2013 record revenue jumps to $20.5 million; EBITDA jumps to
$2.6 million
Cover-All Technologies Inc. (NYSE MKT:COVR) today announced
financial results for the fourth quarter and year ended December
31, 2013.
“We are pleased to report record revenue with meaningful revenue
and EBITDA* growth for the year ended December 31, 2013 – up 26%
and up 339%, respectively, year-over-year,” said Manish Shah, CEO
and President of Cover-All. “We successfully executed our growth
strategy for 2013 to establish a solid base and build momentum
through winning new accounts in 2013.”
“We also announced a reorganization of the Company during fourth
quarter 2013 which is now in full effect and should help us reduce
costs in excess of $1.5 million in 2014. These cost savings will
improve operating profitability and free up capital for growth
strategies.”
“We are starting 2014 with a solid services backlog and greater
visibility for revenue. We continue to see demand for core systems
and data analytics in the US P/C insurance industry. We are
aggressively pursuing marketing our new software and services to
continue to build shareholder value through 2014.”
FINANCIAL RESULTS FOR THE YEAR ENDED DECEMBER 31,
2013
Revenue
- Total revenues for the year ended
December 31, 2013 were $20.5 million, compared to $16.2 million in
2012, an increase of 26.2%.
- License revenue was $5.9 million in
2013, up 51.7% compared to $3.9 million in 2012.
- Support Services revenue (which
represents contracted continuing revenue) was $8.1 million in 2013,
compared to $8.3 million in 2012, a decrease of 1.8%.
- Professional Services revenue was $6.4
million in 2013, up 59.4% compared to $4.0 million in 2012.
Profitability
- Operating loss for the twelve months
ended December 31, 2013 was $2.4 million, compared to $5.1 million
in 2012.
- Net loss for 2013 was $2.9 million, or
$0.11 per basic and diluted share, compared to net loss of $5.0
million, or $0.19 per basic and diluted share, for 2012.
Non-GAAP* Profitability
- Earnings before interest, taxes,
depreciation and amortization (“EBITDA”), a non-GAAP metric, was
$2.6 million, or $0.10 per basic and diluted share, for 2013,
compared to $(1,087,986), or $(0.04) per basic and diluted share,
for 2012.
- Net loss excluding non-recurring
reorganization-related costs, a non-GAAP metric, for the twelve
months ended December 31, 2013 was $2.6 million, or $0.10 per basic
and diluted share, compared to $5.0 million, or $0.19 per basic and
diluted share, in the same period of 2012.
Balance Sheet
- As of December 31, 2013, the Company
had $1.8 million in cash and cash equivalents and $2.6 million in
accounts receivable.
Earnings per Share Disclosures
- All earnings per share results
disclosed above for the years ended December 31, 2013 and 2012 are
based on 26.17 million and 25.87 million basic and diluted shares
issued and outstanding, respectively.
FINANCIAL RESULTS FOR THE FOURTH QUARTER ENDED DECEMBER 31,
2013
Revenue
- Total revenues for the three months
ended December 31, 2013 were $4.5 million, compared to $4.0 million
for the same period in 2012, an increase of 14.4%.
- License revenue for the fourth quarter
of 2012 was $599,000, compared to $1.3 million for the same period
in 2012, a decrease of 52.4%.
- Support Services revenue (which
represents contracted continuing revenue) was $2.1 million for the
fourth quarter of 2013, up 15.9% compared to $1.8 million for the
same period in 2012.
- Professional Services revenue for the
fourth quarter of 2013 was $1.8 million, compared to $0.9 million
for the same quarter in 2012, an increase of 108.5%.
Profitability
- Operating loss for the three months
ended December 31, 2013 was $1.3 million, compared to $2.1 million
in the comparable period in 2012.
- Net loss for the three months ended
December 31, 2013 was $1.5 million, or $0.06 per basic and diluted
share, compared to net income of $2.0 million, or $0.08 per basic
and diluted share, in the same quarter of 2012.
Non-GAAP* Profitability
- EBITDA, a non-GAAP metric, was
$(65,720), or $(0.00) per basic and diluted share, for the fourth
quarter of 2013, compared to $(897,746), or $(0.03) per basic and
diluted share, for the fourth quarter of 2012.
- Net loss excluding non-recurring
reorganization-related costs, a non-GAAP metric, for the three
months ended December 31, 2013 was $1.5 million, or $0.06 per basic
and diluted share, compared to $2.0 million, or $0.08 per basic and
diluted share, for the same period in 2012.
Earnings per Share Disclosures
- All earnings per share results
disclosed above for the three months ended December 31, 2013 and
2012 are based on 26.35 million and 25.90 million basic and diluted
shares issued and outstanding, respectively.
WEBCAST AND CONFERENCE CALL INFORMATION
Management will conduct a live teleconference to discuss its
financial results at 4:30 p.m. EST on Thursday, February 20, 2014.
Anyone interested in participating should call 1-877-941-1428 if
calling from the United States, or 1-480-629-9856 if dialing
internationally. A replay will be available until March 6, 2014,
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 4669615 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://public.viavid.com/index.php?id=107957.
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 implementation
of our acquisition strategies and our ability to complete or
integrate acquisitions, 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, 2012, filed with the SEC on March 29, 2013,
copies of which are available from the SEC or may be obtained upon
request from the Company.
*ABOUT NON-GAAP FINANCIAL MEASURES
In evaluating its business, Cover-All considers and uses EBITDA
as a supplemental measure of its operating performance. The Company
defines EBITDA as earnings before interest, taxes, depreciation and
amortization. The Company presents EBITDA because it believes it is
frequently used by securities analysts, investors and other
interested parties as a measure of financial performance.
The term EBITDA is not defined under U.S. generally accepted
accounting principles (“U.S. GAAP”) and is not a measure of
operating income, operating performance or liquidity presented in
accordance with U.S. GAAP. EBITDA has limitations as an analytical
tool, and when assessing the Company’s operating performance,
investors should not consider EBITDA in isolation or as a
substitute for net income (loss) or other consolidated income
statement data prepared in accordance with U.S. GAAP. Among other
things, EBITDA does not reflect the Company’s actual cash
expenditures. Other companies may calculate similar measures
differently than Cover-All, limiting their usefulness as
comparative tools. Cover-All compensates for these limitations by
relying on its U.S. GAAP results and using EBITDA only
supplementally.
ABOUT COVER-ALL TECHNOLOGIES INC.
Cover-All provides property and casualty insurance professionals
a robust state-of-the-art, browser-based family of Policy, Business
Intelligence, and Claims solutions designed to deliver products to
market faster, enhance quality, ensure compliance, and reduce
costs. With offices in Morristown, NJ and Honolulu, HI, Cover-All
continues its tradition of developing technology solutions designed
to revolutionize the way property and casualty insurance business
is conducted. Additional information is available online at
www.cover-all.com.
Cover-All®, My Insurance Center™ (MIC) NexGen, Insurance Policy
Database™ (IPD) and PipelineClaims™ 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.
Cover-All Technologies Inc. and
Subsidiaries
CONSOLIDATED STATEMENT OF
OPERATIONS
(UNAUDITED)
Three months ended
December 31,
Twelve months ended
December 31,
2013 2012 2013 2012
Revenues:
Licenses
$
598,903
$
1,257,178
$ 5,947,225 $ 3,921,171 Support Services 2,140,902 1,846,910
8,147,108 8,296,263 Professional Services 1,794,486
860,588 6,388,403 4,007,405
Total Revenues 4,534,290
3,964,676 20,482,736 16,224,839
Cost of Revenues: Licenses 1,267,023 1,140,950 4,794,113
4,344,837 Support Services 1,209,675 2,298,712 7,089,457 6,687,683
Professional Services 1,173,160 1,000,018
3,499,100 4,681,203
Total
Cost of Revenues 3,649,857 4,439,680
15,382,669 15,713,723
Direct
Margin 884,434 (475,004 ) 5,100,067
511,116
Operating Expenses: Sales and
Marketing 480,759 505,557 2,255,059 2,557,273 General and
Administrative* 1,060,218 763,405 2,618,543 2,026,180 Acquisition
Costs –– –– –– 136,957 Restructuring Cost –– –– 319,014 –– Research
and Development 681,587 374,410
2,315,198 911,688
Total Operating
Expenses 2,222,564 1,643,372
7,507,814 5,632,098
Operating (Loss)
Income (1,338,130 ) (2,118,376 )
(2,407,747 ) (5,120,982 )
Other (Income) Expense:
Interest Expense 188,251 97,927 464,071 125,852 Interest Income ––
–– –– (37 ) Other Income –– (99 )
(3,821 ) (14,638 )
Total Other (Income) Expense
188,251 97,828 460,250
111,177
(Loss) Income Before Income Taxes
(1,526,381 ) (2,216,204 ) (2,867,997 )
(5,232,159 )
Income Taxes 11,914
(257,928 ) 30,380 (257,928 )
Net (Loss)
Income $ (1,538,295 ) $ (1,958,276 ) $ (2,898,377 ) $
(4,974,231 )
Basic (Loss) Earnings Per Common Share $ (0.06
) $ (0.08 ) $ (0.11 ) $ (0.19 )
Diluted (Loss) Earnings Per
Common Share $ (0.06 ) $ (0.08 ) $ (0.11 ) $ (0.19 )
Weighted Average Number of Common Shares Outstanding for
Basic (Loss) Earnings Per Common Share 26,348,000
25,900,715 26,173,000 25,869,969
Weighted Average Number of Common Shares
Outstanding for Diluted (Loss) Earnings Per Common Share
26,348,000 25,900,715 26,173,000
25,869,969
*Includes performance-based annual
compensation.
Cover-All Technologies Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET (UNAUDITED)
December 31,
2013
December 31,
2012
Assets: Current Assets: Cash and Cash Equivalents $
1,848,571 $ 1,353,892
Accounts Receivable (Less Allowance for
Doubtful Accounts of $25,000)
2,604,489 2,365,750 Prepaid Expenses 491,905 528,398 Deferred Tax
Asset 850,500 910,998 Total Current
Assets 5,795,465 5,159,038 Property and
Equipment – At Cost: Furniture, Fixtures and Equipment 1,336,048
1,373,485 Less: Accumulated Depreciation 627,457
450,604 Property and Equipment – Net 708,590
922,881 Goodwill 1,039,114
1,039,114
Capitalized Software (Less Accumulated
Amortization of $22,305,191 and $17,658,748, Respectively)
7,964,583 10,441,992 Customer
Lists/Relationships (Less Accumulated Amortization of
$341,333 and $260,093, Respectively)
60,667 141,907 Deferred Tax Asset
2,674,928 2,614,430 Deferred Financing
Costs (Net of Amortization of $36,082 and $7,870, Respectively)
56,201 84,413 Other Assets
424,522 362,806 Total Assets $ 18,724,070
$ 20,766,581
Liabilities and Stockholders’
Equity: Current Liabilities: Accounts Payable $ 1,059,238 $
1,681,007 Accrued Expenses Payable 1,412,400 1,390,533 Deferred
Charges 231,051 83,455 Current Portion of Capital Lease 114,640
109,878 Deferred Revenue 2,997,455 2,426,810
Total Current Liabilities 5,814,784
5,691,683 Long-Term Liabilities: Long-Term Debt 1,639,109
1,457,945 Long-Term Portion of Capital Lease 353,139
476,664 Total Long Term Liabilities 1,992,248
1,934,609 Total Liabilities 7,807,032
7,626,292 Commitments and Contingencies
— — Stockholders’ Equity:
Common Stock, $.01 Par Value, Authorized
75,000,000 Shares; 26,402,227 and 25,936,106 Shares Issued and
Outstanding in 2013 and 2012, Respectively
264,022 259,361 Paid-In Capital 32,674,374 32,003,909 Accumulated
Deficit (22,021,359 ) (19,122,981 ) Total
Stockholders’ Equity 10,917,038 13,140,289
Total Liabilities and Stockholders’ Equity $ 18,724,070
$ 20,766,581
Cover-All Technologies Inc. and
Subsidiaries
RECONCILIATION OF U.S. GAAP NET (LOSS)
INCOME TO EBITDA
(UNAUDITED)
Three months ended
December 31,
Twelve months ended
December 31,
2013 2012 2013 2012
Net (Loss) Income $ (1,538,295 ) $ (1,958,276 ) $ (2,898,377
) $ (4,974,231 ) Interest Expense, Net 188,252 97,927
464,072 125,815 Income Tax Expense 11,913 (257,928 ) 30,379
(257,928 ) Depreciation 63,218 173,493 251,853 296,693 Amortization
1,209,192 1,047,038 4,755,896
3,721,665 EBITDA $ (65,720 ) $ (897,746
) $ 2,603,823 $ (1,087,986 ) EBITDA per Common Share:
Basic $ (0.00 ) $ (0.03 ) $ 0.10 $ (0.04 ) Diluted $ (0.00 )
$ (0.03 ) $ 0.10 $ (0.04 )
RECONCILIATION OF SELECTED U.S. GAAP
MEASURES TO NON U.S. GAAP MEASURES
(UNAUDITED)
Three months ended
December 31,
Twelve months ended
December 31,
2013 2012 2013 2012 Net Income
(Loss) (U.S. GAAP) $ (1,538,295 ) $ (1,958,276 ) $ (2,898,377 ) $
(4,974,231 ) Reorganization Costs — —
319,014 — Net Income
(Loss) (Excluding Reorganization Costs) (Non U.S. GAAP)
$
(1,538,295
)
$
(1,958,276
)
$
(2,579,363
)
$
(4,974,231
)
Earnings (Loss) per Common Share (Excluding Reorganization
Costs): Basic $ (0.06 ) $ (0.08 ) $ (0.10 ) $ (0.19 ) Diluted $
(0.06 ) $ (0.08 ) $ (0.10 ) $ (0.19 )
Three months
ended
December 31,
Twelve months ended
December 31,
2013 2012 2013 2012 EBITDA $
(65,720 ) $ (897,746 ) $ 2,603,823 $ (1,087,986 )
Reorganization Costs — — 319,014
— EBITDA (Excluding Reorganization
Costs) $ (65,720 ) $ (897,746 ) $ 2,922,837 $ (1,087,986 )
EBITDA per Common Share (Excluding Reorganization Costs):
Basic $ (0.00 ) $ (0.03 ) $ 0.11 $ (0.04 ) Diluted $ (0.00 )
$ (0.03 ) $ 0.11 $ (0.04 )
Cover-All Technologies Inc.Ann Massey, 973-461-5190Chief
Financial Officeramassey@cover-all.com