FRISCO, Texas, April 11, 2006 (PRIMEZONE) -- Avatar Systems, Inc. (OTCBB:AVSY) today announced year-end results for 2005 ended December 31, 2005. Revenues for 2005 were $2,278,404 compared to $2,661,370 for 2004. Revenues were affected by a 76.2% decrease in hardware sales. Hardware sales were $259,258 for 2005 compared to $1,091,259 for 2004. Hardware sales were unusually high in 2004 due to three transactions with major customers. Net Income of 2005 was $168,130 or $.02/share compared to $191,557 in 2004 or $.02/share. The other three revenue components, software sales, maintenance revenues and professional services, increased 28.6% to $2,019,146 in 2005 from $1,570,111 in 2004. Costs of sales were down $595,921 or 48.2% primarily due to the decrease in hardware sales. Operating expenses were up $245,993 or 21.6% primarily due to an increase in sales and marketing expense and increased depreciation and amortization. Sales and marketing increased due to the addition of a sales manager to market iSynergy Avatar's document management software and related increased travel, printing costs and trade show expenses.
Chuck Shreve, President, Chief Executive Officer and Chief Financial Officer of Avatar systems, Inc. remarked, "Our year end results reflect solid improvement in our core product offerings, software, maintenance and professional services. Demand for our products should continue strong, correlating with higher oil and natural gas prices and the entry of more companies into this industry."
Avatar Systems, Inc. is based in Frisco, Texas. The company provides enterprise resource solutions for companies engaged in the petroleum exploration and production industry as well as Document Management Imaging Solutions for all vertical markets. Avatar has a growing customer base on its Petroware(TM) products, customers utilizing the Company's Avatar400(TM) IBM AS400 product, and subscribers utilizing its ASP services.
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 in 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.