Attached files
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| 8-K - CURRENT REPORT - ADVANT E CORP | d8k.htm |
Exhibit 99.1
Thursday, November 12, 2009
Advant-e Corporation Announces Third Quarter 2009 Results
Company Reports Net Income Increase of 28% and Revenue Increase of 4% over Third Quarter of 2008
DAYTON, Ohio, November 12, 2009 — Advant-e Corporation (OTC Bulletin Board: ADVC) today announced financial and operating results for the third quarter of 2009. The Company provides Internet-based Electronic Data Interchange services through Edict Systems, Inc. and sells electronic document management software and services through Merkur Group, Inc. Edict Systems and Merkur Group are wholly owned subsidiaries of Advant-e Corporation.
For the third quarter of 2009 the Company reported revenue of $2,158,016, a 4% increase, compared to revenue of $2,067,253 in the third quarter of 2008. Revenue from Edict Systems increased by $83,284, and revenue from Merkur Group increased by $7,479.
Net income for the third quarter of 2009 was $316,678, or $.05 per share, a 28% increase compared to net income of $247,079, or $.04 per share, for the same period in 2008.
Jason K. Wadzinski, Chairman of the Board and Chief Executive Officer, remarked, “We continue our trend of strong cash flow and I believe we performed well in a sluggish economic environment. Both Edict Systems and Merkur Group reported increased revenue in the quarter compared to last year. While Merkur’s revenue growth was nominal, Merkur did contribute considerably to our net income.”
“Due to current economic realities, our automotive related revenue declined 13% in the quarter, and software sales from Merkur are still affected by delayed purchasing decisions and the impact of budgetary constraints by potential customers,” continued Mr. Wadzinski. “I believe that our significant value proposition and the great people we have at both Edict and Merkur will allow us to weather the current economic environment. I also believe that we are well positioned for sustained growth when the overall economy improves”.
The Company announced on October 30, 2009 that it’s Board of Directors has authorized a ten-for-one stock split of the Company’s common stock. All shareholders of record on November 30, 2009 will receive 10 shares in exchange for each share held on that date.
The Board of Directors also declared the payment of $.03 per share (after the ten-for-one stock split) cash dividend, payable in three installments of $.01 each by no later than December 31, 2009, June 30, 2010, and December 31, 2010. The record date for each dividend will be announced separately on dates to be determined by the Board of Directors of the company.
About Advant-e Corporation
Advant-e, via its wholly owned subsidiaries Edict Systems, Inc. and Merkur Group, Inc. is a provider of internet-based hosted Electronic Data Interchange (EDI) and electronic document management software and services. The Company helps businesses automate manual, paper-intensive processes via expanded use of EDI or by integrating directly with ERP/MRP systems.
Additional information about Advant-e Corporation can be found at www.Advant-e.com, www.EdictSystems.com, and www.MerkurGroup.com, or by contacting investor relations at (937) 429-4288. The company’s email is advant-e@edictsystems.com.
ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||
| Revenue |
$ | 2,158,016 | 2,067,253 | 6,514,265 | 6,712,754 | |||||||
| Cost of revenue |
858,522 | 792,351 | 2,688,352 | 2,615,977 | ||||||||
| Gross margin |
1,299,494 | 1,274,902 | 3,825,913 | 4,096,777 | ||||||||
| Marketing, general and administrative expenses |
801,355 | 884,584 | 2,526,143 | 2,869,978 | ||||||||
| Operating income |
498,139 | 390,318 | 1,299,770 | 1,226,799 | ||||||||
| Other income (expense), net |
(3,376 | ) | (25,852 | ) | 2,459 | (2,241 | ) | |||||
| Income before income taxes |
494,763 | 364,466 | 1,302,229 | 1,224,558 | ||||||||
| Income tax expense |
178,085 | 117,387 | 439,611 | 432,944 | ||||||||
| Net income |
$ | 316,678 | 247,079 | 862,618 | 791,614 | |||||||
| Earnings per share – basic and diluted |
$ | .05 | .04 | .13 | .12 | |||||||
| Weighted average shares outstanding – basic and diluted |
6,685,883 | 6,791,399 | 6,691,922 | 6,807,085 | ||||||||
ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
| September 30, 2009 (Unaudited) |
December 31, 2008 |
||||||
| Assets |
|||||||
| Current Assets: |
|||||||
| Cash and cash equivalents |
$ | 3,121,338 | 2,090,005 | ||||
| Short-term investments |
— | 232,721 | |||||
| Accounts receivable, net |
712,543 | 699,095 | |||||
| Prepaid software maintenance costs |
165,495 | 156,027 | |||||
| Prepaid expenses and deposits |
93,669 | 74,361 | |||||
| Prepaid income taxes |
38,132 | 16,837 | |||||
| Deferred income taxes |
138,134 | 152,156 | |||||
| Total current assets |
4,269,311 | 3,421,202 | |||||
| Software development costs, net |
111,820 | 112,453 | |||||
| Property and equipment, net |
333,068 | 434,645 | |||||
| Goodwill |
1,474,615 | 1,474,615 | |||||
| Other intangible assets, net |
350,398 | 413,932 | |||||
| Total assets |
$ | 6,539,212 | 5,856,847 | ||||
| Liabilities and Shareholders’ Equity |
|||||||
| Current liabilities: |
|||||||
| Accounts payable |
$ | 144,018 | 207,374 | ||||
| Accrued salaries and other expenses |
300,228 | 283,360 | |||||
| Deferred revenue |
590,314 | 583,677 | |||||
| Total current liabilities |
1,034,560 | 1,074,411 | |||||
| Deferred income taxes |
243,534 | 335,663 | |||||
| Total liabilities |
1,278,094 | 1,410,074 | |||||
| Shareholders’ equity: |
|||||||
| Common stock, $.001 par value; 20,000,000 shares authorized; 6,737,741 shares issued and 6,672,269 outstanding at September 30, 2009; 6,738,261 shares issued and 6,713,919 shares outstanding at December 31, 2008 |
6,738 | 6,738 | |||||
| Paid-in capital |
2,019,583 | 2,020,206 | |||||
| Retained earnings |
3,318,382 | 2,455,764 | |||||
| Treasury stock at cost, 65,472 and 24,342 shares at September 30, 2009 and December 31, 2008, respectively |
(83,585 | ) | (35,935 | ) | |||
| Total shareholders’ equity |
5,261,118 | 4,446,773 | |||||
| Total liabilities and shareholders’ equity |
$ | 6,539,212 | 5,856,847 | ||||
ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
| Nine Months Ended September 30, |
|||||||
| 2009 | 2008 | ||||||
| Cash flows from operating activities: |
|||||||
| Net income |
$ | 862,618 | 791,614 | ||||
| Adjustments to reconcile net income to net cash flows from operating activities: |
|||||||
| Depreciation |
190,127 | 205,845 | |||||
| Amortization of software development costs |
61,338 | 61,338 | |||||
| Amortization of other intangible assets |
63,534 | 63,534 | |||||
| Deferred income taxes |
(78,107 | ) | (93,920 | ) | |||
| Purchases of trading securities |
(99,922 | ) | (213,754 | ) | |||
| Proceeds from sales of trading securities |
327,193 | 209,724 | |||||
| Net unrealized (gains) losses on trading securities |
(34,546 | ) | 38,095 | ||||
| Net realized (gains) losses on sales of securities |
39,996 | (7,429 | ) | ||||
| Increase (decrease) in cash arising from changes in assets and liabilities: |
|||||||
| Accounts receivable |
(13,448 | ) | 77,906 | ||||
| Prepaid software maintenance costs |
(9,468 | ) | 831 | ||||
| Prepaid expenses and deposits |
(19,308 | ) | 12,695 | ||||
| Prepaid income taxes |
(21,295 | ) | (55,553 | ) | |||
| Accounts payable |
(63,356 | ) | (20,008 | ) | |||
| Accrued salaries and other expenses |
16,868 | (22,063 | ) | ||||
| Income taxes payable |
— | (136,947 | ) | ||||
| Deferred revenue |
6,637 | 2,953 | |||||
| Net cash flows from operating activities |
1,228,861 | 914,861 | |||||
| Cash flows from investing activities: |
|||||||
| Purchases of property and equipment |
(88,550 | ) | (162,948 | ) | |||
| Software development costs |
(60,705 | ) | — | ||||
| Net cash flows from investing activities |
(149,255 | ) | (162,948 | ) | |||
| Cash flows from financing activities: |
|||||||
| Purchase of treasury shares |
(48,273 | ) | (88,581 | ) | |||
| Net increase in cash and cash equivalents |
1,031,333 | 663,332 | |||||
| Cash and cash equivalents, beginning of period |
2,090,005 | 2,039,447 | |||||
| Cash and cash equivalents, end of period |
$ | 3,121,338 | 2,702,779 | ||||
| Supplemental disclosures of cash flow items: |
|||||||
| Income taxes paid |
$ | 539,013 | 718,100 | ||||
| Non-cash transaction |
|||||||
| Retirement of 520 and 60,000 treasury shares during the nine months ended September 30, 2009 and 2008, respectively |
623 | 75,000 | |||||
The information in this news release includes certain forward looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements to the future financial performance of the company. Although the company believes that the expectations reflected on its forward looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development and acceptance, the impact of competitive services and pricing, or general economic risks and uncertainties.