AXS-One Reports Third Quarter Financial Results RUTHERFORD, N.J.,
Oct. 28 /PRNewswire-FirstCall/ -- AXS-One Inc. (AMEX:AXO), a
leading provider of Records Compliance Management (RCM) software
solutions today announced its financial results for the third
quarter and nine-month period ended September 30, 2004. Revenues
for the quarter were $9.1 million, a 10 percent decrease from the
$10.2 million reported in the corresponding prior year period.
License revenues were $1.3 million, including $0.9 million (70
percent) related to e-mail management and archiving products, an
increase of 30 percent from the previous quarter but a decrease of
47 percent from the $2.5 million in total license revenues reported
in the same quarter last year. Operating expenses increased 18
percent from the same quarter last year as a result of management's
focus on improving key aspects of the organization, including
sales, marketing and research and development, to better position
the company to exploit the opportunities for long term success
created by global compliance and governance drivers. As a result of
these initiatives, sales and marketing expenses increased 28
percent and R&D expenses increased 23 percent from the same
quarter last year. The Company reported an operating loss of $1.7
million versus operating income of $1.1 million in the third
quarter of 2003. The Company reported a net loss of $1.7 million,
or ($0.06) per diluted share, versus net income of $918,000, or
$0.04 per diluted share last year. For the quarter, 54 percent of
the license revenue recognized was with customers inside the United
States, while 46 percent was recognized internationally. For the
first nine months of 2004, revenues increased 1.1 percent to $29.6
million, compared to $29.2 million reported for the first nine
months of 2003. License fees decreased 5.6 percent to $4.8 million
compared to license fees of $5.1 million for the first nine months
of 2003. Total operating expenses, including the restructuring and
other costs, increased 20 percent to $32.9 million compared to
$27.5 million for the first nine months of 2003. The Company
reported an operating loss of $3.4 million compared to operating
income of $1.7 million for the first nine months of 2003. The net
loss for the nine-month period was $3.5 million, or ($0.13) per
diluted share, compared to net income of $1.5 million, or $0.06 per
diluted share, for the first nine months of 2003. The Company's
balance sheet reported $6.7 million in cash and cash equivalents as
of September 30, 2004, an increase from $2.9 million as of December
31, 2003, primarily as a result of the $7.7 million private
placement completed in April 2004. The Company carries no long-term
debt. Highlights from the Third Quarter include: * Initial sales of
AXS-Link(TM) for SAP, AXS-One's SAP archiving solution certified by
SAP in March 2004 and the establishment of a pipeline * Additional
business for Records Compliance Management software with marquee
Financial Services accounts in North America * Major wins for
Enterprise Financials including one of Australia's largest
retailers * Significant wins for AXS-One's e-delivery solution
within the European travel industry, including five out of the top
ten tour operators and one of the largest ferry operators. These
agreements give AXO a recurring transaction fee from the
organizations that account for nearly 50 percent of all passenger
bookings made by Civil Aviation Authority (CAA)-regulated travel
agents. * An alliance with NuTech Integrated Systems, a systems
integrator of enterprise-level messaging solutions with focus on
the financial services sector. "During the third quarter, we were
able to deliver wins across our entire product portfolio, including
our new products such as AXS-Link for SAP, where we won business
against an entrenched market leader," commented Bill Lyons,
chairman and chief executive officer of AXS-One. "The predictable
revenue stream that our e-delivery solutions will provide in
addition to our ability to significantly expand the number and size
of opportunities within our installed accounts worldwide provides a
solid foundation, coupled with optimism about our growth prospects
both in the fourth quarter and 2005. The opportunities to develop
agreements with partners, including major global organizations such
as Sun Microsystems and SAP, remain substantial. We continue to be
extremely confident in our ability to leverage these opportunities
worldwide, which should enable us to achieve our strategic
objectives -- grow the business and deliver enhanced shareholder
value." About AXS-One Inc. AXS-One (AMEX:AXO) is a leading provider
of Records Compliance Management solutions. The AXS-One Compliance
Platform enables organizations to implement secure, scalable and
enforceable policies that address records management for corporate
governance, legal discovery and industry regulations such as
SEC17a-4, NASD 3010, Sarbanes-Oxley, HIPAA, The Patriot Act and
Gramm-Leach Bliley. AXS-One's technology has been critically
acclaimed as best of class and delivers digital archiving, business
process management, electronic document delivery and integrated
records disposition and discovery for e-mail, instant messaging,
images, SAP and other corporate records. Founded in 1979, and
headquartered in Rutherford, NJ, AXS-One has offices worldwide
including in the United States, Australia, Singapore, United
Kingdom and South Africa. For further information, visit the
AXS-One web site at http://www.axsone.com/. AXS-One, the AXS-One
logo, "Access Tomorrow Today," AXSPoint, and TransAXS are
registered trademarks of, and AXS-One Compliance Platform, AXS-One
Retention Manager, "The Records Compliance Management Company,"
e-Cellerator, AXS Desk, "AXS-One Collaboration FrameWorks," SMART,
AXS-Link and Tivity are trademarks of, AXS-One Inc., in the U.S.
All other company and product names are trademarks or registered
trademarks of their respective companies. Special Note Regarding
Forward-Looking Statements: A number of statements contained in
this release are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied in the applicable
statements. These risks and uncertainties include, but are not
limited to: potential vulnerability to technological obsolescence;
the risks that its current and future products may contain errors
or defects that would be difficult and costly to detect and
correct; potential difficulties in managing growth; dependence on
key personnel; the possible impact of competitive products and
pricing; and other risks described in more detail in AXO's
Securities and Exchange Commission filings. Company Contact: IR
Contact: William Levering Matthew Hayden AXS-One Inc. Hayden
Communications (201) 935-3400 (858) 456-4533 AXS-ONE INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands,
except per share data) (unaudited) Three Months Ended Nine Months
Ended September 30, September 30, 2004 2003 2004 2003 Revenues:
License fees $1,306 $2,459 $4,770 $5,054 Services 7,759 7,681
24,621 23,930 Other-related parties 80 71 181 260 Total revenues
9,145 10,211 29,572 29,244 Operating expenses: Cost of license fees
693 371 1,479 1,090 Cost of services 4,129 3,815 12,926 11,782
Sales and marketing 2,271 1,780 6,696 5,535 Research and
development 2,081 1,697 6,017 4,949 General and administrative
1,714 1,483 4,811 4,146 Restructuring costs (83) -- 1,020 -- Total
operating expenses 10,805 9,146 32,949 27,502 Operating income
(expense) (1,660) 1,065 (3,377) 1,742 Other income (expense):
Interest income 40 17 105 49 Interest expense -- (48) (14) (167)
Gain on sale of subsidiary -- -- -- 71 Equity in income (losses) of
joint ventures (40) (81) (122) 34 Other income (expense), net (17)
(6) (68) (172) Other expense, net (17) (118) (99) (185) Net income
(loss) before income taxes $(1,677) $947 $(3,476) $1,557 Income tax
benefit (expense) 18 (29) (10) (57) Net income (loss) $(1,659) $918
$(3,486) $1,500 Basic net income per common share $(0.06) $0.04
$(0.13) $0.06 Weighted average basic common shares outstanding
28,106 24,960 27,094 24,929 Diluted net income per common share
$(0.06) $0.04 $(0.13) $0.06 Weighted average diluted common shares
outstanding 28,106 26,228 27,094 25,932 The unaudited financial
information included in this document is intended only as summary
provided for your convenience, and should be read in conjunction
with the complete consolidated financial statements of the Company
(including the Notes thereto, which set forth important
information) contained in its Reports on Form 10-K and 10-Q filed
by the Company with the U.S. Securities and Exchange Commission
(SEC). Such reports are available on the public EDGAR electronic
filing system maintained by the SEC. This press release contains
forward-looking statements. Such statements are only predictions,
and actual events or results may differ materially. All
forward-looking statements involve risks and uncertainties,
including, without limitation, the risks detailed in the Company's
documents and reports filed from time to time with the Securities
and Exchange Commission. AXS-ONE INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands) September 30, December
31, 2004 2003 ASSETS (Unaudited) Current assets: Cash and cash
equivalents $6,681 $2,946 Accounts receivable, net of allowance for
doubtful accounts 5,788 5,541 Due from joint venture 127 107
Prepaid expenses and other current assets 876 659 Total current
assets 13,472 9,253 Equipment and leasehold improvements, net of
accumulated depreciation 411 336 Capitalized software development
costs, net of accumulated amortization 2,106 2,364 Other assets 185
197 Total assets $16,174 $12,150 LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) Current liabilities: Current portion of long-term
debt $-- $547 Accounts payable and accrued expenses 5,515 4,848 Due
to joint venture -- 4 Deferred revenue 9,258 8,946 Total current
liabilities 14,773 14,345 Long-term deferred revenue 505 1,504
Stockholders' equity (deficit): 896 (3,699) Total liabilities and
stockholders' equity (deficit) $16,174 $12,150 The unaudited
financial information included in this document is intended only as
summary provided for your convenience, and should be read in
conjunction with the complete consolidated financial statements of
the Company (including the Notes thereto, which set forth important
information) contained in its Reports on Form 10-K and 10-Q filed
by the Company with the U.S. Securities and Exchange Commission
(SEC). Such reports are available on the public EDGAR electronic
filing system maintained by the SEC. This press release contains
forward-looking statements. Such statements are only predictions,
and actual events or results may differ materially. All
forward-looking statements involve risks and uncertainties,
including, without limitation, the risks detailed in the Company's
documents and reports filed from time to time with the Securities
and Exchange Commission. DATASOURCE: AXS-One Inc. CONTACT: William
Levering of AXS-One Inc., +1-201-935-3400, ; or IR, Matthew Hayden
of Hayden Communications, +1-858-456-4533, , for AXS-One Inc. Web
site: http://www.axsone.com/
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