Exhibit 99.1
800 Second Avenue |
| Tel 212 262 6300 |
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For: |
| Authentidate Holding Corp. |
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Contact: |
| Todd Fromer / Michael Cimini |
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| KCSA Worldwide |
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| (212) 896-1215 / (212) 896-1233 |
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| tfromer@kcsa.com / mcimini@kcsa.com |
Authentidate Holding Corp. Announces Fiscal 2006
Second Quarter Results
BERKELEY HEIGHTS, N.J., February 9, 2006 – Authentidate Holding Corp. (Nasdaq: ADAT) today announced financial results for the fiscal 2006 second quarter ended December 31, 2005.
Total revenue in the quarter was $4,210,835 versus $4,761,727 in the second quarter of fiscal 2005. The company’s core Security Software Solutions Segment reported sales of $1,253,175 in the fiscal 2006 second quarter compared to $1,108,686 in the year-earlier period, an increase of 13%.
Authentidate’s Document Solutions Segment reported sales of $1,707,792 in the fiscal 2006 second quarter versus $1,803,795 in the year-earlier period. Second quarter sales in the Systems Integration Segment totaled $1,249,868 compared to $1,849,246 in the prior year.
Net loss in the fiscal 2006 second quarter was $3,555,199, or $0.10 per diluted share, compared to a net loss of $4,920,116, or $0.15 per diluted share, in the year-earlier period. Net loss for the fiscal 2006 second quarter includes the effect of a new accounting requirement for the expensing of stock options totaling $601,351. The company’s net loss in the fiscal 2005 second quarter includes expense items such as severance and stock-based consulting fees totaling $1,883,348, or $0.06 per diluted share.
Suren Pai, Chief Executive Officer of Authentidate, said, “We continue to invest in our content authentication technology and look for opportunities to offer new products and services. During the second quarter, we introduced the CareFax™ application and signed our first agreement with American HomePatient, one of the largest home medical equipment providers in the U.S., to help streamline its paper-based reimbursement processes and improve auditability. We are encouraged by the early market response to this unique application targeted at healthcare providers, payors and suppliers.”
As of December 31, 2005, the company’s cash and marketable securities was $52,471,116. Total deferred revenue at the end of the fiscal 2006 second quarter was $1,822,308.
“Authentidate’s strong balance sheet, and our growing capabilities to create and deliver scalable applications, enable the execution of our growth strategy,” Pai concluded. “We are pleased with our progress to date. Going forward, our plan is to aggressively rollout CareFax, while we continue to invest in developing new applications to drive future growth.”
About Authentidate Holding Corp.
Authentidate Holding Corp. (AHC) is the holding company which operates its software and services businesses in three segments: the Security Software Solutions Segment (fka Authentidate Segment, including Authentidate, Inc., Trac Medical Solutions, Inc. and Authentidate International AG), the Document Management Solutions Segment (fka Docstar Division) and the Systems Integration Segment (fka DJS).
The Company is a worldwide provider of secure enterprise workflow management solutions that incorporate its proprietary and patent pending content authentication technology. Authentidate’s offerings include the United States Postal Service® Electronic Postmark® Service (USPS® EPM®), electronic signing solutions, and electronic forms processing solutions. Authentidate also provides secure document management solutions, and enterprise network security products and services. For more information, visit the company’s website at http://www.Authentidate.com.
This press release contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Act of 1934. When used in this release, the words “believe,” “anticipate,” “think,” “intend,” “plan,” “will be,” “expect,” and similar expressions identify such forward-looking statements. Such statements regarding future events and/or the future financial performance of the Company are subject to certain risks and uncertainties, which could cause actual events or the actual future results of the Company to differ materially from any forward-looking statement. Such risks and uncertainties include, among other things, the availability of any needed financing, the Company’s ability to implement its business plan for various applications of its technologies, related decisions by the USPS, the impact of competition, the management of growth, and the other risks and uncertainties that may be detailed from time to time in the Company’s reports filed with the Securities and Exchange Commission. In light of the significant risks and uncertainties inherent in the forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.
Tables follow:
Authentidate Holding Corporation and Subsidiaries
Consolidated Balance Sheets
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| December 31, 2005 |
| June 30, 2005 |
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| (Unaudited) |
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Assets |
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Current assets |
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Cash and cash equivalents |
| $ | 20,071,116 |
| $ | 6,429,210 |
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Restricted cash |
| 660,096 |
| 141,947 |
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Marketable securities |
| 32,400,000 |
| 56,075,000 |
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Accounts receivable, net of allowance for doubtful accounts of $466,195 and $406,877 at December 31, 2005 and June 30, 2005, respectively |
| 3,364,891 |
| 3,230,822 |
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Due from related parties |
| 679 |
| 682 |
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Inventories |
| 478,482 |
| 303,678 |
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Prepaid expenses and other current assets |
| 1,028,867 |
| 478,159 |
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Total current assets |
| 58,004,131 |
| 66,659,498 |
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Property and equipment, net |
| 3,869,250 |
| 3,878,750 |
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Other assets |
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Software development costs, net of accumulated amortization of $1,849,228 and $1,758,200 at December 31, 2005 and June 30, 2005 |
| 1,411,742 |
| 411,775 |
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Goodwill |
| 7,340,736 |
| 7,340,736 |
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Other intangible assets, net |
| 595,661 |
| 663,397 |
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Investment in affiliate |
| 750,000 |
| 750,000 |
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Other assets |
| 4,449 |
| 4,449 |
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Total assets |
| $ | 71,975,969 |
| $ | 79,708,605 |
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Liabilities and Shareholders’ Equity |
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Current liabilities |
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Accounts payable |
| $ | 1,178,280 |
| $ | 1,336,840 |
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Accrued expenses and other current liabilities |
| 2,224,967 |
| 2,739,553 |
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Deferred revenue |
| 1,577,308 |
| 2,059,427 |
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Current portion of obligations under capital leases |
| 13,342 |
| 23,903 |
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Current portion of long-term debt |
| — |
| 48,000 |
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Line of credit |
| 420,934 |
| 429,756 |
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Income taxes payable |
| 33,159 |
| 15,743 |
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Total current liabilities |
| 5,447,990 |
| 6,653,222 |
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Long-term deferred revenue |
| 245,000 |
| 446,250 |
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Other long-term accrued liabilities |
| 23,839 |
| 243,520 |
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Obligations under capital leases, net of current portion |
| 1,123 |
| 3,909 |
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Total liabilities |
| 5,717,952 |
| 7,346,901 |
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Commitments and contingencies |
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Shareholders’ equity |
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Preferred stock $.10 par value, 5,000,000 shares authorized |
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Series B - 28,000 shares issued and outstanding at December 31, 2005 and June 30, 2005 |
| 2,800 |
| 2,800 |
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Common stock, $.001 par value; |
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75,000,000 shares authorized, 34,399,161 issued and outstanding at December 31, 2005 and June 30, 2005 |
| 34,399 |
| 34,399 |
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Additional paid-in capital |
| 161,741,253 |
| 160,488,500 |
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Accumulated deficit |
| (95,439,761 | ) | (88,100,574 | ) | ||
Accumulated comprehensive loss |
| (80,674 | ) | (63,421 | ) | ||
Total shareholders’ equity |
| 66,258,017 |
| 72,361,704 |
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Total liabilities and shareholders’ equity |
| $ | 71,975,969 |
| $ | 79,708,605 |
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Authentidate Holding Corporation and Subsidiaries
Consolidated Statement of Operations
(Unaudited)
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| For the three months ended |
| For the six months ended |
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| December 31, 2005 |
| December 31, 2004 |
| December 31, 2005 |
| December 31, 2004 |
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Net sales |
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Products |
| $ | 3,916,490 |
| $ | 4,352,382 |
| $ | 7,889,604 |
| $ | 7,695,843 |
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Services |
| 294,345 |
| 409,345 |
| 624,767 |
| 728,282 |
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Total net sales |
| 4,210,835 |
| 4,761,727 |
| 8,514,371 |
| 8,424,125 |
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Cost of sales |
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Products |
| 1,521,380 |
| 2,297,402 |
| 3,548,661 |
| 4,125,881 |
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Services |
| 141,950 |
| 195,727 |
| 290,909 |
| 327,033 |
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Total cost of sales |
| 1,663,330 |
| 2,493,129 |
| 3,839,570 |
| 4,452,914 |
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Gross profit |
| 2,547,505 |
| 2,268,598 |
| 4,674,801 |
| 3,971,211 |
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Selling, general and administrative expenses |
| 5,844,240 |
| 6,962,081 |
| 11,469,039 |
| 11,171,438 |
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Product development expenses |
| 817,399 |
| 600,073 |
| 1,597,303 |
| 1,301,347 |
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Total operating expenses |
| 6,661,639 |
| 7,562,154 |
| 13,066,342 |
| 12,472,785 |
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Loss from operations |
| (4,114,134 | ) | (5,293,556 | ) | (8,391,541 | ) | (8,501,574 | ) | ||||
Other income (expense) |
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Interest and other income |
| 559,973 |
| 381,054 |
| 1,090,680 |
| 689,732 |
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Interest expense |
| (1,038 | ) | (4,615 | ) | (3,325 | ) | (8,813 | ) | ||||
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| 558,935 |
| 376,439 |
| 1,087,355 |
| 680,919 |
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Loss before income taxes |
| (3,555,199 | ) | (4,917,117 | ) | (7,304,186 | ) | (7,820,655 | ) | ||||
Income tax (expense) benefit |
| — |
| (2,999 | ) | — |
| (5,550 | ) | ||||
Net loss |
| $ | (3,555,199 | ) | $ | (4,920,116 | ) | $ | (7,304,186 | ) | $ | (7,826,205 | ) |
Per share amounts |
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Basic and diluted loss per common share |
| $ | (.10 | ) | $ | (.15 | ) | $ | (.21 | ) | $ | (.23 | ) |