Advant-e Corporation Announces
Third Quarter 2007 Results |
 |
Company Reports 59% Increase in Revenue and
45% Net Income Growth over Q3 2006 |
|
DAYTON, Ohio, Nov. 16 /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 quarter ending September 30, 2007.
For the third quarter of 2007 the Company reported revenues of $2,178,155, a 59% increase over revenues of $1,368,582 in the third quarter of 2006. The increase is attributable primarily to revenue from products and services sold by Merkur Group, Inc. which was acquired on July 2, 2007, and continued growth of the Company's internet-based EDI services.
Net income for the third quarter of 2007 was $335,884, or $.05 per share, a 45% increase over net incom of $232,375, or $.04 per share for the same period in 2006. Net income increased 39% over the second quarter of 2007.
Third Quarter Highlights:
-- Merkur Group Acquisition - Merkur directly contributed $610,3000 torevenue in the quarter and net income of $38,310 before deducting non-ash charges pertaining to amortization of intangible assets of $13,554.
-- Edict Systems Growth - Edict Systems revenue grew 15% in the quarter over Q3 2006 with all major service offerings contributing to this growth. Net income attributable to Edict for the quarter was $311,128 which is an improvement of 34% over the previous year period.
-- Continued Profitability - The Company reports its seventeenth consecutive profitable quarter with pre-tax profitability of 23% in the current quarter.
-- Share Repurchase Program - The Company purchased 60,000 shares at $1.25 as part of the share repurchase program.
Jason K. Wadzinski, Chairman and Chief Executive Officer, remarked, "The third quarter of 2007 was highlighted by our recent acquisition of Merkur Group, Inc., which accounted for 28% of our revenue and contributed to our profitability for the quarter. We are currently working on several opportunities to increase revenue for both Edict and Merkur by leveraging the strengths and product/service offerings of each company."
ADVANT-E CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited) |
Three Months Ended Nine Months Ended
September 30 |
|
2007 |
2006 |
Revenue |
$2,178,155 |
1,368,582 |
Cost of revenue |
818,716 |
422,394 |
Gross margin |
1,359,439 |
946,188 |
Marketing, general and administrative expenses |
876,090 |
589,891 |
Operating income |
483,349 |
356,297 |
Other income (net) |
18,002 |
14,142 |
Income before taxes |
501,351 |
370,439 |
Income tax expense |
165,467 |
138,064 |
Net income |
355,884 |
232,375 |
Basic earnings per share |
.05 |
.04 |
| Diluted earnings per share |
.05 |
.04 |
Weighted average shares outstanding |
6,845,015 |
6,403,174 |
Weighted average shares outstanding,
assuming dilution |
6,845,015 |
6,432,246 |
|
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ADVANT-E CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS |
September 30,
2007
(unaudited) |
December 31,
2006 |
Assets |
Current Assets: |
Cash and cash equivalents |
$1,876,255 |
2,209,782 |
Short-term investments |
292,663 |
274,434 |
Accounts receivable, net |
894,188 |
477,639 |
Prepaid software maintenance costs |
198,742 |
--- |
|
Prepaid expenses and deposits |
70,590 |
28,339 |
Deferred income taxes |
50,226 |
--- |
Total current assets |
3,385,664 |
2,990,194 |
Software development costs, net |
214,684 |
247,621 |
Property and equipment, net |
438,257 |
386,697 |
Goodwill |
1,376,452 |
--- |
Other intangible assets, net |
519,822 |
--- |
Total assets |
5,934,879 |
3,624,512 |
Liabilities and Shareholders’ Equity |
Current liabilities: |
|
|
|
Borrowings under bank line credit |
140,000 |
--- |
Accounts payable |
323,317 |
66,936 |
Accrued salaries and other expenses |
268,001 |
157,802 |
Income taxes payable |
116,049 |
109,642 |
Deferred revenue |
621,682 |
112,846 |
|
Deferred income tax |
--- |
53,119 |
Total current liabilities |
1,469,049 |
500,345 |
Deferred income taxes |
305,154 |
165,784 |
Total liabilities |
1,774,203 |
666,129 |
Shareholders’ equity: |
Common stock, $.001 par value; 20,000,000 shares
authorized; 6,875,015 and 6,478,714 issued, and
6,815,015 and 6,478,714 outstanding at
September 30, 2007 and December 31, 2006 |
6,875 |
6,478 |
Paid-in capital |
2,210,200 |
1,641,906 |
Retained earnings |
2,018,601 |
1,309,999 |
Treasury stock at cost, 60,000 shares at December 31, 2007 |
(75,000) |
--- |
Total shareholders’ equity |
4,160,676 |
2,958,383 |
Total liabilities and shareholders’ equity |
5,934,879 |
3,624,512 |
|
| |
ADVANT-E CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS Nine Months Ended September 30 (unaudited) |
2007 |
2006 |
Cash flows from operating activities: |
Net income |
$708,602 |
630,936 |
Adjustments to reconcile net income to net cash flows from operating activities: |
|
|
Depreciation |
162,233 |
105,624 |
Amortization of software development costs |
48,300 |
93,793 |
Amortization of other intangible assets |
21,178 |
--- |
| Loss on disposal of assets |
--- |
41,921 |
Deferred income taxes |
(41,784) |
116,963 |
Purchases of trading securities |
(154,868) |
--- |
Proceeds from sales of trading securities |
159,184 |
--- |
| Net realized gains on trading securities |
(12,573) |
--- |
Net realized gains on sale of securities |
(12,972) |
(8,769) |
Increase (decrease) in cash arising from changes in assets and liabilities: |
Accounts receivable |
(101,139) |
(95,099) |
Prepaid software maintenance costs |
(26,430) |
--- |
Prepaid expenses and deposits |
(3,841) |
(21,015) |
Accounts payable |
70,493 |
11,538 |
Accrued salaries and other expenses |
68,320 |
11,315 |
Income taxes payable |
6,407 |
(349,347) |
Deferred revenue |
38,310 |
5,077 |
Net cash flows from operating activities |
929,420 |
542,938 |
Cash flows from investing activities: |
| Purchases of available-for-sale securities |
--- |
(107,966) |
| Proceeds from sale of available-for-sale securities |
--- |
90,085 |
Purchases of property and equipment |
(181,246) |
(238,480) |
Software development costs |
(15,363) |
(199,056) |
| Purchase of Merkur Group, Inc. |
(971,338) |
--- |
Net cash flows from investing activities |
(1,167,947) |
(455,417) |
| Cash flows from financing activities: |
| Net payments on bank line of credit |
(20,000) |
--- |
| Purchase of treasury shares |
(75,000) |
--- |
| Net cash flows from financing activities |
(95,000) |
--- |
Net decrease in cash and cash equiv. |
(333,527) |
87,521 |
Cash and cash equivalents,
beginning of period |
2,209,782 |
1,763,435 |
Cash and cash equivalents,
end of period |
1,876,255 |
1,850,956 |
Supplemental disclosures of cash flow items: |
Income taxes paid |
434,561 |
641,000 |
| Non-cash transactions |
| Common stock issued in connection with
purchase of Merkur Group, Inc. |
568,692 |
--- |
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