Exhibit 99.1
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| News Release | |  |
Contact: Stephen Allison
Gensym Corporation
781-265-7100
Gensym Announces First Quarter 2007 Results
Burlington, Mass. – July 12, 2007 –Gensym Corporation (Pink Sheets: GNSM), a leading provider of rule engine software for mission-critical solutions, today announced revenues of $4,093,000 and net income of $179,000, or $0.02 per diluted share, for the quarter ended March 31, 2007. For the corresponding quarter of 2006, Gensym had revenues of $3,888,000 and a net loss of $473,000, or $0.06 per diluted share.
The results for the first quarter of 2007 included a non-cash expense related to stock-based compensation of $10,000, or $0.00 per share, as compared to stock-based compensation expenses of $94,000 or $0.01 per share in the same period of 2006.
“We are pleased to report a profitable first quarter, even after the increase in general and administrative expenses associated with the recently completed restatement of our financial statements” said Robert Ashton, Gensym’s chairman, president and CEO.”
About Gensym Corporation
Gensym Corporation (www.gensym.com) is a leading provider of rule engine software and services for mission-critical solutions that automate decisions in real time. Gensym’s flagship G2 software applies real-time rule technology for decisions that optimize operations and that detect, diagnose, and resolve costly problems. With G2, the world’s largest organizations in manufacturing, utilities, communications, transportation, aerospace, finance, and government maximize the agility of their businesses and achieve greater levels of performance. Gensym and its numerous partners deliver a range of services throughout the world, including training, software support, application consulting, and complete solutions.
Gensym and G2, are registered of Gensym Corporation.
This news release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any statements contained in this news release that relate to prospective events or developments are deemed to be forward-looking statements. These forward-looking statements are subject to important risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to, the impact of
intense competition, the effectiveness of our indirect distribution channel and strategic relationships and the ability of our partners to effectively market and deliver their Gensym-based solutions, fluctuations in demand for our products, and the other risks and factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained. We disclaim any intent or obligation to update any forward- looking statement as a result of developments occurring after the date of this news release.
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GENSYM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands
(Unaudited)
| | | | | | | | |
| | | March 31, | | | December 31, | |
| | | 2007 | | | 2006 | |
| ASSETS | | | | | | | | |
Current Assets: | | | | | | | | |
Cash and cash equivalents | | $ | 3,178 | | | $ | 3,238 | |
Accounts receivable, net | | | 3,009 | | | | 2,952 | |
Other current assets | | | 406 | | | | 453 | |
| | | | | | | | |
Total current assets | | | 6,593 | | | | 6,643 | |
Property and equipment, net | | | 519 | | | | 561 | |
Deposits and other assets | | | 124 | | | | 132 | |
| | | | | | | | |
Total assets | | $ | 7,236 | | | $ | 7,336 | |
| | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | | | |
Current Liabilities: | | | | | | | | |
Other current liabilities | | $ | 2,245 | | | $ | 2,468 | |
Deferred revenue | | | 4,379 | | | | 4,323 | |
| | | | | | | | |
Total current liabilities | | | 6,624 | | | | 6,791 | |
Long term deferred revenue | | | 691 | | | | 826 | |
Capital lease and other long term liabilities, net of current portion | | | 185 | | | | 181 | |
| | | | | | | | |
Total liabilities | | | 7,500 | | | | 7,798 | |
Total stockholders' deficit | | | (264 | ) | | | (462 | ) |
| | | | | | | | |
Total liabilities and stockholder's deficit | | $ | 7,236 | | | $ | 7,336 | |
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GENSYM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands, except per share data
(Unaudited)
| | | | | | | | |
| | | Three Months
Ended March 31, | |
| | | 2007 | | | 2006 | |
REVENUES: | | | | | | | | |
Product | | $ | 1,605 | | | $ | 1,692 | |
Services | | | 2,488 | | | | 2,196 | |
| | | | | | | | |
Total revenues | | | 4,093 | | | | 3,888 | |
| | | | | | | | |
COST OF REVENUES: | | | | | | | | |
Product | | | 117 | | | | 131 | |
Services | | | 1,125 | | | | 858 | |
| | | | | | | | |
Total cost of revenues | | | 1,242 | | | | 989 | |
Gross profit | | | 2,851 | | | | 2,899 | |
| | | | | | | | |
OPERATING EXPENSES: | | | | | | | | |
Sales and marketing | | | 710 | | | | 1,304 | |
Research and development | | | 672 | | | | 961 | |
General and administrative | | | 1,224 | | | | 1,097 | |
| | | | | | | | |
| | | 2,606 | | | | 3,362 | |
| | | | | | | | |
Operating income (loss) | | | 245 | | | | (463 | ) |
OTHER INCOME (EXPENSE), NET | | | (11 | ) | | | (8 | ) |
| | | | | | | | |
Income (loss) before provision for income taxes | | | 234 | | | | (471 | ) |
PROVISION FOR INCOME TAXES | | | 55 | | | | 2 | |
| | | | | | | | |
Net income (loss) | | $ | 179 | | | $ | (473 | ) |
| | | | | | | | |
Basic earnings (loss) per share | | $ | 0.02 | | | $ | (0.06 | ) |
Diluted earnings (loss) per share | | $ | 0.02 | | | $ | (0.06 | ) |
Weighted average common shares outstanding, basic | | | 7,878 | | | | 7,437 | |
Weighted average common shares outstanding, diluted | | | 8,052 | | | | 7,437 | |
