VOXW Voxware (MM)

Voxware, Inc. (Nasdaq: VOXW), a leading supplier of software for voice-driven warehousing operations, reported results for the fourth quarter and year ended June 30, 2009. Total revenues decreased 39% to $3.803 million for the quarter ended June 30, 2009 from $6.207 million during the comparable prior year period. Revenues decreased 38% to $14.527 million for the year ended June 30, 2009 from $23.384 million during the comparable prior year period. Net loss on a Generally Accepted Accounting Principles (“GAAP”) basis was $603,000 for the quarter ended June 30, 2009, compared to a net profit of $66,000 for the comparable prior year period. Net loss on a GAAP basis was $4.826 million for the year ended June 30, 2009, compared to a net profit of $585,000 for the year ended June 30, 2008. Voxware's financial statements for the year ended June 30, 2009, can be found in its Form 10-K filed with the Securities and Exchange Commission on September 28, 2009.

Net profit (loss) on a non-GAAP basis was $97,000 and ($3.209) million, respectively, for the three months and year ended June 30, 2009. The difference between the GAAP and non-GAAP net loss is attributable to non-cash stock-based compensation, which was $700,000 and $1.617 million, respectively for the three months and year ended June 30, 2009. A reconciliation of GAAP measures with non-GAAP measures can be found at the end of this release.

“Revenue increased 17% during the second half of the fiscal year over the first half, which enabled us to operate cash flow positive for the past six months,” said Scott Yetter, Voxware CEO. “Furthermore, our cash balance is even stronger than it was a year ago, as we added $2.5 million in equity funding in June 2009. The Company had $4.3 million in cash at June 30, 2009.”

“We are confident that cost containment projects such as implementing voice in distribution centers will be among the first to be funded as the economic climate improves, and we believe that the steps we have taken position Voxware to better serve increased market demand as it occurs.”

About Voxware

Voxware, Inc. (NASDAQ: VOXW), provides voice-driven software products that optimize the full spectrum of warehouse operations for greater accuracy, productivity and flexibility in supply chain execution. Voxware’s corporate headquarters are in Hamilton, New Jersey, with operating offices in Cambridge, Massachusetts, the United Kingdom, and France. Additional information about Voxware can be obtained at http://www.voxware.com.

Consolidated Balance Sheets (in thousands, except share data)         June 30, 2009 June 30, 2008   ASSETS CURRENT ASSETS Cash and cash equivalents $ 4,342 $ 3,503 Accounts receivable, net of allowance for doubtful accounts of $158 and $201 at June 30, 2009 and June 30, 2008, respectively 3,350 6,134 Inventory, net 564 533 Deferred project costs 33 163 Prepaid expenses and other current assets   337   380 Total current assets 8,626 10,713   PROPERTY AND EQUIPMENT, NET 454 663 OTHER ASSETS   184   316 TOTAL ASSETS $ 9,264 $ 11,692   LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $ 525 $ 566 Accounts payable and accrued expenses 2,541 3,305 Current portion of deferred revenues   2,365   3,043 Total current liabilities 5,431 6,914 Long-term portion of deferred revenues 85 105 Long-term debt, net of current maturities   163   375 Total liabilities   5,679   7,394   COMMITMENTS AND CONTINGENCIES   STOCKHOLDERS' EQUITY Common Stock, $0.001 par value, 12,000,000 shares authorized as of June 30, 2009 and June 30, 2008; 8,007,766 and 6,488,529 shares issued and outstanding at June 30, 2009 and June 30, 2008, respectively 8 6 Additional paid-in capital 83,143 79,032 Accumulated deficit   (79,566)   (74,740) Total stockholders' equity   3,585   4,298 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,264 $ 11,692

Financial statements should be read in conjunction with the Notes to Consolidated Financial Statements contained in Form 10-K for the year ended June 30, 2009.

  Voxware, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except per share data)             Three Months Ended June 30, Year Ended June 30, 2009 2008 2009 2008 (unaudited) (unaudited) REVENUES Product revenues $ 2,241 $ 4,319 $ 8,643 $ 17,173 Services revenues   1,562   1,888   5,884   6,211 Total revenues   3,803   6,207   14,527   23,384   COST OF REVENUES Cost of product revenues 833 1,345 3,321 5,835 Cost of services revenues   620   1,205   2,974   3,718 Total cost of revenues   1,453   2,550   6,295   9,553   GROSS PROFIT   2,350   3,657   8,232   13,831   OPERATING EXPENSES Research and development 797 1,075 3,686 3,830 Sales and marketing 1,101 1,597 5,321 6,019 General and administrative   1,043   919   4,020   3,414 Total operating expenses   2,941   3,591   13,027   13,263   OPERATING (LOSS) PROFIT (591) 66 (4,795) 568   INTEREST (EXPENSE) INCOME, NET   (12)   -   (28)   24   (LOSS) PROFIT BEFORE INCOME TAXES (603) 66 (4,823) 592   PROVISION FOR INCOME TAXES   -   -   (3)   (7)   NET (LOSS) PROFIT $ (603) $ 66 $ (4,826) $ 585   NET (LOSS) PROFIT PER SHARE Basic $ (0.09) $ 0.01 $ (0.74) $ 0.09 Diluted $ (0.09) $ 0.01 $ (0.74) $ 0.08   WEIGHTED AVERAGE NUMBER OF SHARES USED IN

COMPUTING NET (LOSS) PROFIT PER SHARE

Basic 6,579 6,469 6,532 6,417 Diluted 6,579 7,071 6,532 7,139  

Financial statements should be read in conjunction with the Notes to Consolidated Financial Statements contained in Form 10-K for the year ended June 30, 2009.

  Voxware, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures (in thousands)         Three Months Ended June 30, 2009 GAAP Adjustments Non-GAAP NET (LOSS) PROFIT $ (603) (b) $ 700 (a) $ 97 (b)   Year Ended June 30, 2009 GAAP Adjustments Non-GAAP NET (LOSS) $ (4,826) $ 1,617 (c) $ (3,209)   Notes: (a) Adjustment to exclude non-cash stock-based compensation of $700,000 from Net Loss of which $47,000 was reported in research and development costs, $123,000 was reported in sales and marketing costs, and $530,000 was reported in general and administrative costs (b) GAAP net loss and non-GAAP net profit for the three months ended June 30, 2009 are not audited. (c) Adjustment to exclude non-cash stock-based compensation of $1,617,000 from Net Loss of which $144,000 was reported in research and development costs, $316,000 was reported in sales and marketing costs, and $1,157,000 was reported in general and administrative costs.

About Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with GAAP, this press release includes the following measure defined by the Securities and Exchange Commission as non-GAAP financial measures: non-GAAP net profit. This non-GAAP measure is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, this non-GAAP measure, the financial statements prepared in accordance with GAAP and reconciliations of Voxware’s GAAP financial statements to such non-GAAP measure should be carefully evaluated.

Management believes that the large increase in FAS 123R or stock-based compensation charges incurred during the year ended June 30, 2009 makes non-GAAP net loss an important metric for investors to value the Company. Non-cash stock-based compensation charges for the year ended June 30, 2009 were $1,617,000 compared to $898,000 in the year ended June 30, 2008, an increase of 80%. Accordingly, we believe that non-GAAP net loss, excluding non-cash stock-based compensation costs, are meaningful measures for investors to evaluate our financial performance. Moreover, because of varying available valuation methodologies and the variety of award types that companies can use under FAS 123R, we believe that providing non-GAAP financial measures that exclude non-cash stock-based compensation allows investors to make additional comparisons between our operating results to those of other companies. The presentation of non-GAAP net profit, when read in conjunction with our reported GAAP results, can provide useful supplemental information to our management and investors regarding financial and business trends relating to our financial condition and results of operations.

Stock-based compensation has been and will continue to be for the foreseeable future a significant recurring expense in our business. In addition, other companies may calculate non-GAAP financial measures differently than us, thereby limiting the usefulness of these non-GAAP financial measures as a comparative tool. We compensate for this limitation by providing specific information regarding the GAAP amounts excluded from the non-GAAP net profit and evaluating such non-GAAP financial measures with financial measure calculated in accordance with GAAP.

This news release contains forward-looking statements. Such statements are subject to certain factors that may cause Voxware’s plans to differ or results to vary from those expected including the risks associated with Voxware’s need to introduce new and enhanced products and services in order to increase market penetration and the risk of obsolescence of its products and services due to technological change; Voxware’s need to attract and retain key management and other personnel with experience in providing integrated voice-based solutions for e-logistics, specializing in the supply chain sector; the potential for substantial fluctuations in Voxware’s results of operations; competition from others; Voxware’s evolving distribution strategy and dependence on its distribution channels; the potential that speech products will not be widely accepted; Voxware’s need for additional capital and its ability to raise such capital on terms acceptable to Voxware; the potential for Nasdaq delisting proceedings; and a variety of risks set forth from time to time in Voxware’s filings with the Securities and Exchange Commission. Voxware undertakes no obligation to publicly release results of any of these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected results.