DAYTON, Ohio, Feb. 12 /PRNewswire-FirstCall/ -- Advant-e Corporation (OTC Bulletin Board: ADVC - News), a provider of Internet-based business-to-business electronic commerce services, today announced financial and operating results for the year ending December 31, 2006.
In 2006 the Company reported record revenues of $5,403,632 compared to $4,462,702 for 2005. The 21% increase in revenue is attributed to the continued expansion and market acceptance of the Company's Internet-based business-to-business electronic commerce subscription services. Net income for 2006 was a record $858,670 or $.13 per share compared to $600,318 or $.09 per share in 2005.
For the fourth quarter of 2006 the Company reported revenue of $1,439,123 and net income of $227,734 or $.03 per share, compared to revenue of $1,203,771 and net income of $209,994 or $.03 per share in the fourth quarter of 2005.
Highlights of 2006 financial and operating results include:
-- Revenue Increase for the sixth consecutive year - Continued strong acceptance of core Web EDI services to small and medium size suppliers of large grocery and general merchandise retailers, automotive manufacturers, and other large buying organizations.
-- Net Income Increased by 43% and Pre-tax Profit was 25% of Revenue. - Net Income and pre-tax profitability benefited from lower amortization of software development costs in 2006 of $124,498 compared to $217,780
in 2005, and from capitalized software development costs of $219,018 in
2006 compared to $79,627 in 2005.
-- Automotive Web EDI Revenue Acceleration - Automotive Web EDI revenue comprised 7% of total revenue in 2006 compared to 4% in 2005 indicating increased activity with both automotive manufacturers and their
suppliers.
-- EnterpriseEC® Revenue Growth of 67% - Trading Community Connectivity, Management, and Integration Services accounted for 15% of revenue in 2006 compared to 11% in 2005 indicating an increased reliance upon this
service by higher volume customers for enhanced data management and integration into in-house systems.
-- Cash and Short-term Investments increased 25% - Increase to $2,484,216
in 2006 from $1,989,337 in 2005.
-- Shareholders Equity Increased 47% - From $2,014,953 in 2005 to
$2,958,383 in 2006.
Commenting on the year-end results, Mr. Jason K. Wadzinski, CEO of Advant-e stated, "In 2006 we continued to strengthen our financial position while growing key elements of the business. Although our 21% revenue growth was lower than our goal for the year, we substantially exceeded our pre-tax profit target.
"In 2006 we made significant investments in our infrastructure, product offerings, and our sales and marketing activities. In 2007 we expect to announce an updated version of our Web EDI service, which accounts for the majority of our revenue. We are also working with several large customers for a new hosted service that is an extension of our existing Testing & Certification service. Called ValidateEC, it enables our customers to monitor their electronic commerce activities via a hosted business rule engine so that they can rapidly design, test, and implement business rules and proactively respond to exceptions.
"We are pleased with our accomplishments in 2006. I would like to thank the dedicated, hard-working Edict Systems team for their outstanding efforts resulting in these achievements. In 2007 we will continue our focus on accelerating revenue growth while maintaining an acceptable level of profitability."
ADVANT-E CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
Revenue $1,439,123 1,203,771 5,403,632 4,462,702
Cost of revenue 478,014 368,486 1,677,937 1,511,007
Gross margin 961,109 835,285 3,725,695 2,951,695
Marketing, general and
administrative expenses 654,071 539,793 2,453,883 2,010,911
Operating income 307,038 295,492 1,271,812 940,784
Other income, net 41,331 4,602 87,862 9,734
Income before taxes 348,369 300,094 1,359,674 950,518
Income tax expense 120,635 90,100 501,004 350,200
Net income $227,734 209,994 858,670 600,318
Basic earnings per share $0.03 0.03 0.13 0.09
Diluted earnings per share $0.03 0.03 0.13 0.09
Weighted average shares
outstanding 6,424,370 6,403,174 6,408,516 6,325,218
Weighted average shares
outstanding, assuming
dilution 6,447,771 6,408,788 6,434,615 6,340,851
ADVANT-E CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2006 2005
Assets
Current assets:
Cash and cash equivalents $2,209,782 1,763,435
Short-term investments 274,434 225,902
Accounts receivable, net 477,639 351,482
Prepaid expenses and deposit 28,339 25,128
Total current assets 2,990,194 2,365,947
Software development costs, net 247,621 160,656
Property and equipment, net 386,697 262,523
Total assets 3,624,512 2,789,126
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable 66,936 44,838
Accrued salaries and other expenses 157,802 115,510
Income taxes payable 109,642 375,652
Deferred income taxes 53,119 26,000
Deferred revenue 112,846 76,173
Total current liabilities 500,345 638,173
Deferred income taxes 165,784 136,000
Total liabilities 666,129 774,173
Shareholders' equity:
Common stock, $.001 par value; 20,000,000 shares
authorized; 6,478,714 outstanding at December 31,
2006 and 6,403,714 outstanding at
December 31, 2005 6,478 6,403
Paid-in capital 1,641,906 1,551,606
Accumulated other comprehensive income --- 5,615
Retained earnings 1,309,999 451,329
Total shareholders' equity 2,958,383 2,014,953
Total liabilities and shareholders' equity $3,624,512 2,789,126
ADVANT-E CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2006 2005
Cash flows from operating activities:
Net income $858,670 600,318
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation 153,113 110,721
Amortization of software development costs 124,498 217,780
Loss on disposal of assets 41,922 ---
Deferred income taxes 60,703 (32,800)
Purchases of trading investments (31,541) ---
Proceeds from sale of trading investments 28,393 ---
Net realized (gains) losses on short-term
investments (9,701) 2,222
Net unrealized gains on trading investments (27,218) ---
Increase (decrease) in cash arising from changes
in assets and liabilities:
Accounts receivable (126,157) (61,088)
Prepaid expenses (3,211) 1,292
Accounts payable 22,098 5,157
Accrued salaries and other expenses 42,292 15,700
Income taxes payable (266,010) 349,652
Deferred revenue 36,673 (66,615)
Net cash flows from operating activities 904,524 1,142,339
Cash flows from investing activities:
Purchases of available-for-sale investments (107,966) (253,877)
Proceeds from sale of available-for-sale
investments 90,086 35,168
Purchases of equipment (311,654) (101,640)
Software development costs (219,018) (79,627)
Net cash flows from investing activities (548,552) (399,976)
Cash flows from financing activities:
Issuance of common stock 90,375 91,500
Payments of direct costs of securities
registration --- (15,320)
Net cash flows from financing activities 90,375 76,180
Net increase in cash and cash equivalents 446,347 818,543
Cash and cash equivalents, beginning of year 1,763,435 944,892
Cash and cash equivalents, end of year $2,209,782 1,763,435
Supplemental disclosures of cash flow items:
Income taxes paid $706,311 33,348
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 Trading Community Connectivity, Management, and Integration solution, and within specific industries via web-based EDI services including www.GroceryEC.com, www.RetailEC.com, www.AutomotiveEC.com, www.CPGSupplier.com, and www.WebEDI.com.
Additional information about Advant-e Corporation can be found at www.Advant-e.com and www.edictsystems.com or by contacting investor relations at (937) 429-4288. The company's email is info@edictsystems.com.