SOURCE: AccountAbilities, Inc.

August 14, 2008 14:24 ET

AccountAbilities, Inc. Reports Net Income for the Third Quarter of 2008

Consecutive Quarter, and Year Over Year Net Income Improvements; Significant Balance Sheet Improvements Continue

MANALAPAN, NJ--(Marketwire - August 14, 2008) - AccountAbilities, Inc. (OTCBB: ACBT), a provider of financial consulting and staffing services, as well as management consulting services to CPA and other professional firms, today announced financial results for its fiscal third quarter ended June 30, 2008.

While revenue for the current quarter decreased modestly to $15.9 million from $16.2 million, net income improved to $5,000 from a loss of ($14,000) in the third quarter of the prior year. Compared to the previous quarter ended March 31, 2008 net income improved significantly from a loss of ($903,000). Selling, general and administrative expenses decreased to $2.2 million in the third quarter of this year, from $2.7 million in the second quarter of this year as the Company sought and accomplished company wide expense reductions.

Total debt decreased to $3.0 million as of June 30, 2008 versus $5.2 million at year end September 30, 2007 while stockholders equity increased to $1.1 million from $0.5 million at year end September 30, 2007, as the Company accomplished various debt restructurings during the current year to date period. These changes resulted in a greatly improved debt to equity ratio of 2.8 to 1 as of June 30, 2008 versus 11.6 to 1 at September 30, 2007. Working capital also improved $0.8 million from a deficit of ($3.2) million at September 30, 2007 to ($2.4) million at June 30, 2008.

"Our results for the quarter demonstrate our ability to manage to the bottom line in a challenging and uncertain economic environment. Yet we have continued to make progress in strategic areas, such as the roll out of our higher margin finance and accounting service offerings, with the launch in March of our New York area consulting operations and the signing of two new CPA firms to our Partner on Premise Program in April and May," said Jeffrey Raymond, Chief Executive Officer of AccountAbilities.

Stephen DelVecchia, Chief Financial Officer of AccountAbilities, added, "The significant strengthening of our balance sheet provides us with a much more secure position as we await improvements in the overall economic environment. We have also demonstrated our ability to act proactively by aggressively seeking reductions in operating costs throughout the organization as demonstrated in the reduction of our selling, general and administrative expenses in the current quarter. We are excited to have been able to produce these results in our first full quarter as an OTC Bulletin Board traded company."

About AccountAbilities, Inc.

AccountAbilities provides accounting and finance consulting, staffing and recruiting services both independently and through co-branded offerings with some of the largest regional public accounting firms in the United States. In addition, AccountAbilities provides productivity based commercial, scientific and IT staffing solutions across a variety of industries. To learn more, visit www.aabilities.com.

The statements which are not historical facts contained in this press release are forward-looking statements that involve certain known and unknown risks and uncertainties, including but not limited to, changes in the market for professional staffing services, regulatory and technological changes, changes in levels of unemployment and other economic factors, increased competition, the ability to attract and retain customers, the availability of qualified candidates for placement by the Company and the possibility of the Company incurring liability for activities of the employees and contractors that it places with its customers. The Company's actual results may differ materially from the results discussed in or implied by any forward-looking statement. The words "intend," "expect," "should," "project," "anticipate" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made.

                       ACCOUNTABILITIES, INC.
                     STATEMENTS OF OPERATIONS
                            (unaudited)


                               Three Months              Nine Months
                                  Ended                     Ended
                         -----------------------  ------------------------
                          June 30,     June 30,     June 30,     June 30,
                            2008         2007         2008         2007
                         ----------- -----------  -----------  -----------

Revenue                  $15,889,000 $16,241,000  $49,780,000  $40,710,000

Direct cost of services   13,442,000  13,410,000   41,833,000   33,929,000
                         ----------- -----------  -----------  -----------

Gross profit               2,447,000   2,831,000    7,947,000    6,781,000

Selling, general and
 administrative
 expenses *                2,182,000   2,493,000    7,528,000    6,126,000
Depreciation and
 amortization                116,000     106,000      341,000      214,000
                         ----------- -----------  -----------  -----------

Income from operations       149,000     232,000       78,000      441,000

Interest expense             144,000     246,000      687,000      633,000
Loss on goodwill
 impairment                        -           -      148,000            -
Net loss on debt
 extinguishments                   -           -      100,000            -
                         ----------- -----------  -----------  -----------

Net income (loss)        $     5,000 $   (14,000) $  (857,000) $  (192,000)
                         =========== ===========  ===========  ===========

Net income (loss) per
 share:
   Basic                 $      0.00 $      0.00  $     (0.04) $     (0.01)
                         =========== ===========  ===========  ===========
   Diluted               $      0.00 $      0.00  $     (0.04) $     (0.01)
                         =========== ===========  ===========  ===========

Weighted average shares
 outstanding:
   Basic                  21,582,000  16,530,000   19,165,000   15,079,000
                         =========== ===========  ===========  ===========
   Diluted                22,045,000  16,530,000   19,165,000   15,079,000
                         =========== ===========  ===========  ===========




* Includes $41,000 and $7,000 for the three months ended June 30, 2008 and
2007, respectively, and $250,000 and $12,000 for the nine months ended June
30, 2008 and 2007, respectively in non-cash charges for stock based
compensation.



                            ACCOUNTABILITIES, INC.
                                BALANCE SHEETS




                                                  June 30,    September 30,
                                                    2008          2007
                                                ------------  ------------
                                                (unaudited)
                      ASSETS

Current assets:
Cash                                            $     89,000  $    137,000
Accounts receivable - less allowance for
 doubtful accounts of $523,000 and $338,000,
 respectively                                      1,105,000       224,000
Due from financial institution                       123,000       134,000
Unbilled receivables                                 212,000     1,182,000
Prepaid expenses                                     366,000       268,000
Due from related party                                76,000        51,000
                                                ------------  ------------
Total current assets                               1,971,000     1,996,000

Property and equipment, net                          344,000       149,000
Other assets                                           9,000        34,000
Intangible assets, net                             1,506,000     2,023,000
Goodwill                                           3,332,000     4,617,000
                                                ------------  ------------

Total assets                                    $  7,162,000  $  8,819,000
                                                ============  ============

       LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable and accrued liabilities        $  1,365,000  $  1,348,000
Accrued wages and related obligations              1,515,000     1,367,000
Current portion of long-term debt                    437,000       691,000
Current portion of related party long-term debt      985,000     1,647,000
Due to related party                                  61,000       169,000
                                                ------------  ------------
Total current liabilities                          4,363,000     5,222,000

Long term debt, net of current portion               341,000       450,000
Related party long-term debt, net of current
 portion                                           1,212,000     2,440,000
Acquisition related contingent liability             193,000       257,000
                                                ------------  ------------
Total liabilities                                  6,109,000     8,369,000

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000,000
 shares authorized; zero shares issued and
 outstanding                                               -             -
Common stock, $0.0001 par value, 95,000,000
 shares authorized; 23,857,000 and 17,469,000
 shares issued and outstanding as of June 30,
 2008 and September 30, 2007, respectively             2,000         2,000
Additional paid-in capital                         3,195,000     1,735,000
Accumulated deficit                               (2,144,000)   (1,287,000)
                                                ------------  ------------
Total stockholders’ equity                         1,053,000       450,000
                                                ------------  ------------

Total liabilities and stockholders’ equity      $  7,162,000  $  8,819,000
                                                ============  ============

Contact Information

  • Contact:
    Stephen DelVecchia
    AccountAbilities, Inc.
    Chief Financial Officer
    732-333-3622
    www.aabilities.com