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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Elcom Itl | LSE:ELC | London | Ordinary Share | COM SHS USD0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:8595L
Elcom International Inc
10 November 2006
ELCOM INTERNATIONAL, INC. REPORTS
THIRD QUARTER 2006 OPERATING RESULTS
NORWOOD, MA, November 10, 2006 - Elcom International, Inc. (OTCBB: ELCO and AIM:
ELC and ELCS), today announced operating results for its third quarter ended
September 30, 2006.
Financial Summary Table (Unaudited)
(in thousands, except per share amounts)
Quarter Ended Nine Months Ended
September 30, September 30,
--------------- ---------------
2006 2005 2006 2005
------ ------ ------ ------
Net revenues $683 $547 $2,457 $1,924
Gross profit 559 436 2,010 1,585
Operating loss (1,563) (1,050) (3,842) (3,010)
-------- -------- -------- --------
Net loss $(1,523) $(1,115) $(3,770) $(3,209)
======== ======== ======== ========
Basic and diluted net loss per
share $(--) $(0.02) $(0.01) $(0.05)
------- ------- ------- -------
Basic and diluted weighted
average common 402,080 61,282 401,396 61,282
shares outstanding ======= ====== ======= ======
The above table, the following description and the appended condensed
consolidated financial information should be read in conjunction with the Risk
Factors and other information contained in the Company's Forms 10-QSB for the
periods ended March 31, June 30, and September 30, 2006 and 2005 Annual Report
on Form 10-KSB, as amended.
Quarter ended September 30, 2006 compared to the quarter ended September 30,
2005.
Net Revenues.
Net revenues for the quarter ended September 30, 2006 increased to $683,000,
from $547,000 in the same period of 2005, an increase of $136,000, or 25%.
License, hosting services and other fees for the quarter ended September 30,
2006 increased to $636,000 from $505,000 in the same period of 2005, an increase
of $131,000, or 25%. This increase is primarily due to higher hosting services
revenue related to the Scottish Executive's eProcurement Scotl@nd Programme.
License, hosting services and other fees include license fees, hosting services
fees, test system fees, supplier fees, usage fees, and eMarketplace agent and
affiliate fees. Professional services fees for the quarter ended September 30,
2006 increased to $47,000, from $42,000 in the same period of 2005, an increase
of $5,000, or 12%. While the Company anticipates that professional services will
increase in future quarters, the accounting for professional implementation and
development services revenues related to the Zanzibar eMarketplace will be
accreted to revenue over the remaining term of the contract (which expires in
July of 2010, subject to client renewal) which will minimize the impact of these
revenues on reported earnings. Deferred revenue includes $67,000 related to the
Zanzibar eMarketplace, the bulk of which relates to implementation services that
are ongoing as of September 30, 2006. The Company did not begin accreting
professional services revenue related to the Zanzibar eMarketplace in third
quarter of 2006 as originally anticipated, and now believes that such accretion
will commence in the fourth quarter of 2006, or first quarter of 2007.
Gross Profit.
Gross profit for the quarter ended September 30, 2006 increased to $559,000 from
$436,000 in the comparable 2005 quarterly period, an increase of $123,000, or
28%. This increase is primarily a result of the increase in revenue in the 2006
quarter over that recognized in the third quarter of 2005.
Selling, General and Administrative Expenses.
Selling, general and administrative ("SG&A") expenses for the quarter ended
September 30, 2006 were $1,740,000 compared to $1,317,000 in the second quarter
of 2005, an increase of $423,000, or 32%. Because of the cash constraints
experienced by the Company over the last several years, Elcom has operated with
as few personnel as possible, and certain of its personnel have been compensated
at below market rates. In order to address staffing requirements related to its
increasing level of business activity, the Company engaged third party
contractors during late 2005 and through the beginning of the second quarter of
2006, and began to hire additional personnel in April 2006. The Company's
headcount (full and part-time) has increased by ten, from 36 at September 30,
2005 to 46 at September 30, 2006. The Company's personnel costs increased
$233,000 in the third quarter of 2006 as compared to the third quarter of 2005,
and increased $120,000 over the amounts recorded in the second quarter of 2006.
Personnel expenses recorded in the third quarter of 2006 include $99,000 of
stock option expense related to the initial implementation of SFAS 123R, which
requires the expensing of stock based compensation (stock options), which was
not required in the third quarter of 2005. In addition to the increase in
personnel expenses, the primary reasons for the increase in SG&A expenses in the
third quarter of 2006 as compared to the third quarter of 2005 relate to
additional software licensing, computer supplies and other computer
infrastructure expenses related to the Company's growing business, as well as
increases in legal expenses related to the change in control of the Company.
Increases in travel and marketing expenses in the third quarter of 2006 as
compared to the third quarter of 2005, were generally offset by a reduction in
facilities expenses in the third quarter of 2006 as compared to the third
quarter of 2005, as the Company renegotiated its headquarters lease in the first
quarter of 2006.
Research and Development Expense.
Research and development expense for the quarters ended September 30, 2006 and
2005 were $382,000 and $169,000, respectively, reflecting an increase in the
2006 quarter of $213,000 over the expense recorded in the third quarter of 2005.
The expense in the 2006 quarter primarily relates to ongoing work associated
with improving the data interchange and inbound interface capabilities of the
Company's PECOS technology. Additionally, the increase in research and
development expense in the third quarter of 2006, as compared to the third
quarter of 2005, is due to the increased level of development activity as noted
above, as well as approximately $30,000 of stock-based compensation expense
reflected in the third quarter of 2006, while in the third quarter of 2005
stock-based compensation expense was not recorded. Research and development
expense for the quarter ended June 30, 2006 was $266,000, which increased to
$382,000 in the third quarter of 2006, reflecting increased activities related
to the development of new releases of the Company's products in the third
quarter of 2006. Accordingly, the Company anticipates that research and
development expense will moderate in future quarters.
Operating Loss.
The Company reported an operating loss of $1,563,000 for the quarter ended
September 30, 2006 compared to a loss of $1,050,000 reported in the comparable
quarter of 2005, an increase of $513,000 in the loss reported. This increased
operating loss in the third quarter of 2006 compared to the same quarter in 2005
was primarily due to the increase in SG&A expenses and research and development
expenses in 2006, net of the increase in recorded gross profit.
Interest and Other Income (Expense), Net.
Interest income and other income (expense), net for the quarter ended September
30, 2006 was income of $49,000 versus income of $6,000 in the third quarter of
2005. The increase in income, net in 2006 is primarily related to interest
income earned on the funds raised in December of 2005.
Interest Expense.
Interest expense for the quarter ended September 30, 2006 was $9,000, compared
to $71,000 in the same period of 2005. The third quarter 2006 interest expense
reflects interest related to capital leases, while the third quarter 2005
expense primarily reflects interest on the Company's Convertible Debentures, and
amortization of the related conversion discount. The Debentures converted into
Company common stock in December of 2005.
Net Loss.
The Company's net loss for the quarter ended September 30, 2006 was $1,523,000,
an increase in the loss of $408,000 from the loss recorded in the third quarter
2005 of $1,115,000, as a result of the factors discussed above.
Nine months ended September 30, 2006 compared to the nine months ended September
30, 2005.
Net Revenues.
Net revenues for the nine months ended September 30, 2006 increased to
$2,457,000, from $1,924,000 in the same period of 2005, an increase of $533,000,
or 28%. License, hosting services and other fees increased from $1,484,000 in
the first nine months of 2005, to $2,072,000 in the first nine months of 2006,
an increase of $588,000, or 40%. This increase is primarily due to $245,000 in
non-recurring eMarketplace agent fees related to a terminated agreement, as well
as an increase in the level of customers using the Scottish Executive's
eProcurement Scotl@nd Programme. License, hosting services and other fees
include license fees, hosting services fees, test system fees, supplier fees,
usage fees, and eMarketplace agent and affiliate fees. Professional services
fees decreased by $55,000, to $385,000 in the first nine months of 2006, from
$440,000 in the first nine months of 2005, reflecting a decrease in professional
services revenues related to projects completed in 2005. During the first nine
months of 2006, much of the Company's technical staff was focused on completing
a new version of the Company's PECOS software system (which was released on June
30, 2006), and therefore the time available for other professional services
projects was limited. Professional services revenues reflect implementation fees
of $152,000 for eProcurement Scotland clients that went live in the first nine
months of 2005, and professional services revenues in the first nine months of
2006 reflect implementation fees of $154,000 for eProcurement Scotland clients
that went live in the first nine months of 2006.
Gross Profit.
Gross profit for the nine months ended September 30, 2006 increased to
$2,010,000 from $1,585,000 in the comparable 2005 nine month period, an increase
of $425,000, or 27%. This increase is primarily a result of the increase in
revenue in the first nine months of 2006 over that recognized in the first nine
months of 2005.
Selling, General and Administrative Expenses.
SG&A expenses for the nine months ended September 30, 2006 were $4,874,000
compared to $4,085,000 in the first nine months of 2005, an increase of
$789,000, or 19%. Because of the cash constraints experienced by the Company
over the last several years, Elcom has operated with as few personnel as
possible, and certain of its personnel have been compensated at below market
rates. In order to address staffing requirements related to its increasing level
of business activity, the Company engaged third party contractors during late
2005 and through the beginning of the second quarter of 2006, and began to hire
additional personnel in April 2006. The Company's headcount (full and part-time)
has increased by ten, from 36 at September 30, 2005 to 46 at September 30, 2006.
Therefore, Elcom anticipates that its SG&A expenses will also increase in future
quarters. The Company's personnel costs increased $358,000 the first nine months
of 2006 as compared to the first nine months of 2005, primarily due to an
increase in headcount and $213,000 of stock option expense recorded in the first
nine months of 2006, related to the initial implementation of SFAS 123R which
requires the expensing of stock based compensation (stock options), which was
not required in the first nine months of 2005. In addition to the increase in
personnel expenses, the primary reasons for the increase in SG&A expenses in the
first nine months of 2006, as compared to the first nine months of 2005, relate
to additional software licensing, computer supplies and other computer
infrastructure expenses related to the Company's growing business, as well as
increases in insurance and legal expenses related to the change in control of
the Company. Increases in travel and marketing expenses in the first nine months
of 2006 as compared to the first nine months of 2005, were generally offset by
both a reduction in facilities and professional services expense in the first
nine months of 2006 as compared to the first nine months of 2005, as the Company
renegotiated its headquarters lease in the first quarter of 2006. Due to the
acquisition of various equipment and software in the first nine months of 2006,
the Company anticipates that depreciation and amortization expense will increase
in future periods.
Research and Development Expense.
Research and development expense for the nine months ended September 30, 2006
and 2005 were $978,000 and $510,000, respectively, reflecting an increase in the
first nine months of 2006 of $468,000 over the expense recorded in the first
nine months of 2005. The increase in expense in the first nine months of 2006,
compared to the same nine month period in 2005, was due primarily to an
increased level of work commenced in late 2005, related to new software for
supplier directories, marketplace portals, client sign on, request for quotation
module, interfaces to other software, as well as enhancements to improve the
data interchange, and inbound interface capabilities, and a variety of other
internal enhancements incorporated in a new version of the Company's PECOS
software system released on June 30, 2006. Certain of these items were completed
in the first quarter of 2006, and are primarily related to the Zanzibar
eMarketplace, but will also be included in Elcom's offerings to other customers
and potential customers. In the first nine months of 2006, research and
development expense included approximately $114,000 of third party consulting
expense and $65,000 of stock-based compensation expense, while in the first nine
months of 2005 all expenses were internal and stock-based compensation expense
was not recorded.
Operating Loss.
The Company reported an operating loss of $3,842,000 for the nine months ended
September 30, 2006, compared to a loss of $3,010,000 reported in the first nine
months of 2005, an increase of $832,000 in the loss reported. This increased
operating loss in the first nine months of 2006 compared to the same period of
2005 was primarily due to the increase in SG&A expenses and research and
development expenses in 2006, net of the increase in recorded gross profit.
Interest and Other Income (Expense), Net.
Interest income and other income (expense), net for the first nine months of
2006 was $95,000 versus $6,000 in the first nine months of 2005. The increase in
income, net in 2006 over 2005 is primarily related to interest income earned on
the funds raised in December of 2005.
Interest Expense.
Interest expense for the nine months ended September 30, 2006 was $23,000,
compared to $205,000 in the same period of 2005. The expense for the first nine
months of 2006 reflects interest primarily related to capitalized leases, while
the expense for the first nine months of 2005 primarily reflects interest on the
Company's Convertible Debentures, and amortization of the related conversion
discount. The Debentures converted into Company common stock in December of
2005.
Net Loss.
The Company's net loss for the nine months ended September 30, 2006 was
$3,770,000, an increase in the loss of $561,000 from the loss recorded in the
nine months of 2005 of $3,209,000, as a result of the factors discussed above.
Liquidity and Capital Resources
Net cash used in operating activities for the nine months ended September 30,
2006 was $3,895,000, which is attributable primarily to the Company's net loss
of $3,770,000, together with an increase of $110,000 in prepaid expenses and
decreases in accounts payable and accrued expenses totaling $876,000, which uses
were offset by an increase in deferred revenues totaling $294,000 and non-cash
depreciation, amortization and stock based compensation expenses aggregating
$596,000.
In the U.K., the Company has a small overdraft facility with its bank, which
allows for short-term overdrafts. The largest overdraft in the first nine months
of 2005 was approximately $18,000. The facility is an informal arrangement,
secured by a pledge of U.K. assets. There was no overdraft position during the
first nine months of 2006.
The Company's principal commitments consist of a lease on its headquarters
office facility, capital lease obligations and a long-term software license
payable. The Company will also require ongoing investments in research and
development, and equipment and software in order to further increase operating
revenues and meet the requirements of its customers.
On December 20, 2005, the Company issued a total of 298,582,044 shares of common
stock to investors in the U.K. and listed the shares on the AIM. Elcom raised a
total of $7.9 million, with net proceeds to the Company of $7.7 million. Of the
total raised, approximately $547,000 represented the conversion of non-U.S.
investor loans and related accrued interest. The funds derived from the 2005
issuance of common stock on the AIM are being used to support the Company's
working capital requirements.
On October 23, 2006, the Company agreed to issue a total of 76,336,289 shares of
common stock to investors in the U.K. and listed the shares on the AIM. Elcom
raised a total of $2.5 million, with net proceeds to the Company of
approximately $2.5 million. The funds derived from the 2006 issuance of common
stock on the AIM are being used to support the Company's working capital
requirements.
Risk Factors Relating to Liquidity
The Company's consolidated financial statements as of September 30, 2006 have
been prepared under the assumption that the Company will continue as a going
concern through the third quarter of 2007. The Company's independent registered
public accounting firm, Vitale, Caturano & Company, Ltd., issued a report dated
March 6, 2006 that included an explanatory paragraph referring to the Company's
significant operating losses and expressing substantial doubt in Elcom's ability
to continue as a going concern.
As of September 30, 2006, the Company had approximately $991,000 of cash and
cash equivalents, and has used $3,895,000 of cash in operating activities in the
first nine months of 2006. The Company has incurred $12,882,000 of cumulative
net losses for the twenty-one-month period ended September 30, 2006.
As a result of funds raised via common stock issuances at the end of fiscal 2005
and in October 2006, the Company has substantially improved its financial
position from September 30, 2005. The Company believes it has sufficient
liquidity to fund operations through the second quarter of 2007, however, it
anticipates that it will incur a loss in fiscal 2006 and fiscal 2007, and will
require additional operating revenues in order to achieve profitable operations.
There can be no assurance that the Company will generate additional operating
revenues. If the Company does not generate additional operating revenues, it
will require additional capital investment or debt financing in order to
continue operations.
Factors Affecting Future Performance
A significant portion of the Company's revenues are from hosting services and
associated fees received from Capgemini under a back-to-back contract between
Elcom and Capgemini which essentially mirrors the primary agreement between
Capgemini and the Scottish Executive's eProcurement Scotl@nd Programme, executed
in November 2001. Future revenue under this arrangement is contingent on the
following significant factors: the rate of adoption of the Company's ePurchasing
software system by Public Entities associated with the Scottish Executive;
renewal by existing Public Entity clients associated with the Scottish Executive
of their rights to use the ePurchasing software system; the procurement of
additional services from the Company by Public Entities associated with the
Scottish Executive; Capgemini's relationship with the Scottish Executive; their
compliance with the terms and conditions of their agreement with the Scottish
Executive; and the ability of the Company to perform under its agreement with
Capgemini.
In addition, the Company intends to continue to commit resources to provide the
eProcurement and eMarketplace components of the Zanzibar eMarketplace for public
sector organizations in the U.K. under its agreements with PASSL and PA. Future
revenue under this arrangement is contingent primarily on the timing and rate of
adoption by U.K. Public Entities of the Zanzibar eMarketplace, as well as the
timing and level of costs incurred to develop the required infrastructure to
support the architecture of the Zanzibar eMarketplace, stage one (of three
stages) of which was accepted in February 2006, and the ability of the
consortium, as a whole, to operate on a profitable basis. The Company has not
recognized any revenues under this arrangement through September 30, 2006 due to
the limited use of the system, and there is no guarantee of future revenue
related to this agreement.
In early October 2006, U.S. Bank officially launched U.S. Bank Access (R)
Purchase using the Company's software in combination with the bank's commercial
credit card program. The program is aimed at the medium and larger company
segment of U.S. Bank's commercial card customers. In this arrangement, the
Company expects to earn agent or affiliate fees based on the purchases that are
processed through the eMarketplace
If further business fails to develop under the Capgemini agreement or if the
Zanzibar eMarketplace does not attract a profitable level of clients, or if the
U.S. eMarketplaces do not expand as expected, or if the U.S. Bank relationship
does not generate revenues as planned, or if the Company is unable to perform
under any of these agreements, it would have a material adverse affect on the
Company's future financial results.
Outlook
As evidenced by the level of SG&A expenses, research and development expenses,
and cost of revenues, the Company's expenditures in 2006 have begun to increase
as compared to 2005 in order to more properly staff the Company to address the
increased level of its business and expected further increases. The Company
expects that its expenses will continue to increase, although at a moderating
rate, as described above. Accordingly, the Company expects that its operating
loss will continue through 2006. Improvements in revenues and operating results
from operations in future periods will not occur without the Company being able
to generate incremental, ongoing operating revenues from existing and new
clients. The Company believes it has sufficient liquidity to fund operations
through the second quarter of 2007; however, it anticipates that it will incur a
loss in fiscal 2006, and will require additional, ongoing operating revenues in
order to achieve profitable operations. If the Company is unable to generate
incremental, ongoing operating revenues before the end of the second quarter of
2007, it will require additional capital investment or debt financing in order
to continue operations. The Company can make no assurance that it will be able
to raise additional capital or arrange a credit facility in the event its
capital resources are exhausted.
STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
Except for the historical information contained herein, the matters discussed in
this press release could include forward-looking statements or information. All
statements, other than statements of historical fact, including, without
limitation, those with respect to the Company's objectives, plans and strategies
set forth herein and those preceded by or that include the words "believes,"
"expects," "targets," "intends," "anticipates," "plans," or similar expressions,
are forward-looking statements. Although the Company believes that such
forward-looking statements are reasonable, it can give no assurance that the
Company's expectations are, or will be, correct. These forward-looking
statements involve a number of risks and uncertainties which could cause the
Company's future results to differ materially from those anticipated, including:
(i) the necessity for the Company to control its expenses as well as to generate
incremental, ongoing operating revenues and whether this objective can be met
given the overall marketplace and clients' acceptance and usage of eCommerce
software systems, eProcurement and eMarketplace solutions including corporate
demand therefore, the impact of competitive technologies, products and pricing,
particularly given the substantially larger size and scale of certain
competitors and potential competitors; (ii) the consequent results of operations
given the aforementioned factors; and (iii) the necessity of the Company to
achieve profitable operations within the constraints of its existing resources,
and if it can not, the availability of incremental capital funding to the
Company, particularly in light of the audit opinion from the Company's
independent registered public accounting firm in the Company's 2005 Annual
Report on Form 10-KSB, as amended, and other risks detailed from time to time in
this Quarterly Report on Form 10-QSB and in its other SEC reports and
statements, including particularly the Company's "Risk Factors" contained in the
prospectus included as part of the Company's Registration Statement on Form S-3
filed on June 21, 2002. The Company assumes no obligation to update any of the
information contained or referenced in this press release.
The financial data set forth below should be read in conjunction with the
Consolidated Financial Statements and other disclosures contained in the
Company's 2005 Annual Report on Form 10-K, as amended and Forms 10-QSB for the
periods ended March 31, June 30, and September 30, 2006.
ELCOM INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
September 30, December 31,
2006 2005
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 991 $ 6,399
Accounts receivable:
Trade 561 548
Less-Allowance for doubtful accounts 48 45
Accounts receivable, net 513 503
------- -------
Prepaid expenses and other current assets 229 119
------- -------
Total current assets 1,733 7,021
------- -------
PROPERTY, EQUIPMENT AND SOFTWARE, AT COST:
Computer hardware and software 21,272 20,675
Furniture, equipment and leasehold improvements 3,088 3,088
------- -------
24,360 23,763
Less -- Accumulated depreciation and amortization 23,326 23,020
------- -------
1,034 743
------- -------
OTHER ASSETS 14 10
------- -------
Total assets 2,781 $ 7,774
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of capital lease obligations $ 114 $ 27
Related party convertible loan payable - 120
Convertible loans payable - 1,179
Accounts payable 369 547
Deferred revenue 839 545
Related party accrued salary, bonuses and
interest 1,073 1,163
Accrued expenses and other current liabilities 1,044 2,483
Current liabilities of discontinued operations 43 62
------ ------
Total current liabilities 3,482 6,126
------ ------
CAPITAL LEASE OBLIGATIONS, NET OF CURRENT
PORTION 194 -
OTHER LONG TERM LIABILITY 324 423
------ -----
Total liabilities 4,000 6,549
====== ======
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value; - -
Authorized -- 10,000,000 shares
Issued and outstanding - none
Common stock, $.01 par value; 4,026 3,992
Authorized - 700,000,000 shares
Issued - 402,611,152 and 399,152,859 shares
Additional paid-in capital 126,364 125,263
Accumulated deficit (126,252) (122,483)
Treasury stock, at cost -- 530,709 shares (4,712) (4,712)
Accumulated other comprehensive loss (645) (835)
Total stockholders' equity (deficit) (1,219) 1,225
------- -------
$ 2,781 $ 7,774
======= =======
CONSOLIDATED STATEMENTS OF OPERATIONS
AND OTHER COMPREHENSIVE INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30 September 30,
-------------- ---------------
2006 2005 2006 2005
---- ---- ---- ----
Net Revenues:
License, hosting services and
other fees $636 $505 $2,072 $1,484
Professional services 47 42 385 440
---- ---- ----- -----
Total net revenues 683 547 2,457 1,924
Cost of revenues 124 111 447 339
---- ---- ----- -----
Gross profit 559 436 2,010 1,585
---- ---- ----- -----
Operating Expenses:
Selling, general and
administrative 1,740 1,317 4,874 4,085
Research and development 382 169 978 510
----- ----- ----- -----
Total operating expenses 2,122 1,486 5,852 4,595
----- ----- ----- -----
Operating loss (1,563) (1,050) (3,842) (3,010)
Interest and other income
(expense), net 49 6 95 6
Interest expense (9) (71) (23) (205)
----- ------ ------ ------
Net loss before income taxes (1,523) (1,115) (3,770) (3,209)
Income taxes - - - -
----- ------ ------ ------
Net loss (1,523) (1,115) (3,770) (3,209)
Other comprehensive income, net
of tax 37 14 190 39
----- ------ ------ ------
Comprehensive loss $(1,486) $(1,101) $(3,580) $(3,170)
===== ====== ====== ======
Basic and diluted net loss per
share $ (-) $(0.02) $(0.01) $(0.05)
===== ====== ====== ======
Weighted average number of basic
and diluted shares outstanding 402,080 61,282 401,396 61,282
======= ======= ======= ======
ELCOM INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
September 30,
---------------
2006 2005
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,770) $(3,209)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 291 350
Stock based compensation 305 -
Deferred rent expense - 304
Provisions for doubtful accounts receivable 1 2
Changes in current assets and liabilities:
Accounts receivable, net (11) 108
Prepaid expenses and other current assets (110) (130)
Accounts payable (178) 269
Deferred revenue 294 114
Accrued expenses and other current liabilities (698) 1,148
----- -----
Net cash used in continuing operating activities (3,876) (1,044)
Net cash (used in) provided by discontinued operations (19) 6
------ -----
Net cash used in operating activities (3,895) (1,038)
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, equipment and software (228) (3)
Change in other assets (4) (20)
------ ------
Net cash used in investing activities (232) (23)
------- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans payable - 936
Repayments of loans payable (1,299) -
Repayments of capital lease obligations (72) (22)
Decrease in other long term liability (99) (90)
------ ------
Net cash provided by (used in) financing activities (1,470) 824
------ ------
FOREIGN EXCHANGE EFFECT ON CASH 189 34
------ ------
NET DECREASE IN CASH AND CASH EQUIVALENTS (5,408) (203)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 6,399 390
------ ------
CASH AND CASH EQUIVALENTS, END OF PERIOD $991 $187
====== ======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $37 $9
====== ======
Income taxes paid $ - $ -
====== ======
Issuance of common stock in satisfaction of deferred rent $250 $ -
====== ======
Acquisition of equipment under capital leases $353 $ -
====== ======
Cost of capital reduction $580 $ -
====== ======
This information is provided by RNS
The company news service from the London Stock Exchange
END
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