Company Reports 5% Decrease in Revenue and 26% Net Income Decline
over Q3 2007 DAYTON, Ohio, Nov. 14 /PRNewswire-FirstCall/ --
Advant-e Corporation (OTC:AVEE) (BULLETIN BOARD: AVEE) , a provider
of Internet-based Electronic Data Interchange and electronic
document management software and services today announced financial
and operating results for the quarter ending September 30, 2008.
For the third quarter of 2008 the Company reported revenue of
$2,067,253, a 5% decrease over revenue of $2,178,155 in the third
quarter of 2007. The decrease is attributable primarily to lower
software license revenue from Merkur Group partially offset by
increased revenue from Edict Systems hosted EDI services. Net
income for the third quarter of 2008 was $247,079, or $.04 per
share, a 26% decrease over net income of $335,884, or $.05 per
share, for the same period in 2007. For the nine months ended
September 30, 2008, the Company reported revenue of $6,712,754, a
32% increase over revenue of $5,075,628 for the same period in
2007. The increase is attributable primarily to organic growth from
Edict Systems and the inclusion of three quarters of Merkur Group
revenue in 2008 compared to only one quarter in 2007. Net income
for the nine-months ended September 30, 2008 was $791,614, or $.12
per share, a 12% increase over net income of $708,602, or $.11 per
share, for the same period in 2007. Jason K. Wadzinski, Chairman,
Chief Executive Officer, and President, remarked, "While we
continue to experience growth in our core EDI products and services
from Edict Systems, weakness in new software sales for Merkur Group
during the quarter produced weaker results than we expected.
However, year-to-date Merkur revenue is up 13% over last year due
to above average sales activity in the first half of this year."
"We believe that both Edict Systems and Merkur Group will face
challenges related to the current deteriorating economic
conditions," continued Mr. Wadzinski. "Potential customers are
facing budgetary constraints, shifting priorities, and less
internal resources for implementation which causes delayed
decisions and increased lead times." About Advant-e Corporation
Advant-e, via its wholly owned subsidiaries Edict Systems, Inc. and
Merkur Group, Inc. is a provider of internet-based Electronic Data
Interchange (EDI) and electronic document management software and
services. The Company helps businesses automate manual,
paper-intensive processes via expanded use of EDI or by integrating
directly with ERP/MRP systems. Additional information about
Advant-e Corporation can be found at http://www.advant-e.com/,
http://www.edictsystems.com/, and http://www.merkurgroup.com/, or
by contacting investor relations at (937) 429-4288. The company's
email . ADVANT-E CORPORATION AND SUBSIDIARIES CONSOLIDATED
CONDENSED STATEMENTS OF INCOME (Unaudited) Three Months Ended Nine
months Ended September 30, September 30, 2008 2007 2008 2007
Revenue $2,067,253 2,178,155 6,712,754 5,075,628 Cost of revenue
792,351 818,716 2,615,977 1,810,060 Gross margin 1,274,902
1,359,439 4,096,777 3,265,568 Marketing, general and 2,869,978
2,231,039 administrative expenses 884,584 876,090 Operating income
390,318 483,349 1,226,799 1,034,529 Other income (loss), net
(25,852) 18,002 (2,241) 73,257 Income before income taxes 364,466
501,351 1,224,558 1,107,786 Income tax expense 117,387 165,467
432,944 399,184 Net income $247,079 335,884 791,614 708,602 Basic
and diluted earnings per share $.04 .05 .12 .11 Weighted average
shares outstanding 6,791,399 6,845,015 6,807,085 6,612,266 ADVANT-E
CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, 2008 December 31, (Unaudited) 2007 Assets Current
Assets: Cash and cash equivalents $2,702,779 2,039,447 Short-term
investments 265,515 292,151 Accounts receivable, net 727,334
805,241 Prepaid software maintenance costs 182,787 183,618 Prepaid
expenses and deposits 56,235 68,930 Prepaid income taxes 55,553 --
Deferred income taxes 154,262 40,057 Total current assets 4,144,465
3,429,444 Software development costs, net 132,900 194,238 Property
and equipment, net 390,761 433,658 Goodwill 1,474,615 1,450,368
Other intangible assets, net 435,110 498,644 Total assets
$6,577,851 6,006,352 Liabilities and Shareholders' Equity Current
liabilities: Accounts payable $191,730 211,738 Accrued salaries and
other expenses 251,147 273,210 Income taxes payable -- 112,700
Deferred revenue 648,046 645,093 Total current liabilities
1,090,923 1,242,741 Deferred income taxes 309,143 288,858 Total
liabilities 1,400,066 1,531,599 Shareholders' equity: Common stock,
$.001 par value; 20,000,000 shares authorized; 6,772,061 shares
issued and 6,755,961 outstanding at September 30, 2008; 6,875,015
shares issued and 6,815,015 shares outstanding at December 31, 2007
6,772 6,875 Paid-in capital 2,070,872 2,210,200 Retained earnings
3,124,291 2,332,678 Treasury stock at cost, 16,100 shares at
September 30, 2008 and 60,000 shares at December 31, 2007 (24,150)
(75,000) Total shareholders' equity 5,177,785 4,474,753 Total
liabilities and shareholders' equity $6,577,851 6,006,352 ADVANT-E
CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS (Unaudited) Nine months Ended September 30, 2008 2007
Cash flows from operating activities: Net income $791,614 708,602
Adjustments to reconcile net income to net cash flows from
operating activities: Depreciation 205,845 162,233 Amortization of
software development costs 61,338 48,300 Amortization of other
intangible assets 63,534 21,178 Deferred income taxes (93,920)
(41,784) Purchases of trading securities (213,754) (154,868)
Proceeds from sales of trading securities 209,724 159,184 Net
unrealized (gains) losses on trading securities 38,095 (12,573) Net
realized gains on sales of securities (7,429) (12,972) Increase
(decrease) in cash arising from changes in assets and liabilities:
Accounts receivable 77,906 (101,139) Prepaid software maintenance
costs 831 (26,430) Prepaid expenses and deposits 12,695 (3,841)
Prepaid income taxes (55,553) -- Accounts payable (20,008) 70,493
Accrued salaries and other expenses (22,063) 68,320 Income taxes
payable (136,947) 6,407 Deferred revenue 2,953 38,310 Net cash
flows from operating activities 914,861 929,420 Cash flows from
investing activities: Purchases of property and equipment (162,948)
(181,246) Software development costs - (15,363) Cash paid for
purchase of Merkur Group, Inc. - (971,338) Net cash flows from
investing activities (162,948) (1,167,947) Cash flows from
financing activities: Net payments on bank line of credit -
(20,000) Purchase of treasury stock (88,581) (75,000) Net cash
flows from financing activities (88,581) (95,000) Net increase in
cash and cash equivalents 663,332 (333,527) Cash and cash
equivalents, beginning of period 2,039,447 2,209,782 Cash and cash
equivalents, end of period $2,702,779 1,876,255 Supplemental
disclosures of cash flow items: Income taxes paid $718,100 434,561
Non-cash transactions Retirement of 60,000 shares repurchased in
2007 and held as treasury stock 75,000 --- Common stock issued in
connection with purchase of Merkur Group, Inc. --- 568,692 The
information in this news release includes certain forward looking
statements that are based upon assumptions that in the future may
prove not to have been accurate and are subject to significant
risks and uncertainties, including statements to the future
financial performance of the company. Although the company believes
that the expectations reflected on its forward looking statements
are reasonable, it can give no assurance that such expectations or
any of its forward-looking statements will prove to be correct.
Factors that could cause results to differ include, but are not
limited to, successful performance of internal plans, product
development and acceptance, the impact of competitive services and
pricing, or general economic risks and uncertainties. DATASOURCE:
Advant-e Corporation CONTACT: Investor relations, +1-937-429-4288,
Web site: http://www.advant-e.com/ http://www.edictsystems.com/
http://www.merkurgroup.com/
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