Exhibit 99.1
FOR IMMEDIATE RELEASE
AccountAbilities, Inc. Reports Net Income for the Third Quarter of 2008
-Consecutive Quarter, and Year over Year Net Income Improvements
-Significant Balance Sheet Improvements Continue
MANALAPAN, NJ – Thursday August 14, 2008, - AccountAbilities, Inc. (OTC Bulletin Board: ACBT), a provider of financial consulting and staffing services, as well as management consulting services to CPA and other professional firms, today announced financial results for its fiscal third quarter ended June 30, 2008.
While revenue for the current quarter decreased modestly to $15.9 million from $16.2 million, net income improved to $5,000 from a loss of ($14,000) in the third quarter of the prior year. Compared to the previous quarter ended March 31, 2008 net income improved significantly from a loss of ($903,000). Selling, general and administrative expenses decreased to $2.2 million in the third quarter of this year, from $2.7 million in the second quarter of this year as the Company sought and accomplished company wide expense reductions.
Total debt decreased to $3.0 million as of June 30, 2008 versus $5.2 million at year end September 30, 2007 while stockholders equity increased to $1.1 million from $0.5 million at year end September 30, 2007, as the Company accomplished various debt restructurings during the current year to date period. These changes resulted in a greatly improved debt to equity ratio of 2.8 to 1 as of June 30, 2008 versus 11.6 to 1 at September 30, 2007. Working capital also improved $0.8 million from a deficit of ($3.2) million at September 30, 2007 to ($2.4) million at June 30, 2008.
“Our results for the quarter demonstrate our ability to manage to the bottom line in a challenging and uncertain economic environment. Yet we have continued to make progress in strategic areas, such as the roll out of our higher margin finance and accounting service offerings, with the launch in March of our New York area consulting operations and the signing of two new CPA firms to our Partner on Premise Program in April and May,” said Jeffrey Raymond, Chief Executive Officer of AccountAbilities.
Stephen DelVecchia, Chief Financial Officer of AccountAbilities added, “The significant strengthening of our balance sheet provides us with a much more secure position as we await improvements in the overall economic environment. We have also demonstrated our ability to act proactively by aggressively seeking reductions in operating costs throughout the organization as demonstrated in the reduction of our selling, general and administrative expenses in the current quarter. We are excited to have been able to produce these results in our first full quarter as an OTC Bulletin Board traded company.”
About AccountAbilities, Inc.
AccountAbilities provides accounting and finance consulting, staffing and recruiting services both independently and through co-branded offerings with some of the largest regional public accounting firms in the United States. In addition, AccountAbilities provides productivity based commercial, scientific and IT staffing solutions across a variety of industries. To learn more, visit www.aabilities.com.
The statements which are not historical facts contained in this press release are forward-looking statements that involve certain known and unknown risks and uncertainties, including but not limited to, changes in the market for professional staffing services, regulatory and technological changes, changes in levels of unemployment and other economic factors, increased competition, the ability to attract and retain customers, the availability of qualified candidates for placement by the Company and the possibility of the Company incurring liability for activities of the employees and contractors that it places with its customers. The Company’s actual results may differ materially from the results discussed in or implied by any forward-looking statement. The words “intend,” “expect,” “should,” “project,” “anticipate” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made.
SOURCE: AccountAbilities, Inc.
Contact: Stephen DelVecchia
Chief Financial Officer
732-333-3622
www.aabilities.com
ACCOUNTABILITIES, INC.
STATEMENTS OF OPERATIONS
(unaudited)
| | | Three Months | | | Nine Months | |
| | | Ended | | | Ended | |
| | | June 30, 2008 | | | June 30, 2007 | | | June 30, 2008 | | | June 30, 2007 | |
| | | | | | | | | | | | | |
| Revenue | | $ | 15,889,000 | | | $ | 16,241,000 | | | $ | 49,780,000 | | | $ | 40,710,000 | |
| | | | | | | | | | | | | | | | | |
| Direct cost of services | | | 13,442,000 | | | | 13,410,000 | | | | 41,833,000 | | | | 33,929,000 | |
| | | | | | | | | | | | | | | | | |
| Gross profit | | | 2,447,000 | | | | 2,831,000 | | | | 7,947,000 | | | | 6,781,000 | |
| | | | | | | | | | | | | | | | | |
| Selling, general and administrative expenses * | | | 2,182,000 | | | | 2,493,000 | | | | 7,528,000 | | | | 6,126,000 | |
| Depreciation and amortization | | | 116,000 | | | | 106,000 | | | | 341,000 | | | | 214,000 | |
| | | | | | | | | | | | | | | | | |
| Income from operations | | | 149,000 | | | | 232,000 | | | | 78,000 | | | | 441,000 | |
| | | | | | | | | | | | | | | | | |
| Interest expense | | | 144,000 | | | | 246,000 | | | | 687,000 | | | | 633,000 | |
| Loss on goodwill impairment | | | - | | | | - | | | | 148,000 | | | | - | |
| Net loss on debt extinguishments | | | - | | | | - | | | | 100,000 | | | | - | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 5,000 | | | $ | (14,000 | ) | | $ | (857,000 | ) | | $ | (192,000 | ) |
| | | | | | | | | | | | | | | | | |
| Net income (loss) per share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.00 | | | $ | 0.00 | | | $ | (0.04 | ) | | $ | (0.01 | ) |
| Diluted | | $ | 0.00 | | | $ | 0.00 | | | $ | (0.04 | ) | | $ | (0.01 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 21,582,000 | | | | 16,530,000 | | | | 19,165,000 | | | | 15,079,000 | |
| Diluted | | | 22,045,000 | | | | 16,530,000 | | | | 19,165,000 | | | | 15,079,000 | |
| | | | | | | | | | | | | | | | | |
* Includes $41,000 and $7,000 for the three months ended June 30, 2008 and 2007, respectively, and $250,000 and $12,000 for the nine months ended June 30, 2008 and 2007, respectively in non-cash charges for stock based compensation.
ACCOUNTABILITIES, INC.
BALANCE SHEETS
| | | June 30, | | | September 30, | |
| | | 2008 | | | 2007 | |
| | | (unaudited) | | | | |
| ASSETS | | | | | | |
| | | | | | | |
| Current assets: | | | | | | |
| Cash | | $ | 89,000 | | | $ | 137,000 | |
| Accounts receivable – less allowance for doubtful accounts of $523,000 and $338,000, respectively | | | 1,105,000 | | | | 224,000 | |
| Due from financial institution | | | 123,000 | | | | 134,000 | |
| Unbilled receivables | | | 212,000 | | | | 1,182,000 | |
| Prepaid expenses | | | 366,000 | | | | 268,000 | |
| Due from related party | | | 76,000 | | | | 51,000 | |
| Total current assets | | | 1,971,000 | | | | 1,996,000 | |
| | | | | | | | | |
| Property and equipment, net | | | 344,000 | | | | 149,000 | |
| Other assets | | | 9,000 | | | | 34,000 | |
| Intangible assets, net | | | 1,506,000 | | | | 2,023,000 | |
| Goodwill | | | 3,332,000 | | | | 4,617,000 | |
| Total assets | | $ | 7,162,000 | | | $ | 8,819,000 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 1,365,000 | | | $ | 1,348,000 | |
| Accrued wages and related obligations | | | 1,515,000 | | | | 1,367,000 | |
| Current portion of long-term debt | | | 437,000 | | | | 691,000 | |
| Current portion of related party long-term debt | | | 985,000 | | | | 1,647,000 | |
| Due to related party | | | 61,000 | | | | 169,000 | |
| Total current liabilities | | | 4,363,000 | | | | 5,222,000 | |
| | | | | | | | | |
| Long term debt, net of current portion | | | 341,000 | | | | 450,000 | |
| Related party long-term debt, net of current portion | | | 1,212,000 | | | | 2,440,000 | |
| Acquisition related contingent liability | | | 193,000 | | | | 257,000 | |
| Total liabilities | | | 6,109,000 | | | | 8,369,000 | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
| | | | | | | | | |
| Stockholders’ equity: | | | | | | | | |
| Preferred stock, $0.0001 par value, 5,000,000 shares authorized; zero shares issued and outstanding | | | - | | | | - | |
| Common stock, $0.0001 par value, 95,000,000 shares authorized; 23,857,000 and 17,469,000 shares issued and outstanding as of June 30, 2008 and September 30, 2007, respectively | | | 2,000 | | | | 2,000 | |
| Additional paid-in capital | | | 3,195,000 | | | | 1,735,000 | |
| Accumulated deficit | | | (2,144,000 | ) | | | (1,287,000 | ) |
| Total stockholders’ equity | | | 1,053,000 | | | | 450,000 | |
| | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 7,162,000 | | | $ | 8,819,000 | |
| | | | | | | | | |
