Advant-e Corporation Announces
First Quarter 2009 Results |
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Company Reports Net Income for 23rd Consecutive Quarter;
Revenue for Internet-based EDI Services Increased;
Software Revenue Decreased |
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DAYTON, Ohio, May 15, 2009 -- Advant-e Corporation (OTC Bulletin Board: ADVC) today announced financial and operating results for the first 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 first quarter of 2009 the Company reported revenue of $2,155,291, an 8% decrease compared to revenue of $2,345,234 in the first quarter of 2008. Revenue from Edict Systems increased by $111,752, but revenue from Merkur Group fell by $301,695.
Net income for the first quarter of 2009 was $234,677, or $.03 per share, an 11% decrease compared to net income of $264,910, or $.04 per share, for the same period in 2008.
Jason K. Wadzinski, Chairman of the Board and Chief Executive Officer, remarked, “As stated in previous earnings releases, current economic weakness is having a more pronounced impact on software sales by Merkur Group than internet-based EDI services provided by Edict Systems. Although Merkur’s results are below our internal targets, the steep decline in Merkur’s revenue year-over-year is mainly due to the strong sales Merkur reported in the first quarter of 2008.”
“I believe that given the current economic conditions, our overall performance and level of profitability are satisfactory. We are continuing to focus on our core markets as well as expanding into new industries and we are investing in the people and resources deemed appropriate to position the company for increased activity going forward.”
Three Months Ended
March 31, |
2009 |
2008 |
Revenue |
$2,155,291 |
2,345,234 |
Cost of revenue |
899,659 |
920,846 |
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|
|
Gross margin |
1,255,632 |
1,424,388 |
Marketing, general and administrative expenses |
887,285 |
1,006,002 |
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Operating income |
368,347 |
418,386 |
Other income (expense), net |
(19,649) |
5,204 |
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|
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Income before income taxes |
348,698 |
423,590 |
Income tax expense |
114,021 |
158,680 |
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Net income |
$234,677 |
264,910 |
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Earnings per share – basic and diluted |
$0.03 |
0.04 |
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Weighted average shares outstanding – basic and diluted |
6,711,699 |
6,815,015 |
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ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS |
March 31, 2009
(Unaudited) |
December 31,
2008 |
Assets |
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Current Assets: |
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|
Cash and cash equivalents |
$2,378,330 |
2,090,005 |
Short-term investments |
203,774 |
232,721 |
Accounts receivable, net |
828,295 |
699,095 |
Prepaid software maintenance costs |
172,856 |
156,027 |
Prepaid expenses and deposits |
79,601 |
74,361 |
Prepaid income taxes |
— |
16,837 |
Deferred income taxes |
153,700 |
152,156 |
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Total current assets |
3,816,556 |
3,421,202 |
Software development costs, net |
92,008 |
112,453 |
Property and equipment, net |
379,268 |
434,645 |
Goodwill |
1,474,615 |
1,474,615 |
Other intangible assets, net |
392,754 |
413,932 |
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Total assets |
$6,155,201 |
5,856,847 |
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
$209,176 |
207,374 |
Accrued salaries and other expenses |
245,469 |
283,360 |
Income taxes payable |
116,223 |
--- |
Deferred revenue |
614,635 |
583,677 |
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Total current liabilities |
1,185,503 |
1,074,411 |
Deferred income taxes |
292,168 |
335,663 |
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Total liabilities |
1,477,671 |
1,410,074 |
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Shareholders’ equity: |
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Common stock, $.001 par value; 20,000,000 shares authorized; 6,737,741 shares issued and 6,710,399 shares outstanding at March 31, 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 |
2,690,441 |
2,455,764 |
Treasury stock at cost, 27,342 and 24,342 shares at March 31, 2009 and December 31, 2008, respectively |
(39,232) |
(35,935) |
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Total shareholders’ equity |
4,677,530 |
4,446,773 |
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Total liabilities and shareholders’ equity |
$6,155,201 |
5,856,847 |
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ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) |
Three Months Ended
March 31, |
|
2009 |
2008 |
Cash flows from operating activities: |
|
|
Net income |
$234,677 |
264,910 |
Adjustments to reconcile net income to net cash flows from operating activities: |
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Depreciation |
62,767 |
63,399 |
Amortization of software development costs |
20,445 |
20,446 |
Amortization of other intangible assets |
21,178 |
21,178 |
Deferred income taxes |
(45,039) |
(41,020) |
Purchases of trading securities |
(43,949 ) |
(80,477 ) |
Proceeds from sales of trading securities |
49,828 |
78,007 |
Net unrealized losses on trading securities |
4,667 |
14,078 |
Net realized (gains) losses on sales of securities |
18,401 |
(5,339) |
Increase (decrease) in cash arising from changes in assets and liabilities: |
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|
Accounts receivable |
(129,200) |
(131,363) |
Prepaid software maintenance costs |
(16,829) |
(25,911) |
Prepaid expenses and deposits |
(5,240) |
(51,733) |
Prepaid income taxes |
16,837 |
--- |
Accounts payable |
1,802 |
324,567 |
Accrued salaries and other expenses |
(37,891) |
52,035 |
Income taxes payable |
116,223 |
60,336 |
Deferred revenue |
30,958 |
157,274 |
Net cash flows from operating activities |
299,635 |
720,387 |
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Cash flows from investing activities: |
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Purchases of property and equipment |
(7,390 ) |
(98,186 ) |
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Cash flows from financing activities: |
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Purchase of treasury shares |
(3,920) |
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Net increase in cash and cash equivalents |
288,325 |
622,201 |
Cash and cash equivalents, beginning of period |
2,090,005 |
2,039,447 |
Cash and cash equivalents, end of period |
$2,378,330 |
$2,661,648 |
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Supplemental disclosures of cash flow items: |
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Income taxes paid |
$26,000 |
$138,100 |
Non-cash transaction: retirement of 520 treasury shares |
623 |
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