Company reports both financial and cash improvement
ATLANTA, May 8 /PRNewswire-FirstCall/ -- Firstwave Technologies, Inc. (NASDAQ:FSTW), a web-based, CRM solutions provider, today announced preliminary financial results for the quarter ended March 31, 2006.
Continuing Operations The loss from continuing operations applicable to common shareholders for the first quarter of 2006 decreased 77.2% to $187,000, or ($0.06) per fully diluted share, as compared to a loss from continuing operations applicable to common shareholders of $821,000 in the first quarter of 2005, or ($0.30) per fully diluted share.
As more fully explained below, the decreases in license and services revenues are in part the result of a shift in the product marketing approach from a direct model to a channel model as reflected in our previously announced relationship with M1 Global which commenced in October 2005. Software license revenues decreased 42.7% to $47,000 in the first quarter of 2006 from $82,000 in the first quarter of 2005. Services revenues decreased 53.0% to $94,000 in the first quarter of 2006 as compared to $200,000 in the same quarter a year ago. Maintenance revenues decreased 20.9% to $458,000 in first quarter of 2006 from $579,000 in the first quarter of 2005. Total revenues for the first quarter of 2006 were $599,000, a 32.0% decrease from the first quarter of 2005 revenues of $881,000. Of the total revenue decrease in the first quarter of 2006, $138,000 relates to the fact that Firstwave now receives a percentage of revenues from M1 Global's sales (33% of license revenues and 20% of services revenues); however, the costs relating to making such sales are borne by M1 Global so the amounts received by Firstwave from these revenues benefit the bottom line.
Although revenues decreased during the first quarter 2006 as compared to the same period last year, the bottom line improved primarily due to the M1 Global relationship and the significant reductions in our operating expenses associated therewith.
Discontinued Operations As previously announced on June 3, 2005, Firstwave entered into the Stock Purchase Agreement with AllAboutTickets LLC, now known as First Sports International, to sell its UK Subsidiary. As a result of this sale, there were no discontinued operations results during the first quarter of 2006 compared to a loss of $427,000 in the first quarter of 2005. The impact of this transaction on reported financials is explained in the Company's annual report and Form 10K which have previously been filed.
Other Firstwave reported a cash balance of $409,000 at March 31, 2006, and continues to carry no debt. This was the second consecutive increase in quarter-over-quarter cash balances. With the $500,000 received from the Galactus transaction on May 2, 2006 for the assignment of the Company's .Net Integrated Development Environment ("IDE"), as described in our May 5, 2006 Form 8-K filing with the Securities and Exchange Commission and the related press release, and the anticipated collection of the $300,000 note payment due on June 3, 2006 from First Sports International, we believe our cash balance will show a significant increase at June 30, 2006.
The May 2 transaction increased our cash balance by $500,000, less nominal transaction costs. After deducting the capitalized software development costs associated with the IDE, the benefit to our bottom line will be approximately $340,000 for the quarter ending June 30, 2006. Given our current expense structure, we believe we will report net income for the quarter ending June 30, 2006 compared to a net loss from continuing operations applicable to common shareholders of $439,000 for the quarter ended June 30, 2005.
Financial results for quarters subsequent to June 30, 2006 will also benefit from the absence of the recent $153,000 per quarter in amortization of software development costs which will no longer be incurred since these capitalized costs have now been reduced to zero.
"We have been extremely pleased with the transactions the Company has made and believe that continued improvement in both cash and financial performance will help the Company to grow," said Richard T. Brock, President and CEO of Firstwave. "We believe that with our reduced expense levels and with a strategy to build applications in markets where we can gain competitive advantage, we will continue to see progress." ABOUT FIRSTWAVE Firstwave(R) Technologies, Inc. is a provider of strategic CRM solutions specifically designed for "capturing the story so far" in sales and customer support applications. Firstwave's solutions provide companies with fit-to- purpose features that optimize how companies win, maintain and grow customer and organizational relationships while improving the overall customer experience. With 20 years of experience in CRM, Firstwave's legacy of CRM best practices and Customer-First Commitment has earned the Company numerous industry awards and accolades. Firstwave is headquartered in Atlanta, Georgia. For more information, visit the Company's web site at http://www.firstwave.net/ or call 1-800-540-6061.
NOTE: Except for historical information contained herein, the matters set forth in this communication are "forward-looking statements" within the meaning of various provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements can generally be identified by words such as will, expect, intends, believe, anticipates, should and words of similar meaning. Firstwave Technologies, Inc. (the "Company") notes that the forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, such as potential fluctuations in quarterly results due to delays in purchase decisions and other adverse market conditions, whether the parties will be able to successfully launch a combined product offering and develop any significant customer following from the transactions described in this release, the Company's dependence on other parties to continue to perform under the agreements described in this release, whether the Company will be able to continue diversification of its revenues, competition and technological developments, the Company's capital requirements and other liquidity concerns, the Company's ability to continue to comply with NASDAQ listing requirements, and the size, timing, and contractual terms of orders, and also the risks and uncertainties discussed under the caption "Certain Factors Affecting Forward-Looking Statements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2005, as filed with the Securities and Exchange Commission ("SEC"), which discussions are incorporated herein by this reference. The information set forth herein is provided as of the date hereof. The Company does not assume, and expressly disclaims, any duty or obligation to update any of the information presented herein with respect to its consolidated operations or anticipated performance in 2006 or beyond.
Firstwave Technologies, Inc. Selected Financial Information
(in thousands, except per share data) Consolidated Statement of Operations For the
Three Months Ended
Mar 31,
(unaudited)
2005 2006 Net Revenues $881 $599 Loss from continuing operations before taxes (323) (116) Loss from continuing operations after taxes (323) (116) Loss from discontinued operations (427) 0 Net loss (750) (116) Dividends on preferred stock (71) (71) Net loss applicable to common shareholders $(821) $(187) Basic and diluted per share data:
Loss from continuing operations $(0.14) $(0.06)
Loss from discontinued operations (0.16) -
Net loss per common share $(0.30) $(0.06)
Weighted average shares 2,694 2,729 Consolidated Balance Sheet Dec 31, Mar 31,
2005 2006 Cash $360 $409
Accounts receivable and other current assets 1,174 951
Total current assets $1,534 $1,360 Non-current assets 2,725 2,493 Total assets $4,259 $3,853 Current liabilities $1,596 $1,341
Shareholders' equity 2,663 2,512 Total liabilities and shareholders' equity $4,259 $3,853
DATASOURCE: Firstwave Technologies, Inc.
CONTACT: Richard Brock, President and CEO of Firstwave Technologies, Inc., +1-770-250-0351, or Web site: http://www.firstwave.net/
|