SAN JOSE, Calif., March 9, 2009 (GLOBE NEWSWIRE) -- EnterConnect Inc. (OTCBB:ECNI), a developer of business-ready, self-service SaaS portals, has released financial results for the third quarter of fiscal 2009 ended December 31, 2008.
In announcing the Company's results, Sam Jankovich, chief executive officer of EnterConnect, stated: "While 2008 was a challenging year for the company, especially given the general economic conditions in the U.S., we are still very excited to report 104% growth in revenues for the quarter. Also this quarter, we have right-sized our business and have reduced our cash burn by 70%. We remain committed to building our subscription-based revenues through sales of our on-demand portal solutions as a cost-effective alternative for mid-sized companies during these difficult economic times."
The company also announced it has signed a financing and strategic advisory agreement with John Thomas Financial to support its short-term and long-term financing needs for revenue growth and strategic acquisitions. Working with John Thomas Financial, EnterConnect seeks to review its strategic financing options, optimize its capital structure and pursue acquisition opportunities.
Commenting on the partnership, Thomas Belesis, chief executive officer of John Thomas Financial, said: "Our relationship with EnterConnect complements our strategy of working with emerging growth companies that have a solid vision, experienced leadership and dedication to the achievement of their goals. We look forward to advising EnterConnect and providing them with the necessary resources for both their organic and strategic acquisition growth strategies."
Overview of the Three Months Ended December 31, 2008
Total revenues for the three months ended December 31, 2008 increased to $106,884, or 104%, from $52,300 in the same period in 2007. The revenues are not significant, and the Company is beginning in fiscal 2009 to invest in sales efforts to generate new subscribers.
Gross profit increased to $91,723 during the three months ended December 31, 2008 from $52,300 in the same year-ago period. The gross profit percentage was 86% for the three months ended December 31, 2008 and 100% for the same period in 2007. Cost of revenues will increase in absolute dollars as new subscribers and personnel are added to support an increased customer base.
Net loss for the three-month period ended December 31, 2008 totaled ($959,171) or ($.03) per share, a decrease of 45% compared to a net loss of ($1,734,768) or ($.07) per share.
Overview of the Nine Months Ended December 31, 2008
Total revenues for the nine months ended December 31, 2008 increased to $226,791, or 92%, from $118,298 in the same period in 2007. The revenues are not significant, and the Company is beginning in fiscal 2009 to invest in sales efforts to generate new subscribers.
Gross profit increased to $165,810 during the nine months ended December 31, 2008 from $118,298 in the same year-ago period. The gross profit percentage was 73% for the nine months ended December 31, 2008 and 100% for the same period in 2007. Cost of revenues will increase in absolute dollars as new subscribers and personnel are added to support an increased customer base.
For the nine-month period in 2008 net loss increased 40% to ($4,362,315) or ($0.16) per share compared to ($3,116,605), or ($0.13) per share, for the nine-month period ended in 2007.
Strategy Update
The Company intends to focus its revenue growth activities on mid-market companies which are looking to significantly reduce IT costs by consolidating their intranet, extranet and Internet sites on one portal platform. The Company will continue to invest in its strategic partnerships with both Oracle and Intel for customer acquisition growth.
The Company plans to leverage its partnership with John Thomas Financial to rapidly grow through strategic acquisitions that complement its SaaS suite of solutions.
About EnterConnect Inc.
EnterConnect Inc. is a leading provider of enterprise-proven on-demand business portals that improve communication, collaboration and business processes to help companies increase customer satisfaction, growth and productivity. EnterConnect's portals enable customers, employees, partners, suppliers and other stakeholders to securely consolidate, collaborate and connect online -- at anytime, from anywhere -- to accelerate business on-demand. EnterConnect solutions are based on a rich technology foundation in use at more than 50 Fortune 1000 companies. Now available on-demand, these solutions are used at leading organizations across diverse industries including Exide Technologies, John Thomas Capital Management, Piedmont Church, Rheem Manufacturing, Rush University Medical Center and others. For more information, visit http://www.enterconnect.com.
Forward-Looking Statements
The statements contained in this document that are not statements of historical fact, including but not limited to, statements identified by the use of terms such as "anticipate," "appear," "believe," "could," "estimate," "expect," "hope," "indicate," "intend," "likely," "may," "might," "plan," "potential," "project," "seek," "should," "will," "would," and other variations or negative expressions of these terms, including statements related to expected market trends and our performance, are all "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The actual results of the future events described in the forward-looking statements in this document could differ materially from those stated in the forward-looking statements due to numerous factors. Recipients of this document are cautioned to consider these risks and uncertainties and to not place undue reliance on these forward-looking statements. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions including the risks described in our filings with the Securities and Exchange Commission that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. EnterConnect Inc. expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based.