Sento Reports Results for Third Quarter of Fiscal 2007.* Revenues are $12.5 million; Net Loss is $3.2 Million or $0.80 per 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. Share * Revenue Enhancement revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. and Additional Cost Reduction Initiatives Expected to Improve Operating Margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in Fiscal 2008 SALT LAKE CITY -- Sento Corporation (Nasdaq: SNTO), a right-channeling solutions leader, today reported financial results for the third quarter and nine months of fiscal 2007 ended December 31, 2006. FINANCIAL RESULTS Consolidated revenues for the third quarter of fiscal 2007 were $12.5 million compared with $15.0 million reported in the third quarter of fiscal 2006. The decline was mainly due to the Company's decision to terminate service to a large client at the end of the fiscal 2007 second quarter and the bankruptcy of another large client in the fiscal 2007 second quarter. For the nine months of fiscal 2007, consolidated revenues were $40.9 million, a 22% increase from the same period of fiscal 2006. Sento's gross margin for the third quarter of fiscal 2007 was a negative $55,000 compared with a gross profit of $3.5 million reported in the third quarter of fiscal 2006. The decline in gross margin resulted from the Company's increased cost of sales due to higher agent wages, over-staffing with personnel retained to support expected fourth quarter revenue growth, the absence of training reimbursements in the quarter and under-utilization of facilities due to the lower revenue base. For the nine months of fiscal 2007, the gross margin was $2.7 million compared with $7.1 million in the comparable period of fiscal 2006. In addition to the factors cited above, the fiscal 2007 year-to-date period included a $409,000 write-down recorded in the fiscal 2007 second quarter of a training reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. receivable resulting from the client termination. Sento's operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the third quarter of fiscal 2007 was $3.1 million compared with 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. of $697,000 in the fiscal 2006 third quarter. Operating costs operating costs npl → gastos mpl operacionales increased 5% over the third quarter of fiscal 2006. The increase in the operating loss was mainly due to the decline in gross margin. For the nine months of fiscal 2007, the operating loss was $7.1 million compared with an operating loss of $584,000 in the prior nine-month period. The net loss for the third quarter of fiscal 2007 was $3.2 million or $0.80 per diluted share compared with net income of $709,000 or $0.17 per diluted share in the third quarter of fiscal 2006. The net loss for the nine months of fiscal 2007 was $7.4 million or $1.85 per diluted share compared with a net loss of $646,000 or $0.17 per diluted share in the first nine months of fiscal 2006. BALANCE SHEET Sento's balance sheet for the period ended December 31, 2006 included cash and cash equivalents of $1.9 million and negative working capital of $0.8 million. Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. to equity was 40%, excluding the long-term portion of the accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. contingent consideration from business acquisition and other long-term liabilities Other Long-Term Liabilities A balance sheet item that includes obligations that do not currently require interest payments. Notes: This would include items such as remaining leases, future employee benefits and deferred taxes. . As previously reported, the Company obtained two amendments to its credit facility from its commercial lender Whilst nearly all lenders offer loans on a commercial basis the term commercial lender has differed meanings around the world.
Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. related to tangible net worth Tangible Net Worth Total assets less intangible assets and total liabilities. Notes: In terms of a consumer, tangible net worth is the sum of all your tangible assets (cash, home, cars, etc). levels or debt service and quick ratio levels required of the Company. As of December 31, 2006, the Company was not in compliance with the net worth requirement. Sento is working to re-negotiate terms to bring it in compliance with current borrowing arrangements. To enhance liquidity, the Company also completed a previously announced private placement of 3,000 shares of Series B Redeemable 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. , with gross proceeds of $3 million, to certain institutional and private investor in December 2006. The Company may seek additional funding from the capital markets in calendar year 2007 to meet its obligations. OUTLOOK The following statements are based on the Company's current expectations. These statements are forward-looking, and actual results may differ materially.
-- The Company expects revenues to increase sequentially in the fiscal
2007 fourth quarter due to seasonal factors and the addition of new
business previously reported.
-- The Company has expanded its service delivery model to include a
home agent program to reduce costs and increase employee retention.
-- The Company announced additional cost-savings initiatives on
February 13, 2007 to reduce Company expenses by an additional $4
million. These included:
-- The immediate closing of its Evanston, Wyoming satellite
facility to improve company-wide facility utilization. This
will result in a charge of approximately $600,000 in the
fourth quarter of fiscal 2007. Employees of the facility were
offered the opportunity to become home agents;
-- Staff reductions to match its current revenues without
affecting the quality of service delivery;
-- Reduction of the cost and/or use of outside vendors;
-- The replacement of its auditors due to proposed fee increases;
-- Because these measures, as well as revenue enhancement
programs, were not fully implemented until the fourth quarter
of fiscal 2007, the Company expects to incur a loss for that
period.
-- With the cost-savings initiatives implemented to date, combined
with revenue increases anticipated from its marketing pipeline, the
Company expects to achieve substantial improvement in its operating
margins beginning in the first two quarters of fiscal 2008.
Kim Cooper, Interim 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 Sento, stated: "We have gone through challenging times, but feel confident that the initiatives now in place will enable us to return Sento to future profitability and growth." CONFERENCE CALL The Company noted that it intends to resume its regular quarterly investor conference call when it reports financial results for the fiscal 2007 fourth quarter and full year ending March 31, 2007. SENTO PROFILE Sento Corporation (www.sento.com) specializes in Right Channeling(SM), a proven methodology designed to optimize customer contact solutions and ensure that companies make informed choices for multi-channel communication that support their business goals and customer expectations. We offer outsourced customer contact services designed to optimize the way companies interact with their customers to enhance brand loyalty, improve customer satisfaction, drive business initiatives and reduce service costs. Through our proprietary Customer Choice Platform(SM), we offer comprehensive professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. and customer interaction tools for customer acquisition, customer service and technical support. Companies can select communication channels from a range of integrated live support and web-enabled self-help applications that combine voice, chat, email and web forums. With operations in the U.S., The Netherlands, and France, plus partnerships in India and other low-cost regions, Sento provides customer contact solutions in 19 languages to industry-leading clients worldwide including McAfee, LensCrafters, Philips, Thomson, and Overstock.com. 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. Statements in this press release, which are not purely historical, are forward-looking statements within the meaning 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. Such statements encompass Sento's beliefs, expectations, goals, hopes or intentions regarding future events. Words such as "expects," "intends," "estimates," "believes," "anticipates," "should" and "likely" also identify forward-looking statements. All forward-looking statements included in this release are made 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" and are based on information available to Sento as of such date. Sento assumes no obligation, and specifically disclaims any obligation, to update any forward-looking statement. Actual results could differ materially from those anticipated for a number of reasons, including, among others: the Company's recent losses, the Company's ability to successfully execute cost cutting measures, the Company's stock price has historically been volatile; variations in market and economic conditions; the Company's dependence on its limited number of key clients; failure to renew existing client contracts for continuation of services; reduction in services requested by the Company's clients resulting in lower revenues for the Company; the Company's ability to complete negotiations and execute client agreements; failure to maintain the listing of its common stock on NASDAQ Capital Market Originally called the NASDAQ Small Cap Market, NASDAQ announced a name change to the NASDAQ Capital Market on September 27, 2005. [1] The NASDAQ Capital Market exists for securities of smaller, less-capitalized companies (small caps) that do not qualify for ; risk of equipment failure and/or emergency interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. of the Customer Contact Solutions operations; and other unanticipated factors. Risk factors, cautionary statements and other conditions, which could cause actual results to differ from the Company's current expectations, are contained in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-KSB. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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