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AXS-One Reports Financial Results for First Quarter of 2005
RUTHERFORD, N.J., April 27 /PRNewswire-FirstCall/ -- AXS-One Inc. (AMEX:AXO),
a leading provider of Records Compliance Management (RCM) software solutions
today announced its financial results for the first quarter ended March 31,
2005.
Total revenues for the first quarter were $8.1 million, a decrease of 26
percent, compared with revenues of $10.9 million in the first quarter of 2004.
License revenues for the first quarter decreased to $1.0 million from $2.5
million in the first quarter of 2004, and decreased $1.0 million sequentially
when compared with $2.0 million for the fourth quarter of 2004. Records
Compliance Management (RCM) license revenues were $0.5 million, a decrease of
$0.5 million from those reported in the fourth quarter of 2004. Total expenses
increased 9 percent to $11.0 million compared to $10.1 million in the first
quarter of 2004, and remained flat compared with the fourth quarter of 2004.
The increase in expenses resulted from management's ongoing commitment to
enhance sales, marketing and research and development functions related to the
Company's RCM product strategy. The Company reported an operating loss of $3.0
million for the first quarter, resulting in a net loss of $3.2 million, or
$(0.11) per diluted share compared to income from operations and net income of
$0.8 million in the first quarter of last year or $0.03 per diluted share.
"While we are disappointed at our revenue performance for the quarter, we are
also encouraged by the progress made in many areas of our business and remain
optimistic about our ability to grow revenues and return to profitability in
2005," said Bill Lyons, chairman and CEO of AXS-One. "During the first
quarter, despite receiving executive-level approval for new license agreements
from prospects, a number of significant contracts were delayed but not lost.
We expect our expanding distribution channels and deepening qualified prospect
pipeline to help bring more predictability to license revenue in the future.
Furthermore, our qualified pipeline is the largest the company has ever known
in terms of number of opportunities and potential revenue."
Mr. Lyons continued, "We are continuing to aggressively execute against our
strategy of partnering with world class technology vendors to obtain the
necessary credibility and leverage to maximize sales opportunities for our RCM
solutions with Global 2000 customers. Building a top-tier channel required us
to first pass our partners' stringent tests for functionality, scale and
integration. We have successfully completed that phase. We are now in the
second phase of channel development which includes building and rolling out
joint value propositions, training our partners' world-wide sales organizations
and developing joint marketing activities. This is an ongoing initiative, but
one in which we have already made great progress. Our partner pipeline is
growing weekly with prospects in all stages of the sales process and we expect
to realize the results of these efforts in the upcoming months."
Mr. Lyons concluded, "We also believe that our professional services business
is back on track. With the March release of our new Enterprise Financials 9.0
-- Compliance Edition, our Enterprise Financials professional services
engagement backlog has increased and we are seeing an increased demand for RCM
professional services as a result of our RCM channels growing. We therefore
anticipate improvement in our services business over the year and we expect
license revenue growth to resume in the second quarter."
Highlights from the First Quarter include:
* Global Technology Development and Licensing Agreement announced in
January with Sun Microsystems with active field engagements in all
markets.
* Global TekAlliance partnership with StorageTek announced in March with
active field engagements in all markets.
* Release of Enterprise Financials Version 9.0 -- Compliance Edition in
March with upgrades already scheduled at a significant number of our
current customers.
* Completion of extensive testing of the Travel Bill Presentment
application (T4); it went live, generating recurring revenue beginning
the first week of April.
* Winner of two industry awards: KMWorld's 100 Companies That Matter and
Lotus Advisor Editors Choice Gold Award for Compliance.
Conference call information
Management will conduct a conference call to discuss these results at 4:30 p.m.
Eastern on April 27, 2005. Interested parties can participate in the call by
dialing 706-645-0399 or can access the webcast at http://www.axsone.com/. The
webcast will be archived for 30 days following the call. Interested parties
may submit questions that they would like answered during the conference call
by e-mail to . Interested parties may listen to the call via a live CCBN
webcast that will be available via the company website http://www.axsone.com/.
Interested parties should access the webcast approximately 10-15 minutes before
the scheduled start time.
About AXS-One Inc.
AXS-One (AMEX:AXO) is a leading provider of Records Compliance Management
solutions. The AXS-One Compliance Platform enables organizations to implement
secure, scalable and enforceable policies that address records management for
corporate governance, legal discovery and industry regulations such as
SEC17a-4, NASD 3010, Sarbanes-Oxley, HIPAA, The Patriot Act and Gramm-Leach
Bliley. AXS-One's technology has been critically acclaimed as best of class
and delivers digital archiving, business process management, electronic
document delivery and integrated records disposition and discovery for e-mail,
instant messaging, images, SAP and other corporate records. Founded in 1979,
and headquartered in Rutherford, NJ, AXS-One has offices worldwide including in
the United States, Australia, Singapore, United Kingdom and South Africa. For
further information, visit the AXS-One website at http://www.axsone.com/.
AXS-One, the AXS-One logo, "Access Tomorrow Today," AXSPoint, and TransAXS are
registered trademarks of, and AXS-One Compliance Platform, AXS-One Retention
Manager, "The Records Compliance Management Company", e-Cellerator, AXS Desk,
"AXS-One Collaboration FrameWorks," SMART, AXS-Link and Tivity are trademarks
of, AXS-One Inc., in the U.S. All other company and product names are
trademarks or registered trademarks of their respective companies.
Special Note Regarding Forward-Looking Statements: A number of statements
contained in this release are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in the applicable statements. These risks and
uncertainties include, but are not limited to: our ability to return to
profitability in 2005; our ability to grow license and service revenue in 2005;
potential vulnerability to technological obsolescence; the risks that its
current and future products may contain errors or defects that would be
difficult and costly to detect and correct; potential difficulties in managing
growth; dependence on key personnel; the possible impact of competitive
products and pricing; and other risks described in more detail in AXO's
Securities and Exchange Commission filings.
Company Contact: IR Contact:
Joseph Dwyer Matthew Hayden
AXS-One Inc. Hayden Communications
(201) 935-3400 (858) 704-5065
AXS-ONE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, December 31,
2005 2004
ASSETS
Current assets:
Cash and cash equivalents $3,137 $4,809
Accounts receivable, net of
allowance for doubtful accounts 5,633 6,084
Due from joint venture 75 68
Prepaid expenses and other current
assets 1,000 1,283
Total current assets 9,845 12,244
Equipment and leasehold improvements,
net of accumulated depreciation 486 509
Capitalized software development
costs, net of accumulated amortization 1,704 1,886
Other assets 113 142
Total assets $12,148 $14,781
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses 4,567 5,687
Due to joint venture -- 29
Deferred revenue 10,641 9,786
Total current liabilities 15,208 15,502
Long-term deferred revenue 157 303
Stockholders' deficit (3,217) (1,024)
Total liabilities and stockholders'
deficit $12,148 $14,781
The unaudited financial information included in this document is intended only
as summary provided for your convenience, and should be read in conjunction
with the complete consolidated financial statements of the Company (including
the Notes thereto, which set forth important information) contained in its
Reports on Form 10-K and 10-Q filed by the Company with the U.S. Securities and
Exchange Commission (SEC). Such reports are available on the public EDGAR
electronic filing system maintained by the SEC.
This press release contains forward-looking statements. Such statements are
only predictions, and actual events or results may differ materially. All
forward-looking statements involve risks and uncertainties, including, without
limitation, the risks detailed in the Company's documents and reports filed
from time to time with the Securities and Exchange Commission.
AXS-ONE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
2005 2004
Revenues:
License fees $1,022 $2,460
Services 7,016 8,411
Other-related parties 20 51
Total revenues 8,058 10,922
Operating expenses:
Cost of license fees 364 411
Cost of services 4,659 4,269
Sales and marketing 2,588 1,970
Research and development 2,101 1,899
General and administrative 1,348 1,567
Total operating expenses 11,060 10,116
Operating income (loss) (3,002) 806
Other income (expense):
Interest income 30 25
Interest expense -- (12)
Equity in losses of joint ventures (24) (33)
Other expense, net (173) (33)
Other expense, net (167) (53)
Net income (loss) $(3,169) $753
Basic and diluted net income
(loss) per common share $(0.11) $0.03
Weighted average basic
common shares outstanding
shares 28,576 25,250
Weighted average diluted
common shares outstanding 28,576 28,782
The unaudited financial information included in this document is intended only
as summary provided for your convenience, and should be read in conjunction
with the complete consolidated financial statements of the Company (including
the Notes thereto, which set forth important information) contained in its
Reports on Form 10-K and 10-Q filed by the Company with the U.S. Securities and
Exchange Commission (SEC). Such reports are available on the public EDGAR
electronic filing system maintained by the SEC.
This press release contains forward-looking statements. Such statements are
only predictions, and actual events or results may differ materially. All
forward-looking statements involve risks and uncertainties, including, without
limitation, the risks detailed in the Company's documents and reports filed
from time to time with the Securities and Exchange Commission.
DATASOURCE: AXS-One Inc.
CONTACT: Joseph Dwyer of AXS-One Inc., +1-201-935-3400,
; or IR, Matthew Hayden of Hayden Communications,
+1-858-704-5065, , for AXS-One Inc.
Web site: http://www.axsone.com/