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Share Name | Share Symbol | Market | Type |
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AMEX:COVR | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.95 | 0 | 01:00:00 |
Cover-All Technologies Inc. (NYSE MKT: COVR) today announced financial results for the quarter and year ended December 31, 2014.
“While total revenues were flat compared to last year’s record revenues, profitability improved significantly to $0.4 million for 2014 from a net loss of $2.9 million last year,” said Manish Shah, CEO and President of Cover-All. “Profitability would have been even higher had it not been for $0.4 million of expenses we incurred during the 2014 fourth quarter as a result of the proposed merger with Majesco we announced on December 14, 2014. Improvements to profitability and prudent cash management meaningfully improved our liquidity and balance sheet, and at December 31, 2014 the Company’s cash position increased nearly 150% to $4.6 million.
“We reported record professional services revenue in 2014 driven by implementations of last year’s licensing sales. Throughout 2014, we successfully completed several implementation phases and helped five customers go live with their Cover-All products. Successful and rapid implementations are critically important as we work on achieving the next cycle of licensing sales. Strong demand for professional services continues to increase as a result of ongoing implementation projects, as well as the next rounds of recently completed implementations at existing customers. We expect demand for professional services to remain strong throughout 2015. Cover-All’s ability to implement our software quickly and cost effectively increases our value proposition to potential customers and enhances our credibility within the industry.
“The other significant milestone of 2014 was the December 14 merger announcement with Majesco. This is a transformative opportunity for Cover-All’s shareholders, employees and customers. The merger should improve our competitiveness as there are a limited amount of vendors in the marketplace today that will compare to the combined company’s proven and comprehensive solutions. We are excited about this opportunity, which accelerates the creation of shareholder value through what we expect to be faster and more consistent growth. Majesco is expected to file a registration statement on Form S-4 on February 19, 2015 and we look forward to providing more details on the proposed merger in our conference call and webcast today.”
FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED DECEMBER 31, 2014
Revenue
GAAP Profitability
Non-GAAP* Profitability
Balance Sheet
FINANCIAL HIGHLIGHTS FOR THE FOURTH QUARTER ENDED DECEMBER 31, 2014
Revenue
GAAP Profitability
Non-GAAP* Profitability
WEBCAST, CONFERENCE CALL AND PRESENTATION INFORMATION
Management of Cover-All and Majesco will conduct a live teleconference to discuss Cover-All’s 2014 financial results and provide investors an update on the proposed merger at 4:30 p.m. EST on Thursday, February 19, 2015. Anyone interested in participating should call 888-397-5352 if calling from the U.S., or 719-457-2645 if dialing internationally. A replay will be available until March 5, 2015, which can be accessed by dialing 877-870-5176 within the U.S. and 858-384-5517 if dialing internationally. Please use passcode 9018125 to access the replay.
In addition, the call will be webcast and will be available on the Company’s website at www.cover-all.com or by visiting http://public.viavid.com/index.php?id=113019. During the webcast, management will be using a presentation which is accessible using the webcast link above. The presentation will also be available on Cover-All’s website.
FORWARD-LOOKING STATEMENTS
Statements in this press release, other than statements of historical information, are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks which may cause the Company’s actual results in future periods to differ materially from expected results. Those risks include, among others, risks associated with increased competition, customer decisions, the successful completion of continuing development of new products, the successful negotiations, execution and implementation of anticipated new software contracts, the successful implementation of our acquisition strategies and our ability to complete or integrate acquisitions, the successful addition of personnel in the marketing and technical areas, our ability to complete development and sell and license our products at prices which result in sufficient revenues to realize profits and other business factors beyond the Company’s control. Those and other risks are described in the Company’s filings with the Securities and Exchange Commission (“SEC”) over the last 12 months, including but not limited to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 28, 2014, copies of which are available from the SEC or may be obtained upon request from the Company.
*ABOUT NON-GAAP FINANCIAL MEASURES
In evaluating its business, Cover-All considers and uses EBITDA as a supplemental measure of its operating performance. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. The Company presents EBITDA because it believes it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance.
The term EBITDA is not defined under U.S. generally accepted accounting principles (“GAAP”) and is not a measure of operating income, operating performance or liquidity presented in accordance with GAAP. EBITDA has limitations as an analytical tool, and when assessing the Company’s operating performance, investors should not consider EBITDA in isolation or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with GAAP. Among other things, EBITDA does not reflect the Company’s actual cash expenditures. Other companies may calculate similar measures differently than Cover-All, limiting their usefulness as comparative tools. Cover-All compensates for these limitations by relying on its GAAP results and using EBITDA only supplementally.
ABOUT COVER-ALL TECHNOLOGIES INC.
Cover-All provides property and casualty insurance professionals a robust state-of-the-art, browser-based family of Policy, Business Intelligence, and Claims solutions designed to deliver products to market faster, enhance quality, ensure compliance, and reduce costs. With offices in Morristown, NJ and Honolulu, HI, Cover-All continues its tradition of developing technology solutions designed to revolutionize the way property and casualty insurance business is conducted.
Additional information is available online at www.cover-all.com.
Cover-All Technologies Inc. and Subsidiaries CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) Three months endedDecember 31,
Year endedDecember 31,
2014 2013 2014 2013 Revenues:Licenses
$ 33,517 $ 598,903 $ 1,101,231 $ 5,947,225 Support Services 2,033,963 2,140,902 8,427,649 8,147,108 Professional Services 3,198,415 1,794,486 10,949,550 6,388,403 Total Revenues 5,265,895 4,534,291 20,478,430 20,482,736 Cost of Revenues: Licenses—
80,363—
147,670 Support Services 1,420,814 1,209,675 6,049,385 7,089,456 Professional Services 1,396,319 1,173,160 5,015,313 3,499,100 Total Cost of Revenues 2,817,133 2,463,198 11,064,698 10,736,226 Direct Margin 2,448,762 2,071,093 9,413,732 9,746,510 Operating Expenses: Sales and Marketing 442,911 480,759 2,002,036 2,255,059 General and Administrative 1,376,891 1,060,218 3,603,553 2,618,543 Amortization of Capital Software 372,638 1,186,659 1,490,552 4,646,443 Acquisition Costs 406,298—
406,298—
Restructuring Cost—
—
—
319,014 Research and Development 327,844 681,587 1,130,070 2,315,198 Total Operating Expenses 2,926,582 3,409,223 8,632,509 12,154,257 Operating (Loss) Income (477,820 ) (1,338,130 ) 781,223 (2,407,747 ) Other (Income) Expense: Interest Expense 76,407 188,251 362,256 464,071 Interest Income—
—
—
—
Other Income—
—
—
(3,821 ) Total Other (Income) Expense 76,407 188,251 362,256 460,250 (Loss) Income Before Income Taxes (554,227 ) (1,526,381 ) 418,967 (2,867,997 ) Income Taxes 6,001 11,914 52,479 30,380 Net (Loss) Income $ (560,228 ) $ (1,538,295 ) $ 366,488 $ (2,898,377 ) Basic Earnings (Loss) Per Common Share $ (0.02 ) $ (0.06 ) $ 0.01 $ (0.11 ) Diluted Earnings (Loss) Per Common Share $ (0.02 ) $ (0.06 ) $ 0.01 $ (0.11 ) Weighted Average Number of Common Shares Outstanding for Basic Earnings (Loss) Per Common Share 26,628,000 26,348,000 26,628,000 26,173,000 Weighted Average Number of Common Shares Outstanding for Diluted Earnings (Loss) Per Common Share 26,628,000 26,348,000 26,628,000 26,173,000 Cover-All Technologies Inc. and Subsidiaries CONSOLIDATED BALANCE SHEET (UNAUDITED) December 31,2014
December 31,2013
Assets: Current Assets: Cash and Cash Equivalents $ 4,564,595 $ 1,848,571Accounts Receivable (Less Allowance for Doubtful Accounts of $25,000)
2,532,853 2,604,489 Prepaid Expenses 361,930 491,905 Deferred Tax Asset 864,037 850,500 Total Current Assets 8,323,415 5,795,465 Property and Equipment – Net 499,639 708,590 Goodwill 1,039,114 1,039,114 Capitalized Software (Less Accumulated Amortization of $23,795,743 and $22,305,191, Respectively) 6,474,031 7,964,583Customer Lists/Relationships (Less Accumulated Amortization of $402,000 and $341,333, Respectively)
—
60,667 Deferred Tax Asset 2,661,391 2,674,928Deferred Financing Costs (Net of Amortization of $67,000 and $36,082, Respectively)
24,483 56,201 Other Assets 148,290 424,522 Total Assets $ 19,170,363 $ 18,724,070 Liabilities and Stockholders’ Equity: Current Liabilities: Accounts Payable $ 1,413,353 $ 1,059,238 Accrued Expenses Payable 1,253,298 1,412,400 Deferred Charges 183,219 231,051 Short-Term Debt 1,842,780—
Current Portion of Capital Lease 119,608 114,640 Deferred Revenue 2,454,435 2,997,455 Total Current Liabilities 7,266,693 5,814,784 Long-Term Liabilities: Long-Term Debt—
1,639,109 Long-Term Portion of Capital Lease 233,531 353,139 Total Long Term Liabilities 233,531 1,992,248 Total Liabilities 7,500,224 7,807,032 Commitments and Contingencies—
—
Stockholders’ Equity: Common Stock, $.01 Par Value, Authorized 75,000,000 Shares;26,786,693 and 26,402,227 Shares Issued and Outstanding in 2014 and 2013, Respectively 267,867 264,022 Paid-In Capital 33,057,142 32,674,374 Accumulated Deficit (21,654,870 ) (22,021,358 ) Total Stockholders’ Equity 11,670,139 10,917,038 Total Liabilities and Stockholders’ Equity $ 19,170,363 $ 18,724,070 Cover-All Technologies Inc. and Subsidiaries RECONCILIATION OF U.S. GAAP NET (LOSS) INCOME TO EBITDA (UNAUDITED) Three months endedDecember 31,
Year endedDecember 31,
2014 2013 2014 2013 Net (Loss) Income $ (560,228 ) $ (1,538,295 ) $ 366,488 $ (2,898,377 ) Interest Expense, Net 76,406 188,252 362,256 464,072 Income Tax Expense 6,001 11,913 52,479 30,379 Depreciation 49,317 63,218 229,540 251,853 Amortization 396,086 1,209,192 1,582,938 4,755,896 EBITDA $ (32,418 ) $ (65,720 ) $ 2,593,701 $ 2,603,823 EBITDA per Common Share: Basic $ (0.00 $ (0.00 ) $ 0.10 $ 0.10 Diluted $ (0.00 $ (0.00 ) $ 0.10 $ 0.10 RECONCILIATION OF SELECTED U.S. GAAP MEASURES TO NON U.S. GAAP MEASURES (UNAUDITED) Three months endedDecember 31,
Year endedDecember 31,
2014 2013 2014 2013 Net Income (Loss) (U.S. GAAP) $ (560,228 ) $ (1,538,295 ) $ 366,488 $ (2,898,377 ) Acquisition Costs 406,298 — 406,298 — Restructuring Costs — — — 319,014 Net Income (Loss) (Excluding Acquisition and Restructuring Costs) (Non U.S. GAAP)$
(153,930
)
$
(1,538,295
)
$
772,786
$
(2,579,363
)
Earnings (Loss) per Common Share (Excluding Acquisition and Restructuring Costs): Basic $ (0.01 ) $ (0.06 ) $ 0.03 $ (0.10 ) Diluted $ (0.01 ) $ (0.06 ) $ 0.03 $ (0.10 ) Three months endedDecember 31,
Year endedDecember 31,
2014 2013 2014 2013 EBITDA $ (32,418 ) $ (65,720 ) $ 2,593,701 $ 2,603,823 Acquisition Costs 406,298 — 406,298 — Restructuring Costs — — — 319,014 EBITDA (Excluding Acquisition and Restructuring Costs) $ 373,880 $ (65,720 ) $ 2,999,999 $ 2,922,837 EBITDA per Common Share (Excluding Acquisition and Restructuring Costs): Basic $ 0.01 $ (0.00 ) $ 0.11 $ 0.11 Diluted $ 0.01 $ (0.00 ) $ 0.11 $ 0.11
Corporate ContactCover-All Technologies Inc.Ann Massey, 973-461-5190Chief Financial Officeramassey@cover-all.comorInvestor & Media ContactSM Berger & CoAndrew Berger, 216-464-6400andrew@smberger.com
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