US Dataworks Reports Fiscal 2006 First Quarter Results

US Dataworks Reports Fiscal 2006 First Quarter Results 


HOUSTON, Aug. 2  /PRNewswire-FirstCall/ -- US Dataworks (AMEX:UDW), a leading developer of payment processing solutions, today announced financial results for the first quarter of fiscal 2006.

Revenues for the fiscal 2006 first quarter were $1.1 million compared to revenues of $903,132 for the same period a year ago.  Operating loss for the first quarter was $939,962 compared to an operating loss of $957,035 for the first quarter of fiscal 2004.  Net loss for the first quarter was $968,800, or $0.03 per share, compared to a net loss of $1.4 million, or $0.05 per share, for the corresponding period in the prior year.

"We are pleased to report year over year growth in revenues and, in particular, marked improvement in revenues over our recent fourth quarter of 2005 results," stated Charles E. Ramey, CEO of US Dataworks.  "We are also pleased to have recently announced that we have exceeded the one billion (1,000,000,000) transaction threshold using our Clearingworks(TM) payment platform and remain confident about our growth opportunities over the next several years as the electronification(SM) of payment processing increases.

"Additionally, we have added several new brand name accounts and believe our Clearingworks product suite is being embraced, embedded and standardized into the fabric of some of the world's name brand financial institutions."

FY 2006 OUTLOOK

The following statements are based on current expectations.  These statements are forward-looking and actual results may differ materially.

US Dataworks expects revenues for the second quarter of fiscal 2006 to range from $1.5 million to $1.6 million and loss per share to be approximately $(0.01) to $(0.02).  For the full fiscal year ending March 31, 2006, the company continues to expect revenues to range from $4.8 million to $5.3 million and loss per share to be between ($0.10) and ($0.12) excluding any one-time charges.

CONFERENCE CALL

US Dataworks has scheduled a conference call for today, August 2, 2005 at 9:00 a.m. EDT.  To participate in the conference call, dial 303-262-2140 at least ten minutes before the call begins and ask for the US Dataworks conference call.  A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until August 9, 2005.  To access the replay, dial [phone] using a pass code of 11036766.

Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting http://www.usdataworks.com/ .  To listen to the live call on the web, please visit the company's web site at least fifteen minutes before the call begins to register, download and install any necessary audio software.  For those who cannot listen to the live web cast, an archive will be available shortly after the call.

ABOUT US DATAWORKS

US Dataworks is a developer of payment processing solutions, focused on the Financial Services market, Federal, State and local governments, billers and retailers.  Software developed by US Dataworks is designed to enable organizations to transition from traditional paper-based payment and billing processes to electronic solutions that automate end-to-end processes for accepting and clearing checks.

Except for the historical information contained herein, the matters set forth in this press release, including, but not limited to the extent to which the Company's balance sheet has been strengthened, leadership in the ARC market has been captured and efforts toward profitability have been continued and the increasing of our efforts toward capturing further market share in ARC, Check-21 and other electronic payment processing solutions are forward- looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, but not limited to, the Company's position in the marketplace, our ability to develop and timely introduce products that address market demand, the impact of alternative technological advances and competitive products, market fluctuations, our ability to obtain future financing and other risks detailed from time to time in the SEC reports of US Dataworks, Inc., including its annual report on Form 10-KSB/A for the period ended March 31, 2004.  These forward-looking statements speak only as of the date hereof.  US Dataworks disclaims any obligation to update these forward-looking statements.

                         STATEMENTS OF OPERATIONS
                               (UNAUDITED)

                                                  For the Three Months Ended
                                                            June 30,
                                                       2005         2004
  Revenues
    Software licensing revenues                      $299,120     $347,716
    Software transactional revenues                   181,243      129,652
    Software maintenance revenues                      92,326       31,739
    Professional service revenues                     507,650      394,025
      Total revenues                                1,080,339      903,132

  Cost of sales                                       377,501      316,136
    Gross profit                                      702,838      586,996

  Operating expenses
    General and administrative                      1,554,275    1,469,905
    Depreciation and amortization                      88,525       74,126
      Total operating expense                       1,642,800    1,544,031

  Loss from operations                               (939,962)    (957,035)

  Other income (expense)
    Financing costs                                       ---     (322,451)
    Interest expense                                  (35,637)    (116,521)

  Other income (expense)                                6,799        6,460
      Total other income (expense)                    (28,838)    (432,512)

  Loss before provision for income taxes             (968,800)  (1,389,547)

  Provision for income taxes                              ---          ---

  Net Loss                                          $(968,800) $(1,389,547)

  Basic and diluted loss per share
      Total basic and diluted loss per share           $(0.03)      $(0.05)
  Basic and diluted weighted-average shares
   outstanding                                     28,972,005   25,509,912



                              BALANCE SHEET
                              June 30, 2005
                               (UNAUDITED)

                                  ASSETS
  Current assets
    Cash and cash equivalents                                   $1,769,273
    Accounts receivable, net of allowance for doubtful
     accounts of $0                                                752,959
    Prepaid expenses and other current assets                      169,333
      Total current assets                                       2,691,565
  Property and equipment, net                                      629,736
  Goodwill, net                                                 14,133,629
  Other assets                                                      43,792
        Total Assets                                           $17,498,722

                   LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities
    Note payable-related party                                     $39,000
    Deferred revenue                                               195,702
    Accounts payable                                               309,338
    Accrued expenses                                               344,483
    Interest payable                                                60,877
    Current portion of convertible notes payable,
     net of unamortized discount of $314,484                        95,582
      Total current liabilities                                  1,044,982
    Long-term portion of convertible notes payable,
     net of unamortized discount of $327,596                       800,537
    Deferred revenue                                                25,021
    Deferred compensation                                            2,022
      Total liabilities                                          1,872,562
  Commitments
  Shareholders' equity
    Convertible Series B preferred stock, $0.0001 par value
      700,000 shares authorized, 549,667 shares issued and
       outstanding, $0.75 liquidation preference,
       dividends of $179,805 in arrears                                 55
    Common stock, $0.0001 par value
      90,000,000 shares authorized and 30,037,020 shares
       issued and outstanding                                        3,004
    Additional paid-in capital                                  62,885,019
    Deferred compensation                                             (937)
    Accumulated deficit                                        (47,260,981)
      Total shareholders' equity                                15,626,160
        Total Liabilities and Shareholders' Equity             $17,498,722


   Contacts:
   John Reiland, CFO
   US Dataworks, Inc.
   [phone]
   http://www.usdataworks.com/

   Ken Dennard, Managing Partner
   Karen Roan, Sr. Vice President
   DRG&E   [phone]


DATASOURCE: US Dataworks, Inc.



CONTACT:  John Reiland, CFO of US Dataworks, Inc., [phone]; or

Ken Dennard, Managing Partner, or Karen Roan, Sr. Vice President, both of

DRG&E, [phone], for US Dataworks, Inc.



Web site:  http://www.usdataworks.com/ 

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