TUSTIN, Calif., Nov. 16, 2004 (PRIMEZONE) -- VillageEDOCS (OTCBB:VEDO) announced today its financial results for the quarter ended September 30, 2004.
"We are excited to report a $146,053 income from operations for the third quarter on revenue of $1,682,917. This quarter, we are reporting a year-to-date income from operations of $97,505 as compared to the year-to-date operating loss of $48,548 that we reported for the six months ended June 30, 2004, another important milestone. Tailored Business Systems ("TBS") contributed $974,890 in revenue and $144,782 in operating income for the quarter. The electronic document delivery business, recently reorganized as MessageVision, contributed $708,027 in revenue and $131,110 in operating income for the quarter and has now reported an operating income for the third straight quarter. We are anticipating our current revenue and operating income trends to continue for at least the next two quarters," said Mr. Mason Conner, President and CEO of VillageEDOCS.
Mr. Conner continued, "I'm pleased with our consistent growth and trend of improving gross margins, operating income, net income, and earnings per share. These results reflect our ability to effectively manage costs and success in building for long-term growth of existing business. Our aggressive acquisition strategy generates higher expenses at the corporate level, which so far has had a negative impact on our overall operating results. We intend to resolve this situation over the next several quarters through growth of MessageVision and TBS. Additionally, the strategy of acquiring complementary and profitable companies in the business information delivery market (See our press release "VillageEDOCS Signs Letter of Intent to Acquire Document Management Solutions Provider" dated November 2, 2004) will bring our incremental corporate-level acquisition expenses in line."
Net sales for the three months ended September 30, 2004 were $1,682,917, a 265% increase over net sales for prior year quarter of $461,396. The increase in the 2004 quarter resulted from an increase of $246,631 in revenue from MessageVision (which resulted from growth in the number of clients) as well as the addition of $974,890 in revenue of TBS.
Gross profit for the three months ended September 30, 2004 increased 265% to $883,180 as compared to $241,739 for the prior year quarter. Gross profit margin for both the 2004 and 2003 quarters was 52%. Of the overall increase of $641,441, $236,867 is attributable to improved profits from MessageVision, and $404,574 is attributable to TBS.
Operating expenses for the three months ended September 30, 2004 increased by 40% to $729,343 from the $519,722 reported in the three months ended September 30, 2003, an increase of $209,621. Product and technology development increased $11,022 to $125,788 from the $114,766 reported in the prior year quarter, which was comprised of a decrease of $28,929 from reduced staff at MessageVision as offset by $39,951incurred by TBS. Sales and marketing increased by $29,594 to $223,379 from the $193,785 reported in the prior year quarter, which was comprised of a $38,454 decrease due to a reduction in sales management staff at MessageVision as offset by $68,048 incurred by TBS. General and administrative increased by $160,602 to $333,559 from the $172,957 reported in the prior year quarter. The overall increase was comprised of a $45,092 increase in salaries, legal, and accounting at MessageVision and $115,510 incurred by TBS. Depreciation and amortization expense increased $16,187 to $54,401 from the $38,214 reported in the 2003 quarter. The overall increase was comprised of a 16% decrease from MessageVision (due to disposal of certain capitalized equipment during the fourth quarter of 2003) and the addition of depreciation from equipment owned by TBS.
For the quarter ended September 30, 2004, the operations of MessageVision resulted in operating income of $131,110, and the operations of TBS resulted in operating income of $144,782. Corporate operations reported an operating loss of $129,839 for an overall operating income of $146,053.
Net loss for the three months ended September 30, 2004 was $27,737, or $0.00 per share, compared to a net loss of $363,625, or $0.01 per share, for the three months ended September 30, 2003 on weighted average shares of 35,911,544 and 30,920,702, respectively.
Net sales for the nine months ended September 30, 2004 were $3,928,708, a 185% increase over net sales for the prior year period of $1,379,613. The increase in the 2004 period resulted from an increase of $608,797, or 44%, in revenue from MessageVision (which resulted from growth in the number of clients) as well as the addition of $1,940,298 in revenue contributed by TBS.
Gross profit for the nine months ended September 30, 2004, increased 225% to $2,364,659 as compared to $727,771 for the prior year period. Gross profit margin for the 2004 period was 60% as compared with 53% for the 2003 period. Of the overall increase of $1,636,888, $515,026 is attributable to improved profits from MessageVision, and $1,121,862 is attributable to TBS.
Operating expenses for the nine months ended September 30, 2004 increased by 27% to $2,267,154 from the $1,783,432 reported in the nine months ended September 30, 2003, an increase of $483,722. Product and technology development decreased $81,688 to $300,637 from the $382,325 reported in the prior year period because of a reduction in staff at MessageVision. Sales and marketing decreased by $111,201 to $530,878 from the $642,079 reported in the prior year period due to a reduction in sales management staff and a small decrease in spending on sales lead generation programs. General and administrative increased by $637,626 to $1,286,596 from the $648,970 reported in the prior year period. The overall increase was comprised of a $14,936 decrease (comprised of a decrease in consulting fees which was partially offset by increases in salaries, legal, and accounting) MessageVision and $652,562 attributable to TBS. Depreciation and amortization expense increased $38,985 to $149,043 from the $110,058 reported in the 2003 period. The overall increase was comprised of a 15% decrease from MessageVision (due to disposal of certain capitalized equipment during the fourth quarter of 2003) and the addition of depreciation from equipment owned by TBS.
For the nine months ended September 30, 2004, the operations of MessageVision resulted in operating income of $215,815, and the operations of TBS resulted in operating income of $301,478. Corporate operations reported an operating loss of $419,788 for an overall operating income of $97,505.
Net loss for the nine months ended September 30, 2004 was $352,223, or $0.01 per share, compared to a net loss of $1,582,849, or $0.05 per share, for the nine months ended September 30, 2003 on weighted average shares of 35,253,633 and 30,782,582, respectively.
About VillageEDOCS
VillageEDOCS, through our MessageVision subsidiary, is a leading provider of comprehensive business-to-business business information delivery services and products for organizations with mission-critical needs, including major corporations, government agencies and non-profit organizations. Through our Tailored Business Systems subsidiary, we provide accounting and billing solutions for county and local governments. For further information, visit our website at www.villageedocs.com.
Cautionary Statement Regarding Forward-Looking Information
All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent the Company's plans, intentions, expectations and belief and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected or expressed herein. These include uncertainties in the market, competition, legal, regulatory initiatives, success of marketing efforts, availability, terms and deployment of capital, and other risks detailed in the Company's SEC reports, of which many are beyond the control of the Company. The Company assumes no obligation to update or alter the information in this news release. Investors are cautioned not to put undue reliance on any forward-looking statements. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in Section 21E of the Exchange Act.