RESTON, Va., Nov. 14, 2013 /PRNewswire/ -- Santeon Group
Inc. (OTCBB: SANT, "Santeon" or the "Company") announced today
operating results for the third quarter ended September 30, 2013.
Third Quarter Highlights
- Increased revenue 24% year-over-year to $1,481,436 for the third quarter 2013
- Grew government sector revenue 134% year-over-year to
$747,771 for the third quarter
2013
- Achieved net income of $23,251,
or $0.02 per diluted share, for the
third quarter 2013
"During the third quarter, Santeon took meaningful steps to
advance its strategic long-term growth plan and improve its
financial profile. The divestiture of our eBenefits Network (eBN)
business strongly positions the Company to focus exclusively
on Enterprise Agility and outsourced software development
services—areas we believe present the most compelling growth
opportunities and best leverage the core capabilities of the
Company," commented Dr. Ash Rofail, Chief Executive Officer of
Santeon. "The addition of two dedicated business development
executives and three new revenue-generating employees, coupled with
redeployed financial resources following the eBN transaction, will
allow us to expand our presence in the public and private sector to
meet growing market demand."
Dr. Rofail added, "Our shift in strategy comes as we continued
to execute operationally. During the quarter, we increased revenues
by 24% year-over-year, maintained strong Adjusted EBITDA, secured a
high profile government-sponsored enterprise customer win and
further penetrated existing customer accounts, all of which helped
drive momentum in our business."
Third Quarter 2013 Results
Revenue increased 23.8% over the third quarter 2012 from
$1,196,711 to $1,481,436 for the third quarter 2013. Agile
training, coaching and consulting revenue increased 4% to
$840,837 for the third quarter 2013,
compared to $809,661 for the third
quarter 2012. Software development revenue increased 53% to
$427,562 for the third quarter 2013,
compared to $279,694 for the third
quarter 2012. eBN revenue increased 98.4% to $213,037 for the third quarter 2013, compared to
$107,356 for the third quarter
2012.
Adjusted EBITDA, as reconciled in the attached table, was
$19,590, or 1.3% of revenue, for the
third quarter 2013, compared to $183,451, or 15.3% of revenue, for the third
quarter 2012.
Net income was $23,251, or
$0.02 per diluted share, for the
third quarter 2013, compared to net income of $150,723, or $0.13
per diluted share, for the third quarter 2012.
During the third quarter ended 2013, the Company generated
$26,368 in cash from operations and
reduced its debt balance by $17,454 to
$106,574. As of September 30,
2013, Santeon had cash of $190,492, resulting in a net cash position of
$83,918.
Conference Call
The Company will host a conference call with investors to
discuss its third 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 93481016. The call will also be available as a
live, listen-only webcast at http://www.santeon.com.
A replay of the webcast will be available online at
http://www.santeon.com beginning shortly after the call. A
telephone replay of the call will also be available two hours after
the call until November 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: 93481016.
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://www.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
|
SANTEON GROUP
INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
September 30,
2013
|
|
December 31,
2012
|
|
ASSETS
|
(Unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
Cash
|
$
190,492
|
|
$
183,785
|
|
Accounts
receivable
|
657,823
|
|
796,466
|
|
Other current
assets
|
81,265
|
|
16,795
|
|
Total current
assets
|
929,580
|
|
997,046
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
39,599
|
|
20,364
|
|
Software assets,
net
|
199,582
|
|
281,212
|
|
Other
asset
|
23,950
|
|
8,783
|
|
Total
non-current assets
|
263,131
|
|
310,359
|
|
|
|
|
|
Total
Assets
|
$
1,192,711
|
|
$
1,307,405
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
718,028
|
|
$
1,107,345
|
|
Notes payable -
current portion
|
76,649
|
|
120,509
|
|
Total current
liabilities
|
794,677
|
|
1,227,854
|
|
|
|
|
|
Long term
liabilities:
|
|
|
|
|
Deferred
rent
|
58,078
|
|
-
|
|
Notes
payable
|
29,925
|
|
83,166
|
|
Total long
term liabilities
|
88,003
|
|
83,166
|
|
|
|
|
|
Stockholders' equity
(deficit):
|
|
|
|
|
Preferred stock, par
value $0.001, 50,000,000 shares authorized: 0 shares issued and
outstanding as of September 30, 2013 and December 31, 2012,
respectively
|
-
|
|
-
|
|
Common stock, par
value $0.001, 50,000,000 shares authorized; 1,240,861 and
1,184,899 shares issued and outstanding as of September 30,
2013 and December 31, 2012, respectively
|
1,241
|
|
1,185
|
|
Common stock to be
issued
|
52,500
|
|
10,000
|
|
Additional paid in
capital
|
1,682,717
|
|
1,518,726
|
|
Treasury Stock, at
cost, 0 and 16,238 shares as of September 30, 2013 and
December 31, 2012, respectively
|
-
|
|
(38,925)
|
|
Accumulated
deficit
|
(1,426,427)
|
|
(1,494,601)
|
|
Total
stockholders' equity (deficit)
|
310,031
|
|
(3,615)
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity (Deficit)
|
$
1,192,711
|
|
$
1,307,405
|
|
|
|
|
|
SANTEON GROUP
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
FOR THE THREE AND
NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
2013
|
|
September 30,
2012
|
|
September 30,
2013
|
|
September 30,
2012
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
1,481,436
|
|
$
1,196,711
|
|
$
4,042,117
|
|
$
2,897,904
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
785,948
|
|
588,741
|
|
2,043,506
|
|
1,608,833
|
|
Gross Profit
|
695,488
|
|
607,970
|
|
1,998,611
|
|
1,289,071
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
General, selling and
administration
|
724,570
|
|
456,478
|
|
2,027,725
|
|
1,276,315
|
|
Depreciation and
amortization
|
4,413
|
|
1,460
|
|
8,098
|
|
4,273
|
|
Total
operating expenses
|
728,983
|
|
457,938
|
|
2,035,823
|
|
1,280,588
|
|
|
|
|
|
|
|
|
|
(Loss) income from
operations
|
(33,495)
|
|
150,032
|
|
(37,212)
|
|
8,483
|
|
|
|
|
|
|
|
|
|
Other Income
(Expenses):
|
|
|
|
|
|
|
|
|
Interest
expense
|
(792)
|
|
(1,556)
|
|
(8,224)
|
|
(9,908)
|
|
Gain on cancellation
of debt/equity
|
7,500
|
|
-
|
|
40,523
|
|
-
|
|
Gain on
forgiveness/settlement of debt
|
54,190
|
|
407
|
|
61,956
|
|
75,697
|
|
(Loss)/gain from
foreign currency transactions
|
(4,152)
|
|
1,840
|
|
11,187
|
|
2,386
|
|
Loss on disposal of
asset
|
-
|
|
-
|
|
(56)
|
|
-
|
|
Total other income, net
|
56,746
|
|
691
|
|
105,386
|
|
68,175
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
23,251
|
|
150,723
|
|
68,174
|
|
76,658
|
|
|
|
|
|
|
|
|
|
Provision for income
tax expense (benefit)
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Net income
|
$
23,251
|
|
$
150,723
|
|
$
68,174
|
|
$
76,658
|
|
|
|
|
|
|
|
|
|
Net income per common
share, basic
|
$
0.02
|
|
$
0.13
|
|
$
0.06
|
|
$
0.06
|
|
|
|
|
|
|
|
|
|
Net income per common
share, diluted
|
$
0.02
|
|
$
0.13
|
|
$
0.06
|
|
$
0.06
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares
outstanding, basic
|
1,254,883
|
|
1,192,734
|
|
1,215,366
|
|
1,198,825
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares
outstanding, diluted
|
1,254,883
|
|
1,192,734
|
|
1,215,366
|
|
1,198,825
|
|
SANTEON GROUP
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 2013 AND 2012
|
|
(Unaudited)
|
|
|
September 30,
2013
|
September 30,
2012
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net
income
|
$
68,174
|
$
76,658
|
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
Depreciation and
amortization
|
112,604
|
101,524
|
|
Loss on disposal of
asset
|
56
|
-
|
|
Gain on cancellation
of debt
|
(40,523)
|
-
|
|
Gain on
forgiveness/settlement of debt
|
(61,956)
|
(75,697)
|
|
Common stock issued
or to be issued for compensation
|
35,625
|
22,500
|
|
Stock-based
compensation expense - common stock options
|
66,665
|
-
|
|
Common stock issued
for accrued interest
|
1,750
|
-
|
|
Changes in
operating assets and liabilities:
|
|
|
|
Accounts
receivable
|
138,643
|
(78,714)
|
|
Other current
assets
|
(5,095)
|
(4,112)
|
|
Other
asset
|
(15,167)
|
-
|
|
Accounts payable and
accrued expenses
|
(190,983)
|
174,514
|
|
Net cash
provided by operating activities
|
109,793
|
216,673
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Capitalized software
assets
|
(22,877)
|
-
|
|
Purchases of
property, plant and equipment
|
(28,388)
|
(4,851)
|
|
Proceeds from sale of
fixed assets
|
1,000
|
-
|
|
Net cash used
in investing activities
|
(50,265)
|
(4,851)
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Payments for treasury
stock
|
(720)
|
(17,500)
|
|
Repayments of notes
payable-related party
|
-
|
(57,033)
|
|
Repayments of notes
payable
|
(52,101)
|
(34,131)
|
|
Net cash used
in financing activities
|
(52,821)
|
(108,664)
|
|
|
|
|
Net increase in
cash
|
6,707
|
103,158
|
|
Cash, beginning of
the period
|
183,785
|
16,960
|
|
|
|
|
Cash, end of the
period
|
$
190,492
|
$
120,118
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
Income tax
paid
|
$
-
|
$
-
|
|
Interest
paid
|
$
2,298
|
$
2,513
|
|
|
|
|
Supplemental
disclosures for non-cash investing and financing
activities:
|
|
|
|
Common stock issued
for settlement of debt and accrued interest
|
$
50,000
|
$
-
|
|
Common stock issued
for settlement of accrued bonus
|
$
40,277
|
$
-
|
|
Common stock issued
for prepayment of services to be rendered
|
$
59,375
|
$
-
|
|
SANTEON GROUP
INC.
|
|
RECONCILIATION OF NET
INCOME TO ADJUSTED EBITDA
|
|
FOR THE THREE AND
NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
|
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September 30,
2013
|
|
September 30,
2012
|
|
September 30,
2013
|
|
September 30,
2012
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
23,251
|
|
$
150,723
|
|
$
68,174
|
|
$
76,658
|
|
|
|
|
|
|
|
|
|
|
Loss on disposal of
assets
|
-
|
|
-
|
|
(56)
|
|
-
|
|
Gain on forgiveness /
settlement of debt
|
(54,190)
|
|
407
|
|
61,956
|
|
75,697
|
|
Gain on cancellation
of debt
|
(7,500)
|
|
-
|
|
40,523
|
|
-
|
|
Interest expense,
net
|
(792)
|
|
(1,556)
|
|
(8,224)
|
|
(9,908)
|
|
Depreciation and
amortization
|
40,011
|
|
33,877
|
|
112,604
|
|
101,524
|
|
Non-cash stock option
compensation expense
|
18,810
|
|
-
|
|
66,665
|
|
-
|
|
Termination
expense
|
-
|
|
-
|
|
46,311
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
19,590
|
|
$
183,451
|
|
$
387,954
|
|
$
243,971
|
SOURCE Santeon Group, Inc.