding a quarterly earnings conference call, Omtool is providing the following summary and additional guidance: --AccuRoute continues to represent an increasing percentage of overall software license revenue and now represents 50% of software license revenue. --Based on the strength of Omtool's AccuRoute sales, revenue derived from software licenses In computing, software that is copyrighted and licensed under a software license is done under a variety of licensing schemes. For end-users there are proprietary licenses and there are free software licenses, and there are proprietary Within these schemes are further classifications. during the fourth quarter of 2005 was the highest of any quarter in the last four years and was 5% higher in fiscal year 2005 than it was in fiscal year 2004. Omtool achieved this increase in software license revenue despite suffering a decline of approximately 10% in its fax software license revenue in 2005 as compared to 2004. --For the year ended December 31, 2005, Omtool increased its investment in sales and marketing. As communicated in previous guidance, the company did not anticipate these investments would have a material impact on revenue in 2005. During 2006, Omtool will continue - in fact accelerate - its investment in sales and marketing. Omtool expects to start seeing the impact of these investments during 2006. --In both U.S. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , during 2006, Omtool will focus its
AccuRoute sales in the financial services, healthcare and legal vertical
markets through direct sales efforts in parallel with expanding its
partner focus.--Omtool's primary focus is to further penetrate vertical and geographic markets through sales and marketing investments. To achieve quarterly profitability with these investments, it will require an overall increase in revenue. The company expects revenue to increase gradually grad·u·al adj. Advancing or progressing by regular or continuous degrees: gradual erosion; a gradual slope. n. Roman Catholic Church 1. during 2006. About Omtool, Ltd.: Omtool, Ltd. is a leading provider of document routing products and services that enable organizations to manage the capture, process and delivery into electronic information systems of "mixed-mode" documents containing both paper and electronic documents. Omtool's enterprise-level products are used by organizations worldwide whose business processes frequently include paper-based documents and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. stringent compliance requirements Compliance requirements are a series of directives established by United States Federal government agencies that summarize hundreds of Federal laws and regulations applicable to Federal assistance (also known as Federal aid or Federal funds). that include secure handling, storage, integration and tracking of a variety of documents into corporate systems. Omtool's flagship product A primary product of a company, which is typically why the company was founded and/or what made it well known. For example, MS-DOS, Windows and the Microsoft Office suite have been flagship products of Microsoft. CorelDRAW is a flagship product of Corel Corporation. , AccuRoute, is a document capture, conversion and distribution platform that makes it easy to centralize cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. valuable company information and distribute it to multiple systems simultaneously, all from users' desktops. Based in Salem, N.H., with offices in the United Kingdom, Omtool can be contacted at 800-886-7845 or www.omtool.com. This press release contains 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. , including, without limitation, statements regarding Omtool's future financial and operating performance; customer interest in Omtool's Genifax(TM) and AccuRoute(R) products; long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. sales strategy; distribution channels; and the future plans of Omtool's management. These forward-looking statements are neither promises nor guarantees, and are subject to risk and uncertainties that could cause actual results to differ materially from the expectations set forth in these forward-looking statements, including but not limited to, risks associated with the introduction of new product offerings, including the AccuRoute, Genidocs(TM) and Genifax software products; the success of Omtool's channel sales strategies; business partner strategies and new sales and marketing efforts; Omtool's investments in vertical markets, including legal, financial services and healthcare; the continuation of market demand for fax-based software solutions; fluctuations in quarterly results of operations; Omtool's upcoming headquarters relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. ; changes in the regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. environment; dependence on continuing growth in the number of organizations implementing secure electronic document exchange; competition; product enhancements; product concentration; declines in Omtool's legacy fax business; seasonality; international sales; our ability to manage expansion; and those other risk factors described in Omtool's periodic reports and registration statements as filed with the Securities and Exchange Commission, including Omtool's Annual 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. filed with the Securities and Exchange Commission on March 29, 2005 and Omtool's Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. filed with the Securities and Exchange Commission on May 12, 2005, July July: see month. 28, 2005 and November November: see month. 14, 2005. Reported results should not be considered an indication of future performance. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . Omtool undertakes no responsibility to update any such forward-looking statements. The consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: statement of operations See Income statement. and condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. follow.
OMTOOL, LTD.
Consolidated Summary Financial Data
Consolidated Statements of Operations
(in Thousands except Per
Share Amounts)
(Unaudited) Three Months Twelve Months
Ended Ended
December 31, December 31,
-------------- ---------------
2005 2004 2005 2004
------- ------ --------- -----
Revenue:
Software license $1,399 1,190 $4,732 $4,505
Hardware 563 865 2,705 3,177
Service and other 1,737 1,891 6,859 7,108
------- ------ ------- -------
Total revenue 3,699 3,946 14,296 14,790
------- ------ ------- -------
Cost of revenue:
Software license 41 44 154 196
Hardware 333 551 1,694 1,944
Service and other 700 676 2,782 2,743
------- ------ ------- -------
Total cost of revenue 1,074 1,271 4,630 4,883
------- ------ ------- -------
Gross profit 2,625 2,675 9,666 9,907
------- ------ ------- -------
Operating expenses:
Sales and marketing 1,584 1,055 5,256 4,100
Research and development 622 506 2,239 1,937
General and administrative 599 618 2,672 2,417
------- ------ ------- -------
Total operating expenses 2,805 2,179 10,167 8,454
------- ------ ------- -------
Income (loss) from operations (180) 496 (501) 1,453
Interest and other income 48 35 186 140
------- ------ ------- -------
Income (loss) before tax benefit (132) 531 (315) 1,593
Tax benefit (12) (17) (5) (7)
------- ------ ------- -------
Net income (loss) $(120) $548 $(310) $1,600
======= ====== ======= =======
Net income (loss) per share
Basic $(0.03) $0.14 $(0.08) $0.42
======= ====== ======= =======
Diluted $(0.03) $0.14 $(0.08) $0.41
======= ====== ======= =======
Weighted average number of common shares
outstanding
Basic 3,962 3,851 3,924 3,765
======= ====== ======= =======
Diluted 3,962 4,028 3,924 3,946
======= ====== ======= =======
OMTOOL, LTD.
Consolidated Summary Financial Data
Consolidated Balance Sheets December 31, December 31,
2005 2004
(Unaudited)
(in Thousands)
Assets:
Cash and cash equivalents $10,472 $10,655
Accounts receivable, net 1,619 1,803
Inventory 58 138
Prepaids and other 333 279
---------------- --------------
12,482 12,875
Property and equipment, net 175 213
Other assets 12 12
---------------- --------------
$12,669 $13,100
================ ==============
Liabilities and stockholders'
equity:
Accounts payable $905 $850
Accrued expenses 1,223 1,258
Accrued state sales tax 291 700
Deferred revenue 3,818 3,661
---------------- --------------
6,237 6,469
Stockholders' equity 6,432 6,631
---------------- --------------
$12,669 $13,100
================ ==============
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