Friday, May 15, 2009
Advant-e Corporation Announces
First Quarter 2009 Results
Company Reports Net Income for 23rd Consecutive Quarter;
Revenue for Internet-based EDI Services Increased;
Software Revenue Decreased

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

Gross margin

1,255,632

1,424,388

Marketing, general and administrative expenses

887,285

1,006,002

Operating income

368,347

418,386

Other income (expense), net

(19,649)

5,204

Income before income taxes

348,698

423,590

Income tax expense

114,021

158,680

Net income

$234,677

264,910

Earnings per share – basic and diluted

$0.03

0.04

Weighted average shares outstanding – basic and diluted

6,711,699

6,815,015

 
ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

March 31, 2009
(Unaudited)

December 31,
2008

Assets

Current Assets:

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

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

Total assets

$6,155,201

5,856,847

Liabilities and Shareholders’ Equity

Current liabilities:

Accounts payable

$209,176

207,374

Accrued salaries and other expenses

245,469

283,360

Income taxes payable

116,223

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Deferred revenue

614,635

583,677

Total current liabilities

1,185,503

1,074,411

Deferred income taxes

292,168

335,663

Total liabilities

1,477,671

1,410,074

Shareholders’ equity:

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)

Total shareholders’ equity

4,677,530

4,446,773

Total liabilities and shareholders’ equity

$6,155,201

5,856,847

 
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:

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:

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

Cash flows from investing activities:

Purchases of property and equipment

(7,390 )

(98,186 )

Cash flows from financing activities:

Purchase of treasury shares

(3,920)

---

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

Supplemental disclosures of cash flow items:

Income taxes paid

$26,000

$138,100

Non-cash transaction:  retirement of 520 treasury shares

623

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About Advant-e
Advant-e, via its wholly owned subsidiaries Edict Systems, Inc. and Merkur Group, Inc. is a provider of internet-based hosted Electronic Data Interchange (EDI) and electronic document management software and services. The Company helps businesses automate manual, paper-intensive processes via expanded use of EDI or by integrating directly with ERP/MRP systems.

Additional information about Advant-e Corporation can be found at www.Advant-e.com, www.EdictSystems.com, and www.MerkurGroup.com, or by contacting investor relations at (937) 429-4288. The company's email is [email protected].

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.