netGuru Reports Fiscal 2007 First Quarter Financial Results From Continuing Operations; Excludes REI, French Subsidiary and India Operations.YORBA LINDA Yorba Linda (yôr`bə lĭn`də), city (1990 pop. 52,422), Orange co., S Calif., in a region of citrus fruit; inc. 1967. The city has grown tremendously along with the southern California area; its population increased fivefold between , Calif. -- netGuru, Inc. (Nasdaq: NGRU) reported financial results for fiscal 2007 first quarter ended June June: see month. 30, 2006. In November November: see month. 2005, the Company completed the sale of its Research Engineers International ("REI") business to Bentley Systems Bentley Systems, Incorporated, provides software for the "Design, construction and operation of the world's infrastructure". The company’s software serves the building, plant, civil, and geospatial vertical markets in the areas of architecture, engineering, construction (AEC) , Incorporated, and in January January: see month. 2006 the Company sold its French subsidiary. All amounts pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to REI and the French subsidiary are accounted for as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Since November 2005, the special committee appointed by the Company's board of directors has been evaluating the possible divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of some of or all of the Company's remaining assets and operations, as well as possible mergers 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. strategic acquisitions for the Company and its information technology, collaborative software This is a list of collaborative software (or list of groupware) applications. Wiki software is on a list of wiki software. Open source or free software The following are open source or free software applications. , and engineering business process outsourcing Business process outsourcing (BPO) is the contracting of a specific business task, such as payroll, to a third-party service provider. Usually, BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain its position in businesses. Discussions with a number of public and private entities have been, or are being, held. The Company anticipates entering into a merger and/or a sale agreement with one or more parties, but neither the timing nor completion of a transaction can be assured. However, due to the probability of the sale of the India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. operations of the Company, those operations are reported as assets and liabilities held for sale. Net revenues for the quarter were $870,000, compared to $796,000 in first-quarter fiscal 2006. Revenues from collaborative software sales and services were $450,000, compared to $242,000 in first-quarter last year; revenues from IT services were $420,000, compared to $554,000 in first-quarter fiscal 2006. Gross profit for the quarter was $509,000 versus $407,000 in first quarter a year ago. Total 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 were $880,000 versus $688,000 in first-quarter fiscal 2006 due primarily to higher sales, general, and administrative expenses reflecting, in part, costs related to the Company's ongoing evaluations of strategic alternatives for its remaining operations. 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 quarter was $371,000, compared to an operating loss of $281,000 in first-quarter last year. Net loss for the quarter was $452,000, or $0.02 per share on 19,235,041 shares outstanding, and included a loss from discontinued operations of $82,000. For fiscal 2006 first quarter, net loss was $334,000, or $0.02 per share on 19,117,154 shares outstanding, and included income from discontinued operations of $80,000. The Company also stated that future capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. depend upon sales and marketing efforts, the development of new products and services, possible future corporate mergers or strategic acquisitions or divestitures, the progress of research and development efforts, competitive products and services, and other factors. The Company believes that the proceeds remaining from its sale of its REI business, together with its operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. and the proceeds from the sale of its French subsidiary, will be adequate to extinguish Extinguish Retire or pay off debt. all of its remaining liabilities and fund its current operations through at least October October: see month. 2006. However, to the extent the Company is in need of any additional financing, there can be no assurance that any such additional financing will be available on acceptable terms, or at all. In addition, any future financing may cause significant dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. to existing stockholders. About netGuru netGuru is an engineering services company offering engineering business process outsourcing (EBPO EBPO Electronic Business Process Optimization ) services for the architecture, engineering, and construction (A/E/C A/E/C Architect/Engineer/Contractor ) industry; document/project collaboration Working together on a project. See collaborative software. software/solutions for A/E/C companies, enterprise software providers, software integrators, and other businesses engaged in document/project-centric operations; and technical services and support. netGuru offices are located 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. , 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). , and
India. For more information, please visit www.netguru.com.Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities 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. Reform Act of 1995: With the exception of historical or factual information, other matters discussed in this press release, including opportunities for the Company's remaining operations, discussions with interested parties, progress being made, timing and completion of any agreement, sufficiency of the Company's assets and revenues, and the need for and availability and terms of additional financing, are forward looking statements that involve risks and uncertainties. Actual future results may differ. Factors that could cause or contribute to such differences in results include, but are not limited to, the special committee's and Company's ability to identify, negotiate and consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. any divestiture or other strategic transaction, netGuru's ability to conserve resources and implement further reductions in ongoing expenses and/or increase revenues, market conditions regionally and worldwide, demand for collaborative col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. and IT products and services, technological change, economic conditions, changes in governmental regulations and policies, competitive products and services, unforeseen issues, and other factors discussed in the "Risk Factors" Section and other sections of the Company's Form 10-KSB for the fiscal year ended March 31, 2006, and other filings made with the U.S. Securities and Exchange Commission.
NETGURU, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
($ in thousands except share and per share amounts)
Three Months Ended
June 30,
------------------------
2006 2005
----------- -----------
Net revenues:
Collaborative software products and
services $ 450 $ 242
IT services 420 554
----------- -----------
Total net revenues 870 796
----------- -----------
Cost of revenues:
Collaborative software products and
services 54 1
IT services 307 388
----------- -----------
Total cost of revenues 361 389
----------- -----------
Gross profit 509 407
----------- -----------
Operating expenses:
Selling, general and administrative 738 482
Research and development 108 150
Depreciation 34 56
----------- -----------
Total operating expenses 880 688
----------- -----------
Operating loss (371) (281)
----------- -----------
Other (income) expense (1) 123
----------- -----------
Loss from continuing operations before income
taxes (370) (404)
Income tax expense - 10
----------- -----------
Loss from continuing operations (370) (414)
----------- -----------
(Loss) income from discontinued operations (82) 80
----------- -----------
Net loss $ (452) $ (334)
=========== ===========
Basic and diluted net loss per common share:
Net loss per common share from continuing
operations $ (0.02) $ (0.02)
Net income per common share from
discontinued operations $ - $ -
----------- -----------
Basic and diluted loss per common share (0.02) (0.02)
=========== ===========
Common equivalent shares used in computing
basic and diluted net loss per common share 19,235,041 19,117,154
=========== ===========
NETGURU, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
June 30,
2006 March 31,
(Unaudited) 2006
----------- ---------
Assets
Current assets:
Cash and cash equivalents $ 2,197 $ 2,497
Restricted cash - 1,070
Accounts receivable (net of allowance for
doubtful accounts of $20 of June 30, 2006 and
March 31, 2006) 368 606
Note receivable 38 103
Prepaid expenses and other current assets 134 239
Assets held for sale 1,995 2,133
----------- --------
Total current assets 4,732 6,648
Property and equipment, net 151 179
Other assets 105 109
----------- --------
$ 4,988 6,936
=========== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of capital lease obligations 118 117
Accounts payable 158 205
Accrued expenses 244 451
Income taxes payable 32 52
Deferred revenues 87 199
Accrued settlement for REI sale - 760
Other liabilities 34 53
Liabilities held for sale 451 717
----------- --------
Total current liabilities 1,124 2,554
Capital lease obligations, net of current
portion 106 136
Deferred gain on sale-leaseback 591 608
----------- --------
Total liabilities 1,821 3,298
----------- --------
Stockholders' equity:
Preferred stock, par value $.01 (Authorized
5,000,000 shares; no shares issued and
outstanding) - -
Common stock, par value $.01; authorized
150,000,000 shares; 19,235,041 shares
outstanding as of June 30, 2006 and March 31,
2006 192 192
Additional paid-in capital 20,685 20,685
Accumulated deficit (17,014) (16,563)
Accumulated other comprehensive loss:
Cumulative foreign currency translation
adjustments (696) (676)
----------- --------
Total stockholders' equity 3,167 3,638
----------- --------
$ 4,988 6,936
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