CADA Cam Commerce Solutions (MM)

CAM Reports 3rd Quarter Results Earnings Rise Sharply on Higher Revenues FOUNTAIN VALLEY, Calif., July 26 /PRNewswire-FirstCall/ -- CAM Commerce Solutions, Inc. (NASDAQ:CADA) reported a 21% increase in revenues to $6.3 million for the three months ended June 30, 2004 compared to $5.2 million for the same period of fiscal 2003. Net income for the three months ended June 30, 2004 increased to $721,000 or $0.17 per fully diluted share, compared to $86,000 or $0.03 per share for the quarter ended June 30, 2003. The figures for the quarter ended June 30, 2004 included $170,000 in additional revenue and $126,000 in net income related to a change in the accounting estimate for payment processing revenues (X-Charge) during the quarter. Revenues and net income, excluding the change in accounting estimate, for the three months ended June 30, 2004 were $6.1 million and $595,000 or $0.14 per fully diluted share, respectively. The change in accounting estimate resulted from the Company's ability to better estimate the payment processing revenues based on the accumulation of sufficient historical information required to analyze trends and formulate a reasonable estimate. In prior periods, payment processing revenues were recognized on a cash basis due to the lack of historical information available to make a reliable estimate. The June quarter was the Company's seventh consecutive quarter of increased revenues and fifth consecutive quarterly profit increase. Revenues for the nine months ended June 30, 2004 increased 16% to $17.4 million compared to $15.0 million for the same period of fiscal 2003. Net income for the nine months ended June 30, 2004 was $1.6 million or $0.41 per fully diluted share, compared to a net loss of $(410,000) or $(0.13) per share. Revenues and net income, excluding the effect of the change in accounting estimate, for the nine months ended June 30, 2004 were $17.2 million and $1.4 million or $0.38 per fully diluted share, respectively. The results included income tax expense for the State of California, based on California's suspension of the use of net operating loss carryforwards. The Company does not currently pay Federal income taxes due to the utilization of net operating loss carryforwards. As of June 30, 2004, the Company had $16.6 million in cash and marketable securities, or $4.46 per share based on shares outstanding at June 30, 2004, compared to $12.4 million at September 30, 2003, or $3.82 per share based on shares outstanding at September 30, 2003. "In the June quarter we saw modest improvement in system sales, while X-Charge business continued to show strong growth resulting in the continuing trend of higher earnings on increasing revenues," said Geoff Knapp, CEO. "We are not seeing any significant improvement in market conditions for the system sales side even with an improving economy; although overall conditions of the business do appear to be better than at any time in the past 3 years. Nearly all of the improvement in our results over the past several quarters has been directly related to a better business model that emphasizes high margin recurring revenue, customer satisfaction and building our brands. X-Charge payment processing revenues, excluding the additional revenue related to the change in accounting estimate, were $916,000 for the June quarter of 2004. The revenues more than doubled from the same quarter a year ago. The reseller channel for X-Charge continues to expand with approximately 100 active resellers, and interest from new potential resellers remains positive." Calculation of Cash and Marketable Securities Per Share JUNE 30 SEPTEMBER 30 2004 2003 (Unaudited) Cash and cash equivalents $16,091,000 $10,889,000 Marketable available-for-sale securities 501,000 1,541,000 Total cash and marketable securities (numerator) $16,592,000 $12,430,000 Shares outstanding (denominator) 3,723,000 3,253,000 Cash and marketable securities per share $4.46 $3.82 Calculation of the Effect of Change in Accounting Estimate THREE MONTHS ENDED NINE MONTHS ENDED JUNE 30, 2004 JUNE 30, 2004 (Unaudited) (Unaudited) Revenues $6,272,000 $17,372,000 Effect of change in accounting estimate (170,000) (170,000) Revenues without change in accounting estimate $6,102,000 $17,202,000 Net income $721,000 $1,571,000 Effect of change in accounting estimate (126,000) (126,000) Net income without change in accounting estimate $595,000 $1,445,000 Diluted net income per share $0.17 $0.41 Diluted net income per share without change in accounting estimate $0.14 $0.38 Shares used in computing diluted net income per share 4,124,000 3,850,000 About CAM Commerce Solutions CAM Commerce Solutions, Inc. provides total commerce solutions for traditional and web retailers that are based on the Company's open architecture software products for inventory management, point of sale, sales transaction processing, accounting, and payment processing. These solutions often include hardware, installation, training, service, and payment processing services provided by the Company. You can visit CAM Commerce Solutions at http://www.camcommerce.com/. Important Information The statements made in this news release, including those relating to the expectations of profitability and economic climates, are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Words such as "will," "should," "believe," "expect," "anticipate," "outlook," "forecast," "optimistic," "feel," "potential," "continue," "intends," "plans," "estimates," "may," "seeks," "would," "future," "bright," "projected", and other similar expressions that predict or indicate future events or trends, or that are not statements of historical matters, identify forward-looking statements. Expectations concerning financial results for future quarters are not actual results and are based upon preliminary estimates, as well as certain assumptions management believes to be reasonable at this time. Investors should not rely upon forward looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations, and the company expressly does not undertake any duty to update forward-looking statements which speak only as of the date of this news release. The performance of any one month or quarter may not be indicative of future performance, particularly given prevailing market and economic uncertainties. In addition to the factors set forth elsewhere in this release, the economic, competitive, technological, and other factors identified in CAM Commerce Solutions' filings with the Securities and Exchange Commission could affect the forward looking statements contained in this news release. CAM COMMERCE SOLUTIONS, INC. CONDENSED STATEMENT OF OPERATIONS (In thousands, except per share data) (Unaudited) THREE MONTHS ENDED NINE MONTHS ENDED JUNE 30 JUNE 30 JUNE 30 JUNE 30 2004 2003 2004 2003 REVENUES Net hardware, software and installation revenues $3,812 $3,413 $10,632 $9,803 Net service revenues 1,374 1,341 4,136 4,084 Net payment processing revenues 1,086 410 2,604 1,076 Total net revenues 6,272 5,164 17,372 14,963 COSTS AND EXPENSES Cost of hardware, software and installation revenues 1,899 1,610 5,228 4,838 Cost of service revenues 503 526 1,521 1,548 Cost of payment processing revenues 51 30 134 81 Total cost of revenues 2,453 2,166 6,883 6,467 Selling, general and administrative expenses 2,743 2,494 7,911 7,760 Research and development expenses 387 485 1,136 1,350 Total costs and operating expenses 5,583 5,145 15,930 15,577 Operating income (loss) 689 19 1,442 (614) Interest income 87 72 250 209 Income (loss) before provision for income taxes 776 91 1,692 (405) Provision for income taxes 55 5 121 5 Net income (loss) $721 $86 $1,571 $(410) Basic net income (loss) per share $0.20 $0.03 $0.45 $(0.13) Diluted net income (loss) per share $0.17 $0.03 $0.41 $(0.13) Shares used in computing basic net income (loss) per share 3,634 3,134 3,467 3,117 Shares used in computing diluted net income (loss) per share 4,124 3,257 3,850 3,117 CAM COMMERCE SOLUTIONS, INC. CONDENSED BALANCE SHEETS (In thousands, except per share data) JUNE 30 SEPTEMBER 30 2004 2003 (Unaudited) ASSETS Current assets: Cash and cash equivalents $16,091 $10,889 Marketable available-for-sale securities 501 1,541 Accounts receivable, net 1,674 1,214 Inventories 300 272 Other current assets 185 102 Total current assets 18,751 14,018 Property and equipment, net 574 710 Intangible assets, net 738 908 Other assets 245 305 Total assets $20,308 $15,941 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $512 $518 Accrued compensation and related expenses 972 687 Deferred service revenue and customer deposits 1,587 1,455 Other accrued liabilities 350 263 Total current liabilities 3,421 2,923 Stockholders' equity: Common stock, $.001 par value; 12,000 shares authorized, 3,723 shares issued and outstanding at June 30, 2004 and 3,253 at September 30, 2003 4 3 Paid-in capital 16,591 14,271 Accumulated other comprehensive income -- 23 Retained earnings (accumulated deficit) 292 (1,279) Total stockholders' equity 16,887 13,018 Total liabilities and stockholders' equity $20,308 $15,941 DATASOURCE: CAM Commerce Solutions CONTACT: Mathew Hayden of Hayden Communications, Inc., +1-858-456-4533, for CAM Commerce Solutions Web site: http://www.camcommerce.com/

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