MAITLAND, Fla., Aug. 28, 2009 (GLOBE NEWSWIRE) -- Workstream Inc. (OTCBB:WSTM), a leading provider of on-demand compensation, performance and talent management solutions, today announced its preliminary financial results for its fiscal year ended May 31, 2009.
Preliminary Results
* FY2009 improved EBITDA to approximately ($1,200,000) vs. FY2008 EBITDA of ($40,800,000). This improvement resulted primarily due to the following: -- Focus on our core customer segment -- Reduced investment in R&D after the release of our Version 7.0 Talent Center -- Reduced SG&A along with other costs, such as a substantial goodwill impairment, incurred in FY2008 * FY2009 revenues of approximately $21,500,000 vs. FY2008 $27,600,000. This decrease resulted primarily due to: -- Revenue declined in its Career Networks Business vs. prior year -- Company exiting unprofitable customers implementations * Approximately 90% customer renewal of Enterprise Software in FY2009. * Renewal revenue increased from existing customers 17% vs. prior year.
EBITDA is a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. EBITDA is commonly defined as earnings before interest, taxes, depreciation and amortization. We believe that EBITDA provides useful information to investors as it excludes transactions not related to the core cash operating business activities. We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash operations.
"We have focused our efforts on new products, successful customers and profitable growth. Our employees have worked hard through these difficult economic times and are building the Company on a stronger platform moving forward," said Steve Purello, CEO of the Company. "With the challenges of last year behind us, we are focused daily on revenue growth, profitable business and free cash flow. In addition, our note holders have been working with us in an effort to improve our balance sheet and create long-term growth."
Note Restructuring
In August 2009, the Company and a majority of the holders of its Senior Secured Notes (the "Notes") signed a term sheet, whereby such holders have agreed to restructure the approximately $19 million in Notes. The parties have agreed to an exchange of the Notes for a combination of $9.5 million in new senior secured notes with the balance, including accrued interest, in convertible notes. All such newly issued notes would accrue interest at a rate of 9.5% per annum and have a maturity date of July 31, 2012. The Company expects to close the transaction in the coming weeks.
"Workstream's note holders have proposed restructuring our indebtedness, which would allow the Company to focus on long term value creation and provide payments to the note holders," stated Michael Mullarkey, the Company's Chairman. "Our note holders have seen the progress of the Company and understand that with the right capital structure we can position the Company to succeed as the economy turns. Through this restructuring, our goals are to regain the appropriate shareholder equity values, reverse split our stock and re-establish our listing on NASDAQ."
The Company and the note holders are in the process of negotiating final definitive agreements with respect to the restructuring. However, there can be no assurance that the parties will enter into such definitive agreements or consummate the note restructuring on the terms described above or at all.
Form 10-K
The Company expects to file a Form NT 10-K extending the filing date of its annual report on Form 10-K as it finalizes the accounting treatment of its senior secured notes and works to consummate a restructuring of its indebtedness. The full financial results of the Company for FY2009 will be contained in such annual report on Form 10-K when it is filed with the SEC.
About Workstream
Workstream provides on-demand compensation, performance and talent management solutions and services that help companies manage the entire employee lifecycle -- from recruitment to retirement. Workstream's TalentCenter provides a unified view of all Workstream products and services including Recruitment, Performance, Compensation, Development and Transition. Access to TalentCenter is offered on a monthly subscription basis under an on-demand software delivery model to help companies build high performing workforces, while controlling costs. With offices across North America, Workstream services customers including Chevron, Kaiser Permanente and Nordstrom. For more information visit www.workstreaminc.com or call toll free 1-407-475-5500.
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Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations or beliefs of Workstream's management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: failure to negotiate the final terms of definitive agreements giving effect to the proposed note restructuring; in the event a restructuring of our indebtedness is not consummated, if an event of default should occur and be continuing with respect to such indebtedness; inability to grow our client base and revenue because of the number of competitors and the variety of sources of competition we face; client attrition; inability to offer services that are superior and cost effective when compared to the services being offered by our competitors; inability to further identify, develop and achieve success for new products, services and technologies; increased competition and its effect on pricing, spending, third-party relationships and revenues; as well as the inability to enter into successful strategic relationships and other risks detailed from time to time in filings with the Securities and Exchange Commission.