RESTON, Va., Aug. 14, 2013 /PRNewswire/ -- Santeon Group
Inc. (OTCBB: SANT, "Santeon" or the "Company") announced today
operating results for the second quarter ended June 30, 2013.
Second Quarter Highlights
- Increased revenue 46.3% year-over-year to $1,355,614 for the second quarter 2013
- Grew Agile revenue 69.3% year-over-year to $971,799 for the second quarter 2013
- Generated Adjusted EBITDA of $73,931, or 5.5% of revenue, for the second
quarter 2013
- Expanded gross margins 920 basis points to 52.5% for the second
quarter 2013, compared to 43.3% for the second quarter 2012
- Generated $83,425 of cash from
operating activities in the first half of 2013
- Added four revenue-generating employees during the second
quarter 2013, bringing the total number of revenue-generating
employees to 25 as of June 30,
2013
"Santeon's strong performance during the second quarter 2013
reflects the increasing demand within the public and private
sectors for enterprise agility. During the quarter, we added four
new revenue-generating employees, and received a full quarter of
productivity from three others who joined the Company during the
first quarter, as we served new and existing clients with expert
training, coaching and consulting services," commented Dr. Ash
Rofail, Chief Executive Officer of Santeon. "Looking ahead, we are
poised to continue our growth trajectory as more organizations look
to drive operational efficiencies. We are particularly excited
about growth opportunities for our public sector business as budget
cuts prompt federal, state and local agencies to leverage
technology and optimize practices to run more efficiently and
increase their ability to respond to tighter budget demands."
Dr. Rofail added, "We continue to be encouraged by our improving
financial profile, including higher revenue, positive working
capital and significantly reduced debt, all of which have enhanced
stockholders' equity. Looking forward, our improved financial
profile positions us strongly to execute our long-term growth
strategy."
Second Quarter 2013 Results
Revenue increased 46.3% over the second quarter 2012 from
$926,643 to $1,355,614 for the second quarter 2013. Agile
training, coaching and consulting revenue increased 69.3% to
$971,799 for the second quarter 2013,
compared to $573,986 for the second
quarter 2012. Software development revenue remained relatively flat
year over year at $254,435 versus
$269,439 in the second quarter 2012.
eBN revenue increased 55.5% to $129,379 for the second quarter 2013, compared to
$83,219 for the second quarter
2012.
Adjusted EBITDA, as reconciled in the attached table, was
$73,931, or 5.5% of revenue, for the
second quarter 2013, compared to $18,292, or 2.0% of revenue, for the second
quarter 2012.
Net loss was $4,712, or
($0.00) per diluted share, for the
second quarter 2013 compared to net income of $1,232, or $0.00
per diluted share, for the second quarter 2012.
During the quarter ended June 30,
2013, the Company settled the 15.0% Unsecured Note due
July 2007 (principal of $45,000) plus $5,000 in accrued interest for 21,277 shares of
the Company's common stock. As a result of this and other principal
repayments on debt the Company's overall debt decreased from
$203,675 in the second quarter 2012
to $124,028 in the second quarter
2013, resulting in a net cash position of $79,326.
As of June 30, 2013, Santeon had
cash of $203,354.
Conference Call
The Company will host a conference call with investors to
discuss its second quarter 2013 results today at 9:00 a.m. ET. To participate, please call
1-888-562-3356 in the U.S. (1-973-582-2700 outside the U.S.) and
enter pass code 28458464. The call will also be available as a
live, listen-only webcast at http://www.santeon.com or on the
Santeon Group Channel at
http://www.ubroadcast.com/show/santeon-group-inc.
A replay of the webcast will be available online at
http://www.santeon.com or on the Santeon Group Channel at
www.ubroadcast.com/show/santeon-group-inc beginning shortly after
the call. A telephone replay of the call will also be available two
hours after the call until August 21,
2013, and may be accessed via telephone by dialing
1-855-859-2056 (1-404-537-3406 outside the United States) and entering pass code:
28458464.
About Santeon Group Inc.
Santeon Group Inc. is a technology company headquartered in
Northern Virginia with offices in
Reston, Va., Tampa, Fla., Cairo,
Egypt and Pune, India.
Santeon offers products and services to optimize federal and
commercial enterprise performance. Santeon's goal is to serve
emerging markets by providing technically superior products and
solutions while reducing the cost of ownership and deployment of
these solutions through a strong channel partner and distribution
model. For more information please visit our web site at
http://www.santeon.com.
Safe Harbor Statement
The preceding press release may include statements
that include, among others, forward-looking statements about
our beliefs, plans, objectives, goals, expectations, estimates and
intentions that are subject to significant risks and uncertainties
and are subject to change based on various factors, many of which
are beyond our control. The words "may", "could", "should",
"would", "believe", "anticipate", "estimate", "expect", "intend",
"plan", "target", "goal" and similar expressions are intended to
identify forward-looking statements. All forward-looking
statements, by their nature, are subject to risks and
uncertainties. Our actual future results may differ materially from
those set forth in the forward-looking statements. Our ability to
achieve our financial objectives or improve the company's stock
price could be adversely affected by many factors, including,
without limitation, the following factors: The strength of
the United States economy, changes
in the securities markets legislative or regulatory changes, the
loss of key personnel, technological changes, changes in customer
habits, our ability to manage these and other risks, and our
ability to deliver products and services on time. However,
other factors besides those listed above could adversely affect our
results, and you should not consider any such list of factors to be
a complete set of all potential risks or uncertainties. These
forward-looking statements are not guarantees of future
performance, but reflect the present expectations of future events
by our management and are subject to a number of factors and
uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. Any
forward-looking statements made by us speak only as of the date
they are made. For additional information about Santeon's business
and financial results, refer to Santeon's Annual Report on Form
10-K that may be found at sec.gov or on
http://santeon.com/Sec_Filings.html. Santeon undertakes no
obligation to update any forward-looking statements that may be
made from time to time by the company, except as may be required by
applicable law, whether as a result of new information, future
events or otherwise.
Use of Non-GAAP Financial Measures
The Company has included in this press release certain non-GAAP
financial measures. The Company believes that both management and
investors benefit from referring to these non-GAAP financial
measures in assessing the performance of the Company and when
planning and forecasting future periods. Readers are cautioned not
to view non-GAAP financial measures on a stand-alone basis or as a
substitute for GAAP measures, or as being comparable to results
reported or forecasted by other companies, and should refer to the
reconciliation of GAAP measures with non-GAAP measures also
included herein.
Investor Relations Contact
Jeffrey Goldberger / Rob
Fink
KCSA Strategic Communications
212.896.1249 / 212.896.1206
jgoldberger@kcsa.com / rfink@kcsa.com
(Tables to Follow)
|
SANTEON GROUP
INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
AS OF JUNE 30,
2013 AND DECEMBER 31, 2012
|
|
|
|
|
|
June 30,
2013
|
|
December 31, 2012
|
|
ASSETS
|
(Unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
Cash
|
$
203,354
|
|
$
183,785
|
|
Accounts
receivable
|
668,449
|
|
796,466
|
|
Other current
assets
|
12,480
|
|
16,795
|
|
Total current
assets
|
884,283
|
|
997,046
|
|
|
|
|
|
Property, plant and
equipment, net
|
29,897
|
|
20,364
|
|
Software assets,
net
|
227,519
|
|
281,212
|
|
Other
assets
|
23,950
|
|
8,783
|
|
Total
non-current assets
|
281,366
|
|
310,359
|
|
|
|
|
|
Total
Assets
|
$
1,165,649
|
|
$
1,307,405
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
795,404
|
|
$
1,107,345
|
|
Notes payable -
current portion
|
76,267
|
|
120,509
|
|
Total current
liabilities
|
871,671
|
|
1,227,854
|
|
|
|
|
|
Long term
liabilities:
|
|
|
|
|
Deferred
rent
|
60,747
|
|
-
|
|
Notes
payable
|
47,761
|
|
83,166
|
|
Total long
term liabilities
|
108,508
|
|
83,166
|
|
|
|
|
|
Stockholders' equity
(deficit):
|
|
|
|
|
Preferred stock, par
value $0.001, 50,000,000 shares authorized: 0 shares issued and
outstanding as of June 30, 2013 and December 31, 2012,
respectively
|
-
|
|
-
|
|
Common stock, par
value $0.001, 50,000,000 shares authorized; 1,190,783 and
1,184,899 shares issued and outstanding as of June 30, 2013
and December 31, 2012, respectively
|
1,191
|
|
1,185
|
|
Common stock to be
issued
|
95,277
|
|
10,000
|
|
Additional paid in
capital
|
1,538,680
|
|
1,518,726
|
|
Treasury Stock, at
cost, 0 and 16,238 shares as of June 30, 2013 and December 31,
2012, respectively
|
-
|
|
(38,925)
|
|
Accumulated
deficit
|
(1,449,678)
|
|
(1,494,601)
|
|
Total
stockholders' equity (deficit)
|
185,470
|
|
(3,615)
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity (Deficit)
|
$
1,165,649
|
|
$
1,307,405
|
|
SANTEON GROUP
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
FOR THE THREE AND
SIX MONTHS ENDED JUNE 30, 2013 AND 2012
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2013
|
|
June 30,
2012
|
|
June 30,
2013
|
|
June 30,
2012
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
1,355,614
|
|
$
926,643
|
|
$
2,560,681
|
|
$
1,701,193
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
644,184
|
|
525,167
|
|
1,257,558
|
|
1,020,092
|
|
Gross Profit
|
711,430
|
|
401,476
|
|
1,303,123
|
|
681,101
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
General, selling and
administration
|
763,432
|
|
415,750
|
|
1,303,155
|
|
819,837
|
|
Depreciation and
amortization
|
1,845
|
|
1,439
|
|
3,685
|
|
2,813
|
|
Total
operating expenses
|
765,277
|
|
417,189
|
|
1,306,840
|
|
822,650
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(53,847)
|
|
(15,713)
|
|
(3,717)
|
|
(141,549)
|
|
|
|
|
|
|
|
|
|
Other Income
(Expenses):
|
|
|
|
|
|
|
|
|
Interest
expense
|
(4,694)
|
|
(1,954)
|
|
(7,432)
|
|
(8,352)
|
|
Gain on forgiveness /
settlement of debt
|
7,766
|
|
18,750
|
|
7,766
|
|
75,290
|
|
Gain on cancellation
of debt
|
33,023
|
|
-
|
|
33,023
|
|
-
|
|
Gain from foreign
currency transactions
|
13,040
|
|
149
|
|
15,339
|
|
546
|
|
Loss on disposal of
asset
|
-
|
|
-
|
|
(56)
|
|
-
|
|
Total other income, net
|
49,135
|
|
16,945
|
|
48,640
|
|
67,484
|
|
|
|
|
|
|
|
|
|
(Loss) income before
provision for income taxes
|
(4,712)
|
|
1,232
|
|
44,923
|
|
(74,065)
|
|
|
|
|
|
|
|
|
|
Provision for income
tax expense (benefit)
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
(4,712)
|
|
$
1,232
|
|
$
44,923
|
|
$
(74,065)
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
common share, basic
|
$
(0.00)
|
|
$
0.00
|
|
$
0.04
|
|
$
(0.06)
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
common share, diluted
|
$
(0.00)
|
|
$
0.00
|
|
$
0.04
|
|
$
(0.06)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding, basic
|
1,200,182
|
|
1,201,424
|
|
1,195,281
|
|
1,201,904
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding, diluted
|
1,200,182
|
|
1,201,424
|
|
1,208,662
|
|
1,201,904
|
|
SANTEON GROUP
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
FOR THE SIX MONTHS
ENDED JUNE 30, 2013 AND 2012
|
|
(Unaudited)
|
|
|
|
June 30,
2013
|
June 30,
2012
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
(loss)
|
$
44,923
|
$
(74,065)
|
|
Adjustments to
reconcile net Income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
72,593
|
67,647
|
|
Loss on disposal of
assets
|
56
|
-
|
|
Gain on forgiveness /
settlement of debt
|
(7,766)
|
(75,290)
|
|
Gain on cancellation
of debt
|
(33,023)
|
-
|
|
Common stock to be
issued for services rendered
|
5,000
|
22,500
|
|
Stock-based
compensation expense - common stock options
|
47,855
|
-
|
|
Common stock issued
for accrued interest
|
1,750
|
-
|
|
Changes in
operating assets and liabilities:
|
|
|
|
Accounts
receivable
|
128,016
|
(128,713)
|
|
Other current
assets
|
4,316
|
(1,285)
|
|
Other
assets
|
(15,167)
|
-
|
|
Accounts payable and
accrued expenses
|
(165,128)
|
227,916
|
|
Net cash
provided by operating activities
|
83,425
|
38,710
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Capitalized software
assets
|
(15,215)
|
-
|
|
Purchases of
property, plant and equipment
|
(14,274)
|
(1,300)
|
|
Proceeds from sale of
fixed assets
|
1,000
|
-
|
|
Net cash used
in investing activities
|
(28,489)
|
(1,300)
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Payments for treasury
stock
|
(720)
|
(10,000)
|
|
Repayments of notes
payable-related party
|
-
|
(23,000)
|
|
Repayments of notes
payable
|
(34,647)
|
(17,023)
|
|
Net cash used
in financing activities
|
(35,367)
|
(50,023)
|
|
|
|
|
Net increase
(decrease) in cash
|
19,569
|
(12,613)
|
|
Cash, beginning of
the period
|
183,785
|
16,960
|
|
|
|
|
Cash, end of the
period
|
$
203,354
|
$
4,347
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
Income tax
paid
|
$
-
|
$
-
|
|
Interest
paid
|
$
1,443
|
$
-
|
|
|
|
|
Supplemental
disclosures for non-cash investing and financing
activities:
|
|
|
|
Common stock to be
issued for settlement of debt and accrued interest
|
$
50,000
|
$
-
|
|
Common stock to be
issued for payment of accrued bonus
|
$
40,277
|
$
-
|
|
SANTEON GROUP
INC.
|
|
RECONCILIATION OF
NET (LOSS) INCOME TO ADJUSTED EBITDA
|
|
FOR THE THREE AND
SIX MONTHS ENDED JUNE 30, 2013 AND 2012
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June 30,
2013
|
|
June 30,
2012
|
|
June 30,
2013
|
|
June 30,
2012
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(4,712)
|
|
$
1,232
|
|
$
44,923
|
|
$
(74,065)
|
|
|
|
|
|
|
|
|
|
|
Loss on disposal of
assets
|
-
|
|
-
|
|
(56)
|
|
-
|
|
Gain on forgiveness /
settlement of debt
|
(7,766)
|
|
(18,750)
|
|
(7,766)
|
|
(75,290)
|
|
Gain on cancellation
of debt
|
(33,023)
|
|
-
|
|
(33,023)
|
|
-
|
|
Interest expense,
net
|
4,694
|
|
1,954
|
|
7,432
|
|
8,352
|
|
Depreciation and
amortization
|
36,300
|
|
33,856
|
|
72,593
|
|
67,647
|
|
Non-cash stock option
compensation expense
|
32,127
|
|
-
|
|
47,855
|
|
-
|
|
Termination
expense
|
46,311
|
|
-
|
|
46,311
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
73,931
|
|
$
18,292
|
|
$
178,270
|
|
$
(73,357)
|
SOURCE Santeon Group Inc.