INX Provides Business Update and Comments On Status Of Restatement
August 26 2010 - 6:00AM
Business Wire
INX Inc. (NASDAQ:INXI) (the “Company”; or “INX”) today provided
an update on recent business trends and commented on the planned
restatement of previously filed financial statements.
The Company has been in the process of evaluating and
quantifying the effect of errors in its previously issued financial
statements related to accounting for revenue recognition. On June
21, 2010 the Company announced its intention to restate certain
previously issued financial statements to correct these errors.
BUSINESS UPDATE:
Since the Company is unable to provide operating results for the
quarter ended June 30, 2010 until the prior period financial
statements are completed and restated, in an effort to provide
investors with as much meaningful information as is possible at
this time, the Company is providing the information below. The
information provided herein is limited to that which the Company
does not expect to be impacted by the changes related to revenue
recognition. Note that contract/order “bookings” and “billings” as
used in the following paragraphs represent customer orders and
invoices for products and services which is not the same as
“revenue” determined in accordance with Generally Accepted
Accounting Principles.
For the Company's second quarter ended June 30, 2010
(unaudited):
- Customer product sales
"bookings" (receipt of new orders and contracts from customers for
product sales) provides an indication of the near-term trend in
customer demand and business activity. Product bookings increased
by approximately 17% sequentially compared to the first quarter
ended June 30, 2010, and increased by approximately 52% compared to
the comparable prior year quarter.
- Customer product sales
"billings", (invoicing of product shipments to customers, net of
sales taxes) also provides an indication of near-term customer
demand as well as an indication of product availability from our
suppliers. Product billings increased by approximately 27% on a
sequential basis compared to the first quarter, and increased by
approximately 52% compared to the prior year period.
- Customer billings for services
(invoicing of professional services and managed services to
customers, net of sales taxes), also provides an indication of
business activity, but some services projects and contracts are of
a longer-term nature so services are not as good an indication of
near term customer demand as is product sales bookings, but does
provide an indication of the general level of business activity for
the Company's services offerings. Services billings increased by
approximately 21% compared to the first quarter, but decreased by
approximately 35% compared to comparable prior year period, which
year-over-year decrease primarily relates to the previously
disclosed loss of the services contract supporting the U.S. Army in
Iraq that ended in approximately October 2009.
As of June 30, 2010 (unaudited):
- Cash and cash equivalents is
expected to be approximately $8.7 million, compared to
approximately $11.1 million at March 31, 2010 and approximately
$13.2 million at December 31, 2009.
- Short-term debt is expected to
be approximately $197,000, compared to approximately $202,000 at
March 31, 2010 and approximately $209,000 at December 31,
2009.
- Long-term debt is expected to be
approximately $125,000, compared to approximately $171,000 at March
31, 2010 and approximately $222,000 at December 31, 2009.
The decrease in cash at June 30, 2010 compared to March 31, 2010
was primarily related to increased aging of accounts receivable.
Subsequent improvement in the aging of accounts receivables
resulted in cash increasing to approximately $15.4 million as of
the end of last week, with no material change in debt compared to
June 30, 2010.
Commenting on the trends in the Company's business, Mr. Long
said "General business conditions and customer demand improved
further in the second quarter compared to the first quarter, as
well as compared to the comparable prior year quarter. Based upon
billings to customers, all three categories of revenue; including
products, professional services and managed services, improved for
the second quarter compared to the first quarter. Total contract
bookings and billings for the second quarter were each at record
levels for any quarter in the Company's history. We currently
expect third quarter product order bookings will be in a range of
approximately minus 1% to minus 6% compared to the second quarter,
which would represent a year-over-year increase of approximately 18
to 23%. Our sales and operations teams have done an outstanding job
in continuing to drive business and take care of our customers in
an environment where customer demand has continued to improve for
the technology solutions that we provide."
STATUS OF THE AUDIT AND RESTATEMENT
Commenting on the status of the previously disclosed accounting
issues, and the status of the audit and restatement of previous
financial statements, Mr. Long said "The accounting issues we have
been working to resolve for the past five months have been a very
time consuming and costly endeavor. It is now apparent that the
project is going to take longer than we previously anticipated. We
are currently attempting to estimate the length of time required to
complete the project so we can provide an update. We hope to be
able to communicate a more comprehensive timing update in the next
few weeks."
SAFE HARBOR STATEMENT:
The statements contained in this document that are not
statements of historical fact including but not limited to,
statements identified by the use of terms such as “anticipate,”
“appear,” “believe,” “could,” “estimate,” “expect,” “hope,”
“indicate,” “intend,” “likely,” “may,” “might,” “plan,” “pointing
towards,” “potential,” “project,” “seek,” “should,” “will,”
“would,” and other variations or negative expressions of these
terms, are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on current expectations and
are subject to a number of risks and uncertainties. The financial
information contained in this press release is preliminary and
subject to change until the Company files its Annual Report on Form
10-K for the year ended December 31, 2009 and its Quarterly Reports
on Form 10-Q for the quarterly periods ended March 31, 2010 and
June 30, 2010 with the Securities and Exchange Commission. All
numbers set forth in this press release are unaudited.
Actual results could differ materially from the forward-looking
statements contained herein due to numerous factors, including:
- Events that occur or adjustments
made after the date of this announcement.
- Market and economic conditions,
including capital expenditures by enterprises for network,
telephone communications and data center systems products and
services.
- Unexpected customer contract
cancellations.
- Currently unforeseen events that
cause further delays in the Company's ability to publish its
financial results within the time period indicated herein, or
provide an estimate of the time required to publish its financial
results.
- Credit and financial market
conditions that could impact customers' ability to finance
purchases.
- Catastrophic events.
Recipients of this document are cautioned to consider these
risks and uncertainties and to not place undue reliance on these
forward-looking statements. All information in this press release
is as of the date of this press release, and the Company expressly
disclaims any obligation or undertaking to update or revise any
forward-looking statement contained herein to reflect any change in
the Company's expectations with regard thereto, or any change in
events, conditions or circumstances upon which any statement is
based.
ABOUT INX INC.:
INX Inc. (NASDAQ:INXI) is a leading U.S. provider of IP
communications and data center solutions for enterprise
organizations. INX offers a suite of advanced technology solutions
focused around the entire lifecycle of enterprise IP network
communications and data center infrastructure. Services are
centered on the design, implementation and support of network
infrastructure, including routing and switching, wireless,
security, unified communications, and data center solutions such as
storage and server virtualization. Customers include enterprise
organizations such as corporations, as well as federal, state and
local governmental agencies. Additional information about INX can
be found on the Web at www.INXI.com.
Inx Inc. (MM) (NASDAQ:INXI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Inx Inc. (MM) (NASDAQ:INXI)
Historical Stock Chart
From Jul 2023 to Jul 2024