SOURCE: Patron Systems

May 22, 2007 09:21 ET

Patron Systems Files First Quarter 2007 Financial Results

Company Makes Significant Progress in Implementation of Major Contracts

BOULDER, CO -- (MARKET WIRE) -- May 22, 2007 -- Patron Systems, Inc. (OTCBB: PTRN), a leading provider of application software and services focused on business process management for the public sector, today reported financial results for the quarter ended March 31, 2007.

Revenue for the first quarter 2007 was $171,218, compared to revenues of $179,925 in the first quarter of 2006.

Operating loss for the quarter ended March 31, 2007 was $1,667,448 compared with a loss of $631,879 for the comparable quarter in 2006. The net loss from continuing operations before taxes for the quarter ended March 31, 2007 was $2,162,583 compared with $1,604,281 for the first quarter of 2006.

Net loss available to common holders for the first quarter 2007 was $2,374,367 compared to net loss of $1,991,824 for the first quarter of 2006. The Company's loss per basic and fully diluted share available to common stockholders was $0.16 per share on 14,512,260 weighted average shares outstanding in the first quarter of 2007 compared to $0.96 per share on 2,083,954 weighted average shares outstanding in the comparable quarter of 2006.

During the past year the Company dramatically reduced its cash usage. Cash used in continuing operating activities dropped from $2,068,000 in the 1st quarter of 2006 to $944,000 in the 1st quarter of 2007. Additionally, the decisions to divest the LucidLine business and discontinue operations of the PolicyBridge business reduced the cash demands from a use of $614,000 in the 1st quarter of 2006 to $13,000 of cash provided by the discontinued operations in the 1st quarter of 2007.

"We continue to make considerable progress in our business as we execute on the new sales strategy implemented last year. And while we are disappointed with the revenue performance during the first quarter, as an early-stage software company our bookings and revenue performance will be more variable until we achieve greater scale. We continue to believe that our decision to focus our resources on the FormStream business will help us to achieve scale, particularly when combined with our ongoing efforts to complete strategic acquisitions," said Braden Waverley, Chief Executive Officer.

"Our most important progress during the quarter was the significant advancement in the implementation of three major contracts: Minneapolis, Minnesota; Nashville, Tennessee; and El Paso County, Colorado. Combined, these contracts represent over 2,500 user seats, which demonstrates both the scalability and growing market acceptance of the FormStream technology. We have been able to effectively integrate our business process management solutions into these agencies and expect that the visibility of these, and other, successful implementations will serve as a catalyst for accelerated growth in the future.

"Our engineering and development team achieved major milestones in the development of FormStream. We are on track for the launch of FormStream 3.1 this summer and plan to launch Version 4.0 during the fourth quarter of 2007. While both will bring rapid advancement in data sharing and field reporting capabilities for law enforcement, Version 4.0 will usher in a SaaS distribution model for Patron and open up a much larger portion of the addressable market in public safety."

"Additionally, we continue to work on increasing our partner base. Our partners have been paramount in the major contracts signed to date and in opening doors at larger municipalities across the nation. We believe that this model provides the most efficient and cost effective way of growing our pipeline. Our efforts to recruit new distribution partners have been ongoing and will continue as a core part of our sales strategy. In addition, we are on track to launch a Partner Certification program this year, which will further extend the reach of our technology into the marketplace."

Mr. Waverley concluded, "In terms of technology advancement and customer implementations, the first quarter was unprecedented in Patron's history. We are delivering a greatly enhanced customer experience, while simultaneously reducing our operating cash requirements by over 50%. And while Patron's business is not yet at the scale where we can regularly forecast revenues, we do believe that our first quarter efforts will help drive a healthy top-line growth rate in the second quarter. A number of factors can influence this outcome, however, including customer scheduling and system acceptance. A sustainable revenue growth trajectory will ultimately depend on new contract bookings and we're pleased to report that the FormStream technology is in the late stages of consideration in major municipal markets throughout the country. The outcome of these prospective customer decisions will set the stage for second half of 2007, and we believe our considerable progress on technology development and implementations position us competitively."

Conference Call

The Company will hold a shareholder overview conference call on Wednesday, May 23, 2007 at 5:00 p.m. ET. A live webcast of the conference call will be available online at www.patronsystems.com in the investor relations section of the Web site. Those without Web access should access the call telephonically at least ten minutes prior to the conference call. The dial-in numbers are (877) 407-4018 for domestic callers and (201) 689-8471 for international callers.

After the live webcast, the call will remain available on the Company's Web site, www.patronsystems.com, through June 6, 2007. In addition, a telephonic replay of the call will be available until June 6, 2007. The replay dial-in number is (877) 660-6853 for domestic callers and (201) 612-7415 for international callers. Please use account number 3055 and conference ID 243327.

About Patron Systems

Patron Systems, Inc. provides application software and services focused on process management in the public sector. Patron's current application software offering, FormStream, is an open standards information sharing tool that addresses the need for law enforcement and public safety agencies to share information between local, state and federal law enforcement and homeland security agencies. FormStream is a mobile electronic forms (e-forms) application, which provides a secure, highly scalable, open standard, network independent method for the distribution and synchronization of e-forms to mobile devices. The implementation of FormStream allows its user agencies to update and modernize their business processes to utilize the sophisticated form and user based rules and process routing capabilities of FormStream. FormStream addresses mobile e-form creation, capture and sharing over wireless networks and manages data in industry standard formats (forms: .pdf, XDP and XML; law enforcement: Global Justice XML data model (GJXDM) and National Information Exchange Model (NIEM)). Further information is available at http://www.patronsystems.com

Forward-Looking Statements

This release may contain statements that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current estimates and projections about Patron Systems' business, which are derived in part on assumptions of its management, and are not guarantees of future performance, as such performance is difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in forward-looking statements due to numerous factors. Such factors include, but are not limited to, the Company's ability to execute effectively its business plan and acquisition strategy, the ability to obtain additional debt or equity financing, changes in the market for business process management, mobile electronic forms (e-forms) and electronic message management solutions, changes in market activity, the development of new products and services, the enhancement of existing products and services, competitive pressures (including price competition), system failures, economic and political conditions, changes in consumer behavior and the introduction of competing products having technological and/or other advantages. These and other risks are described in the Company's filings with the Securities and Exchange Commission, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The Company assumes no obligation to update information concerning its expectations.

Contact Information

  • CONTACT:
    Martin "Tork" Johnson
    for Patron Systems, Inc.
    cell: +1-312-543-7488

    or

    David Pasquale / Tyler Wilson
    (investors)
    646-536-7008/7018
    or
    Catherine Bright
    (media)
    646-536-7013
    all with The Ruth Group