AXS-One Reports Financial Results for Second Quarter of 2005
RUTHERFORD, N.J., July 28 /PRNewswire-FirstCall/ -- AXS-One Inc.
(AMEX:AXO), a leading provider of high performance Records
Compliance Management (RCM) software solutions today announced its
financial results for the second quarter and six month period ended
June 30, 2005. Total revenues for the second quarter were $7.5
million, a decrease of 21 percent, compared with revenues of $9.5
million in the second quarter of 2004. License revenues for the
second quarter decreased to $0.5 million from $1.0 million in the
second quarter of 2004. Records Compliance Management (RCM) license
revenues were $0.3 million compared to $0.8 million in the second
quarter of 2004. Total operating expenses were $11.6 million
compared to $12.0 million in the second quarter of 2004. The
Company reported a net loss of $4.4 million for the second quarter,
or ($0.15) per diluted share compared to a net loss of $2.6 million
in the second quarter of last year or ($0.09) per diluted share.
"We are clearly disappointed that we did not close several pending
deals in the second quarter," said Bill Lyons, chairman and CEO of
AXS-One. "While we experienced significant deal slippage during the
quarter, AXS-One and our partners have closed in July a number of
these deals representing approximately $1.6 million in license
revenue, more than 90% of which was generated by RCM products,
resulting in the best first month of a quarter in more than three
years. This includes a major West Coast health care company closed
with a partner along with a significant direct sale to a leading
international financial services provider. Going into the third
quarter, we have streamlined the company to substantially reduce
costs and generate license and service revenue." The $1.6 million
of license deals closed this month may or may not be recognized in
the company's third quarter financial statements, subject to
meeting contractual commitments and revenue recognition criteria.
Mr. Lyons continued, "We have taken the necessary steps to ensure
our future success. We raised $6.075 million through an equity
private placement in June, with an additional $675,000 of proceeds
committed from management and the board, subject to shareholder
approval. We are targeting annual cost savings of approximately $4
million per year principally from a reduction in workforce
effective June 30 which trimmed the expense structure, as well as a
reduction of executive salaries. The result was an overall
reduction during the second quarter of 33 positions, including
several executives, which collectively represented 13% of the total
employee count. Finally, we made some considerable changes within
our sales organization. We are confident that these necessary
measures will enable us to improve our financial and sales
performance." Mr. Lyons concluded, "While the results of the second
quarter are extremely disappointing, we continue to believe that
the market for Records Compliance Management Solutions is still
emerging. The growth opportunity is substantial and our ability to
close business in the past month provides initial validation for
this premise. We have significantly expanded the quality and depth
of our validated pipeline and have made substantial progress on
closing these potential deals. We look forward to a continuation of
these trends through the remainder of 2005." Highlights from the
Second Quarter include: * $6.075 million raised in an equity
private placement. * Release of AXS-One Compliance Platform Version
3.5, featuring AXS-One Rapid-AXS. Benchmark figures point to a new
record for search performance with a very low total cost of
ownership, providing AXS-One with an industry leading
price-performance ratio. * First implementation of AXS-One
Compliance Platform to address Sarbanes-Oxley requirements
completed. * MONY Group wins industry regulation compliance and
corporate governance category industry award from Storage
Networking World for successful implementation of AXS-One solution.
Conference call information Management will conduct a conference
call to discuss these results at 5:00 p.m. Eastern on July 28,
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 during the conference call
by e-mail to . Interested parties may listen to the call via a live
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 high performance 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 award-winning
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, AXS-One Rapid-AXS, "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 recognize any revenue or satisfy all contractual
commitments on the $1.6 million of license contracts signed in July
2005, our ability to achieve annual cost savings; our ability to
improve financial and sales performance; 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) June 30, December 31, 2005 2004 ASSETS
Current assets: Cash and cash equivalents $7,022 $4,809 Accounts
receivable, net of allowance for doubtful accounts 3,216 6,084 Due
from joint venture 106 68 Prepaid expenses and other current assets
756 1,283 Total current assets 11,100 12,244 Equipment and
leasehold improvements, net of accumulated depreciation 462 509
Capitalized software development costs, net of accumulated
amortization 1,462 1,886 Other assets 53 142 Total assets $13,077
$14,781 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities:
Accounts payable and accrued expenses 5,362 5,687 Due to joint
venture -- 29 Deferred revenue 9,048 9,786 Total current
liabilities 14,410 15,502 Long-term deferred revenue 168 303
Stockholders' deficit (1,501) (1,024) Total liabilities and
stockholders' deficit $13,077 $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 Six Months Ended June 30, June 30,
2005 2004 2005 2004 Revenues: License fees $518 $1,004 $1,540
$3,464 Services 6,944 8,451 13,960 16,862 Other-related parties 17
50 37 101 Total revenues 7,479 9,505 15,537 20,427 Operating
expenses: Cost of license fees 406 375 770 786 Cost of services
4,383 4,528 9,042 8,797 Sales and marketing 2,523 2,455 5,111 4,425
Research and development 2,034 2,037 4,135 3,936 General and
administrative 1,437 1,530 2,785 3,097 Restructuring and other
costs 863 1,103 863 1,103 Total operating expenses 11,646 12,028
22,706 22,144 Operating loss (4,167) (2,523) (7,169) (1,717) Other
income (expense): Interest income 28 40 58 65 Interest expense (1)
(2) (1) (14) Equity in losses of joint ventures (3) (49) (27) (82)
Other expense, net (241) (18) (414) (51) Other expense, net (217)
(29) (384) (82) Net loss before income taxes (4,384) (2,552)
(7,553) (1,799) Income tax (provision) benefit 25 (28) 25 (28) Net
loss $(4,359) $(2,580) $(7,528) $(1,827) Basic and diluted net loss
per common share $(0.15) $(0.09) $(0.26) $(0.07) Weighted average
basic and diluted common shares outstanding 30,016 27,915 29,300
26,582 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
Matthew Hayden of Hayden Communications, +1-858-704-5065, , for
AXS-One Inc. Web site: http://www.axsone.com/
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