SOURCE: Avatar Systems

December 20, 2006 08:00 ET

Avatar Systems, Inc.'s Nine Month Net Income Increases 79.9%

3rd Quarter Revenue Increases 52.5% and 9 Months 43%

FRISCO, TX -- (MARKET WIRE) -- December 20, 2006 -- Avatar Systems, Inc. (OTCBB: AVSY) announced 3rd quarter and nine months results for the period ending September 30, 2006. Revenues for the third quarter were $1,019,553 as compared to $668,366 for the corresponding quarter in 2005, representing a 52.5% increase. Revenues for the nine months were $2,441,431 as compared to $1,707,014 for the corresponding period of 2005, a 43% increase. Net income for the quarter was $55,378 vs. $83,963 for the 2005 3rd quarter, a 34% decrease. The net income for the quarter was down primarily due to the one time accounting expenses booked in the quarter related to the August $2.2 million acquisition of Questa Software Systems of Midland, Texas and due to increases in marketing and investor relations expenses. Net income for the nine month period was $232,769 compared to $129,367 for the comparable 2005 period, a 79.9% improvement. All core revenue components improved for the quarter and nine months except hardware sales. Cost of revenues for the quarter increased 52.4% and for the nine months cost of revenues increased 51.2%. Operating expenses increased 82.1% for the quarter and 32% for the nine months primarily due to additional expenses resulting from the recording of two months of Questa's results and additional accounting, marketing and investor relations expenses.

Chuck Shreve, President and Chief Executive Officer of Avatar Systems, Inc., remarked, "The Questa acquisition has been integrated and we are excited about the opportunity to work with our customer base of 620 oil and gas companies from coast to coast, in providing them with cutting edge technology. 2006 and 2007 will be very productive for our business. We expect brisk continued growth organically and to make future strategic acquisitions."

Avatar Systems' Headquarters are in Frisco, Texas, USA with branch offices in Midland and Tyler, TX. The Company provides ERP / Accounting Software and Computing Infrastructure Solutions for companies engaged in the petroleum exploration and production industry. Avatar has a growing customer base on its Petroware™, Integra™ products for Microsoft Windows, Avatar400™ on the IBM AS400 platform, and subscribers utilizing its (SaaS) On-Demand ASP services. Avatar's products and services provide an excellent resource for critical information management requirements of the petroleum industry. Avatar also provides document imaging/document management systems, disaster recovery services and remote backup services for all vertical markets.

The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements to the future financial performance of the Company. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectation or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development and acceptance, the impact of competitive services and pricing, or general economic risks and uncertainties.

Contact Information

  • Investor Relations Contact:
    The Eversull Group, Inc.
    972-991-7359 (fax)
    Email Contact