Advant-e Corporation Announces
Financial Results
for 2009 |
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Company Reports Record Net Income in 2009
Net Income in 2009 Increased by 12% Despite 2% Decrease in Revenue
Compared to Prior Year
Revenue in 2009 for Internet-based EDI Services Increased;
Software Revenue Decreased
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DAYTON, Ohio, Thursday March 11, 2010 -- Advant-e Corporation (OTC Bulletin Board: ADVC), today announced financial and operating results for 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.
The Company reported revenue in 2009 of $8,649,199, a 2% decrease compared to revenue of $8,869,169 in 2008. The decrease is attributable to a significant decline in revenue from our Merkur Group subsidiary from $2,134,193 in 2008 to $1,505,974 in 2009. This decline was partially offset by the increase in revenue for Edict Systems from $6,734,976 in 2008 to $7,143,225 in 2009. Revenue for Edict Systems increased by $408,249, or 6%, while revenue from Merkur Group decreased by $628,219, or 29%.
The Company reported record net income for 2009 of $1,194,802, or $.018 per share, compared to $1,063,790, or $.016 per share, in 2008. Net income in 2009 increased 12% compared to 2008. Earnings per share for 2009 and 2008 reflect the increased number of outstanding shares that resulted from the ten for one stock split in the fourth quarter of 2009.
| Highlights of 2009 financial and operating results include: |
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Edict Systems Revenue Increased for the Ninth Consecutive Year
Revenue for Edict Systems increased across all major product and service categories in 2009 compared to 2008 with the exception of AutomotiveEC, which declined due to the overall weakness in the automotive sector. Revenue from EnterpriseEC®, a hosted integration service, increased by 15%, from $1,175,178 in 2008 to $1,351,233 in 2009. |
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Net Income Exceeded $1 million for Third Consecutive Year
The Company in 2009 reported a net profit for the seventh consecutive year. |
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Merkur Group Net Income increased by 47%
Despite a significant decline in revenue for Merkur Group, net Income increased by 47% to $177,459 in 2009 from $121,048 in 2008. The increase was due to the Company’s efforts to control costs and operating expenses. |
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Special Cash Dividend
In 2009 the Company announced a special cash dividend of $0.03 per share totaling $2,001,678, to be paid in three installments of $.01 per share. The first installment was paid in December of 2009. Two additional installments of $.01 per share each are scheduled to be paid in June of 2010 and December of 2010. |
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Strong Cash Position at Year-end
Cash and cash equivalents of $2,713,996 provide a solid foundation for growth and meeting financial obligations in 2010 and beyond. |
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No Outstanding Bank or Other Long-Term Debt
The Company continues to maintain an unused $1.5 million bank line of credit. |
Mr. Jason K. Wadzinski, Chairman and CEO of Advant-e stated, “2009 was another challenging year for Advant-e with a significant reduction in software revenue from Merkur Group. Customers in the automotive industry were hit very hard by the economic downturn, and accordingly, revenue from our automotive sector declined for the first year since we entered the industry in 2004. We were successful, however, in planning for the slow economy in 2009 as we reduced our selling, general and administrative expenses sufficiently to report a record net income.”
“I continue to be positive about our prospects going forward and our ability to produce acceptable financial results under the current adverse economic conditions. We continue to pursue new industries that would benefit from our services and have been making inroads into the health care market. Merkur Group is expanding product offerings and recently introduced an automated remittance advice solution for its PeopleSoft integration. Edict and Merkur personnel have been working together to combine product offerings into a certified SaaS EDI solution for the PeopleSoft market.”
ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
December 31, 2008 and 2009 |
2009 |
2008 |
Assets |
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Current Assets: |
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Cash and cash equivalents |
$2,713,996 |
2,090,005 |
Short-term investments |
— |
232,721 |
Accounts receivable, net |
634,055 |
699,095 |
Prepaid software maintenance costs |
162,507 |
156,027 |
Prepaid expenses and deposits |
75,519 |
74,361 |
Prepaid income taxes |
39,798 |
16,837 |
Deferred income taxes |
139,144 |
152,156 |
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Total current assets |
3,765,019 |
3,421,202 |
Software development costs, net |
149,956 |
112,453 |
Property and equipment, net |
312,821 |
434,645 |
Goodwill |
1,474,615 |
1,474,615 |
Other intangible assets, net |
329,220 |
413,932 |
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Total assets |
$6,031,631 |
5,856,847 |
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
$115,546 |
207,374 |
Dividends payable |
1,334,452 |
— |
Accrued salaries and other expenses |
146,699 |
283,360 |
Deferred revenue |
582,298 |
583,677 |
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Total current liabilities |
2,178,995 |
1,074,411 |
Deferred income taxes |
261,024 |
335,663 |
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Total liabilities |
2,440,019 |
1,410,074 |
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Shareholders’ equity: |
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Common stock, $.001 par value; 100,000,000 shares authorized, 66,951,010 shares issued, and 66,722,590 shares outstanding at December 31, 2009; 20,000,000 shares authorized, 6,738,261 shares issued and 6,713,919 shares outstanding at December 31, 2008 |
66,951 |
6,738 |
Paid-in capital |
1,964,221 |
2,020,206 |
Retained earnings |
1,588,632 |
2,455,764 |
Treasury stock at cost, 27,342 and 24,342 shares at March 31, 2009 and December 31, 2008, respectively |
(28,192) |
(35,935) |
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Total shareholders’ equity |
3,591,612 |
4,446,773 |
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Total liabilities and shareholders’ equity |
$6,031,631 |
5,856,847 |
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ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31, 2009 and 2008 |
2009 |
2008 |
Revenue |
$8,649,199 |
8,869,169 |
Cost of revenue |
3,561,780 |
3,476,670 |
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Gross margin |
5,087,419 |
5,392,449 |
Marketing, general and administrative expenses |
3,294,187 |
3,705,542 |
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Operating income |
1,793,232 |
1,686,957 |
Other income (expense), net |
5,007 |
(30,701) |
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Income before income taxes |
1,798,239 |
1,656,256 |
Income tax expense |
603,437 |
592,466 |
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Net income |
1,194,802 |
1,063,790 |
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Earnings per share – basic and diluted |
$0.018 |
0.016 |
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Weighted average shares outstanding – basic and diluted |
66,869,669 |
67,857,940 |
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ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2009 and 2008 |
2009 |
2008 |
Cash flows from operating activities: |
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Net income |
$1,194,802 |
1,063,790 |
Adjustments to reconcile net income to net cash flows from operating activities: |
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Depreciation |
257,340 |
284,097 |
Amortization of software development costs |
81,784 |
81,785 |
Amortization of other intangible assets |
84,712 |
84,712 |
Deferred income taxes |
(61,627) |
(65,294) |
Purchases of trading securities |
(99,922) |
(264,182) |
Proceeds from sales of trading securities |
327,193 |
258,457 |
Net realized (gain) loss on sales of securities |
(34,546) |
952 |
Net unrealized loss on trading securities |
39,996 |
64,203 |
Increase (decrease) in cash arising from changes in assets and liabilities, net of effects of acquisition: |
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Accounts receivable |
65,040 |
106,146 |
Prepaid software maintenance costs |
(6,480) |
27,591 |
Prepaid expenses and deposits |
(1,158) |
(5,431) |
Prepaid income taxes |
(22,961) |
(16,8370 |
Accounts payable |
(91,828) |
(4,364) |
Accrued salaries and other expenses |
(136,661) |
10,150 |
Income taxes payable |
--- |
(136,947) |
Deferred revenue |
(1,379) |
(61,416) |
Net cash flows from operating activities |
1,594,305 |
1,427,412 |
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Cash flows from investing activities: |
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Purchases of property and equipment |
(135,516) |
(285,084) |
Software Development Cost |
(119,287) |
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Net cash flows from investing activities |
(254,803) |
(285,084) |
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Cash flows from financing activities: |
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Purchase of treasury shares |
(48,285) |
(151,066) |
Dividends paid |
(667,226) |
(940,704) |
Net cash flows from financing activities |
(715,511) |
(1,091,770) |
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Net increase in cash and cash equivalents |
623,991 |
50,558 |
Cash and cash equivalents, beginning of year |
2,090,005 |
2,039,447 |
Cash and cash equivalents, end of year |
2,713,996 |
2,090,005 |
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Supplemental disclosures of cash flow items: |
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Income taxes paid |
688,024 |
810,279 |
Non cash transactions: |
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Retirement of shares |
56,028 |
190,131 |
Dividends declared in 2009 and payable in 2010 |
1,334,452 |
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