DOCC Docucorp Intl (MM)

Docucorp(R) International (Nasdaq:DOCC), a leading provider of Customer Communication Management (CCM) solutions, today announced revenues increased 13 percent to a record $22.4 million for the third quarter of fiscal year 2006, as compared to $19.8 million for the third quarter of the prior year. Net income for the quarter was $1.1 million, or $0.09 per diluted share, compared to net income of $468,000, or $0.04 per diluted share, for the same period a year ago. For the nine months ended April 30, 2006, the company reported record revenues of $65.7 million, a 10 percent increase compared to $59.7 million for the same period a year ago. Net income for the first nine months of fiscal year 2006 was $2.8 million, or $0.24 per diluted share, compared to $2.4 million, or $0.21 per diluted share, for the first nine months of fiscal year 2005. Compared to the third quarter of the prior fiscal year, ASP hosting revenue increased 28 percent to $8.4 million, professional services revenue increased 13 percent to $5.9 million, and maintenance revenue increased three percent to $5.4 million. Software license revenue remained virtually unchanged at $2.8 million. "During the third quarter, we continued to see solid improvement in our ASP hosting and professional services revenues, as well as record revenues from our EMEA operations," said Michael D. Andereck, president and chief executive officer, Docucorp International. "We are very pleased with double-digit revenue growth, record revenues, and the substantial increase in net income for the quarter." About Docucorp Docucorp markets Customer Communication Management (CCM) solutions via a portfolio of information software, business process outsourcing and professional services, which enables companies to create, publish, manage and archive complex, high-volume, personalized information in-house or fully outsource to Docucorp. The company has an installed base of more than 1,300 customers, including some of the largest insurance, utility, financial services and health care organizations. Headquartered in Dallas, Docucorp has facilities in Atlanta, Silver Spring, Md., Bedford, N.H., and London, as well as an international presence in the Benelux, Switzerland, Central and Eastern Europe, Middle East and Africa regions. Certain information contained in this news release may include "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than historical facts, included herein are forward-looking statements. These statements involve risks and uncertainties, such as competition, technological developments, loss of significant customers and the other factors discussed in the Company's periodic reports filed with the Securities and Exchange Commission, that could cause the Company's actual results to differ materially from those expressed or implied by these forward-looking statements. Docucorp is a registered trademark of Docucorp International. (C) 2006 Docucorp International. All Rights Reserved. Company, organization and product names mentioned herein are trademarks or registered trademarks of their respective owners. Docucorp and its symbol are trademarks of Docucorp International. -0- *T DOCUCORP INTERNATIONAL, INC. Consolidated Statements of Operations (in thousands except per share amounts) (unaudited) Three Months Nine Months Ended April 30, Ended April 30, --------------------------------- 2006 2005 2006 2005 ------- ------- -------- -------- Revenues ASP hosting $8,388 $6,559 $25,343 $20,150 Professional services 5,902 5,246 16,735 16,227 License 2,761 2,756 7,287 7,427 Maintenance 5,385 5,218 16,312 15,935 ------- ------- -------- -------- Total revenues 22,436 19,779 65,677 59,739 ------- ------- -------- -------- Cost of revenues ASP hosting 7,485 6,092 22,591 17,858 Professional services 4,726 4,169 13,114 12,502 License 1,184 1,044 3,511 3,002 Maintenance 329 393 1,029 1,120 ------- ------- -------- -------- Total cost of revenues 13,724 11,698 40,245 34,482 ------- ------- -------- -------- Gross profit 8,712 8,081 25,432 25,257 ------- ------- -------- -------- Operating expenses Product development 2,284 2,180 6,784 6,404 Sales and marketing 2,700 3,040 7,986 8,817 General and administrative 2,108 2,064 6,273 6,065 ------- ------- -------- -------- Total operating expenses 7,092 7,284 21,043 21,286 ------- ------- -------- -------- Income from operations 1,620 797 4,389 3,971 Interest expense (84) (118) (295) (442) Other income, net 188 82 365 326 ------- ------- -------- -------- Income before income taxes 1,724 761 4,459 3,855 Provision for income taxes 638 293 1,650 1,484 ------- ------- -------- -------- Net income $1,086 $468 $2,809 $2,371 ======= ======= ======== ======== Basic net income per share $0.10 $0.04 $0.26 $0.22 ======= ======= ======== ======== Weighted average basic shares outstanding 10,856 10,741 10,910 10,609 ======= ======= ======== ======== Diluted net income per share $0.09 $0.04 $0.24 $0.21 ======= ======= ======== ======== Weighted average diluted shares outstanding 11,501 11,621 11,504 11,561 ======= ======= ======== ======== DOCUCORP INTERNATIONAL, INC. Consolidated Balance Sheets (in thousands except share and per share amounts) (unaudited) April 30, July 31, Assets 2006 2005 --------- --------- Current assets: Cash and cash equivalents $9,915 $8,381 Accounts receivable, net of allowance of $428 and $293, respectively 17,386 17,132 Current portion of deferred taxes 170 170 Income tax receivable 248 248 Other current assets 2,898 2,559 --------- --------- Total current assets 30,617 28,490 Property and equipment, net of accumulated depreciation of $23,142 and $20,122, respectively 9,208 10,261 Software development costs, net of accumulated amortization of $29,051 and $25,909 respectively 14,225 13,687 Goodwill 9,842 9,842 Identifiable intangibles, net of accumulated amortization of $248 and $113, respectively 772 907 Other assets 446 448 --------- --------- Total assets $65,110 $63,635 ========= ========= Liabilities and stockholders' equity Current liabilities: Accounts payable $3,152 $2,423 Accrued liabilities: Accrued compensation 3,671 3,067 Other 1,354 1,491 Income taxes payable 65 403 Current portion of lease obligations 1,542 1,459 Current portion of long-term debt 3,619 3,617 Deferred revenue 12,193 11,479 --------- --------- Total current liabilities 25,596 23,939 Deferred taxes 5,459 5,178 Long-term lease obligations 1,227 2,303 Long-term debt 747 3,462 Other long-term liabilities 1,467 1,224 Commitment and contingencies Stockholders' equity: Preferred stock, $0.01 par value, 1,000,000 shares authorized; none issued - - Common stock, $0.01 par value, 50,000,000 shares authorized; 16,593,849 shares issued 166 166 Additional paid-in-capital 46,006 48,035 Treasury stock at cost, 5,290,557 and 5,458,912 shares, respectively (29,574) (30,347) Retained earnings 14,536 12,268 Unearned compensation - (2,100) Foreign currency translation adjustment (520) (493) --------- --------- Total stockholders' equity 30,614 27,529 --------- --------- Total liabilities and stockholders' equity $65,110 $63,635 ========= ========= *T