NEW YORK, Oct. 16, 2006 (PRIMEZONE) -- Aftersoft Group, Inc (OTCBB:ASFG), a leading supplier of software and services to the automotive aftermarket in the U.S., U.K. and Canada, today announced the results of operations for the year ending 30th June, 2006. In addition the company issued guidance for the forthcoming year.
CEO Ian Warwick commented, "This was a transitional year for the business of Aftersoft as we repositioned the company and laid the foundations for sustainable profitable growth. The company's repositioning during the last nine months has resulted in the company now being in a position to maximize the growth opportunity available in its fragmented marketplace. With the recent acquisition of EXP dealer software and the operational restructuring now behind the company. Aftersoft is able to issue guidance for the current year of revenues of $31.8m and net income of $6.2m.
"Revenues for the year ended June 30th 2006 decreased by 12% to $19,261,000. This decrease was attributable to our U.S. operations, which made up 43% of revenue for the year ending 30th June, 2005, and 32% of revenue for the year ending 30th June, 2006. The company made a loss of $1,058,000 for the year ended June 30th, 2006. This loss was wholly attributable to the costs incurred during repositioning, which have now been fully expended. In addition R&D increased by 15% to $3,089,000, and our U.S. operations accounted for 64% of R&D expense as we updated our product offering to include the introduction of MAM's Autopart into the U.S. market. This additional expense has now been concluded. General and Administrative costs for the year increased by 2% to $4,489,000. This included one time reorganization costs of $1,049,000.
"We believe a useful indicator of the groups repositioning is the fact that the group generated cash flow of $1,470,000 from operating activities during the year ending June 30, 2006 against negative cashflow of $189,000 for the year ended June 30, 2005.
"With the repositioning and the acquisition of EXP complete, the company now will begin to see the benefit from improved margins as it is now focused on higher margin business going forward. This is evidenced by the quarter ended September 30, 2006 where we achieved revenues of $7.4m and a net income of $1.2m on a pro-forma basis (EXP closed in the middle of the quarter). In addition we have identified a number of accretive acquisitions which are extremely synergistic with our existing business which are not factored into our guidance."
About Aftersoft
Aftersoft Group, Inc. is a leading provider of software, information and services to the automotive aftermarket and automotive dealerships in the U.S., U.K. and Canada. Aftersoft develops and markets business, supply chain management, dealership and customer relationship management software solutions to small and medium-size firms in the automotive aftermarket and dealership market in the U.S and U.K. The automotive aftermarket consists of businesses associated with the life cycle of a motor vehicle -- from when the original manufacturer's warranty expires to when the vehicle is scrapped. The Company services this market with business management systems, information products and online services that its customers use to manage their critical day-to-day business operations through automated point-of-sale, inventory management, purchasing, general accounting and customer relationship management. We are currently number two in the U.S. market, which represents a $68 billion market opportunity with approximately 20,000 potential clients. We are the market leader in the U.K. market, which is an estimated $27 billion market opportunity with approximately 30 million vehicles in circulation. The dealer management division services this market with dealership business management and marketing software systems for automotive manufacturers and automobile dealerships. This is a highly fragmented market with a total worldwide market value of approximately $15 billion.
Safe Harbour Statement
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the company's business including, increased competition; the ability of the company to expand its operations through either acquisitions or internal growth, to attract and retain qualified professionals, and to expand commercial relationships; technological obsolescence; general economic conditions; and other risks detailed from time to time in filings with the Securities and Exchange Commission (SEC).
Aftersoft Group, Inc.
Consolidated Balance Sheet
(In thousands, except share data)
As of
June 30, 2006
---------------
ASSETS
Current Assets
Cash $ 423
Accounts receivable, net of
allowance of $332 3,409
Note receivable 950
Inventories 246
Other 231
---------------
Total Current Assets 5,259
---------------
Property and Equipment, Net 155
---------------
Other Assets
Goodwill 22,061
Amortizable intangible assets, net 5,644
Software development costs, net 1,256
Other long-term assets 46
---------------
Total Other Assets 29,007
---------------
Total Assets $ 34,421
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 1,707
Accrued expenses 1,396
Accrued consulting fees 550
Accrued legal expenses 1,970
Payroll and other taxes 655
Amounts due to parent company 14
Current portion of long-term debt 898
Deferred revenue 1,216
Taxes payable 807
---------------
Total Current Liabilities 9,213
Long-Term Liabilities
Deferred revenue 1,073
Deferred income taxes 880
Long-term debt 10
Other 487
---------------
Total Liabilities 11,663
---------------
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock
Par value $0.0001 per share;
10,000,000 shares authorized,
none issued and outstanding --
Common stock
Par value $0.0001 per share;
100,000,000 shares authorized,
35,071,167 shares issued
and outstanding 4
Additional paid-in capital 21,962
Accumulated other comprehensive loss (388)
Retained earnings 1,180
---------------
Total Stockholders' Equity 22,758
---------------
Total Liabilities and Stockholders' Equity $ 34,421
===============
Aftersoft Group, Inc.
Consolidated Statements of Operations
and Comprehensive Income (Loss)
(In thousands, except share data)
For the year For the year
ended ended
June 30, June 30,
2006 2005
------------ ------------
Revenues $ 19,261 $ 22,062
Cost of revenues 9,746 9,225
------------ ------------
Gross Profit 9,515 12,837
------------ ------------
Operating Expenses
Research and development 3,089 2,665
Sales and marketing 1,904 1,970
General and administrative 4,489 4,389
Depreciation and amortization 1,275 1,421
------------ ------------
Total Operating Expenses 10,757 10,445
------------ ------------
Operating Income (Loss) (1,242) 2,392
------------ ------------
Other Income (Expense)
Interest expense (130) (105)
Gain on sale of property and
equipment 224 --
Other, net 20 (12)
------------ ------------
Total other income (expense),
net 114 (117)
------------ ------------
Pre-tax income (loss) from
continuing operations (1,128) 2,275
Provision for income taxes 714 337
------------ ------------
Income (loss) from continuing
operations (1,842) 1,938
Income from discontinued
operations, net of tax 448 --
Gain on sale of discontinued
operations 422 --
------------ ------------
Net Income (Loss) (972) 1,938
Foreign currency translation
gain (86) 32
------------ ------------
Total Comprehensive Income
(Loss) $ (1,058) $ 1,970
============ ============
Earnings (loss) per share
attributed to common
stockholders - basic and
diluted
Net income (loss) from
continuing operations $ (0.05) $ 0.06
Discontinued operations 0.02 --
------------ ------------
Net income (loss) $ (0.03) $ 0.06
============ ============
Weighted average number of
shares of common stock
outstanding - basic and
diluted 33,651,233 30,701,671
============ ============
Aftersoft Group, Inc.
Consolidated Statements of Cash Flows
(In thousands)
For the year For the year
ended ended
June 30, June 30,
2006 2005
------------ ------------
Cash Flows from operating
activities:
Net income (loss) $ (972) $ 1,938
Adjustments to reconcile net
income (loss) to cash
provided by (used in)
operating activities :
Depreciation and
amortization 1,275 1,421
Deferred income taxes -- 118
Gain on sale of property
and equipment (224) --
Gain on sale of
discontinued operations (422) --
Common stock issued for
consulting services 499 --
Changes in assets and
liabilities (net of the
effect of acquisition and
divestiture) :
Trade accounts receivable (752) 194
Inventories 112 107
Prepaid expenses and
other assets (126) 155
Accounts payable 18 542
Taxes payable 780 219
Deferred revenue (305) (4,497)
Accrued expenses and
other liabilities 1,587 386
----------- -----------
Net cash provided by (used in)
operating activities 1,470 (189)
----------- -----------
Cash Flows from investing
activities :
Cash acquired in acquisition -- 490
Purchase of property and
equipment (62) (311)
Proceeds from the sale of
property and equipment 103 --
Capitalized software
development costs (551) (285)
----------- -----------
Net cash used in investing
activities (510) (106)
----------- -----------
Cash Flows from financing
activities :
Proceeds from related party
advances 617 349
Proceeds from long-term debt -- 256
Payment on long-term debt (1,043) (155)
Payments on related party
advances (219) --
----------- -----------
Net cash (used in) provided by
financing activities (645) 450
----------- -----------
Effect of exchange rate changes (86) 32
----------- -----------
Net increase in cash 229 187
Cash at beginning of year 194 7
----------- -----------
Cash at end of year $ 423 $ 194
=========== ===========
Aftersoft Group, Inc.
Consolidated Statements of Cash Flows (Continued)
(In thousands)
For the year For the year
ended ended
June 30, June 30,
2006 2005
------------ ------------
Supplemental disclosures of cash
flow information
Cash paid during the year for:
Interest $ 130 $ 105
Income taxes $ 182 $ 15
Non-cash investing and financing
transactions during the year for:
Settlement of note receivable by
offsetting against amounts due
to parent company $ 510
Shares issued for acquisition
of software licenses $ 530
Proceeds from sale of office
equipment offset against
amounts due to parent company $ 308
Proceeds from sale of Euro Soft
offset against amounts due to
parent company $ 450
Euro Software Services Limited
divestiture:
Accounts receivable $ 880
Software licenses 530
Accounts payable (240)
Income taxes payable (192)
Gain on sale 422
---------
$ 1,400
=========
Shares issued for Car Parts Technologies, Inc. acquisition :
Cash $ 490
Other current assets 1,132
Property and equipment 140
Other long-term assets 37
Other current liabilities (3,264)
Deferred income (4,872)
Long-term debt (1,151)
Other long-term liabilities (487)
Goodwill 14,549
Amortizable intangibles 5,300
------------
$ 11,874
============