ACE*COMM Corporation (NASDAQ:ACEC): Fiscal 2006 Highlights -- 34%
year-over-year revenue growth to $26.7 million -- Profit for the
year of EPS $0.02 versus a loss of $0.44 for last year --
Transformation of Company beyond the traditional OSS sector with
new Value Added Services (VAS) and Network Business Intelligence
(NBI) offerings -- Five new service provider customers, three in
Tier 1 ranks -- Eight major announcements of new products or
enhancements -- Signed Lucent distribution agreement and Tier 1
North American wireless carrier for Patrol suite applications --
Three new NetPlus(R) customers in civilian government sector --
NetPlus(R) awarded "Product of the Year" by Internet Telephony
magazine ACE*COMM Corporation (NASDAQ:ACEC), a global provider of
network business intelligence and advanced operations support
systems (OSS) solutions, today reported financial results for the
fourth quarter and fiscal year 2006, both ending June 30, 2006. For
the year ended June 30, 2006, the Company recorded revenues of
$26.7 million, compared to $20.0 million for fiscal year 2005. The
Company had net income and income per fully diluted share of $0.3
million and $0.02, respectively, compared to a net loss and loss
per fully diluted share of $6.5 million and $0.44 for fiscal year
2005. Revenues for the fourth quarter 2006 totaled $6.5 million
compared to $6.8 million for the same quarter in fiscal year 2005.
Net loss for the quarter was $0.5 million, or $0.03 per fully
diluted share, compared to net income of $0.3 million, or $0.02 per
fully diluted share for the same quarter a year ago. "The ACE*COMM
team performed well during the recently concluded year," said
George T. Jimenez, Chairman and CEO of ACE*COMM. "Last year at this
time we outlined the growth strategies - to expand our technology
offerings, broaden our market penetration, add major new customers,
and more tightly integrate our business across product lines. We
are executing on all these fronts today. We have aligned our
product focus and investments in technology and marketing, and have
produced some of the most promising market opportunities we have
experienced in many years." Continued Mr. Jimenez: "The fiscal 2006
results demonstrate our progress in transforming our Company from a
trusted provider of OSS infrastructure solutions to one that
carriers can also tap for high-margin, value-added service
applications and network business intelligence solutions. We
developed and brought to market a number of new products and
capabilities designed to deliver innovative, profit-enhancing
solutions to customers, and gained solid market visibility for
Parent Patrol(TM) - the first of our new suite of value-added
service applications. At the same time we added Tier 1 carriers
such as Turktel and the Saudi Telecom Company as customers, and
plan to leverage these wins for further NBI and VAS opportunities.
In addition, we achieved a significant financial milestone in 2006,
increasing annual revenues by 34 percent, and achieving our first
profitable fiscal year in five years." "While our fiscal year
results demonstrated notable improvements, revenues for the fourth
quarter reflect short-term delays in booking revenues on a few
significant contracts which we now expect to accomplish in the next
couple of quarters," said Steve Delmar, CFO of ACE*COMM. "In
addition, our margins for the fourth quarter were negatively
impacted by higher cost of sales components due to a higher than
normal mix of hardware revenues during the quarter, which increased
costs by approximately $700 thousand. We also reduced some staff in
locations where shifts in business concentration indicated we move
to better align our resources, incurring one-time charges related
to those reductions totaling $200 thousand." Continued Mr. Delmar:
"We are making significant progress on our Tier 1 market
penetration efforts relative to Parent Patrol(TM) - an access
control application that lets parents manage their children's
mobile phone use. First, we announced that Lucent will use Parent
Patrol(TM) technology in its global offering of a parental control
solution for mobile operators; and second, that we signed a
contract with a Tier 1 North American wireless service provider to
roll out Parent Patrol(TM) in one of its regional divisions this
fall. We are continuing discussions with large wireless service
providers around the world for this technology." Concluded Mr.
Jimenez: "The year ahead, I believe, will be one of building on the
progress achieved this year. We believe our market leading
solutions for value-added services, business intelligence, and
advanced OSS are well-positioned in their respective markets. We
also believe we are on track to achieve further solid revenue
growth and improve our operating margins over the next few years."
ACE*COMM will host an earnings teleconference call this evening,
September 13, 2006 at 5:30 pm, Eastern Standard Time, to discuss
the fourth quarter fiscal year 2006 results. To participate, please
call 866-219-5268. When prompted, enter the ACE*COMM reservation
number 966674. Internet users can hear a simultaneous live Webcast
of the teleconference at http://acecomm.com or
http://www.fulldisclosure.com. A taped replay of the call will be
made available from the ACE*COMM Corporate Web Site after 8:30 pm,
on September 13, 2006. About ACE*COMM ACE*COMM is a global provider
of network business intelligence and advanced operations support
systems (OSS) solutions for telecom service providers and
enterprises. ACE*COMM's solutions are applicable to a range of
legacy through next-generation networks that include wired,
wireless, voice, data, multimedia, and Internet communications
networks. These solutions provide the analytical tools required to
extract knowledge from operating networks--knowledge customers use
for asset recovery and revenue assurance, cost reduction, improved
operational efficiency, acceleration of time-to-market for new
services, and more effective customer care. For over 20 years,
ACE*COMM technology has been effectively deployed for more than 300
customers, spanning over 4000 installations in 70 countries
worldwide. ACE*COMM-installed products are currently enabling the
success of customers and partners such as Alcatel, AT&T, Cisco,
General Dynamics, IBM, Level 3 Communications, Marconi, Motorola,
Northrop Grumman, Siemens, and Unisys. Headquartered in the
Washington, DC area, ACE*COMM has corporate offices in Australia,
Canada, China, and the UK. ACE*COMM is a registered ISO 9001
quality standard company. For more information, visit
www.acecomm.com. ACE*COMM, NetPlus, the ACE*COMM logo, and N*VISION
are registered trademarks, and Convergent Mediation and Parent
Patrol are trademarks of ACE*COMM Corporation. Except for
historical information, the matters discussed in this news release
include forward-looking statements that are subject to certain
risks and uncertainties that could cause the actual results to
differ materially from those projected, including, but not limited
to: the failure of anticipated demand to materialise, delays or
cancellations of orders due to various factors, including business
and economic conditions in the U.S. and foreign countries;
industry-wide slowdowns, any limitations on customers' financial
resources, the continued convergence of voice and data networks,
the continuing success of the Company's strategic alliances for
product development and marketing, customer purchasing and
budgetary patterns or lack thereof; pricing pressures and the
impact of competitive products; the timely development and
acceptance of new products; the Company's ability to adequately
support its operations, and other risks detailed from time to time
in the Company's Report on Form 10-Q and other reports filed with
the Securities Exchange Commission. -0- *T ACE*COMM CORPORATION
CONSOLIDATED BALANCE SHEETS (in thousands except share and per
share amounts) June 30, June 30, 2006 2005 -------- -------- Assets
Current assets: Cash and cash equivalents $946 $2,683 Accounts
receivable, net 10,981 5,456 Inventories, net 838 532 Deferred
contract costs 18 85 Prepaid expenses and other 571 601 --------
-------- Total current assets 13,354 9,357 Property and equipment,
net 787 636 Goodwill 522 1,681 Acquired intangibles, net 1,041
2,001 Other non-current assets 657 478 -------- -------- Total
assets $16,361 $14,153 ======== ======== Liabilities and
Stockholders' Equity Current liabilities: Borrowings $2,970 $2,332
Accounts payable 1,114 1,379 Accrued expenses 1,940 1,940 Accrued
compensation 606 1,013 Deferred revenue 3,617 2,040 --------
-------- Total current liabilities 10,247 8,704 -------- --------
Long-term notes payable 17 72 -------- -------- Total liabilities
10,264 8,776 -------- -------- Commitments and contingencies
Stockholders' equity: Preferred stock, $.01 par value, 5,000,000
shares authorized, none issued and outstanding - - Common stock,
$.01 par value, 45,000,000 shares authorized, 17,788,032 and
16,694,330 shares issued and outstanding 178 167 Additional paid-in
capital 35,257 34,808 Other accumulated comprehensive loss (91)
(32) Accumulated deficit (29,247) (29,566) -------- -------- Total
stockholders' equity 6,097 5,377 -------- -------- Total
liabilities and stockholders' equity $16,361 $14,153 ========
======== ACE*COMM CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts) For the three months For
the twelve months ended ended June 30, June 30,
----------------------- ----------------------- 2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited) -----------
----------- ----------- ----------- Revenue Licenses and hardware
$2,714 $3,523 $12,875 $8,734 Services 3,831 3,242 13,796 11,227
----------- ----------- ----------- ----------- Total revenue 6,545
6,765 26,671 19,961 Cost of licenses and hardware revenue 1,165
1,036 2,970 3,276 Cost of services revenue 1,899 1,802 7,171 5,673
----------- ----------- ----------- ----------- Total cost of
revenue 3,064 2,838 10,141 8,949 Gross profit 3,481 3,927 16,530
11,012 Selling, general, and administrative 2,923 2,607 12,159
9,774 Research and development 1,040 949 3,866 2,694 Acquired in
process research and development - - - 5,118 -----------
----------- ----------- ----------- Income (loss) from operations
(482) 371 505 (6,574) Interest expense 48 32 223 53 Gain from
settlement of debt obligation - - - 228 ----------- -----------
----------- ----------- Income (loss) before income taxes (530) 339
282 (6,399) Income tax (benefits) expense (38) 2 (37) 63
----------- ----------- ----------- ----------- Net income (loss)
$(492) $337 $319 $(6,462) =========== =========== ===========
=========== Basic net income (loss) per share $(0.03) $0.02 $0.02
$(.44) =========== =========== =========== =========== Diluted net
income (loss) per share $(0.03) $0.02 $0.02 $(.44) ===========
=========== =========== =========== Shares used in computing net
income (loss) per share: Basic 17,082 16,694 16,899 14,555
=========== =========== =========== =========== Diluted 17,082
17,067 17,442 14,555 =========== =========== ===========
=========== *T
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