DAYTON, Ohio, May 14, 2007 --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 March 31, 2007.
For the first quarter of 2007 the Company reported revenues of $1,416,323, a 12% increase over revenues of $1,262,169 in the first quarter of 2006. The increase in revenue is attributable primarily to continued growth of the Company's Web EDI services along with growth of EnterpriseEC®, the Company's electronic trading community connectivity and integration service.
Net income for the quarter was $131,145, or $.02 per share, a 22% decline over net incom of $167,706, or $.03 per share for the same period in 2006. The decline in net income is attributable primarily to less-than-anticipated revenue growth insufficient to offset higher technical and sales personnel costs, marketing expenses, and reduced capitalized software development costs.
Jason K. Wadzinski, Chariman and Chief Executive Officer, remarked, "The first quarter of 2007 marks the 15th consecutive quarter that the Company reported positive earnings. Our revenue growth rate, however, is less than our recent historical growth rates when comparing each quarter in 2004 through 2006 to the comparable quarter of the prior year. Our strategy of extending outside of our strong grocery industry presence is wroking, but at a slower rate than anticipated. We are re-evaluating our sales and marketing initiatives so that in the 2nd half of 2007 we can accelerate our revenue growth while maintaining an acceptable level of profitability."
ADVANT-E CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended
March 31,
2007 2006
Revenue $1,416,323 1,262,169
Cost of revenue 508,568 407,868
Gross margin 907,755 854,301
Marketing, general and
administrative expenses 713,478 595,855
Operating income 194,277 258,446
Other income, net 22,668 16,975
Income before taxes 216,945 275,421
Income tax expense 85,800 107,715
Net income $131,145 167,706
Basic earnings per share $0.02 0.03
Diluted earnings per share $0.02 0.03
Weighted average shares
outstanding 6,478,714 6,403,174
Weighted average shares
outstanding, assuming
dilution 6,478,714 6,426,009
ADVANT-E CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31,2007 December 31,
(unaudited) 2006
Assets
Current assets:
Cash and cash equivalents $2,313,287 2,209,782
Short-term investments 275,846 274,434
Accounts receivable, net 448,948 477,639
Prepaid expenses and deposit 56,470 28,339
Total current assets 3,094,551 2,990,194
Software development costs, net 244,896 247,621
Property and equipment, net 381,010 386,697
Total assets 3,720,457 3,624,512
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable 79,449 66,936
Accrued salaries and other expenses 125,791 157,802
Income taxes payable 69,409 109,642
Deferred income taxes 74,430 53,119
Deferred revenue 116,344 112,846
Total current liabilities 465,423 500,345
Deferred income taxes 165,506 165,784
Total liabilities 630,929 666,129
Shareholders' equity:
Common stock, $.001 par value; 20,000,000 shares
authorized; 6,478,714 outstanding at December 31,
2006 and 6,403,714 outstanding at
December 31, 2005 6,478 6,478
Paid-in capital 1,641,906 1,641,906
Retained earnings 1,441,144 1,309,999
Total shareholders' equity 3,089,528 2,958,383
Total liabilities and shareholders' equity $3,720,457 3,624,512
ADVANT-E CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended
March 31,
2007 2006
Cash flows from operating activities:
Net income $131,145 167,706
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation 48,487 29,553
Amortization of software development costs 18,088 32,383
Loss on disposal of assets --- 24,221
Deferred income taxes 21,033 35,723
Purchases of trading securities (74,483) ---
Proceeds from sale of trading securities 79,679 ---
Net realized gains on trading investments (6,608) (4,421)
Increase (decrease) in cash arising from changes
in assets and liabilities:
Accounts receivable 28,691 (48,874)
Prepaid expenses (28,131) 3,228
Accounts payable 12,513 19,614
Accrued salaries and other expenses (32,011) 16,796
Income taxes payable (40,223) 298,008)
Deferred revenue 3,498 27,426
Net cash flows from operating activities 161,668 5,667
Cash flows from investing activities:
Purchases of available-for-sale securities --- (35,545)
Proceeds from sale of available-for-sale
securities --- 36,914
Purchases of equipment (42,800) (28,697)
Software development costs (15,363) (69,649)
Net cash flows from investing activities (58,163) (96,977)
Net increase (decrease)
in cash and cash equivalents 103,505 (91,310)
Cash and cash equivalents, beginning of period 2,209,782 1,763,435
Cash and cash equivalents, end of period $2,313,287 1,672,125
Supplemental disclosures of cash flow items:
Income taxes paid $105,000 370,000
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.
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 .