Thursday, August 13, 2009
Advant-e Corporation Announces
Second Quarter 2009 Results
Company Reports Net Income Increased by 11% over Second Quarter of 2008 Despite 4% Revenue Decline

DAYTON, Ohio, August 13, 2009 -- Advant-e Corporation (OTC Bulletin Board: ADVC) today announced financial and operating results for the second quarter of 2009.  The Company provides Internet-based Electronic Data Interchange services through Edict Systems, Inc. and sells electronic document management software and services through Merkur Group, Inc.  Edict Systems and Merkur Group are wholly owned subsidiaries of Advant-e Corporation.
For the second quarter of 2009 the Company reported revenue of $2,200,958, a 4% decrease compared to revenue of $2,300,267 in the second quarter of 2008. Revenue from Edict Systems increased by $65,555, but revenue from Merkur Group fell by $164,864.

Net income for the second quarter of 2009 was $311,263, or $.05 per share, an 11% increase compared to net income of $279,625, or $.04 per share, for the same period in 2008.

Jason K. Wadzinski, Chairman of the Board and Chief Executive Officer, remarked, “Given the economic realities during the quarter, I am pleased that we were able to increase net income despite the drop in software-related revenue.  While Merkur’s revenue is down over last year, Merkur has contributed significantly to our increased net income in the quarter.”

“Our focus for the remainder of 2009 will be to continue our push into additional industries and increase our investment in upgrades and enhancements, primarily in our Web EDI offerings and integration solutions.”

ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)

Three Months Ended
June 30,

Six Months Ended
June 30,

2009

2008

2009

2008

Revenue

$2,200,958

2,300,267

4,356,250

4,645,501

Cost of revenue

930,171

902,780

1,829,830

1,823,626

Gross margin

1,270,787

1,397,487

2,526,420

2,821,875

Marketing, general and administrative expenses

837,504

979,392

1,724,789

1,985,394

Operating income

433,283

418,095

801,631

836,481

Other income (expense), net

25,484

18,407

5,834

23,611

Income before income taxes

458,767

436,502

807,465

860,092

Income tax expense

147,504

156,877

261,526

315,557

Net income

$311,263

279,625

545,939

544,535

Earnings per share - basic and diluted

$.05

.04

.08

.08

Weighted average shares outstanding – basic and diluted

6,689,026

6,815,015

6,700,698

6,815,015


ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

June 30, 2009
(Unaudited)

December 31,
2008

Assets

Current Assets:

Cash and cash equivalents          

$2,679,196

2,090,005

Short-term investments

197,332

232,721

Accounts receivable, net             

810,565

699,095

Prepaid software maintenance costs          

176,237

156,027

Prepaid expenses and deposits   

59,103

74,361

Prepaid income taxes

19,546

16,837

Deferred income taxes   

143,559

152,156

Total current assets 

4,085,538

3,421,202

Software development costs, net     

71,561

112,453

Property and equipment, net             

318,498

434,645

Goodwill               

1,474,615

1,474,615

Other intangible assets, net              

371,576

413,932

Total assets         

$6,321,788

5,856,847

Liabilities and Shareholders’ Equity

Current liabilities:

Accounts payable         

$157,625

207,374

Accrued salaries and other expenses         

347,523

283,360

Deferred revenue           

613,830

583,677

Total current liabilities             

1,118,978

1,074,411

Deferred income taxes        

252,288

335,663

Total liabilities     

1,371,266

1,410,074

Shareholders’ equity:

Common stock, $.001 par value; 20,000,000 shares authorized; 6,737,741 shares issued and 6,677,799 outstanding at June 30, 2009; 6,738,261 shares issued and 6,713,919 shares outstanding at December 31, 2008   

6,738

6,738

Paid-in capital           

2,019,583

2,020,206

Retained earnings    

3,001,703

2,455,764

Treasury stock at cost, 60,842 and 24,342 shares at June 30, 2009 and December 31, 2008, respectively

(77,502)

(35,935)

Total shareholders’ equity

4,950,522

4,446,773

Total liabilities and shareholders’ equity        

$6,321,788

5,856,847


ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

Six Months Ended
June 30,

2009

2008

Cash flows from operating activities:

Net income

$545,939

544,535

Adjustments to reconcile net income to net cash flows from operating activities:       

Depreciation   

125,716

133,158

Amortization of software development costs           

40,892

40,892

Amortization of other intangible assets     

42,356

42,356

Deferred income taxes   

(74,778)

(80,120)

Purchases of trading securities   

(87,591)

(146,993)

Proceeds from sales of trading securities  

123,056

162,965

Net unrealized (gains) losses on trading securities 

(24,158)

13,016

Net realized (gains) losses on sales of securities     

24,082

(10,564)

Increase (decrease) in cash arising from changes in assets and liabilities:          

Accounts receivable          

(111,470)

(175,200)

Prepaid software maintenance costs               

(20,210)

(28,470)

Prepaid expenses and deposits        

15,258

24,225

Prepaid income taxes

(2,709)

Accounts payable              

(49,749)

109,659

Accrued salaries and other expenses              

64,163

21,142

Income taxes payable         

(123,687)

Deferred revenue

30,153

90,137

Net cash flows from operating activities         

640,950

617,051

Cash flows from investing activities:

Purchases of property and equipment  

(9,569)

(120,258)

Cash flows from financing activities:

Purchase of treasury shares

(42,190)

Net increase in cash and cash equivalents     

589,191

496,793

Cash and cash equivalents, beginning of period          

2,090,005

2,039,447

Cash and cash equivalents, end of period      

$2,679,196

2,536,240

Supplemental disclosures of cash flow items:

Income taxes paid     

$339,013

518,100

Non-cash transaction              

Retirement of 520 and 60,000 treasury shares during the six months ended  June 30, 2009 and 2008, respectively             

623

75,000

 

About Advant-e
Advant-e, via its wholly owned and sole operating subsidiary Edict Systems, Inc., is a provider of Business-to-Business electronic commerce software and Internet-based applications specializing in Electronic Data Interchange (EDI) and XML-based solutions for recurring transactions. Advant-e specializes in horizontal transaction services via EnterpriseEC®, an Internet-based Electronic Business Transaction Network, and within specific vertical industries via web-based "vortals" including www.GroceryEC.com, www.RetailEC.com, www.CPGSupplier.com, www.LogisticsEC.com, and www.MfgEC.com.

The information in this news release includes certain forward looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements to the future financial performance of the company. Although the company believes that the expectations reflected on its forward looking statements are reasonable, it can give no assurance that such expectations or any or its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development and acceptance, the impact of competitive services and pricing, or general economic risks and uncertainties.