Ace Comm Corp (MM) (NASDAQ:ACEC)
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ACE*COMM Corporation (NASDAQ:ACEC)
Corporate Highlights for the Quarter:
-- Reported revenues of $6.7 million for the quarter - a 43%
increase over same quarter last year - while increasing
backlog to approximately $24 million
-- Launched Network Business Intelligence(TM) product suite - a
new, more comprehensive approach to employing network data to
improve business efficiency
-- Selected by Saudi Telecom to assist their audit group in
analyzing the effectiveness of billing operations
-- Selected by Telecom Egypt to provide a country-wide Service
Activation capability
-- Selected to provide a multi-million dollar data collection and
mediation system for a Tier 1 Eastern European wireline
carrier
-- Added a new, major East Coast university to NetPlus(R)
Enterprise OSS customer list, marking high-profile penetration
of education market vertical
-- Signed a multi-million dollar contract with a national
Southeast Asian carrier for network data collection
-- Announced Market Maker(TM), a network visualization solution
designed to discover prospective new subscriber marketing
opportunities, for cable and wireline operators
-- Increased market exposure to Parent Patrol(TM), a newly
released product that allows parents to control their
children's usage of mobile phones and data services
ACE*COMM Corporation (NASDAQ:ACEC), a global provider of network
business intelligence and advanced operations support systems (OSS)
solutions, today reported financial results for the quarter ended
September 30, 2005, the first quarter of its 2006 fiscal year. The
Company reported revenues of $6.7 million for the quarter, which
compares to $4.7 million for the comparable quarter of fiscal year
2005. Net profit for the quarter was $99 thousand, or a net profit of
$0.01 per share, compared to a net loss of $383 thousand, or a net
loss of $0.03 per share, for same quarter of the prior year. Backlog
in the quarter increased to $23.9 million. The net profit figure for
the quarter reflects costs associated with the recent 2helix
acquisition, and costs of launching the new expanded Network Business
Intelligence(TM) product suite.
"From the above-mentioned corporate highlights for the quarter, I
am pleased to identify some strategic new business wins to start our
2006 fiscal year," said George T. Jimenez, CEO of ACE*COMM. "First, we
extended our already strong presence at Telecom Egypt to provide a
Service Activation system layered on top of the data collection and
mediation platforms previously provided by ACE*COMM and installed by
Giza Systems for that carrier. This is a substantial Tier 1 win for
the ACE*COMM Provisioning Gateway (APG) product. Of additional note
was our new contract with Saudi Telecom that validates both the
concepts underlying our Network Business Intelligence(TM) approach to
OSS integration - which includes technology we acquired from 2helix -
as well as the pricing model we developed for this offering. These
wins, combined with the other new business captured in the quarter,
increased our backlog from the previous quarter and provided some new
optimism about our financial prospects for fiscal 2006."
"We are also excited about the market opportunities for our newest
offerings - Parent Patrol(TM) and other applications we will introduce
under the Network Business Intelligence(TM) (NBI) label," continued
Mr. Jimenez. "We recently commissioned a survey of North American
teens to ascertain their mobile phone usage patterns. The results
underscored a market demand for a product such as Parent Patrol(TM)
and generated extensive mainstream media attention. Parent Patrol(TM),
which service providers can overlay on their existing mobile marketing
plan, allows parents to set restrictions on their children's use of
mobile phones and data services. The value proposition for the
consumer is the ability for parents to easily manage their children's
phone usage in terms of what services can be used, when they can be
used, and what individual telephone numbers can and cannot be
accessed. We are optimistic about the market potential for this
innovative new product launched just this past spring."
"We also recently launched our new, expanded Network Business
Intelligence(TM) platform that is geared specifically to enhancing
service providers' business performance," added Mr. Jimenez. "NBI is
the embodiment of ACE*COMM's vision to create service delivery and
network analysis applications at the network OSS layer that focus on
the telecommunications business, and provide new tools for network
operators to achieve their goals of increasing revenue, improving
profit margins, and improving returns on network asset investment . It
is an integrated, yet open platform for the collection, integration,
interpretation, and utilization of data that is geared toward the
operator taking action, not just doing audits and generating reports.
This suite is designed to address an emerging telecom network operator
demand for business intelligence, and we were pleased to note the
interest we have seen so far in the marketplace."
"We are satisfied with our solid revenue performance for the
quarter and will continue to focus on building our revenue generation
on a global basis," said Steven Delmar, CFO for ACE*COMM. "From an
operational perspective, we are now focused on supporting our new
products, delivering under existing contracts, and working on
increasing the level of profitability."
Annual Shareholder's Meeting
The Company has scheduled its Annual Shareholder's Meeting for
Friday, December 2nd, 10:00 AM, Eastern Standard Time, at ACE*COMM
Corporate headquarters, Gaithersburg, MD.
Earnings Call
ACE*COMM will host an earnings teleconference call this evening,
Thursday, October 27, 2005 at 5:30 pm, Eastern Standard Time, to
discuss the first quarter results. To participate, please call (866)
253-6509. When prompted, enter the ACE*COMM reservation number 795361.
Internet users can hear a simultaneous live Webcast of the
teleconference at http://acecomm.com or http://www.fulldisclosure.com.
A taped replay of the call will be made available from the ACE*COMM
Corporate Web Site after 8:30 pm, on Thursday, October 27, 2005.
About ACE*COMM
ACE*COMM is a global provider of network business intelligence and
advanced operations support systems (OSS) solutions for telecom
service providers and enterprises. ACE*COMM's solutions are applicable
to a range of legacy through next-generation networks that include
wired, wireless, voice, data, multimedia, and Internet communications
networks. These solutions provide the analytical tools required to
extract data from operating networks and correlate it with business
data to produce business intelligence -- insight customers use for
asset recovery and revenue assurance, cost reduction, improved
operational efficiency, acceleration of time-to-market for new
services, and more effective customer care.
For over 20 years, ACE*COMM technology has been effectively
deployed for more than 300 customers, spanning over 4000 installations
in 70 countries worldwide. ACE*COMM-installed products are currently
enabling the success of customers and partners such as Alcatel, AT&T,
Cisco, General Dynamics, IBM, Level 3 Communications, Marconi,
Motorola, Northrop Grumman, Siemens, and Unisys. Headquartered in the
Washington, DC area, ACE*COMM has corporate offices in Australia,
Canada, China, and the UK. ACE*COMM is a registered ISO 9001 quality
standard company. For more information, visit www.acecomm.com.
ACE*COMM, and the ACE*COMM logo are registered trademarks of
ACE*COMM Corporation.
Except for historical information, the matters discussed in this
news release include forward-looking statements that are subject to
certain risks and uncertainties that could cause the actual results to
differ materially from those projected, including, but not limited to:
the failure of anticipated demand to materialize, delays or
cancellations of orders due to various factors, including business and
economic conditions in the U.S. and foreign countries; industry-wide
slowdowns, any limitations on customers' financial resources, the
continued convergence of voice and data networks, the continuing
success of the Company's strategic alliances for product development
and marketing, customer purchasing and budgetary patterns or lack
thereof; pricing pressures and the impact of competitive products; the
timely development and acceptance of new products; the Company's
ability to adequately support its operations, and other risks detailed
from time to time in the Company's Report on Form 10-Q and other
reports filed with the Securities Exchange Commission.
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ACE*COMM CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share amounts)
September 30, June 30,
2005 2005
(unaudited)
------------- ------------
Assets
Current assets:
Cash and cash equivalents $ 1,885 $ 2,683
Accounts receivable, net 6,001 4,870
Inventories, net 792 532
Deferred contract costs 28 85
Prepaid expenses and other 806 601
------------- ------------
Total current assets 9,512 8,771
Property and equipment, net 591 636
Goodwill 1,681 1,681
Acquired intangibles, net 1,837 2,001
Other non-current assets 1,076 478
------------- ------------
Total assets $ 14,697 $ 13,567
============= ============
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings $ 3,180 $ 2,332
Accounts payable 1,218 1,379
Accrued expenses 2,037 1,940
Accrued compensation 782 1,013
Deferred revenue 1,169 1,454
------------- ------------
Total current liabilities 8,386 8,118
Long-term notes payable 35 72
------------- ------------
Total liabilities 8,421 8,190
------------- ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value,
5,000,000 shares authorized,
none issued and outstanding - -
Common stock, $.01 par value, 45,000,000
shares authorized, 17,033,347 and
16,694,330 shares issued and
outstanding 170 167
Additional paid-in capital 35,641 34,808
Other accumulated comprehensive loss (68) (32)
Accumulated deficit (29,467) (29,566)
------------- ------------
Total stockholders' equity 6,276 5,377
------------- ------------
Total liabilities and stockholders'
equity $ 14,697 $ 13,567
============= ============
ACE*COMM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
For the three months ended
September 30,
2005 2004
(unaudited) (unaudited)
------------- ------------
Revenue
Licenses and hardware $ 3,455 $ 2,269
Services 3,230 2,392
------------- ------------
Total revenue 6,685 4,661
Cost of licenses and hardware revenue 1,070 900
Cost of services revenue 1,612 1,245
------------- ------------
Total cost of revenue 2,682 2,145
------------- ------------
Gross profit 4,003 2,516
Selling, general and administrative 2,817 2,341
Research and development 1,037 545
------------- ------------
Income (loss) from operations 149 (370)
Net interest expense 51 -
------------- ------------
Income (loss) before income tax
provision 98 (370)
Income tax (benefit) provision (1) 13
------------- ------------
Net income (loss) $ 99 $ (383)
============= ============
Basic net income (loss) per share $ 0.01 $ (0.03)
============= ============
Diluted net income (loss) per share $ 0.01 $ (0.03)
============= ============
Shares used in computing net income (loss)
per share:
Basic 16,741 13,768
============= ============
Diluted 17,160 13,768
============= ============
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