Datastream Provides Preliminary Fiscal-Year-Ended 2004 and First-Quarter 2005 Results
13 Maio 2005 - 11:35AM
PR Newswire (US)
Datastream Provides Preliminary Fiscal-Year-Ended 2004 and
First-Quarter 2005 Results Company Generates 17th and 18th
Consecutive Quarters of Positive Operating Cash Flow GREENVILLE,
S.C., May 13 /PRNewswire-FirstCall/ -- Datastream Systems, Inc.,
(NASDAQ:DSTME) released today updated preliminary financial
results. The results are unaudited, and the final results could
differ from the results described herein due to, among other
reasons, the financial review conducted in connection with the
audit. Based on preliminary information, Datastream expects to
announce the following results for the year ended December 31,
2004, the quarter ended December 31, 2004 and the quarter ended
March 31, 2005, compared to the corresponding results from the
previous comparable period: Preliminary, Unaudited Financial
Results for Year Ended 2004 and Quarters Ended December 31, 2004
and March 31, 2005 (in millions) 2004 4Q 4Q 2004 1Q 1Q 2005 2003
Estimated 2003 Estimated 2004 Estimated Software license revenues
$25.1 $26.1 to $26.3 $6.6 $6.6 to $6.8 $6.5 $5.8 to $6.1 Support
and hosting revenues $33.0 $36.9 $8.8 $9.5 $9.3 $9.4 Profess- ional
services revenues $32.6 $31.1 $7.1 $7.7 $7.4 $7.6 Total revenues
$90.7 $94.1 to $94.3 $22.5 $23.8 to $24.0 $23.3 $22.8 to $23.1
Diluted earnings per share $0.18 $0.18 to $0.19 $0.07 break-even
$0.06 break-even The Company expects to report a significant
increase in deferred revenue as a result of increased deferred
license sales and increased support and hosting sales. For the
fiscal year ended December 31, 2004 and the first quarter 2005, the
Company expects to report approximately $21 million and $22 million
in deferred revenues, respectively, an increase of approximately
10% over same prior periods, respectively. The Company closed 27
transactions over $50,000 in license value in the fourth quarter of
2004, compared with 35 transactions over $50,000 in license value
in the fourth quarter of 2003. The Company closed 20 transactions
over $50,000 in license value in the first quarter of 2005,
compared with 18 such transactions in the first quarter of 2004.
Restatement and audit related fees for the fiscal year 2004 are
expected to exceed $1.9 million, including restatement and audit
fees for the fourth quarter of 2004 that are expected to exceed
$1.5 million. Restatement and audit related fees for the first
quarter of 2005 are expected to exceed $1.2 million. The Company
expects to continue its streak of positive operating cash flow for
the 17th and 18th consecutive quarters, respectively. This resulted
in cash and cash equivalent balances increasing from $47.2 million
at September 30, 2004 to approximately $50 million at December 31,
2004 and to approximately $52 million at March 31, 2005. The
Company expects to continue profitable growth in 2005, with revenue
growth of approximately 5%. The Company expects to achieve a 10%
operating margin by the fourth quarter of 2005 and the Company
expects to hit its target operating margin of 15% by the second
quarter of 2006. The Company also expects to report that 2005 will
be its fifth consecutive year of approximately $10 million in
operating cash flow. The Company does not currently expect to file
its Annual Report on Form 10-K for 2004 until the latter part of
July 2005. This delay is due to (1) the fact that the Company, in
committing all reasonable efforts and resources to complete the
recent restatement of the Company's financial statements for the
years ended December 31, 2001, 2002 and 2003, and the quarters
ended March 31 and June 30, 2004 in the most expedient way
possible, diverted efforts and resources that might otherwise have
been expended on its Form 10-K for 2004, and (2) the significantly
increased internal testing and independent auditor procedures
resulting from the material weaknesses indicated by the
restatement. As previously disclosed by the Company and as a result
of errors that led to the recent restatements, the Company
determined that internal control deficiencies existed at September
30, 2004 that were indicative of material weaknesses in the
Company's internal control over financial reporting. The internal
control deficiencies, which were primarily related to the Company's
international operations, are described in detail in the Company's
restatements filed with the Securities and Exchange Commission on
March 23, 2005. The Company has expended significant resources
implementing measures designed to address the deficiencies noted
during the restatement period. In connection with the
Sarbanes-Oxley Act, the Company also is required to test its
internal controls, including the remedial measures put into place
in connection with the restatement, as of December 31, 2004 to
determine if any material weakness still exists and to assess the
effectiveness of the internal control over financial reporting. The
Company has noted during its ongoing testing of internal controls
that the instances of control deficiencies identified during the
restatement period have declined significantly. The Company
believes this is due to the remedial measures it has put in place,
including (i) hiring additional accounting staff, (ii) implementing
formal and more comprehensive revenue recognition policies and
procedures worldwide, (iii) implementing stricter controls and
oversight of revenue recognition policy and procedures, and (iv)
centralizing accounting processes. The Company and its independent
auditors are continuing their testing of the Company's internal
controls and the expanded procedures resulting from the
restatement. Even though the instances of control deficiencies have
declined, the Company expects that it will have material weaknesses
at December 31, 2004 related to the control deficiencies identified
during the restatement period. A Nasdaq Listing Qualifications
Panel had granted the Company an extension to April 30, 2005 to
file the late Form 10-K. The Company has formally requested the
Panel to grant another extension of time through July 2005 to file
the late Form 10-K and the first quarter Form 10-Q. On May 6, 2005,
the Company received notice that the Nasdaq Listing and Hearing
Review Council (the "Council") has elected to review the Panel's
prior decision on March 24, 2005 to grant the Company an extension
until March 31, 2005 for filing its third quarter 2004 Form 10-Q
and its amended filings to reflect the restatements. The third
quarter 2004 Form 10-Q and restated filings were filed on March 23,
2004. If the Panel does not agree to grant the most recent
requested extension or if the Council determines to reverse the
Panel's prior decision to grant a filing extension to the Company,
then the Company's shares would be delisted from the Nasdaq Stock
Market. About Datastream Systems, Inc. Datastream Systems, Inc.
(NASDAQ:DSTME) provides Asset Performance Management software and
services to enterprises worldwide, including more than 65 percent
of the Fortune 500. Datastream's solutions combine world-class
asset management functionality with advanced analytics to deliver a
powerful platform for optimizing enterprise asset performance. By
using Datastream's solutions, customers can maintain and manage
capital assets -- such as manufacturing equipment, vehicle fleets
and buildings -- and create analyses and forecasts so they can take
action to improve future performance. Datastream's flagship
product, Datastream 7i(TM), delivers a complete Asset Performance
Management infrastructure by combining an Internet architecture
with broad enterprise asset management functionality, integrated
procurement, advanced analytics and multi-site capability.
Datastream was founded in 1986 and has customers in more than 140
countries. For more information, visit http://www.datastream.net/.
This press release contains forward-looking statements that involve
a number of risks and uncertainties. Factors that could cause
actual results to differ materially include, but are not limited
to: the financial results disclosed herein have not been audited or
reviewed by the Company's auditors and such results may change as a
result of the audit or review; the Nasdaq Listing and Hearing
Review Council could reverse the Nasdaq Hearing Panel's March 24,
2005 decision to grant the Company an additional filing extension;
the Company was not able to file its Form 10-K for the year ended
December 31, 2004 by the extended deadline required by the Nasdaq
Hearings Panel, and the Nasdaq Hearings Panel may not grant the
Company's requested extension; the Company was not able to file its
Form 10-Q for the quarter ended March 31, 2005 by the required
filing date, and the Nasdaq Hearings Panel may not grant the
Company's requested extension; even if extensions are granted for
filing the Company's Form 10-K for the year ended December 31, 2004
and Form 10-Q for the quarter ended March 31, 2005, the Company may
not be able to file such documents before the extended deadlines;
the Company may not be able to comply with the other conditions for
continued listing issued by the Nasdaq Hearings Panel; if the
Nasdaq Listing and Hearing Review Council reverses the Nasdaq
Hearings Panel's March 24, 2005 decision, if the Nasdaq Hearings
Panel does not grant the requested filing extensions or if the
Company cannot comply with the conditions for continued listing,
the Company's common stock may no longer be approved for trading on
the Nasdaq Stock Market, which could adversely affect the liquidity
of the trading market for its common stock, and, therefore, could
adversely affect the trading price of the Company's common stock;
with respect to the Company's review of its internal controls, the
Company expects that it will have material weaknesses at December
31, 2004 related to the control deficiencies identified during the
restatement period and the Company cannot be certain that it or its
independent registered public accounting firm will be able to
assess the Company's other internal controls were otherwise working
effectively at December 31, 2004; increasing competition in the
markets in which the Company competes; the stability of the
Company's strategic relationships with third party suppliers and
technologies; the ability of the Company to: sell larger and more
complex software solutions, successfully transition to the
development of further Internet- based products, successfully
manage its international operations, enhance its current products
and develop new products and services that address technological
and market developments; and other risk factors listed from time to
time in Datastream's SEC reports, including, but not limited to the
"Risk Factors" contained in Datastream's Annual Report on Form 10-K
for the fiscal year ended December 31, 2003, as amended, and in
Datastream's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004. Datastream does not have, and expressly
disclaims, any obligation to release publicly any updates or any
changes in the Company's expectations or any changes in events,
conditions or circumstances on which any forward-looking statement
is based. Investor Relations and Media Inquiries Andy Murphy
SparkSource, Inc. 1-781-274-6061 DATASOURCE: Datastream Systems,
Inc. CONTACT: Andy Murphy, Media Contact for Datastream Systems,
Inc., +1-781-274-6061, Web site: http://www.datastream.net/
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