BELLEVUE, Wash., Feb. 14 /PRNewswire-FirstCall/ -- Captaris, Inc.
(NASDAQ:CAPA), a leading provider of software products that
automate document-centric processes, today reported financial
results for its 2007 fourth quarter and fiscal year ended December
31, 2007. Total revenue for the fourth quarter was $28.1 million, a
21% increase over the preceding quarter and 11% over the fourth
quarter of 2006. Fourth quarter revenue by category compared to the
fourth quarter of 2006 is as follows: -- Software revenue was $10.0
million, an increase of $753,000 -- Maintenance, support and
services revenue was $11.1 million, an increase of $1.6 million --
Hardware revenue was $5.1 million, a decrease of $1.4 million --
Appliance revenue, the FaxPress product line of hardware and
embedded software, was $1.9 million Gross profit was $19.4 million,
compared to $17.4 million in the prior year's fourth quarter; gross
margin was 69.2%, compared to 68.8% in the same quarter last year.
Total operating expenses for the fourth quarter were $19.9 million,
compared to $15.1 million in the prior year's fourth quarter. The
increase is primarily due to approximately $1.7 million for
Castelle which was acquired in July, 2007, approximately $1.5
million of planned additional cost for the consolidation and
outsourcing of the Company's software development activities,
approximately $650,000 associated with its sales organization's
geographic expansion and skills enhancement, and approximately
$750,000 for higher legal and advisory services, travel and other
G&A costs. David P. Anastasi, President and CEO of Captaris,
stated, "We are a much stronger and revenue diverse company than a
year ago. Our improvement in fourth quarter revenue is attributable
to our strategic initiatives that significantly increased our
scale, products and market reach. Our recent acquisitions of
Castelle and CDT expand our product offerings, make us a
significantly larger player in the rapidly evolving distributed
capture market and substantially expand our international
presence." "We are already seeing increased speed to market, with
several exciting new product releases scheduled for the first half
of 2008, and are expanding distribution through greater
participation with our MFP (multi-function printer devices),
Microsoft and IP Telephony channel partners. In addition, we have
expanded and strengthened our sales organization and are focused on
leveraging the success we've already seen in larger markets in both
the U.S. and internationally. Our focus in 2008 will be to maximize
our expanded opportunities for increased revenue and to leverage
improved operational efficiencies to drive improving
profitability." The Company recognized stock-based compensation
expense of $396,000 in the fourth quarter of 2007, compared to
$201,000 in the fourth quarter of 2006. Amortization of intangible
assets for the fourth quarter of 2007 was $864,000, including
$500,000 in cost of revenue and $364,000 in operating expenses,
compared to $693,000 in the fourth quarter of 2006, including
$481,000 in cost of revenue and $212,000 in operating expenses.
Depreciation was $768,000 in the fourth quarter of 2007, compared
to $697,000 in the fourth quarter of 2006. The Company reported net
income for the fourth quarter of 2007 of $168,000, or $0.01 per
basic and diluted share, compared to net income of $2.2 million, or
$0.08 per basic and diluted share, for the fourth quarter in 2006.
For the year ended December 31, 2007, net revenue was $94.8
million, compared to $92.0 million in 2006. Total operating
expenses were $69.9 million, compared to $60.4 million in 2006. Net
income for the full year was $224,000, or $0.01 per basic and
diluted share, compared to net income of $4.0 million, or $0.14 per
basic and diluted share, in 2006. The results in 2007 included a
$1.5 million tax benefit, of which approximately $400,000 was due
to the realization of R&D tax credits related to prior years.
Cash flow from operations was $2.2 million in the fourth quarter of
2007, compared to $1.9 million in the prior year's fourth quarter.
Cash flow from operations for the year ended December 31, 2007 was
$11.2 million, compared to $13.9 million for 2006. Consolidated
cash, cash equivalents and investment balances as of December 31,
2007 totaled $46.3 million, compared to $46.5 million as of
September 30, 2007 and $59.4 million as of December 31, 2006. On
January 4, 2008 the Company purchased Oce Document Technology for a
net cash payment of $15.3 million. Deferred revenue at December 31,
2007 was $28.7 million compared to $25.9 million at December 31,
2006 and $27.7 million as of September 30, 2007. Stock Repurchase
During the quarter, the Company repurchased 300,000 shares of its
outstanding common stock at a cost of $1.45 million, at an average
purchase price of $4.83 per share. For the full year 2007, the
Company repurchased approximately 1.7 million shares at a cost of
$9.5 million, compared to approximately 2.1 million shares at a
cost of about $11.3 million in 2006. On December 31, 2007,
approximately 26.4 million shares of common stock were outstanding
and $9.6 million was available for share repurchase under the
Company's stock repurchase program. Captaris may repurchase shares
under its stock repurchase program subject to overall market
conditions, stock prices and its cash position and requirements.
Conference Call The Company will discuss its 2007 fourth quarter
and full year results and business outlook for the first quarter of
2008 on its regularly scheduled conference call today, February
14th, at 7:30 a.m. PT (10:30 a.m. ET). The live web cast of the
conference call can be accessed from the Investor Relations section
of the Captaris Web site at http://www.captaris.com/ or at
http://www.mkr-group.com/ (under "featured events"). To access the
live conference call, dial (800) 240-7305 and give the Company name
"Captaris." An audio replay of the conference call can be accessed
at (800) 405-2236. The replay will be available starting two hours
after the call and remain in effect until Friday, February 22nd at
11:59 PT. The required pass code is 11107967#. About Captaris, Inc.
Captaris, Inc. is a leading provider of software products that
automate business processes, manage documents electronically and
provide efficient information delivery. The products of Captaris
and its subsidiaries Castelle and Captaris Document Technologies
GmbH, including Captaris RightFax, Captaris Workflow, Captaris
Alchemy, the FaxPress line of products, RecoStar, DOKuStar,
DOKuStar Capture Suite, Single Click Entry, ID-Star, BUSY, Invoice
CENTER, Tax CENTER, and Mail CENTER are distributed through a
global network of leading technology partners. We have customers in
financial services, healthcare, government and many other
industries, and our products are installed in all of the Fortune
100 and many Global 2000 companies. Headquartered in Bellevue,
Washington, Captaris was founded in 1982 and is publicly traded on
the NASDAQ Global Market under the symbol CAPA. For more
information please visit http://www.captaris.com/. The following
are registered trademarks and trademarks of Captaris: Captaris,
Alchemy, RightFax and Captaris Workflow. FaxPress is a trademark of
Castelle. RecoStar, DOKuStar, DOKuStar Capture Suite, Single Click
Entry, ID-Star, BUSY, Invoice CENTER, Tax CENTER and Mail CENTER
are trademarks of Captaris Document Technologies GmbH. All other
brand names and trademarks are the property of their respective
owners. Certain statements in this press release are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without
limitation, statements regarding expected releases of new products
and our strategic plans for 2008. Forward-looking statements
include all passages containing verbs such as "aims,"
"anticipates," "estimates," "expects," "intends," "plans,"
"predicts," "projects" or "targets" or nouns corresponding to such
verbs. Forward-looking statements also include any other passages
that are primarily relevant to expected future events or that can
only be evaluated by events that will occur in the future.
Forward-looking statements are based on the opinions and estimates
of the management at the time the statements are made and are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those anticipated in the
forward-looking statements. Factors that could affect Captaris'
actual results include, among others, the impact, if any, of
stock-based compensation charges, the potential failure to maintain
and expand Captaris' network of dealers and resellers or to
establish and maintain strategic relationships, inability to
integrate recent and future acquisitions, including the recent
acquisition of Captaris Document Technologies GmbH, inability to
develop new products or product enhancements on a timely basis,
inability to protect our proprietary rights or to operate without
infringing the patents and proprietary rights of others, and
quarterly and seasonal fluctuations in operating results. More
information about factors that potentially could affect Captaris'
financial results is included in Captaris' quarterly reports on
Form 10-Q filed in 2007, and most recent annual report on Form 10-K
filed with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance upon these forward-looking
statements that speak only as to the date of this release. Except
as required by law, Captaris undertakes no obligation to update any
forward-looking or other statements in this press release, whether
as a result of new information, future events or otherwise.
Captaris, Inc. Condensed Consolidated Balance Sheets (in thousands)
(Unaudited) December 31, 2007 2006 Assets Current assets: Cash and
cash equivalents $46,182 $10,695 Short-term investments,
available-for-sale 137 7,084 Accounts receivable, net 19,348 21,347
Inventories, net 1,681 961 Prepaid expenses and other current
assets 4,427 2,971 Income tax receivable and current deferred tax
assets, net 3,527 3,052 Total current assets 75,302 46,110
Long-term investments, available-for-sale 5 41,584 Restricted cash
1,000 1,000 Other long-term assets 842 303 Equipment and leasehold
improvements, net 7,735 4,340 Intangible assets, net 11,748 6,570
Goodwill 37,522 32,199 Long-term deferred tax assets, net 5,344
3,842 Total assets $139,498 $135,948 Liabilities and Shareholders'
Equity Current liabilities: Accounts payable $8,621 $5,308 Accrued
compensation and benefits 5,528 4,522 Other accrued liabilities
1,706 1,920 Income taxes payable 327 192 Deferred revenue 22,747
20,328 Total current liabilities 38,929 32,270 Other long-term
accrued liabilities 696 307 Long-term deferred revenue 5,962 5,544
Total liabilities 45,587 38,121 Shareholders' equity: Common stock
264 275 Additional paid-in capital 40,971 46,614 Retained earnings
49,961 49,790 Accumulated other comprehensive income 2,715 1,148
Total shareholders' equity 93,911 97,827 Total liabilities and
shareholders' equity $139,498 $135,948 Captaris, Inc. Condensed
Consolidated Statements of Operations (in thousands, except per
share data) (Unaudited) Quarter Ended Year Ended December 31,
December 31, 2007 2006 2007 2006 Net revenue: Software revenue
$10,017 $9,264 $33,164 $34,428 Maintenance, support and services
revenue 11,125 9,490 40,355 36,183 Hardware revenue 5,053 6,469
17,773 21,375 Appliance revenue 1,890 - 3,537 - Net revenue 28,085
25,223 94,829 91,986 Cost of revenue 8,656 7,865 28,754 27,720
Gross profit 19,429 17,358 66,075 64,266 Operating expenses:
Research and development 4,895 2,840 16,167 12,227 Selling and
marketing 9,454 8,051 35,084 31,830 General and administrative
5,222 3,964 18,392 16,103 Amortization of intangible assets 364 212
1,029 1,274 In-process research and development - - 219 - Gain on
sale of discontinued product line CallXpress - - (1,000) (1,000)
Total operating expenses 19,935 15,067 69,891 60,434 Operating
income (loss) (506) 2,291 (3,816) 3,832 Other income (expense):
Interest income 462 500 2,052 1,894 Other income, net 288 292 467
55 Other income 750 792 2,519 1,949 Income (loss) from continuing
operations before income tax expense 244 3,083 (1,297) 5,781 Income
tax expense (benefit) 75 827 (1,525) 1,816 Income from continuing
operations 169 2,256 228 3,965 Discontinued operations: Gain (loss)
from sale of MediaTel assets, net of income tax expense (benefit)
(1) (11) (4) 16 Income (loss) from discontinued operations (1) (11)
(4) 16 Net income $168 $2,245 $224 $3,981 Basic net income per
common share: Income from continuing operations $0.01 $0.08 $0.01
$0.14 Income (loss) from discontinued operations (0.00) (0.00)
(0.00) 0.00 Net income $0.01 $0.08 $0.01 $0.14 Diluted net income
per common share: Income from continuing operations $0.01 $0.08
$0.01 $0.14 Income (loss) from discontinued operations (0.00)
(0.00) (0.00) 0.00 Net income $0.01 $0.08 $0.01 $0.14 Weighted
average basic common shares 26,446 27,206 27,019 27,899 Weighted
average diluted common shares 26,733 28,506 27,623 28,514 Captaris,
Inc. Condensed Consolidated Statements of Cash Flows (in thousands)
(Unaudited) Year Ended December 31, 2007 2006 Cash flows from
operating activities: Net income $224 $3,981 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation 2,700 3,104 Amortization 2,980 3,198 Stock-based
compensation expense 1,367 677 In process research and development
219 - (Gain) loss on disposition of assets (7) 74 Impairment of
long-lived assets and intangibles 83 - Provision for doubtful
accounts 114 29 Changes in assets and liabilities: Accounts
receivables 2,658 (2,563) Inventories, net 411 (411) Prepaid
expenses and other assets (1,853) (1,159) Income tax receivable and
deferred income taxes, net (1,977) 2,292 Accounts payable 2,603 622
Accrued compensation and benefits 183 765 Other accrued liabilities
(469) (489) Income taxes payable (109) 111 Deferred revenue 2,088
3,692 Net cash flow provided by operating activities 11,215 13,923
Cash flows from investing activities: Purchase of equipment and
leasehold improvements (5,244) (1,284) Purchase of investments
(38,945) (71,242) Purchase of Castelle, net of cash acquired
(11,974) - Proceeds from disposals of assets 55 14 Proceeds from
sales and maturities of investments 87,481 67,790 Net cash provided
(used) in investing activities 31,373 (4,722) Cash from financing
activities: Proceeds from exercise of common stock options 2,165
5,278 Repurchase of common stock (9,494) (11,301) Excess tax
benefits from stock-based compensation 308 1,116 Net cash used in
financing activities (7,021) (4,907) Net increase in cash 35,567
4,294 Effect of exchange rate changes on cash (80) (19) Cash and
cash equivalents at beginning of period 10,695 6,420 Cash and cash
equivalents at end of period $46,182 $10,695 DATASOURCE: Captaris,
Inc. CONTACT: Erika Simms, Treasury Analyst of Captaris, Inc.,
+1-425-638-4048, ; or Investor Relations, Todd Kehrli, or Jim
Byers, both of MKR Group, Inc., +1-323-468-2300, , for Captaris,
Inc. Web site: http://www.captaris.com/
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