Aftersoft Group
Aftersoft Group Reports Fiscal Second Quarter Financial Results
Company schedules investor conference call for February 22, 2007
NEW YORK and LONDON –February 15, 2007 – Aftersoft Group Inc. ("Aftersoft") (OTC Bulletin Board: ASFG), a leading supplier of software and services to the automotive aftermarket in the US, UK and Canada, today announced the results of operations for fiscal second quarter ended December 31, 2006. Revenues for the second quarter were $6.8 million compared to $4.8 million for the second quarter of the prior fiscal year, an increase of 30%. The Company reported net income of $996,000 versus $488,000 for the comparable period in previous fiscal year, an increase of 104%.
Through the first six months of fiscal 2007, the Company generated revenue of $12.6 million compared to $9.6 million in the prior year period, an increase of 31%. The Company generated net income of $2.0 million or $0.03 per share during the first six months of fiscal 2007. This compares to net income of $312,000 or $0.01 per share for the first six months of fiscal 2006.
| (In 000s except per share amounts) | Three Months Ended | Six Months Ended | ||
|---|---|---|---|---|
| 12-30-06 | 12-30-05 | 12-30-06 | 12-30-05 | |
| Revenue | $ 6,788 | $ 4,845 | $ 12,639 | $ 9,624 |
| Gross profit | $ 4,112 | $ 2,555 | $ 7,322 | $ 4,895 |
| Income from operations | $ 1,103 | $ 341 | $ 1,815 | $ 290 |
| Net (comprehensive) income | $ 996 | $ 488 | $ 2,007 | $ 312 |
| EPS per share | $ 0.01 | $ 0.02 | $ 0.03 | $ 0.01 |
| Shares (basic and diluted) | 63,071 | 34,101 | 54,657 | 34,101 |
Gross margins for the second quarter were 63.4 percent, significantly up from the prior year period level of 52.7 percent. For the first six months, gross margin average 57.9 percent compared to 50.9% for the same period in fiscal 2006.
Aftersoft’s CEO, Ian Warwick, commented, "With the Auto Data Network spin-out of Aftersoft shares firmly in process, we have repositioned the company and laid the foundations for sustainable, profitable growth. We have made significant progress in strengthening our UK and European market share and intend to focus on opportunities to further fortify our competitive position abroad as well as in North America."
Mr. Warwick continued, "We closed the EXP acquisition during the first quarter and are now focused on higher margin business, which, we expect, will soon be reflected on our financial results. In addition, we have identified a number of accretive acquisitions that are extremely synergistic with our existing business."
As announced in a previously issued press release, Aftersoft intends to conduct a conference call on February 22, 2007 at 4:00 p.m. (EST) to present its second quarter financial results and to respond to investor questions. Details as to how investors may participate in the conference call will be made public shortly.
ABOUT AFTERSOFT
Aftersoft Group, Inc. is a leading provider of software, information and services to the automotive aftermarket and automotive dealerships in the U.S., UK and Canada. Aftersoft develops and markets business, supply chain management, dealership and customer relationship management software solutions to small and medium-size firms in the automotive aftermarket and dealership market in the U.S and UK. The automotive aftermarket consists of businesses associated with the life cycle of a motor vehicle—from when the original manufacturer’s warranty expires to when the vehicle is scrapped. The Company services this market with business management systems, information products and online services that its customers use to manage their critical day-to-day business operations through automated point-of-sale, inventory management, purchasing, general accounting and customer relationship management. Aftersoft is currently number two in the U.S. parts aftermarket, which is comprised of approximately 20,000 small to mid-sized (SME) companies that approximately $68 billion in business, annually. The Company is also the leader in the UK parts aftermarket, which generates approximately $27 billion of business, annually, fueled by approximately 30 million vehicles in circulation. Its dealer management division services this market with dealership business management and marketing software systems for automotive manufacturers and automobile dealerships. This is a highly fragmented market with a aggregate annual, worldwide market volume of approximately $15 billion.
This release contains forward-looking statements that involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions, or future events. These statements involve estimates, assumptions, known and unknown risks, uncertainties and performances, or achievements expressed or implied by the forward-looking statement. Actual future results and trends may differ materially from those made in or suggested by any forward-looking statement due to a variety of factors, including, for example, increased competition; the ability of the company to expand its operations through either acquisitions or internal growth, to attract and retain qualified professionals, and to expand commercial relationships; technological obsolescence; general economic conditions. Consequently you should not place undue reliance on these forward-looking statements. We discuss these and other risks and uncertainties in greater detail in the filings we make with the Securities and Exchange Commission, including under the section entitled, "Risk Factors" in the Company's Annual Report on Form 10-KSB and our report on Form 10-Q.
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AFTERSOFT GROUP, INC
CONSOLIDATED BALANCE SHEET
(Unaudited)
(In thousands, except share and per share data)
ASSETS | December 31, 2006 | |
|---|---|---|
| CURRENT ASSETS | ||
| Cash | $ | 767 |
| Accounts receivable, net of allowance of $286 | 5,580 | |
| Note receivable | 950 | |
| Inventories | 561 | |
| Amount due from parent company | 304 | |
| Other | 776 | |
| Total Current Assets | 8,938 | |
| Property and equipment, net | 327 | |
| OTHER ASSETS | ||
| Goodwill | 22,966 | |
| Amortizable intangible assets, net | 7,502 | |
| Software development costs, net | 1,292 | |
| Other long-term assets | 34 | |
| Total Other Assets | 31,794 | |
| TOTAL ASSETS | $ | 41,059 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| CURRENT LIABILITIES | ||
| Accounts payable | $ | 2,697 |
| Accrued expenses | 2,045 | |
| Accrued legal expenses | 1,895 | |
| Payroll and other taxes | 988 | |
| Current portion of long-term debt | 892 | |
| Deferred revenue | 2,521 | |
| Taxes payable | 1,030 | |
| Total Current Liabilities | 12,068 | |
| LONG-TERM LIABILITIES | ||
| Deferred revenue | 772 | |
| Deferred income taxes | 880 | |
| Long-term debt | 6 | |
| Total Liabilities | 13,726 | |
| Commitments and contingencies | ||
| STOCKHOLDERS' EQUITY | ||
| Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized, none issued and outstanding | - | |
| Common stock, par value $0.0001 per share, 100,000,000 shares authorized, 63,071,167 shares issued and outstanding | 6 | |
| Additional paid-in capital | 24,528 | |
| Accumulated other comprehensive loss | (258) | |
| Retained earnings | 3,057 | |
| Total Stockholders' Equity | 27,333 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 41,059 |
AFTERSOFT GROUP, INC
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except share and per share data)
| For the Three Months Ended | For the Six Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2006 | December 31, 2005 | December 31, 2006 | December 31, 2005 | |||||||||
| Revenues | $ | 6,788 | $ | 4,845 | $ | 12,639 | $ | 9,624 | ||||
| Cost of revenues | 2,676 | 2,290 | 5,317 | 4,729 | ||||||||
| Gross profit | 4,112 | 2,555 | 7,322 | 4,895 | ||||||||
| Operating expenses | ||||||||||||
| Research and development | 853 | 763 | 1,628 | 1,536 | ||||||||
| Sales and marketing | 591 | 487 | 1,111 | 966 | ||||||||
| General and administrative | 1,033 | 699 | 1,853 | 1,559 | ||||||||
| Depreciation and amortization | 532 | 265 | 915 | 544 | ||||||||
| Total operating expenses | 3,009 | 2,214 | 5,507 | 4,605 | ||||||||
| Operating income | 1,103 | 341 | 1,815 | 290 | ||||||||
| Other income (expense) | ||||||||||||
| Interest expense | (36 | ) | (26 | ) | (59 | ) | (58 | ) | ||||
| Interest income | 1 | - | 3 | - | ||||||||
| Gain (loss) on sale of property and equipment | - | 304 | (4 | ) | 304 | |||||||
| Other, net | 4 | 17 | 500 | 18 | ||||||||
| Total other income (expense) | (31 | ) | 295 | 440 | 264 | |||||||
| Income from operations | 1,072 | 636 | 2,255 | 554 | ||||||||
| Provision for income taxes | 134 | 104 | 378 | 185 | ||||||||
| Net income | 938 | 532 | 1,877 | 369 | ||||||||
| Foreign currency translation gain (loss) | 58 | (44 | ) | 130 | (57 | ) | ||||||
| Total comprehensive income | $ | 996 | $ | 488 | $ | 2,007 | $ | 312 | ||||
| Earnings per share attributed to common stockholders - basic and diluted | $ | 0.01 | $ | 0.02 | $ | 0.03 | $ | 0.01 | ||||
| Weighted average number of shares of common stock outstanding - basic and diluted | $ | 63,071,167 | $ | 34,101,167 | $ | 54,657,167 | $ | 34,101,167 | ||||