Thursday, May 15, 2008
Advant-e Corporation Announces
First Quarter 2008 Results
Company Reports 66% Increase in Revenue and 102%
Net Income Growth Over Q1 2007

DAYTON, Ohio, May 15, 2008 -- Advant-e Corporation (OTC Bulletin Board: ADVC), a provider of Internet-based Electronic Data Interchange and electronic document management software and services today announced financial and operating results for the quarter ending March 31, 2008.

For the first quarter of 2008 the Company reported revenues of $2,345,234, an 66% increase over revenues of $1,416,323 in the first quarter of 2007. 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 first quarter of 2008 was $264,910, or $.04 per share, a 102% increase over net income of $131,145, or $.02 per share for the same period in 2007.

First Quarter Highlights

  • Edict Systems Revenue Growth and Automotive Industry Expansion - Edict Systems revenue grew 14% over the same period last year with Automotive related WEB EDI services increasing to $148,467, a 39% increase over the same period in 2007. Grocery Web EDI revenue increased 16% in the quarter.
  • Merkur Group Revenue Growth - Merkur reported revenue for the quarter of $736,081 - a 49% increase over its average quarterly revenue for 2007 of $493,436. The revenue increase is primarily attributed to a large software sale to one customer for inbound invoice scanning and integration into PeopleSoft.

Jason K. Wadzinski, Chairman and Chief Executive Officer, remarked, “While our first quarter results showed some weakness last year, our first quarter results this year have been helped by Merkur having an excellent quarter, and an increase in automotive-related activity and continued growth with GroceryEC.com by Edict Systems. During the remainder of this year we will be increasing our expenditures throughout the company in support of our revenue growth initiatives. Our financial position is strong and we are very excited about our opportunities going forward for both operating entities.”

The Company also announced that its Board of Directors has authorized a share repurchase program for up to $750,000 in fair market value of Advant-e common stock. The shares may be purchased from time to time through June 30, 2008 on the open market or in privately negotiated transactions.

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

Three Months Ended
March 31,

2008

2007

Revenue

2,345,234

1,416,323

Cost of revenue

920,846

508,568

Gross margin

1,424,388

907,755

Marketing, general and administrative expenses

1,006,002

713,478

Operating income

418,386

194,277

Other income (net)

5,204

22,668

Income before income taxes

423,590

216,945

Income tax expense

158,680

85,800

Net income

264,910

131,145

Basic and diluted earnings per share

$ .04

.02

Weighted average shares outstanding

6,815,015

6,478,714

 

ADVANT-E CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS

March 31,2008
(Unaudited)

December31,
2007

Assets

Current Assets:

   Cash and cash equivalents

$2,664,648

2,039,447

   Short-term investments

285,882

292,151

   Accounts receivable, net

936,604

805,241

   Prepaid software maintenance costs

209,529

183,618

   Deferred income taxes

161,136

40,057

Total current assets

4,375,462

3,429,444

   Software development costs, net

173,792

194,238

   Property and equipment, net

468,445

433,658

   Goodwill

1,474,615

1,450,368

   Other intangible assets, net

477,466

498,644

Total assets

$6,969,780

6,006,352

Liabilities and Shareholders’ Equity

Current liabilities:

   Accounts payable

$536,305

211,738

   Accrued salaries and other expenses

325,245

273,210

   Income taxes payable

197,283

112,700

   Deferred revenue

802,367

645,093

Total current liabilities

1,861,200

1,242,741

Deferred income taxes

368,917

288,858

Total liabilities

2,230,117

1,531,599

Shareholders’ equity:

Common stock, $.001 par value; 20,000,000 shares authorized; 6,815,015 issued and outstanding

6,875

6,875

Paid-in capital

2,210,200

2,210,200

Retained earnings

2,597,588

2,332,678

Treasury stock at cost, 16,100 shares at September 30, 2008 and 60,000 shares at December 31, 2007

(75,000)

(75,000 )

Total shareholders’ equity

4,739,663

4,474,753

Total liabilities and shareholders’ equity

$6,969,780

6,006,352

 

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

Three Months Ended
March 31,

2008

2007

Cash flows from operating activities:

Net income

$ 264,910

131,145

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

Depreciation

63,399

48,487

Amortization of software development costs

20,446

18,088

Amortization of other intangible assets

21,178

---

Deferred income taxes

(41,020)

21,033

Purchases of trading securities

(80,477)

(74,483)

Proceeds from sales of trading securities

78,007

79,679

Net unrealized gains on trading securities

14,078

---

Net realized gains on sales of securities

(5,339)

(6,608)

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

   Accounts receivable

131,363

28,691

   Prepaid software maintenance costs

(25,911)

---

   Prepaid expenses and deposits

(51,733)

(28,131)

   Accounts payable

324,567

12,513

   Accrued salaries and other expenses

52,035

32,011

   Income taxes payable

60,336

40,233

   Deferred revenue

157,274

3,498

   Net cash flows from operating activities

720,387

161,668

Cash flows from investing activities:

Purchases of property and equipment

98,186

(42,800)

Software development costs

---

(15,363)

Net cash flows from investing activities

(98,186)

(58,163)

Net increase (decrease) in cash and cash equivalents

622,201

103,505

Cash and cash equivalents, beginning of period

2,039,447

2,209,782

Cash and cash equivalents, end of period

$2,661,648

2,313,287

Supplemental disclosures of cash flow items:

Income taxes paid

$ 138,100

105,000

 

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.