Exhibit 99.1
Cover-All Technologies Inc. Announces 38.5%
Revenue Growth, $0.05 Earnings per Share, for First Quarter 2011
Net Income Increases 67.3% to $1.2 Million
vs. $720,000 for Q1 2010; 17th Consecutive Profitable Quarter
FAIRFIELD, NEW JERSEY (May 12, 2011)
– Cover-All Technologies Inc. (OTCQB: COVR.PK), a Delaware corporation (“Cover-All” or the “Company”), today announced
financial results for the quarter ended March 31, 2011.
Operational Highlights:
• |
|
For the quarter ended March 31, 2011 revenue was
$5.2 million compared to $3.8 million for the comparable period in 2010, an increase of 38.5%. The $5.2 million in revenue was the second-highest
quarterly level in Cover-All’s history. |
• |
|
Support Services for the quarter ended March 31,
2011 was $2.1 million, up 8.2% compared to $2.0 million for the same period in 2010. The Company combined two of its revenue categories,
“Maintenance” and “Application Service Provider (“ASP”) services,” on the statements of operations for the
first quarter of 2011 and 2010 and will be reporting these revenue categories as “Support Services” going forward. |
• |
|
Operating income for the quarter ended March 31,
2011 was $1.2 million compared to $792,000 in the comparable period in 2010. |
• |
|
The Company’s balance sheet remains strong
with stockholders’ equity at a record $16.6 million as of March 31, 2011. The Company completed the first quarter of 2011 with $4.4
million in cash, $5.5 million in working capital and no long-term debt. |
• |
|
Announced the general availability of the new
ISO®-based NexGen Commercial Automobile product for 50 US jurisdictions. |
• |
|
Expanded the sales and marketing team, consistent
with strategic growth plans; Cover-All added a Director of Marketing, a Senior Account Executive, and a Director of New Markets, with over
30 years of combined industry experience. |
John Roblin, Chairman of the Board of
Directors and Chief Executive Officer of the Company, commented, “Our focus in 2011 is expansion and profitable growth. These
first quarter results represent a very strong start to what we believe will be a great year.
“Quarterly revenues grew 38.5% from the
year-ago period and operating income increased 56.2%, demonstrating that we are successfully leveraging our technology and human capital
to create products that are creating excitement in the marketplace. Led by the release of the NexGen Commercial Automobile product
in the first quarter and the impending release of our NexGen Commercial Package and NexGen Business Intelligence products in the second
quarter, we are positioned to meet our aggressive objectives.
“We have nearly completed transitioning
the business model of our Business Intelligence acquisition in 2010 from a professional services-only sales model to focus more on
recurring revenue. As we near the completion of our new Business Intelligence product, our focus has shifted to our more traditional
licensing, professional services and support model. Our new Business Intelligence product will be fully integrated into our My
Insurance Center Business Acquisition platform and will also be sold as a stand-alone product. This product and the NexGen products
are already being actively marketed and sold.”
Financial Results for the Quarter Ended
March 31, 2011
Total revenues for the quarter ended March 31,
2011 were $5.2 million compared to $3.8 million for the same period in 2010, an increase of 38.5%. License revenue was up 86.6% to $2.0
million, compared to $1.1 million for the same period in 2010. Support Services (formerly Maintenance and ASP revenue, which together
represent contracted continuing revenue), was $2.1 million for the year ended March 31, 2011, up 8.2% from $2.0 million in the same
period in 2010. Professional Services revenue for the quarter ended March 31, 2011 was $1.1 million, up 49.9% compared to $749,000 for
the same period in 2010.
Total expenses (cost of revenue and operating
expenses) for the quarter ended March 31, 2011 were $4.0 million, up 33.7% compared to $3.0 million in the comparable period of 2010. Net
income for the quarter ended March 31, 2011 was $1.2 million, or $0.05 per basic and diluted share (based on 25.1 million basic and 26.2
million diluted weighted average shares, respectively), compared to $720,000, or $0.03 per share (based on 24.7 million basic and 25.4
million diluted weighted average shares, respectively), in the same period of 2010. The first quarter of last year included $285,000, or
approximately $0.01 per share, in expenses related to the Business Intelligence asset acquisition.
Mr. Roblin continued, “By the end of the
first quarter of 2011, we rolled out the ISO®-based NexGen Commercial Automobile product for 50 US jurisdictions, which creates a
significant competitive advantage. This technology offers the entire ISO®-based Commercial Auto product – with all coverages,
vehicle types, forms, rating algorithms and statistical codes to various distribution channels such as retail agents, Brokers, Program
Administrators and others – without the need for separate portal products. In addition to what we believe is unrivaled
flexibility, the product is both robust and efficient for the carriers’ business operations. We also have our new NexGen Commercial
Package (Property, General Liability, Crime & Inland Marine) product for 20 states release already delivered and we expect that all
50 states will be delivered by the end of July. We demonstrated all our new NexGen products as well as our new Business Intelligence
solution to rave reviews at our recent Customer Conference. The availability of these new products was also a driving factor in the
recent significant expansion of our sales and marketing team. These key individuals represent a wealth of industry contacts, domain knowledge,
and demonstrated success selling solutions in the complex world of property and casualty insurance.”
Mr. Roblin concluded, “We already have
signed contracts for all three of our new products with some of our customers. We are also in various stages of discussion with
additional new and current customers for these products and our pipeline of interest is very strong. Based on early feedback from
existing customers, prospects and industry consultants, we believe that our NexGen products and our new Business Intelligence product,
combined with our My Insurance Center Business Acquisition platform, are ahead of the curve relative to competitive solutions. We look
forward to leveraging this front-leading position in the marketplace and demonstrating our platform capabilities aggressively to take
advantage of what we see as significant growth in technology investments in 2011 and 2012.”
Balance Sheet
Stockholders’ equity was $16.6 million as
of March 31, 2011 compared to $15.2 million as of December 31, 2010. Total assets increased to $20.0 million as of March 31, 2011
compared to $19.5 million as of December 31, 2010. As of March 31, 2011, the Company had $4.4 million in cash, $5.5 million in working
capital and no long term debt.
Conference Call
Management will
conduct a live teleconference to discuss its 2011 first quarter financial results at 10:00 a.m. ET on Thursday, May 12, 2011. Anyone
interested in participating should call 1-877-941-1428 if calling from the United States, or 1-480-629-9665 if dialing internationally. A
replay will be available until May 19, 2011, which can be accessed by dialing 1-877-870-5176 within the United States and 1-858-384-5517
if dialing internationally. Please use passcode 4438893 to access the replay.
In addition, the call
will be webcast and will be available on the Company’s website at www.cover-all.com or by visiting
http://viavid.net/dce.aspx?sid=000085E3.
Page 2 of 6
About Cover-All Technologies Inc.
Cover-All Technologies Inc. is a leader in
development of innovative and sophisticated software solutions for the property and casualty insurance industry. Cover-All’s
My Insurance Center product suite is a functionally rich, technology advanced Business Acquisition Platform currently in use at leading
insurance companies, Brokers, Agents and Managing General Agents (MGAs). Special areas of expertise include Business Intelligence
Solution, Policy Administration including full rating and policy issuance, workflow, and underwriting tools.
Today, Cover-All is continuing to build on its
reputation for quality insurance solutions, knowledgeable people and outstanding customer service by creating new and innovative
insurance solutions that leverage the latest technologies and bring our customers outstanding capabilities and value. Recent
product developments include NexGen Commercial Automobile, NexGen Commercial Package and a revolutionary Business Intelligence product
that will be available as a component of My Insurance Center or as a stand-alone offering.
With our extensive insurance knowledge, our
revolutionary technology, our experience and our commitment to quality, Cover-All continues its tradition of developing innovative
technology solutions designed to revolutionize the way the property and casualty insurance business is conducted.
Additional information is available online at
www.cover-all.com.
Cover-All®, My Insurance Center™
(MIC) and Insurance Policy Database™ (IPD) are trademarks or registered trademarks of Cover-All Technologies Inc. All other company
and product names mentioned are trademarks or registered trademarks of their respective holders.
Forward-looking Statements
Statements in this press release, other than
statements of historical information, are forward-looking statements that are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks which may cause the
Company’s actual results in future periods to differ materially from expected results. Those risks include, among others,
risks associated with increased competition, customer decisions, the successful completion of continuing development of new products, the
successful negotiations, execution and implementation of anticipated new software contracts, the successful addition of personnel in the
marketing and technical areas, our ability to complete development and sell and license our products at prices which result in sufficient
revenues to realize profits and other business factors beyond the Company’s control. Those and other risks are described in the
Company’s filings with the Securities and Exchange Commission (“SEC”) over the last 12 months, including but not limited to
the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 24, 2011, and Post-Effective
Amendment No. 2 to Form S-1 (File No. 333-156397) filed with the SEC on May 10, 2011 copies of which are available from the SEC or may be
obtained upon request from the Company.
For information on Cover-All, contact:
Ann Massey
Chief Financial Officer
973/461-5190
amassey@cover-all.com
Investor Contact:
Hayden IR
Brett Maas, Principal
(646) 536-7331
brett@haydenir.com
Page 3 of 6
Cover-All Technologies, Inc.
Consolidated Balance Sheet
| |
| | | |
| March 31,
| | December
31,
|
|
2011
| |
2010
|
| (Unaudited)
| | |
Assets:
| | |
| | |
Current Assets:
| | |
| | |
Cash and Cash Equivalents
| $
| 4,364,561
| | $
| 5,892,649
|
Accounts Receivable (Less Allowance for Doubtful Accounts of
$25,000)
| | 2,946,513
| | |
1,895,205
|
Prepaid Expenses
| | 754,358
| | |
691,020
|
Deferred Tax Asset
| |
800,000
| | |
800,000
|
| |
| | |
|
Total Current Assets
| |
8,865,432
| | |
9,278,874
|
| |
| | |
|
Property and Equipment – At Cost:
| | |
| | |
Furniture, Fixtures and Equipment
| | 956,269
| | |
956,269
|
Less: Accumulated Depreciation
| |
573,387
| | |
530,701
|
| |
| | |
|
Property and Equipment – Net
| |
382,882
| | |
425,568
|
| |
| | |
|
Goodwill
| |
1,039,114
| | |
1,039,114
|
| |
| | |
|
Capitalized Software (Less Accumulated
Amortization of $12,879,567 and $12,584,710, Respectively)
| |
6,734,380
| | |
5,804,093
|
| |
| | |
|
Customer Lists/Relationships (Less Accumulated
Amortization of $71,093 and $52,759, Respectively)
| |
148,907
| | |
167,241
|
| |
| | |
|
Non-Competition Agreements (Less Accumulated
Amortization of $62,044 and $46,044, Respectively)
| |
97,956
| | |
113,955
|
| |
| | |
|
Deferred Tax Asset
| | 2,467,500
| | |
2,467,500
|
| |
| | |
|
Other Assets
| |
216,446
| | |
217,015
|
| |
| | |
|
Total Assets
| $
| 19,952,617
| |
$
| 19,513,360
|
| |
| | |
|
Page 4 of 6
Cover-All Technologies, Inc.
Consolidated Balance Sheet (continued)
| | |
| | | |
| |
March 31,
| | December 31,
|
| |
2011
| |
2010
|
| |
(Unaudited)
| | |
Liabilities and Stockholders’ Equity:
| | | |
| | |
Current Liabilities:
| | | |
| | |
Accounts Payable
| | $
| 274,734
| | $
| 273,910
|
Note Payable
| | |
300,000
| | |
400,000
|
Accrued Expenses Payable
| | |
504,142
| | |
1,363,706
|
Taxes Payable
| | |
37,385
| | |
—
|
Deferred Charges
| | |
52,545
| | |
52,545
|
Unearned Revenue
| | |
2,199,359
| | |
2,175,683
|
| | |
| | |
|
Total Current Liabilities
| | |
3,368,165
| | |
4,265,844
|
| | |
| | |
|
Long-Term Liabilities:
| | |
| | |
|
Deferred Charges
| | |
30,652
| | |
43,788
|
| | |
| | |
|
Total Liabilities
| | |
3,398,817
| | |
4,309,632
|
| | |
| | |
|
Commitments and Contingencies
| | |
—
| | |
—
|
| | |
| | |
|
Stockholders’ Equity:
| | |
| | |
|
Common Stock, $.01 Par Value, Authorized
75,000,000 Shares; 25,376,671 and 25,201,671 Shares Issued and 25,174,801 and 24,999,801 Shares Outstanding, Respectively
| | |
253,767
| | |
252,017
|
| | |
| | |
|
Paid-In Capital
| | |
30,593,095
| | |
30,450,122
|
| | |
| | |
|
Accumulated Deficit
| | |
(14,128,168)
| | |
(15,333,517)
|
| | |
| | |
|
Treasury Stock – 201,870 Shares – At Cost
| | |
(164,894)
| | |
(164,894)
|
| | |
| | |
|
Total Stockholders’ Equity
| | |
16,553,800
| | |
15,203,728
|
| | |
| | |
|
Total Liabilities and Stockholders’ Equity
| |
$
| 19,952,617
| |
$
| 19,513,360
|
| | |
| | |
|
Page 5 of 6
Cover-All Technologies, Inc.
Consolidated Statement of Operations
| |
| | | | |
| |
Three months ended March
31,
|
| |
|
2011
| | |
2010
|
Revenues:
| | | |
| | |
Licenses
| | $
| 1,961,161
| | $
| 1,051,124
|
Support Services
| | |
2,114,243
| | |
1,953,776
|
Professional Services
| | |
1,122,039
| | |
748,571
|
Total Revenues
| | |
5,197,443
| | |
3,753,471
|
Cost of Revenues:
| | |
| | |
|
Licenses
| | |
517,244
| | |
326,521
|
Support Services
| | |
1,138,120
| | |
1,048,365
|
Professional Services
| | |
1,309,107
| | |
346,368
|
Total Cost of Revenues
| | |
2,964,471
| | |
1,721,254
|
Direct Margin
| | |
2,232,972
| | |
2,032,217
|
Operating Expenses:
| | |
| | |
|
Sales and Marketing
| | |
390,142
| | |
359,786
|
General and Administrative
| | |
452,326
| | |
442,856
|
Acquisition Costs
| | |
—
| | |
285,240
|
Research and Development
| | |
153,812
| | |
152,565
|
Total Operating Expenses
| | |
996,280
| | |
1,240,447
|
Operating Income
| | |
1,236,692
| | |
791,770
|
Other (Income) Expense:
| | |
| | |
|
Interest Expense
| | |
3,750
| | |
—
|
Interest Income
| | |
(83)
| | |
(80)
|
Other Income
| | |
(9,709)
| | |
(19,813)
|
Total Other (Income) Expense
| | |
(6,042)
| | |
(19,893)
|
Income Before Income Taxes
| | |
1,242,734
| | |
811,663
|
Income Taxes
| | |
37,385
| | |
91,249
|
Net Income
| |
$
| 1,205,349
| |
$
| 720,414
|
Basic Earnings Per Common Share
| |
$
| 0.05
| |
$
| 0.03
|
Diluted Earnings Per Common Share
| |
$
| 0.05
| |
$
| 0.03
|
Weighted Average Number of Common
Shares Outstanding for Basic Earnings Per Common Share
| | |
25,084,000
| | |
24,734,000
|
Weighted Average Number of Common
Shares Outstanding for Diluted Earnings Per Common Share
| | |
26,208,000
| | |
25,371,000
|
| |
|
| |
|
|
Page 6 of 6
