TUSTIN, Calif., April 1, 2005 (PRIMEZONE) -- VillageEDOCS (OTCBB:VEDO) announced today its financial results for the year ended December 31, 2004.
"We are excited to report a $277,810 income from operations for 2004 on revenue of $6,014,269. This year, we are reporting income from operations of $277,810 as compared to the operating loss of $1,403,943 that we reported for 2003. Tailored Business Systems ("TBS") contributed $3,328,387 in revenue and $475,538 in operating income for the year. MessageVision ("MVI") contributed $2,685,882 in revenue and $362,344 in operating income for the year and the electronic document delivery service now operated by MVI has reported an operating income for four consecutive quarters. We are anticipating our current revenue and operating income trends to continue," said Mr. Mason Conner, President and CEO of VillageEDOCS.
Mr. Conner continued, "The filing of our Form 10-KSB for 2004 is a major milestone for VillageEDOCS. The report provides a clear picture of the incredible amount of work that has been accomplished over the last two years. We are extremely proud of the significant progress we've made at VillageEDOCS, which is a credit to our employees, who have persevered through the economic and homeland security events of the last several years. The report demonstrates we have achieved real operational and financial momentum. As previously announced, 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 measurable incremental growth in concert with our organic growth in 2005."
Net sales for the year ended December 31, 2004 were $6,014,269, a 220% increase over 2003 net sales of $1,882,027. The increase of $4,132,242 in 2004 resulted from an increase of $803,855, or 43%, in revenue from MVI as well as the addition of $3,328,387 in revenue from TBS. TBS generated 55% of the Company's 2004 revenue between February 17, 2004 (the date of acquisition) and December 31, 2004. MVI generated the remaining 45% of the Company's 2004 revenue, as compared to 2003, when the operations that the Company has now transferred to MVI comprised 100% of revenue.
Gross profit for the year ended December 31, 2004 increased 279% to $3,646,480 as compared to $961,617 for 2003. Gross profit margin for 2004 was 61% as compared with 51% for 2003. Of the overall increase of $2,684,863, $766,640 is attributable to improved profits from MVI, and $1,918,223 is attributable to TBS.
Operating expenses for the year ended December 31, 2004 increased by 42% to $3,368,670 from the $2,365,560 reported in 2003, an increase of $1,003,110. Product and technology development decreased $69,671 to $418,444 from the $488,115 reported in 2003. $136,941 of the net decrease is attributable to a reduction in staff at MVI; however, that decrease was offset by an increase of $67,270 attributable to TBS. Sales and marketing decreased by $80,983 to $725,155 from the $806,138 reported in 2003. Of the net decrease, $164,626 is due to a reduction in sales management staff and a small decrease in spending on sales lead generation programs at MVI; however, that decrease was offset by an increase of $83,643, the sales and marketing costs of TBS. General and administrative increased by $1,068,412 to $1,990,744 from the $922,332 reported in 2003. The overall net increase was comprised of a $653,315 decrease at MVI (comprised of a decrease in consulting fees, salaries, legal, and accounting) which was offset by the addition of $1,161,65 in general and administrative expenses of TBS and $560,072 in general and administrative expenses of the holding company (comprised of consulting fees, salaries, benefits, legal, accounting, and travel expenses). Depreciation and amortization expense increased $85,352 to $234,327 from the $148,975 reported in 2003. The overall increase was comprised of a 30% decrease from electronic document delivery services (due to disposal of certain capitalized equipment during the fourth quarter of 2003) which was offset by the addition of $77,617 in depreciation from equipment owned by TBS, and $52,500 in amortization expense related to intangible assets.
Income from operations for the year ended December 31, 2004 was $277,810, an increase of $1,681,753 (120%) from the loss from operations of $1,403,943 reported in 2003. The overall increase was comprised of (i) an increase of $1,766,287 in operating income from MVI, which grew to $362,344 in 2004 (compared to an operating loss of $1,403,943 in 2003), (ii) the addition of $475,538 in operating income from TBS during 2004, and (iii) an operating loss of $560,072 from the holding company.
Interest expense for the year ended December 31, 2004 increased by $4,964 to $666,623 from $661,659 reported in 2003. The overall increase was comprised of $241,737 in interest on borrowings of TBS (substantially all of which is attributable to the acquisition financing), which was offset by a $236,773 or 36% decrease from MVI that resulted from a decrease in charges related to the beneficial conversion feature associated with 2004 borrowings as compared to 2003 borrowings because of fluctuations in the market price of the Company's common stock. Interest expense incurred in connection with capital leases decreased in 2004 as compared with 2003.
As a result of the foregoing, net loss for the year ended December 31, 2004 was $391,213, or $0.01 per share, compared to a net loss of $2,106,345, or $0.07 per share, for the year ended December 31, 2003 on weighted average shares of 35,321,760 and 30,828,738, 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.
Contact Information: Phone: 714.734.1030, Fax: 714.734.1040, email: info@villageEDOCS.com, Corporate Website: www.villageedocs.com Service Website: www.villagefax.net
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.