Exhibit 99.1
Helios and Matheson Reports Preliminary Unaudited Results - Expects to report $422,000 profit for FY 2012
NEW YORK, New York, January 25, 2013 — Helios and Matheson Information Technology Inc (NASDAQ:HMNY or the “Company”), a 30 year old IT services organization focused on banking, financial services, insurance, automotive and healthcare sectors, is providing the following preliminary (unaudited) information regarding the results of its operations for the fourth quarter of the year ended December 31, 2012:
For 2012, the Company expects to report a profit of $422,000 or $0.18 per diluted share as compared to $203,000 or $0.09 per diluted share for 2011. This represents a 108% increase in profits. The Company expects to close 2012 with profits for each quarter during the year ended December 31, 2012.
The Company expects to end 2012 with cash of approximately $2.9 million, up from $2 million at the onset of the year. The Company is debt free. The Company expects to end 2012 with a strong balance sheet, with current assets and security deposits at about $5.3 million.
The table below represents a summary of the consolidated statements of Operations for the periods indicated:
| | | Three Months Ended | | | Twelve Months Ended | |
| (In 000s except per share amounts) | | 12/31/12 | | | 12/31/11 | | | 09/30/12 | | | 12/31/12 | | | 12/31/11 | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (audited) | |
| Revenue | | $ | 3,325 | | | $ | 2,830 | | | $ | 3,404 | | | $ | 12,369 | | | $ | 12,204 | |
| Gross Profit | | $ | 695 | | | $ | 731 | | | $ | 750 | | | $ | 2,787 | | | $ | 2,526 | |
| Income from operations | | $ | 156 | | | $ | 236 | | | $ | 146 | | | $ | 506 | | | $ | 211 | |
| Net Income | | $ | 164 | | | $ | 239 | | | $ | 143 | | | $ | 422 | | | $ | 203 | |
| EPS per basic share | | $ | 0.07 | | | $ | 0.10 | | | $ | 0.06 | | | $ | 0.18 | | | $ | 0.09 | |
| EPS per diluted share | | $ | 0.07 | | | $ | 0.10 | | | $ | 0.06 | | | $ | 0.18 | | | $ | 0.09 | |
Helios and Matheson expects to report net earnings of $164,000 or $0.07 per diluted share for the fourth quarter compared to $143,000 or $0.06 per diluted share for the third quarter in 2012. The Company expects to report revenue of $3.3 million for the fourth quarter, as compared to third quarter revenue of $3.4 million.
The Company expects that gross margin will be stable in the range of 21-22% for the fourth quarter of 2012. Selling, general and administrative costs are expected to be $540,000 in the fourth quarter, which would be a decrease of 11% from the previous quarter level in 2012 and an increase of 9% from the fourth quarter of 2011, as a result of the Company’s ongoing cost management efforts.
| HELIOS AND MATHESON INFORMATION TECHNOLOGY INC. |
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
| PRELIMINARY AND UNAUDITED |
| | | | | | | |
| | | Year Ended December 31, | |
| | | 2012 | | | 2011 | |
| | | (unaudited) | | | | |
| | | | | | | |
| Revenues | | $ | 12,368,920 | | | $ | 12,203,990 | |
| Cost of revenues | | | 9,582,191 | | | | 9,677,939 | |
| Gross profit | | | 2,786,729 | | | | 2,526,051 | |
| Operating expenses: | | | | | | | | |
| Selling, general and administrative | | | 2,266,666 | | | | 2,290,646 | |
| Depreciation and amortization | | | 14,092 | | | | 23,928 | |
| | | | 2,280,758 | | | | 2,314,574 | |
| Profit from operations | | | 505,971 | | | | 211,477 | |
| Other income(expense): | | | | | | | | |
| Early lease termination fee | | | (82,548 | ) | | | - | |
| Interest income | | | 9,425 | | | | 3,669 | |
| | | | (73,123 | ) | | | 3,669 | |
| Profit before income taxes | | $ | 432,848 | | | $ | 215,146 | |
| Provision for income taxes | | | 11,155 | | | | 12,243 | |
| Net Profit | | | 421,693 | | | | 202,903 | |
| Other comprehensive (loss)/income - foreign currency adjustment | | | (20,978 | ) | | | (16,070 | ) |
| Comprehensive income | | $ | 400,715 | | | $ | 186,833 | |
| | | | | | | | | |
| | | | | | | | | |
| Basic and diluted profit per share | | $ | 0.18 | | | $ | 0.09 | |
| HELIOS AND MATHESON INFORMATION TECHNOLOGY INC. | |
| CONSOLIDATED BALANCE SHEETS | |
| PRELIMINARY AND UNAUDITED | |
| | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2012 | | | 2011 | |
| | | (unaudited) | | | | |
| ASSETS | | | | | | |
| Current Assets: | | | | | | |
| Cash and cash equivalents | | $ | 2,861,733 | | | $ | 1,998,158 | |
| Accounts receivable- less allowance for doubtful accounts of $32,421 at December 31, 2012, and $77,590 at December 31, 2011 | | | 1,257,488 | | | | 1,665,553 | |
| Unbilled receivables | | | 21,490 | | | | 46,408 | |
| Prepaid expenses and other current assets | | | 130,571 | | | | 83,326 | |
| Total current assets | | | 4,271,282 | | | | 3,793,445 | |
| Property and equipment, net | | | 52,717 | | | | 20,685 | |
| Security Deposit | | | 1,000,000 | | | | 1,000,000 | |
| Deposits and other assets | | | 100,032 | | | | 142,673 | |
| Total assets | | $ | 5,424,031 | | | $ | 4,956,803 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | |
| Current Liabilities: | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 1,171,249 | | | $ | 1,104,736 | |
| | | | | | | | | |
| Total current liabilities | | | 1,171,249 | | | | 1,104,736 | |
| | | | | | | | | |
| Shareholders' equity: | | | | | | | | |
| Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued and outstanding as of December 31, 2012, and December 31, 2011 | | | - | | | | - | |
| Common stock, $.01 par value; 30,000,000 shares authorized; 2,330,438 issued and outstanding as of December 31, 2012 and as of December 31, 2011 | | | 23,304 | | | | 23,304 | |
| Paid-in capital | | | 37,855,740 | | | | 37,855,740 | |
| Accumulated other comprehensive (loss)/income - foreign currency translation | | | (46,910 | ) | | | (25,932 | ) |
| Accumulated deficit | | | (33,579,352 | ) | | | (34,001,045 | ) |
| Total shareholders' equity | | | 4,252,782 | | | | 3,852,067 | |
| Total liabilities and shareholders' equity | | $ | 5,424,031 | | | $ | 4,956,803 | |
| HELIOS AND MATHESON INFORMATION TECHNOLOGY INC. |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| PRELIMINARY AND UNAUDITED |
| |
| | | Year Ended December 31, | |
| | | 2012 | | | 2011 | |
| | | (unaudited) | | | | |
| Cash flows from operating activities: | | | | | | |
| Net profit | | $ | 421,693 | | | $ | 202,903 | |
| Depreciation and amortization | | | 14,092 | | | | 23,928 | |
| Provision for doubtful accounts | | | (45,169 | ) | | | (135,034 | ) |
| Gain on Sale of Fixed Assets | | | (2,488 | ) | | | - | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Accounts receivable | | | 453,234 | | | | 692,933 | |
| Unbilled receivables | | | 24,918 | | | | (46,408 | ) |
| Prepaid expenses and other current assets | | | (47,245 | ) | | | (13,680 | ) |
| Deposits | | | 42,641 | | | | (2,970 | ) |
| Accounts payable and accrued expenses | | | 66,513 | | | | (344,396 | ) |
| Deferred revenue | | | - | | | | (19,504 | ) |
| Net cash provided by operating activities | | | 928,189 | | | | 357,772 | |
| | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | |
| Net Purchase of property and equipment | | | (43,636 | ) | | | | |
| Net cash used in investing activities | | | (43,636 | ) | | | - | |
| Effect of foreign currency exchange rate changes on cash and cash equivalents | | | (20,978 | ) | | | (16,070 | ) |
| Net increase in cash and cash equivalents | | | 863,575 | | | | 341,702 | |
| Cash and cash equivalents at beginning of period | | | 1,998,158 | | | | 1,656,456 | |
| Cash and cash equivalents at end of period | | $ | 2,861,733 | | | $ | 1,998,158 | |
| | | | | | | | | |
| Supplemental disclosure of cash flow information: | | | | | | | | |
| Cash paid during the period for interest | | $ | - | | | $ | - | |
| Cash paid during the period for income taxes, net of refunds | | $ | 5,936 | | | $ | 5,350 | |
