Corporate Highlights for the Quarter: -0- *T -- Reported revenues
of $6.7 million for the quarter and $20.1 million for the nine
months - a 78% increase over same quarter last year and 53%
increase over the same nine month period last year -- Posted 4th
consecutive quarter of profitability -- Announced new customer,
Cameroon Tel, for advanced OSS contract -- Signed new Network
Business Intelligence(TM) (NBI) contract with large Latin American
mobile operator *T ACE*COMM Corporation (NASDAQ:ACEC), a global
provider of advanced OSS, value-added services, and network
business intelligence solutions, today reported financial results
for the quarter ended March 31, 2006, the third quarter of its 2006
fiscal year. The Company reported revenues of $6.7 million for the
quarter, which compares to $3.8 million for the comparable quarter
of fiscal year 2005. Net profit for the quarter was $365 thousand,
or $0.02 per share, compared to a net loss of $6.6 million, or
$0.47 per share, for the same quarter in the prior year. For the
nine months, revenues were $20.1 million which compares to $13.2
million for the same nine months period last year. Net profit for
the nine months ended March 31, 2006 was $812 thousand or $0.05 per
share as compared to a net loss of $6.8 million or $0.49 per share
in the same nine months last year. "These results represent
performance consistent with our strategic growth plan," said George
T. Jimenez, CEO of ACE*COMM. "We have demonstrated improving
earnings growth and strong year-over-year revenue increases, while
at the same time bringing new products to market." -0- *T Product
Developments: -- Launched new content filtering capabilities for
Parent Patrol(TM); announced partnership with RuleSpace, industry's
top content classification solutions provider -- Introduced
hyper-convergent product for valuation of network-based charges and
services -- Announced technology partnership with Experian, global
leader in consumer-level information, to supply new demographic
data capabilities for Market Maker(TM) market visualization tool --
Announced Enterprise Patrol(TM) - new solution for businesses that
need to rein in the high cost of corporate mobile phone use --
Introduced Network Business Intelligence capabilities for
enterprise telecom systems -- Unveiled Market Maker(TM) for GSM
operators *T Continued Mr. Jimenez: "We launched a number of new
and upgraded revenue-generating value-added services, and solutions
for the emerging network business intelligence (NBI) market. Most
significantly: -0- *T -- The recent release of Parent Patrol(TM)
with content filtering capabilities, strengthens our ability to
take full advantage of a tremendous market opportunity unfolding
before us - enabling carrier's to capitalize on high-growth mobile
youth segments by offering tools for parental controls. -- We also
launched Market Maker(TM) with new demographic data views designed
to arm service providers with robust consumer profiling and
demographic data capabilities so that they can more effectively
offer targeted services to their best customer prospects. We
believe that this offering is an attractive solution for the
proliferating carrier demand for services that maximize revenue and
engender customer loyalty. *T Our stated growth strategy highlights
the development of vertical solutions, based on our core
technologies, to expand our portfolio of offerings with which to
penetrate the Tier 1 carrier segment. This quarter's product and
technology announcements clearly indicate that we are making
progress in line with our plan." Concluded Mr. Jimenez: "In tandem
with our new product directions, we worked to significantly upgrade
our core, field-proven advanced OSS products to ensure we maintain
our market position, are able to show a clear upgrade path for
existing customers, and can attack Tier 1 market with high margin,
value-added services. Together, our product sets offer advanced,
robust and compelling solutions for the challenges that service
providers now face in an evolving industry." Earnings Call ACE*COMM
will host an earnings teleconference call this evening, May 3, 2006
at 5:30 pm, Eastern Standard Time, to discuss the first quarter
results. To participate, please call 866-835-8825 (within the
United States) or 703-639-1407 (outside the United States). When
prompted, enter the ACE*COMM reservation number 893493. 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 Wednesday, May 3, 2006. 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, and ACE*COMM Network Business
Intelligence and Parent Patrol are trademarks of ACE*COMM
Corporation, and Parent Patrol is a Patent Pending technology of
the company. 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. -0- *T ACE*COMM
CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands except share
and per share amounts) March 31, June 30, 2006 2005 ------------
------------ (Unaudited) Assets Current assets: Cash and cash
equivalents $ 985 $ 2,683 Accounts receivable, net 7,406 4,870
Inventories, net 959 532 Deferred contract costs 18 85 Prepaid
expenses and other 653 601 ------------ ------------ Total current
assets 10,021 8,771 Property and equipment, net 794 636 Goodwill
522 1,681 Acquired intangibles, net 1,049 2,001 Other non-current
assets 849 478 ------------ ------------ Total assets $ 13,235 $
13,567 =========== =========== Liabilities and Stockholders' Equity
Current liabilities: Borrowings $ 2,158 $ 2,332 Accounts payable
939 1,379 Accrued expenses 1,551 1,940 Accrued compensation 899
1,013 Deferred revenue 1,700 1,454 ------------ ------------ Total
current liabilities 7,247 8,118 Long-term notes payable 33 72
------------ ------------ Total liabilities 7,280 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, 17,550,297 and
16,694,330 shares issued and outstanding 176 167 Additional paid-in
capital 34,679 34,808 Other accumulated comprehensive loss (146)
(32) Accumulated deficit (28,754) (29,566) ------------
------------ Total stockholders' equity 5,955 5,377 ------------
------------ Total liabilities and stockholders' equity $ 13,235 $
13,567 ============ ============ ACE*COMM CORPORATION CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except per share amounts)
For the three months For the nine months ended ended March 31,
March 31, ----------------------- ----------------------- 2006 2005
2006 2005 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- ----------- Revenue Licenses
and hardware $ 3,509 $ 1,066 $ 10,161 $ 5,212 Services 3,194 2,694
9,966 7,985 ----------- ----------- ----------- ----------- Total
revenue 6,703 3,760 20,127 13,197 Cost of licenses and hardware
revenue 323 742 1,805 2,193 Cost of services revenue 1,972 1,253
5,272 3,919 ----------- ----------- ----------- ----------- Total
cost of revenue 2,295 1,995 7,077 6,112 Gross profit 4,408 1,765
13,050 7,085 Selling, general, and administrative 3,080 2,548 9,237
7,169 Research and development 872 631 2,826 1,745 Acquired in
process research and development - 5,118 - 5,118 -----------
----------- ----------- ----------- Income (loss) from operations
456 (6,532) 987 (6,947) Interest expense 91 16 174 24 Gain from
settlement of debt obligation - - - 228 ----------- -----------
----------- ----------- Income (loss) before income taxes 365
(6,548) 813 (6,743) Income tax expense - 45 1 60 -----------
----------- ----------- ----------- Net income (loss) $ 365 $
(6,593) $ 812 $ (6,803) =========== =========== ===========
=========== Basic net income (loss) per share $ .02 $ (.47) $ .05 $
(.49) =========== =========== =========== =========== Diluted net
income (loss) per share $ .02 $ (.47) $ .05 $ (.49) ===========
=========== =========== =========== Shares used in computing net
income (loss) per share: Basic 16,889 13,981 16,838 13,844
=========== =========== =========== =========== Diluted 17,679
13,981 17,351 13,844 =========== =========== ===========
=========== *T
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