Access
Worldwide
Access Worldwide Reports Third Quarter Financial Results and
Reforecast of Previous 2007 Guidance
ARLINGTON, Va., Nov. 19 /PRNewswire-FirstCall/ -- Access Worldwide
Communications, Inc. (OTC Bulletin Board: AWWC), an established marketing and
Business Process Outsourcing ("BPO") services company, today reported financial
results for the three and nine months ended September 30, 2007.
For the Three Months Ended September 30, 2007
Our revenues for the quarter ended September 30, 2007 increased $0.8
million, or 10.8%, to $8.2 million, compared to $7.4 million for the quarter
ended September 30, 2006. Revenues for the U.S. Segment decreased $0.5 million,
or 8.5%, to $5.4 million for the quarter ended September 30, 2007, compared to
$5.9 million for the quarter ended September 30, 2006. This was mainly due to
the loss of one of our most profitable programs due to our client's budgetary
cuts. Management is taking every step to adjust our cost structure to keep it in
line with our existing and anticipated revenues. Revenues for the International
Segment increased $1.2 million, or 80.0%, to $2.7 million for the quarter ended
September 30, 2007, compared to $1.5 million for the quarter ended September 30,
2006. The increase was attributed to the consistent growth of our primary client
in the Philippines.
Our earnings before interest, taxes and depreciation for the three months
ended September 30, 2007 decreased $1.0 million or 34.0% to $(0.2) million,
compared to $0.3 million. The decrease was primarily attributed to the loss of
the program mentioned above and increased recruiting and training cost to
ramp-up for two other programs and increased attrition.
We reported a net loss from continued operations of $(0.7) million, or
$(0.02) loss per share of common stock, for the quarter ended September 30,
2007, compared to $(1.8) million, or $(0.10) loss per share of common stock, for
the quarter ended September 30, 2006. Total weighted average common shares
outstanding for the quarters ended September 30, 2007 and September 30, 2006
were 31,029,146 and 17,340,065 respectively.
For the Nine Months Ended September 30, 2007
Our revenues for the nine months ended September 30, 2007 increased $6.4
million, or 33.3%, to $25.6 million, compared to $19.2 million for the nine
months ended September 30, 2006. Revenues for the U.S. Segment increased $2.4
million, or 15.0%, to $18.4 million for the nine months ended September 30,
2007, compared to $16.0 million for the nine months ended September 30, 2006.
Revenues for the International Segment increased $3.9 million, or 118.2%, to
$7.2 million for the nine months ended September 30, 2007, compared to $3.3
million for the nine months ended September 30, 2006.
Our earnings before interest, taxes and depreciation for the nine months
ended September 30, 2007 increased $1.0 million, or 200%, to $0.5 million,
compared to $(0.5) million for the nine months ended September 30, 2007. The
increase was primarily due to increased revenues during the first half of 2007.
We reported net loss from continuing operations of $ (3.4) million, or
$(0.11) loss per share of common stock for the nine ended September 30, 2007,
compared to $(4.0) million, or $(0.23) loss per share of common stock for the
nine months ended September 30, 2006. Total weighted average common shares
outstanding for the nine months ended September 30, 2007 and September 30, 2006
were 31,029,146 and 17,193,204, respectively.
On February 6, 2007, we established a revenue guidance of $38 million for
2007. We are adjusting our forecast down to $33 million based on lower than
expected third quarter and projected fourth quarter revenues.
Access Worldwide is an established marketing and BPO services company that
provides a variety of sales and communication services. Our spectrum of services
include the full range of inbound and outbound voice services such as customer
service, customer acquisition, helpdesk, and a growing list of IT and back
office services among others. Headquartered in Arlington, Virginia, Access
Worldwide has about 1,000 employees in offices throughout the United States and
the Philippines. More information is available at www.accessww.com.
This press release contains forward-looking statements. Such statements
involve known or unknown risks, uncertainties and other factors that may cause
the actual results to differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking statements
include, but are not limited to, the following: our ability to continue as a
going concern if we are unable to generate cash flow and income from operations;
competition from other third-party providers and those clients and prospects who
may decide to do work in-house that we currently do for them; potential consumer
saturation reducing the need for services; our ability and our clients ability
to comply with state, federal and industry regulations; our reliance on a
limited number of major clients; the reduction in services performed for or the
loss of one or more major clients; our ability to develop or fund the operations
of new products or service offerings; our reliance on technology; our reliance
on key personnel and labor force and our ability to recruit additional
personnel. For a more detailed discussion of these risks and others that could
affect results, see our filings with the Securities and Exchange Commission,
including the risk factors section of Access Worldwide's Annual Report on Form
10-K for the year ended December 31, 2006 filed with the Securities and Exchange
Commission. The Company assumes no duty to update any forward-looking
statements.
Contacts:
Access Worldwide Communications, Inc.
(703) 292-5210
Mark Wright
Investor Relations
mwright@accessww.com
- Tables Follow -
Access Worldwide Communications, Inc.
Condensed Consolidated Balance Sheets
September 30, 2007 December 31,
ASSETS (Unaudited) 2006
------------ ------------
Current Assets:
Cash and cash equivalents $ 942,690 $ 2,836,980
Restricted cash 123,000 123,000
Accounts receivable, net of
allowance for doubtful
accounts of $24,715 and
$99,130, respectively 6,658,389 6,956,218
Unbilled receivables -- 7,750
Other current assets, net 613,828 831,958
------------ ------------
Total current assets 8,337,907 10,755,906
Property and equipment, net 4,101,041 3,374,575
Restricted cash 220,000 343,000
Other assets, net 521,441 386,127
------------ ------------
Total assets $ 13,180,389 $ 14,859,608
============ ============
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Revolving line of credit
("Revolver") $ 2,203,428 $ --
Note payable - related party -- 1,750,000
Capital lease obligation --
short term 480,903 438,866
Accounts payable 421,417 1,315,785
Accrued expense 433,015 654,140
Accrued salaries, wages and
related benefits 899,598 586,107
Accrued Interest 16,433 --
Customer deposits 969,296 1,210,146
Deferred revenue 139,033 669,290
------------ ------------
Total current liabilities 5,563,123 6,624,334
Capital lease obligation --
long term 288,506 259,256
Other long-term liabilities 427,494 530,992
Convertible Notes, net -- 4,625,490
Mandatorily redeemable preferred
stock, $0.01 par value: -- --
1,000,000 shares auth.,
40,000 shares issued and out 4,000,000 4,000,000
------------ ------------
Total liabilities 10,279,123 16,040,072
------------ ------------
Commitments and contingencies
Common stockholders' equity
(deficit):
Common stock, $0.01 par value:
voting 100,000,000 shares
and 40,000,000 shares auth
Respectively; 31,029,146
and 17,340,065 shares issued
and outstanding, respectively 310,291 173,401
Additional paid-in capital 78,857,250 71,362,793
Accumulated deficit (76,266,275) (72,716,658)
------------ ------------
Total common stockholders'
equity (deficit) 2,901,266 (1,180,464)
------------ ------------
Total liabilities
and common stockholders'
equity (deficit) $ 13,180,389 $ 14,859,608
============ ============
Access Worldwide Communications, Inc.
Condensed Consolidated Statements of Operations
Unaudited Unaudited
For the Three Months For the Nine Months
Ending Ending
September 30, September 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Revenues $ 8,175,282 $ 7,405,356 $ 25,608,003 $ 19,244,916
Cost and expenses:
Cost of services 6,736,630 5,521,763 20,077,104 14,977,570
Selling, general
and administrative
expenses 1,622,312 1,628,561 4,955,755 4,722,464
Depreciation
Expense 395,881 249,744 1,063,480 791,058
------------ ------------ ------------ ------------
Total costs and
expenses 8,754,823 7,400,068 26,096,339 20,491,092
------------ ------------ ------------ ------------
(Loss) income from
operations (579,541) 5,288 (488,336) (1,246,176)
Interest expense,
net (93,575) (1,806,229) (2,950,619) (2,780,425)
------------ ------------ ------------ ------------
(Loss) from continuing
operations (673,116) (1,800,941) (3,438,955) (4,026,601)
------------ ------------ ------------ ------------
Discontinued operations:
Income (loss)
from discontinued
operations 8,584 13,510 (110,662) (605,090)
Gain on disposal
of segment, net
of income tax
expense of $0 -- 8,199,620 -- 8,199,620
------------ ------------ ------------ ------------
8,584 8,213,130 (110,662) 7,594,530
------------ ------------ ------------ ------------
Net (loss) income (664,532) 6,412,189 (3,549,617) 3,567,929
Basic and diluted (loss)
income per share of
common stock:
Continuing operations $ (0.02) $ (0.10) $ (0.11) $ (0.23)
Discontinued operations 0.00 0.47 (0.00) 0.44
Net (loss) income $ (0.02) $ 0.37 $ (0.11) $ 0.21
Weighted average
common shares
outstanding 31,029,146 17,340,065 31,029,146 17,193,204
============ ============ ============ ============
Access Worldwide Communications, Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended
September 30,
2007 2006
----------- -----------
Cash flows from operating activities:
Net (loss) income $(3,549,617) $ 3,567,929
Adjustments to reconcile net
(loss) income to net cash used
in operating activities:
Depreciation and amortization 1,063,480 791,941
Amortization of deferred
financing costs 198,374 510,273
Amortization of deferred
compensation 7,875 7,875
Accretion of discount on
Convertible Notes 1,009,510 565,536
Interest expense converted to
common shares 1,647,556 --
Allowance for doubtful accounts (74,106) 90,454
Share based compensation expense 76,301 84,190
Gain on sale of discontinued
operations -- (8,199,620)
Common stock issued for Board
of Directors fees' and bonuses 82,250 122,073
Changes in assets and liabilities
from discontinued operations (112,703) (83,233)
Changes in operating assets
and liabilities:
Accounts receivable 217,897 (2,717,646)
Other assets 169,264 (134,037)
Accounts payable and accrued
expenses (1,095,986) (478,697)
Accrued salaries, wages and
related benefits 317,975 468,790
Accrued interest and related
party expenses 16,433 (46,911)
Deferred revenue and customer
deposits (578,649) (310,510)
----------- -----------
Net cash used in operating
activities (604,146) (5,761,593)
----------- -----------
Cash flows from investing activities:
Additions to property
and equipment, net (1,548,832) (196,362)
Additions to property and
equipment from discontinued
operations, net 4,994 (187,549)
Net proceeds from sale of
discontinued operations -- 9,751,470
Increase in restricted cash 123,000 314,000
----------- -----------
Net cash (used in) provided by
investing activities (1,420,838) 9,681,559
----------- -----------
Cash flows from financing activities:
Payments on capital leases (182,368) (262,749)
Proceeds from exercise of common
stock options and warrants 18,490 5,535
Net borrowings (payments) under
Revolver and Debt Agreement 2,203,428 (4,454,388)
Loan origination fees (145,334) (140,000)
Proceeds from issuance of
Convertible Notes -- 1,500,000
(Payments) proceeds on equipment
and insurance financing, net (13,522) 15,175
(Payments) proceeds from note
payable from related party (1,750,000) 2,000,000
Payment of subordinated note from
discontinued operations -- (352,334)
Payments on capital leases from
discontinued operations -- (12,474)
----------- -----------
Net cash provided by (used in)
financing activities 130,694 (1,701,235)
----------- -----------
Net increase (decrease) in cash
and cash equivalents (1,894,290) 2,218,731
Cash and cash equivalents, beginning
of period 2,836,980 1,755,926
----------- -----------
Cash and cash equivalents, end of
period $ 942,690 $ 3,974,657
=========== ===========
Non-Cash Investment and Financing
Activities:
Equipment acquisition through
capital lease 267,177 20,455
Issuance of warrants on Note 171,750 84,000
Conversion of Convertible Notes
with interest 5,635,000 --