DAYTON, Ohio, Nov. 16 /PRNewswire-FirstCall/ --Advant-e Corporation (OTC Bulletin Board: AVEE - News), a provider of Internet-based business-to-business electronic commerce services, today announced financial and operating results for the quarter ending September 30, 2007.
For the third quarter of 2007 the Company reported revenues of $2,178,155, a 59% increase over revenues of $1,368,582 in the third quarter of 2006. The increase is attributable primarily to revenue from products and services sold by Merkur Group, Inc. which was acquired on July 2, 2007, and continued growth of the Company's internet-based EDI services.
Net income for the third quarter of 2007 was $335,884, or $.05 per share, a 45% increase over net incom of $232,375, or $.04 per share for the same period in 2006. Net income increased 39% over the second quarter of 2007.
Third Quarter Highlights
-- Merkur Group Acquisition - Merkur directly contributed $610,3000 to
revenue in the quarter and net income of $38,310 before deducting non-
cash charges pertaining to amortization of intangible assets of
$13,554.
-- Edict Systems Growth - Edict Systems revenue grew 15% in the quarter
over Q3 2006 with all major service offerings contributing to this
growth. Net income attributable to Edict for the quarter was $311,128
which is an improvement of 34% over the previous year period.
-- Continued Profitability-The Company reports its seventeenth consecutive
profitable quarter with pre-tax profitability of 23% in the current
quarter.
-- Share Repurchase Program - The Company purchased 60,000 shares at $1.25
as part of the share repurchase program.
Jason K. Wadzinski, Chariman and Chief Executive Officer, remarked, "The third quarter of 2007 was highlighted by our recent acquisition of Merkur Group, Inc., which accounted for 28% of our revenue and contributed to our profitability for the quarter. We are currently working on several opportunities to increase revenue for both Edict and Merkur by leveraging the strengths and product/service offerings of each company."
ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Revenue $2,178,155 1,368,582 5,075628 3,964,509
Cost of revenue 818,716 422,394 1,810,060 1,119,923
Gross margin 1,359,439 946,188 3,265,568 2,764,586
Marketing, general and
administrative expenses 876,090 589,891 2,231,039 1,799,812
Operating income 483,349 356,297 1,034,529 964,774
Other income, net 18,002 14,142 73,257 46,531
Income before taxes 501,351 370,439 1,107,786 1,011,305
Income tax expense 165,467 138,064 399,184 380,369
Net income $335,884 232,375 708,602 630,936
Basic earnings per share $0.05 0.04 0.11 0.10
Diluted earnings per share $0.05 0.04 0.11 0.10
Weighted average shares
outstanding 6,845,015 6,403,174 6,612,266 6,403,174
Weighted average shares
outstanding, assuming
dilution 6,845,015 6,432,246 6,612,266 6,429,770
ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, December 31,
2007 2006
(unaudited)
Assets
Current assets:
Cash and cash equivalents $1,876,255 2,209,782
Short-term investments 295,663 274,434
Accounts receivable, net 894,188 477,639
Prepaid software maintenance costs 198,742 -
Prepaid expenses and deposits 70,590 28,339
Deferred income taxes 50,226 -
Total current assets 3,385,664 2,990,194
Software development costs, net 214,684 247,621
Property and equipment, net 438,257 386,697
Goodwill 1,376,452 -
Other intangible assets, net 519,822 -
Total assets 5,934,879 3,624,512
Liabilities and Shareholders' Equity
Current liabilities:
Borrowings under bank line credit 140,000 -
Accounts payable 323,317 66,936
Accrued salaries and other expenses 268,001 157,802
Income taxes payable 116,049 109,642
Deferred revenue 621,682 112,846
Deferred income taxes - 53,119
Total current liabilities 1,469,049 500,345
Deferred income taxes 305,154 165,784
Total liabilities 1,774,203 666,129
Shareholders' equity:
Common stock, $.001 par value; 20,000,000 shares
authorized; 6,875,015 and 6,478,714 issued, and
6,815,015 and 6,478,714 outstanding at
September 30, 2007 and December 31, 2006
respectively 6,875 6,478
Paid-in capital 2,210,200 1,641,906
Retained earnings 2,018,601 1,309,999
Treasury stock at cost, 60,000 shares
at September 30, 2007 (75,000) -
Total shareholders' equity 4,160,676 2,958,383
Total liabilities and shareholders' equity $5,934,879 3,624,512
ADVANT-E CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
Nine Months Ended
September 30,
2007 2006
Cash flows from operating activities:
Net income $708,602 630,936
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation 162,233 105,624
Amortization of software development costs 48,300 93,793
Amortization of intangible assets 21,178 ---
Loss on disposal of assets --- 41,921
Deferred income taxes (41,784) 116,963
Purchases of trading securities (154,868) ---
Proceeds from sale of trading securities 159,184 ---
Net realized gains on trading investments (12,573) ---
Net realized gains on sale of securities (12,972) (8,768)
Increase (decrease) in cash arising from changes
in assets and liabilities:
Accounts receivable (101,139) (95,099)
Prepaid software maintenance costs (26,430) ---
Prepaid expenses and deposits (3,841) (21,015)
Accounts payable 70,493 11,538
Accrued salaries and other expenses 68,320 11,315
Income taxes payable 6,407 (349,347)
Deferred revenue 38,310 5,077
Net cash flows from operating activities 929,420 542,938
Cash flows from investing activities:
Purchases of available-for-sale securities --- (107,966)
Proceeds from sale of available-for-sale
securities --- 90,085
Purchases of property and equipment (181,246) (238,480)
Software development costs (15,363) (199,056)
Cash paid for purchase of Merkur Group, Inc. (971,338) ---
Net cash flows from investing activities (1,167,947) (455,417)
Cash flows from financing activities:
Net payments on bank line of credit (20,000) ---
Purchase of treasury stock (75,000) ---
Net cash flows from financing activities (95,000) ---
Net decrease in cash and cash equivalents (333,527) 87,521
Cash and cash equivalents, beginning
of period 2,209,782 1,763,435
Cash and cash equivalents, end of period $1,876,255 1,850,956
Supplemental disclosures of cash flow items:
Income taxes paid 434,561 641,000
Noncash transactions:
Common stock issued in connection with
purchase of Merkur Group, Inc. 568,692 ---
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 or 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.
Advant-e, via its wholly owned and sole operating subsidiary Edict Systems, Inc., is a provider of Business-to-Business electronic commerce software and Internet-based applications specializing in Electronic Data Interchange (EDI) and XML-based solutions for recurring transactions. Advant-e specializes in horizontal transaction services via EnterpriseEC®, an Internet-based Electronic Business Transaction Network, and within specific vertical industries via web-based "vortals" including www.GroceryEC.com , www.RetailEC.com , www.CPGSupplier.com , www.LogisticsEC.com , and www.MfgEC.com .