US Dataworks (AMEX:UDW)
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Profitability Milestone and Record Revenues Achieved; Raises Revenue and Earnings Guidance
HOUSTON, Oct. 27 /PRNewswire-FirstCall/ -- US Dataworks (AMEX:UDW), a leading developer of payment processing solutions, today announced financial results for its fiscal 2006 second quarter ended September 30, 2005.
Revenues for the fiscal 2006 second quarter were $2,732,000 compared with revenues of $610,000 for the same period a year ago. Income from operations for the quarter was $886,000 compared to a loss from operations of $1,168,000 for the quarter ended September 30, 2004. Net income for the second quarter was $791,000 or $0.03 per share, compared to a net loss of $2,302,000 or $0.09 per share, for the corresponding period in the prior year. The net loss for last year's second quarter included a non-recurring, non-cash charge of $1,000,000 in connection with management's estimates of costs necessary to settle a lawsuit filed by an investor. This lawsuit was settled in November 2004.
Revenues for the second quarter in the current fiscal year 2006 include approximately $2,028,000 of license revenue and professional service revenues attributable to a previously announced integrated license, maintenance and services agreement with one of the nation's largest financial services companies. In accordance with generally accepted accounting principles, revenues attributable to this integrated contract are being recorded on a percentage-of-completion basis.
"We are pleased to report record quarterly revenues and our first profitable quarter of operations," stated Charles E. Ramey, CEO of US Dataworks. "These financial results are a result of the outstanding work performed by our dedicated staff of professionals over the last 2 years in conceiving and bringing Clearingworks(TM) to market. Customers are now confirming the fact that Clearingworks offers unmatched value and performance in payment processing. We believe the ability of Clearingworks to process all payments including mailed remittances, Internet payments, telephone payments and transactions captured at worldwide remote offices will drive customers to select us as a single-source provider.
"We are also encouraged by the recent progress attained in ongoing discussions with retailers and potential strategic partners serving the retail market. Our recently released white paper (http://www.usdataworks.com/whitepapers/boc_whitepaper.html ) shows that Electronification(SR) of payment processes in the retail space yields compelling cost savings. We are optimistic of our abilities to capitalize on significant revenue growth opportunities in this very important vertical," concluded Ramey.
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 third quarter of fiscal 2006 to range from $1.4 million to $1.6 million and loss per share to be approximately $(0.01). For the full fiscal year ending March 31, 2006, the company is raising guidance and expect revenues to range from $6.2 million to $6.7 million and loss per share to be between ($0.02) and ($0.03) excluding any one-time charges.
CONFERENCE CALL
US Dataworks has scheduled a conference call for today, October 27, 2005 at 5:00 p.m. eastern time. To participate in the conference call, dial (303) 262-2138 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 November 6, 2005. To access the replay, dial (303) 590-3000 using a pass code of 11042549.
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 Company's leadership in the payment processing software market and the increasing of our efforts toward capturing further market share in the retail space 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, 2005 and its quarterly report on Form 10-QSB for the period ended June 30, 2005. These forward-looking statements speak only as of the date hereof. US Dataworks disclaims any obligation to update these forward-looking statements.
- Tables to Follow -
STATEMENTS OF OPERATIONS
For the Three and Six Months Ended September 30, 2005 and 2004
(UNAUDITED)
For the Three For the Six
Months Ended Months Ended
September 30, September 30,
2005 2004 2005 2004
Revenues
Software licensing
revenues $1,451,800 $153,016 $1,750,920 $500,732
Software transactional
revenues 231,361 158,052 412,604 287,704
Software maintenance
revenues 134,566 140,486 226,892 172,225
Professional service
revenues 914,566 158,280 1,422,216 552,305
Total revenues 2,732,293 609,834 3,812,632 1,512,966
Cost of sales 405,355 202,512 782,856 518,648
Gross profit 2,326,938 407,322 3,029,776 994,318
Operating expenses
General and
administrative 1,351,247 1,493,420 2,905,522 2,963,323
Depreciation and
amortization 89,957 81,646 178,482 155,772
Total operating expense 1,441,204 1,575,066 3,084,004 3,119,095
Income (loss) from operations 885,734 (1,167,744) (54,228) (2,124,777)
Other income (expense)
Financing costs (76,658) (97,451) (88,362) (419,903)
Interest expense (27,605) (48,435) (51,538) (164,956)
Accrued costs of
litigation settlement --- (1,000,000) --- (1,000,000)
Other income (expense) 9,419 11,228 16,218 17,687
Total other income
(expense) (94,844) (1,134,658) (123,682) (1,567,172)
Income (loss) before
provision for income taxes 790,890 (2,302,402) (177,910) (3,691,949)
Provision for income taxes --- --- --- ---
Net income (loss) $790,890 $(2,302,402) $(177,910)$(3,691,949)
Basic and diluted earnings
(loss) per share
Total basic and diluted
earnings (loss)
per share $0.03 $(0.09) $(0.01) $(0.14)
Basic and diluted weighted-
average shares
outstanding 30,037,020 26,852,288 29,369,865 26,184,768
BALANCE SHEET
September 30, 2005
(UNAUDITED)
ASSETS
Current assets
Cash and cash equivalents $ 1,253,853
Accounts receivable, net of allowance for
doubtful accounts of $0 927,411
Costs and estimated earnings in excess
of billings on uncompleted contracts 880,800
Prepaid expenses and other current assets 336,422
Total current assets 3,398,486
Property and equipment, net 571,116
Goodwill, net 14,133,629
Other assets 43,792
Total Assets $18,147,023
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Note payable- related party $ 39,000
Deferred revenue 250,519
Accounts payable 163,732
Accrued expenses 263,230
Interest payable 3,262
Current portion of convertible notes
payable, net of unamortized discount of $464,693 201,440
Total current liabilities 921,183
Long-term portion of convertible notes payable,
net of unamortized discount of $298,329 573,737
Deferred revenue 16,690
Total liabilities 1,511,610
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 $190,201 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 63,102,445
Accumulated deficit (46,470,091)
Total shareholders' equity 16,635,413
Total Liabilities and Shareholders' Equity $18,147,023
Contacts:
John Reiland, CFO
John Figone, VP-Business Development
US Dataworks, Inc.
(713) 934-3855
http://www.usdataworks.com/
Ken Dennard, Managing Partner
DRG&E (713) 529-6600
DATASOURCE: US Dataworks, Inc.
CONTACT: John Reiland, CFO, or John Figone, VP-Business Development,
both of US Dataworks, Inc., +1-713-934-3855; or Ken Dennard, Managing Partner
of DRG&E, +1-713-529-6600, or , for US Dataworks, Inc.
Web site: http://www.usdataworks.com/
http://www.usdataworks.com/whitepapers/boc_whitepaper.html