Consolidated Statements of Operations
(In thousands except per share data)
(Unaudited) Three months ended Six months ended
June 30, June 30,
2008 2007 2008 2007
-------- -------- -------- --------
Revenue:
License fees and services $ 5,342 $ 4,742 $ 10,174 $ 8,733
Customer support 4,303 4,380 8,598 8,850
-------- -------- -------- --------
Total revenue 9,645 9,122 18,772 17,583
-------- -------- -------- --------
Costs of revenue and operating
expenses:
Costs of license fees and
services, excluding
depreciation and amortization 1,902 1,941 4,126 3,865
Costs of customer support,
excluding depreciation and
amortization 1,632 1,716 3,125 3,209
Sales and marketing 2,194 2,186 4,381 4,225
General and administrative 1,236 1,648 2,661 3,199
Product development 950 358 2,018 907
Depreciation 252 252 482 540
Amortization 379 392 759 780
Restructuring and other expense - - - (1)
-------- -------- -------- --------
Total costs of revenue and
operating expenses 8,545 8,493 17,552 16,724
-------- -------- -------- --------
Income from operations 1,100 629 1,220 859
-------- -------- -------- --------
Interest and other income
(expense), net (212) (474) (650) (890)
-------- -------- -------- --------
Income (loss) before income
taxes 888 155 570 (31)
Income tax expense 113 83 39 223
-------- -------- -------- --------
Net income (loss) $ 775 $ 72 $ 531 $ (254)
======== ======== ======== ========
Basic income (loss) per
common share $ 0.04 $ 0.00 $ 0.03 $ (0.01)
======== ======== ======== ========
Diluted income (loss) per
common share $ 0.04 $ 0.00 $ 0.03 $ (0.01)
======== ======== ======== ========
Weighted average basic
shares outstanding 19,374 19,180 19,368 19,167
Weighted average diluted
shares outstanding 19,845 19,604 19,840 19,167
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(In thousands)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2008 2007 2008 2007
-------- -------- -------- --------
Net income (loss) $ 775 $ 72 $ 531 $ (254)
Depreciation 252 252 482 540
Amortization 379 392 759 780
Stock-based compensation
expense 228 132 456 381
Interest expense and other,
net 212 474 650 890
Income tax expense 113 83 39 223
-------- -------- -------- --------
Adjusted EBITDA $ 1,959 $ 1,405 $ 2,917 $ 2,560
======== ======== ======== ========
Evolving Systems reports its financial results in accordance with
accounting principles generally accepted in the U.S. (GAAP). In addition,
the Company is providing in this news release non-GAAP information in the
form of adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, impairment, stock compensation and gain/loss on foreign
exchange transaction.) Management believes adjusted EBITDA is useful to
investors and lenders in evaluating the overall financial health of the
Company in that it allows for greater transparency of additional financial
data routinely used by management to evaluate performance. Adjusted EBITDA
relates to a covenant contained in the Company's loan agreements and
therefore can be useful for lenders as an indicator of earnings available
to service debt. Readers of this adjusted EBITDA information are reminded
that adjusted EBITDA is not a recognized term under GAAP and does not
purport to be an alternative to income (loss) from operations, an indicator
of cash flow from operations or a measure of liquidity. Not all companies
calculate adjusted EBITDA identically, so this presentation may not be
comparable to similar presentations of other companies.
Consolidated Balance Sheets
(In thousands)
(Unaudited) June 30, December 31,
2008 2007
-------- --------
ASSETS
Current Assets:
Cash and cash equivalents $ 7,249 $ 7,271
Contract receivables, net 6,004 10,959
Unbilled work-in-progress 1,261 922
Prepaid and other current assets 1,756 1,335
-------- --------
Total current assets 16,270 20,487
Property and equipment, net 1,501 1,677
Amortizable intangible assets, net 3,920 4,687
Goodwill 26,398 26,417
Long-term restricted cash 100 100
Other long-term assets 308 359
-------- --------
Total assets $ 48,497 $ 53,727
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt
and capital lease obligations $ 2,020 $ 2,520
Accounts payable and accrued liabilities 5,450 5,937
Unearned revenue 8,829 10,635
-------- --------
Total current liabilities 16,299 19,092
Long-term liabilities:
Long-term debt and other obligations 6,996 10,242
Deferred foreign income taxes 753 878
-------- --------
Total liabilities 24,048 30,212
Preferred stock - 5,587
Stockholders' equity:
Common stock 19 18
Additional paid-in capital 81,395 75,317
Accumulated other comprehensive income 2,055 2,144
Accumulated deficit (59,020) (59,551)
-------- --------
Total stockholders' equity 24,449 17,928
-------- --------
Total liabilities and stockholders' equity $ 48,497 $ 53,727
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Contact Information: Investor Relations: Jay Pfeiffer Pfeiffer High Investor Relations, Inc. 303.393.7044 Press Relations: Sarah Hurp Marketing Communications Manager Evolving Systems +44 1225 478060