EXHIBIT INDEX
99.1 Press Release by Registrant, dated August 2, 2006
Exhibit 99.1
[AXS ONE LOGO]
Company Contact: IR Contact:
Joseph Dwyer Matthew Hayden
AXS-One Inc. Hayden Communications
jdwyer@axsone.com matt@haydenir.com
(201) 935-3400 (858) 704-5065
AXS-ONE REPORTS FINANCIAL RESULTS
FOR SECOND QUARTER OF 2006
FOR IMMEDIATE RELEASE
RUTHERFORD, N.J., AUGUST 2, 2006 - AXS-ONE INC. (AMEX: AXO), a leading provider
of high performance Records Compliance Management (RCM) software solutions today
announced its financial results for the second quarter and six-month period
ended June 30, 2006.
Total revenues for the second quarter were $8.0 million, an increase of 6.8
percent compared with revenues of $7.5 million for the second quarter of 2005
and up 6.5 percent sequentially compared to the $7.5 million reported for the
first quarter. License revenues for the second quarter were $1.0 million, up $.5
million from the $.5 million reported for the second quarter last year and
approximately unchanged from the first quarter. Total expenses decreased 9.5
percent to $10.5 million compared to $11.6 million in the second quarter of
2005. For comparison purposes, last year's second quarter results included $0.9
million in restructuring and related expenses, absent from the 2006 second
quarter. The Company reported a net loss of $2.5 million for the second quarter,
or $(0.07) per diluted share (based on 34.4 million fully diluted shares)
compared to a net loss of $4.4 million, or $(0.15) per diluted share (based on
30.0 million fully diluted shares) in the second quarter of last year.
For the first six months of 2006, total revenues were $15.5 million compared
with total revenues of $15.5 million for the first six months of 2005. License
fees were $1.9 million, up 24.5 percent, or $.4 million, from the $1.5 million
in license fees recognized for the first six months last year. Total operating
expenses were $20.7 million, a decrease of 8.7 percent from the $22.7 million
last year, which included the $0.9 million in restructuring expenses. The net
loss for the first six months of 2006 was $5.2 million, or $(0.15) per fully
diluted share (based on 34.3 million fully diluted shares) compared to a net
loss of $7.5 million, or $(0.26) per fully diluted share (based on 29.3 million
fully diluted shares) for the comparable prior-year period.
The Company completed the quarter with $3.3 million in cash and cash
equivalents. The Company's accounts receivable were $4.3 million as of June 30,
and the Company
completed the quarter with $1.7 million of borrowing availability on its $4
million line of credit.
"While we saw an increase in deal closings during the second quarter,
specifically with our partner Sun Microsystems, our reported results are below
our expectations," commented Bill Lyons, chairman and CEO of AXS-One. "We
continue to experience lengthy sales cycles which resulted in a number of deals
that were anticipated to close being pushed out into subsequent quarters.
However, recently released industry studies that highlight AXS-One's complete
integrated platform solution validate our belief that our software is
appropriately positioned within this growing and dynamic market. These factors,
combined with improved execution on our sales pipeline, should allow us to grow
revenues and continue our progress toward a return to profitability."
CONFERENCE CALL INFORMATION
Management will conduct a conference call to discuss these results at 5:00 p.m.
Eastern on August 2, 2006. Interested parties can participate in the call by
dialing 706-645-0399 or can access the webcast at www.axsone.com. The webcast
will be archived for 30 days following the call. Interested parties may submit
questions that they would like answered during the conference call by e-mail to
info@axsone.com. Interested parties may listen to the call via a live CCBN
webcast that will be available via the company website www.axsone.com.
Interested parties should access the webcast approximately 10-15 minutes before
the scheduled start time.
ABOUT AXS-ONE INC.
AXS-One (AMEX: AXO) is a leading provider of high performance Records Compliance
Management solutions. The AXS-One Compliance Platform enables organizations to
implement secure, scalable and enforceable policies that address records
management for corporate governance, legal discovery and industry regulations
such as SEC17a-4, NASD 3010, Sarbanes-Oxley, HIPAA, The Patriot Act and
Gramm-Leach Bliley. AXS-One's technology has been critically acclaimed as best
of class and delivers digital archiving, business process management, electronic
document delivery and integrated records disposition and discovery for e-mail,
instant messaging, images, SAP and other corporate records. Founded in 1979, and
headquartered in Rutherford, NJ, AXS-One has offices worldwide including in the
United States, Australia, Singapore, United Kingdom and South Africa. For
further information, visit the AXS-One website at http://www.axsone.com.
AXS-One, the AXS-One logo, "Access Tomorrow Today," AXSPoint, and TransAXS are
registered trademarks of, and AXS-One Compliance Platform, AXS-One Retention
Manager, AXS-One Rapid-AXS, AXS-Link for Desktop, AXS-Link for SAP, AXS-Link for
Lotus Notes, AXS-Link for Microsoft Exchange, "The Records Compliance Management
Company", e-Cellerator, AXS Desk, "AXS-One Collaboration FrameWorks," SMART,
AXS-Link and Tivity are trademarks of, AXS-One Inc., in the U.S. All other
company and product names are trademarks or registered trademarks of their
respective companies.
Special Note Regarding Forward-Looking Statements: A number of statements
contained in this release are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in the applicable statements. These risks and uncertainties
include, but are not limited to: our ability to return to profitability; our
ability to grow license and service revenue; potential vulnerability to
technological obsolescence; the risks that our current and future products may
contain errors or defects that would be difficult and costly to detect and
correct; potential difficulties in managing growth; dependence on key personnel;
the possible impact of competitive products and pricing; and other risks
described in more detail in AXO's most recent Form 10-K and other Securities and
Exchange Commission filings.
-Tables Follow-
AXS-ONE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2006 2005 2006 2005
-------- -------- -------- --------
Revenues:
License fees $ 952 $ 518 $ 1,917 $ 1,540
Services 7,006 6,944 13,494 13,960
Other-related parties 25 17 64 37
-------- -------- -------- --------
Total revenues 7,983 7,479 15,475 15,537
-------- -------- -------- --------
Operating expenses:
Cost of license fees 456 406 899 770
Cost of services 3,922 4,383 7,357 9,042
Sales and marketing 2,481 2,523 5,300 5,111
Research and development 2,195 2,034 4,421 4,135
General and administrative 1,485 1,437 2,747 2,785
Restructuring costs and other costs -- 863 -- 863
-------- -------- -------- --------
Total operating expenses 10,539 11,646 20,724 22,706
-------- -------- -------- --------
Operating loss (2,556) (4,167) (5,249) (7,169)
-------- -------- -------- --------
Other expense:
Interest income 55 28 139 58
Interest expense (29) (1) (56) (1)
Equity in losses of joint ventures (43) (3) (70) (27)
Other expense, net 85 (241) 2 (414)
-------- -------- -------- --------
Total other expense, net 68 (217) 15 (384)
-------- -------- -------- --------
Loss before income taxes (2,488) (4,384) (5,234) (7,553)
Income tax benefit -- 25 -- 25
-------- -------- -------- --------
Net loss $ (2,488) $ (4,359) $ (5,234) $ (7,528)
======== ======== ======== ========
Basic & diluted net loss per share: $ (0.07) $ (0.15) $ (0.15) $ (0.26)
======== ======== ======== ========
Weighted average basic & diluted
common shares outstanding 34,354 30,016 34,301 29,300
======== ======== ======== ========
The unaudited financial information included in this document is
intended only as summary provided for your convenience, and should be read in
conjunction with the complete consolidated financial statements of the Company
(including the Notes thereto, which set forth important information) contained
in its Reports on Form 10-K and 10-Q filed by the Company with the U.S.
Securities and Exchange Commission (SEC). Such reports are available on the
public EDGAR electronic filing system maintained by the SEC.
This press release contains forward-looking statements. Such statements
are only predictions, and actual events or results may differ materially. All
forward-looking statements involve risks and uncertainties, including, without
limitation, the risks detailed in the Company's documents and reports filed from
time to time with the Securities and Exchange Commission.
AXS-ONE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
2006 2005
----------- ------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 3,341 $ 3,613
Accounts receivable, net of allowance for doubtful accounts 4,300 5,153
Prepaid expenses and other current assets 958 775
-------- --------
Total current assets 8,599 9,541
-------- --------
Equipment and leasehold improvements, net of accumulated depreciation 442 395
Capitalized software development costs, net of accumulated amortization 661 1,038
Other assets 97 92
-------- --------
Total assets $ 9,799 $ 11,066
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses $ 5,171 $ 4,843
Due to joint venture 52
Deferred revenue 9,503 8,224
-------- --------
Total current liabilities 14,674 13,119
Long-term deferred revenue 2,213 63
Stockholders' deficit (7,088) (2,116)
-------- --------
Total liabilities and stockholders' deficit $ 9,799 $ 11,066
======== ========
The unaudited financial information included in this document is
intended only as summary provided for your convenience, and should be read in
conjunction with the complete consolidated financial statements of the Company
(including the Notes thereto, which set forth important information) contained
in its Reports on Form 10-K and 10-Q filed by the Company with the U.S.
Securities and Exchange Commission (SEC). Such reports are available on the
public EDGAR electronic filing system maintained by the SEC.
This press release contains forward-looking statements. Such statements
are only predictions, and actual events or results may differ materially. All
forward-looking statements involve risks and uncertainties, including, without
limitation, the risks detailed in the Company's documents and reports filed from
time to time with the Securities and Exchange Commission.
