Optio Software Reports Fiscal 2007 Second Quarter Financial Results.ALPHARETTA, Ga. -- Optio(R) Software (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :OPTO OPTO Optical OPTO One Person Train Operation (transportation) ), a leading provider of business process improvement solutions dedicated to helping customers achieve unprecedented speed, accuracy, functionality and quality in their inbound in·bound 1 adj. Bound inward; incoming: inbound commuter traffic. Adj. 1. inbound and outbound out·bound adj. Outward bound; headed away: outbound trains. Adj. 1. outbound - that is going out or leaving; "the departing train"; "an outward journey"; "outward-bound ships" document processes, today reported financial results for the fiscal 2007 second quarter and six-month period ended July 31, 2006. Revenue Total revenue for the second quarter of 2007 declined eight percent to $6.8 million from $7.4 million in the prior fiscal year quarter. Software license revenues were $1.6 million in the three months ended July 31, 2006, compared to $2.5 million in the three months ended July 31, 2005. Optio's subscription licensing contracts contributed $560,000 of revenue to the quarter ended July 31, 2006, up from $526,000 of revenue from the quarter ended July 31, 2005. "Optio's Q2 net loss is largely due to the delayed signing of two key contracts that actually closed within four weeks of this quarter's end," said Wayne Cape, chairman, president and chief executive officer of Optio Software. "We anticipated an increase in revenues from our business process improvement (BPI (Bits Per Inch) The measurement of the number of bits stored in one linear inch of a track (storage channel) on a disk or tape. Bit density on magnetic disks has reached 800,000 bpi (800 Kbpi). See tpi, areal density and magnetic disk. BPI - bits per inch ) solutions; however, these products, while contributing to the revenue for the quarter, have not generated revenue as quickly as we expected. Sales of Optio's newer, higher-priced solutions, such as those dedicated to multi-level BPI, require a longer sales cycle than Optio's document management solutions. "In response to current market trends and our customers' ongoing needs, we have recently developed a highly anticipated new product line focused on strategic business process management," added Cape. "Optio's 'next generation' solution suite, which we expect to bring to market within the next three months, will increase our breadth and depth of service in the enterprise document management and electronic health record industries. Looking forward, we're encouraged by the strong interest we see for both our current and future software solution suites." Key Metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. Due to increased customer loyalty, services and maintenance revenues climbed to $4.6 million in the three months ended July 31, 2006 from $4.3 million in the three months ended July 31, 2005. Additionally, Days' Sales Outstanding Days' sales outstanding Average collection period. (DSO See CSO. ) decreased from 48 days to 40 days in comparison to the previous quarter. Cost of Revenue For the second quarter, total cost of revenue increased slightly to $1.8 million from $1.7 million reported during the same quarter in the prior fiscal year. 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. Total operating expenses increased to $5.5 million in the three months ended July 31, 2006 from $5.4 million in the three months ended July 31, 2005. Net Loss Net loss for the second quarter of fiscal 2007 was $450,000 and 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 (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) were $(0.02), a decline from net income of $244,000 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. EPS of $0.01 in the prior-year quarter. Six Months Ended July 31, 2006 Total revenue for the six months ended July 31, 2006 was $13.6 million, compared with $14.3 million in the six months ended July 31, 2005. Software license revenues were $3.5 million in the six months ended July 31, 2006, compared to $4.8 million in the six months ended July 31, 2005. Optio's subscription licensing revenue increased to $1.1 million in the six months ended July 31, 2006 from $1.0 million in the six months ended July 31, 2005. Services and maintenance revenues increased to $9.0 million in the six months ended July 31, 2006 from $8.5 million in the six months ended July 31, 2005. Total cost of revenue increased slightly to $3.6 million in the six months ended July 31, 2006 from $3.5 million in the six months ended July 31, 2005. Operating expenses for the six months ended July 31, 2006 were $10.7 million, consistent with the six months ended July 31, 2005. For the six months ended July 31, 2006, net loss was $504,000, or $(0.02) diluted EPS, a decline from net income of $154,000 and diluted EPS of $0.01 in the six months ended July 31, 2005. Second Quarter Highlights and Business Metrics Several significant software license transactions were closed during the quarter, including sales to Safco Products Company, EV3, Inc., Seachange International  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . , Pinellas County Board of Commissioners Information Systems and Rosetta Stone Rosetta Stone: see under Rosetta. Rosetta Stone Inscribed stone slab, now in the British Museum, that provided an important key to the decipherment of Egyptian hieroglyphs. (Fairfield Language Technologies). Optio closed the quarter with $8.5 million in cash and cash equivalents, compared with $8.0 million as of Jan. 31, 2006. The company had no outstanding balance on its line of credit as of July 31, 2006. About Optio Software Optio Software, with 25 years of experience and more than 5,000 clients, worldwide, provides software solutions dedicated to helping customers achieve unprecedented speed, accuracy, functionality and quality in their inbound and outbound document processes, while extending the value of their Enterprise Resource Planning See ERP. (application, business) Enterprise Resource Planning - (ERP) Any software system designed to support and automate the business processes of medium and large businesses. (ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ) and Hospital Information Systems (HIS) applications. More than 5,000 organizations rely on Optio Software for innovative business process improvement solutions that allow them to reduce transactional activities and focus on core responsibilities. Headquartered in Alpharetta, Ga., Optio Software maintains European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. , Middle Eastern and African headquarters in Paris, France and sales offices in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Germany and the United Kingdom. For more information about Optio Software or to contact a local Optio sales consultant, reach us at 770.576.3500 or visit our website at www.optio.com. (C) Copyright 2006, Optio Software, Inc. All Rights Reserved. Optio is a registered trademark of Optio Software, Inc. Other companies and products mentioned in this document are the property of their respective owners. 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. This press release includes statements and other matters that could be considered to be forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from expectations. Such forward-looking statements are made pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and are made based on management's current expectations or beliefs as well as assumptions made by, and information currently available to, management. Optio's actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, risks associated with Optio's reliance on strategic marketing and reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. relationships, the collectibility of Optio's accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and note receivable note receivable A debt due from borrowers and evidenced by a written promise of payment. Note receivable, an entry on the asset side of many corporate balance sheets, indicates the dollar amount of loans due to be repaid by borrowers. (specifically, the M2 note receivable), fluctuations in operating results because of acquisitions or dispositions, failure to integrate new products and newly acquired companies, diversion A turning aside or altering of the natural course or route of a thing. The term is chiefly applied to the unauthorized change or alteration of a water course to the prejudice of a lower riparian, or to the unauthorized use of funds. of management resources relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc acquisitions, reduction in cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. relating to acquisitions, challenges relating to acquisitions and the possibility that this may cause Optio to no longer be profitable, the negative effect on Optio's earnings relating to the amortization or potential write-down of acquired assets or goodwill, failure to retain the business relationships with existing customers of acquisitions, changes in competition, changes in economic conditions in the U.S. and in other countries in which Optio currently does business (both general and relative to the technology industry), delays or inability to develop new or unique software, market acceptance of new products, the failure of new products to operate as anticipated, expectation of achieving and sustaining operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. and earnings, including the timing of such cash flow and company performance, disputes regarding Optio's intellectual property, risks relating to the delisting Delisting When the stock of a company is removed from a stock exchange. Notes: Reasons for delisting include violating regulations and/or failure to meet financial specifications set out by the stock exchange. of our stock, possible adverse results of pending or future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , or risks associated with Optio's international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. . These and additional factors are set forth in "Item 1.A. Risk Factors" included in Optio's most recent 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. . You should carefully review these risks and additional risks described in other documents Optio files from time to time with the Securities and Exchange Commission, including the Quarterly Report of Form 10-Q Form 10-Q See 10-Q. that Optio will file on or before September 14, 2006.
OPTIO SOFTWARE, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended Six Months Ended
July 31, July 31,
------------------------- -------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Revenue:
License fees $ 1,643 $ 2,544 $ 3,541 $ 4,755
Subscription
fees 560 526 1,115 1,035
Services,
maintenance,
and other 4,565 4,309 8,974 8,505
----------- ----------- ----------- -----------
6,768 7,379 13,630 14,295
Cost of revenue:
License fees 146 175 278 357
Services,
maintenance,
and other 1,644 1,561 3,321 3,176
----------- ----------- ----------- -----------
1,790 1,736 3,599 3,533
----------- ----------- ----------- -----------
4,978 5,643 10,031 10,762
Operating
expenses:
Sales and
marketing 2,543 2,748 5,082 5,609
Research and
development 1,375 1,316 2,697 2,594
General and
administrative 1,380 1,127 2,522 2,044
Depreciation and
amortization 200 243 384 431
----------- ----------- ----------- -----------
5,498 5,434 10,685 10,678
----------- ----------- ----------- -----------
Income (loss) from
operations (520) 209 (654) 84
Other income
(expense):
Interest income 113 60 209 116
Interest expense (2) (2) (3) (4)
Other (5) (13) (4) (14)
----------- ----------- ----------- -----------
106 45 202 98
----------- ----------- ----------- -----------
Income (loss)
before income
taxes (414) 254 (452) 182
Income tax expense 36 10 52 28
----------- ----------- ----------- -----------
Net income (loss) $ (450) $ 244 $ (504) $ 154
=========== =========== =========== ===========
Net income (loss)
per share - basic $ (0.02) $ 0.01 $ (0.02) $ 0.01
=========== =========== =========== ===========
Net income (loss)
per share -
diluted $ (0.02) $ 0.01 $ (0.02) $ 0.01
=========== =========== =========== ===========
Weighted average
shares
outstanding -
basic 22,223,643 20,880,334 22,036,310 20,870,480
=========== =========== =========== ===========
Weighted average
shares
outstanding -
diluted 22,223,643 23,935,173 22,036,310 24,188,430
=========== =========== =========== ===========
OPTIO SOFTWARE, INC.
Condensed Consolidated Balance Sheets
(in thousands)
July 31, January 31,
2006 2006
----------- -----------
ASSETS
Current Assets:
Cash, cash equivalents and marketable
securities $ 8,473 $ 7,954
Accounts receivable, net 3,255 4,811
Notes receivable from M2 298 323
Other current assets 841 725
----------- -----------
Total current assets 12,867 13,813
Property and equipment, net 2,327 613
Notes receivable 1,598 1,720
Goodwill and other intangible assets, net 3,725 3,461
Other assets 94 91
----------- -----------
Total Assets $ 20,611 $ 19,698
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 858 $ 922
Other accrued liabilities 1,411 2,218
Deferred revenue 7,206 7,373
Current portion of accrued lease incentive
liability 122 -
Current portion of debt and capital lease
obligations 69 1
----------- -----------
Total current liabilities 9,666 10,514
Long-term portion of debt and capital lease
obligations 346 -
Long-term accrued expenses 158 63
Accrued lease incentive liability 878 -
Shareholders' equity 9,563 9,121
----------- -----------
Total liabilities and shareholders' equity $ 20,611 $ 19,698
=========== ===========
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