Consolidated Statements of Operations
(In thousands except per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2008 2007 2008 2007
-------- -------- -------- --------
Revenue:
License fees and services $ 4,539 $ 4,692 $ 14,713 $ 13,425
Customer support 4,490 4,619 13,088 13,468
-------- -------- -------- --------
Total revenue 9,029 9,311 27,801 26,893
-------- -------- -------- --------
Costs of revenue and operating
expenses:
Costs of license fees and
services, excluding
depreciation and
amortization 1,977 2,097 6,103 5,962
Costs of customer support,
excluding depreciation and
amortization 1,581 1,532 4,706 4,741
Sales and marketing 2,004 2,003 6,385 6,228
General and administrative 1,281 1,350 3,942 4,549
Product development 792 665 2,810 1,572
Depreciation 189 189 671 729
Amortization 371 396 1,130 1,176
Restructuring and other - - - (1)
-------- -------- -------- --------
Total costs of revenue and
operating expenses 8,195 8,232 25,747 24,956
-------- -------- -------- --------
Income from operations 834 1,079 2,054 1,937
-------- -------- -------- --------
Interest and other
expense, net (119) (165) (769) (1,054)
-------- -------- -------- --------
Income before income taxes 715 914 1,285 883
Income tax expense 122 345 161 569
-------- -------- -------- --------
Net income $ 593 $ 569 $ 1,124 $ 314
======== ======== ======== ========
Basic income per common
share $ 0.03 $ 0.03 $ 0.06 $ 0.02
======== ======== ======== ========
Diluted income per common
share $ 0.03 $ 0.03 $ 0.06 $ 0.02
======== ======== ======== ========
Weighted average basic shares
outstanding 19,386 19,201 19,374 19,178
Weighted average diluted
shares outstanding 19,746 19,550 19,809 19,546
Reconciliation of Net Income to Adjusted EBITDA
(In thousands)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2008 2007 2008 2007
-------- -------- -------- --------
Net income $ 593 $ 569 $ 1,124 $ 314
Depreciation 189 189 671 729
Amortization 371 396 1,130 1,176
Stock-based compensation
expense 189 162 645 543
Interest expense and other,
net 119 165 769 1,054
Income tax expense 122 345 161 569
-------- -------- -------- --------
Adjusted EBITDA $ 1,583 $ 1,826 $ 4,500 $ 4,385
======== ======== ======== ========
Evolving Systems reports its financial results in accordance with
accounting principles generally accepted in the U.S. (GAAP). In addition,
the Company is providing in this news release non-GAAP information in the
form of adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, impairment, stock compensation and gain/loss on foreign
exchange transaction.) Management believes adjusted EBITDA is useful to
investors and lenders in evaluating the overall financial health of the
Company in that it allows for greater transparency of additional financial
data routinely used by management to evaluate performance. Adjusted EBITDA
relates to a covenant contained in the Company's loan agreements and
therefore can be useful for lenders as an indicator of earnings available
to service debt. Readers of this adjusted EBITDA information are reminded
that adjusted EBITDA is not a recognized term under GAAP and does not
purport to be an alternative to income (loss) from operations, an indicator
of cash flow from operations or a measure of liquidity. Not all companies
calculate adjusted EBITDA identically, so this presentation may not be
comparable to similar presentations of other companies.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30, December 31,
2008 2007
---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 5,629 $ 7,271
Contract receivables, net 4,438 10,959
Unbilled work-in-progress 1,871 922
Prepaid and other current assets 1,640 1,335
---------- ----------
Total current assets 13,578 20,487
Property and equipment, net 1,364 1,677
Amortizable intangible assets, net 3,232 4,687
Goodwill 24,586 26,417
Long-term restricted cash 100 100
Other long-term assets 252 359
---------- ----------
Total assets $ 43,112 $ 53,727
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt
and capital lease obligations $ 2,020 $ 2,520
Accounts payable and accrued liabilities 4,730 5,937
Unearned revenue 6,271 10,635
---------- ----------
Total current liabilities 13,021 19,092
Long-term liabilities:
Long-term debt and other obligations 6,666 10,242
Deferred foreign income taxes 630 878
---------- ----------
Total liabilities 20,317 30,212
Preferred stock - 5,587
Stockholders' equity:
Common stock 19 18
Additional paid-in capital 81,604 75,317
Accumulated other comprehensive income
(loss) (401) 2,144
Accumulated deficit (58,427) (59,551)
---------- ----------
Total stockholders' equity 22,795 17,928
---------- ----------
Total liabilities and stockholders' equity $ 43,112 $ 53,727
========== ==========
Contact Information: Investor Relations: Jay Pfeiffer Pfeiffer High Investor Relations, Inc. 303.393.7044 Press Relations: Sarah Hurp Marketing Communications Manager Evolving Systems +44 1225 478060