LOS GATOS, Calif., June 13, 2005 (PRIMEZONE) -- Semotus Solutions (AMEX:DLK), an innovative provider of real-time professional market data and intelligent wireless communications software, reported its financial results for the fiscal year ended March 31, 2005. The Company's focus on marketing and sales was reflected in a 35% increase in revenues to $1,806,295 in fiscal year 2005 from $1,338,373 in fiscal year 2004. The revenue increase is the result of a recovering technology economy with increased IT purchases and the result of the Company having increased its sales force. Semotus also reduced its cash burn from operations by 51%. Gross profit margin increased to 80% for the year ended March 31, 2005 versus 76% for the year ended March 31, 2004 due to lower direct costs.
On March 28, 2005, Semotus acquired Expand Beyond Corporation for 1,719,865 shares of common stock with an additional 191,096 being held in escrow. The 1,719,865 shares are equivalent to approximately $700,000 in DLK stock at current prices. In the purchase of Expand Beyond, Semotus received approximately $400,000 in cash. Expand Beyond had invested over $14,000,000 in developing its mobile database management products and building a recognized brand in the industry, especially in the Oracle community. Expand Beyond's products complement Semotus' HipLinkXS product, which further differentiates HipLinkXS from our competition. Since the acquisition, expenses at Expand Beyond have been brought more in line with revenues and the subsidiary is rapidly approaching breakeven.
"A number of major new accounts were added to our customer base this quarter including Honeywell Control Systems, Hewlett Packard in Australia, MIT University, Dollar Thrifty, Telebec, Schaller Anderson, Janus, Noble Americas and Societe Generale, to name a few. Semotus also had expansions in existing customer installations in the fourth quarter at organizations like Toyota, University of Dayton, Allianz Life, Sharp Healthcare and Eclipsys," stated Pamela LaPine EVP Sales and Marketing."
"The year was also highlighted by the addition of several marquee customers that include the Province of Alberta, Baltimore Airport, One Source Building Technology, Boston Medical Center, University of Nebraska, Lockheed Martin, Archon and the GAO," stated Pamela LaPine. "Over the year the VAR channel has added a host of new clients. Our VAR Ancoris, in the U.K. has been successful with clients like EBS, TUSC with new and expanded installations in Australia. Other accounts added through our VAR channel include Global Beverage's Pepsi clients, and Software House International with NYC Department of Environmental Protection and American Medical Services. Southern Software has integrated HipLinkXS into its E911 system and has competed nine major installations so far with counties in the Southeast."
Semotus reported a net loss of $(654,053) or $(0.03) per share for the year ended March 31, 2005 versus a net loss of $(2,251,685) or $(0.11) per share for the year ended March 31, 2004. This operating improvement was accomplished through increased revenues, adding new customers and a continuing reduction in operating costs.
The net loss in the year ended March 31, 2004 was negatively affected and the net loss in the year ended March 31, 2005, was positively affected by the application of the variable method of accounting for certain stock options that were re-priced. This is further discussed in the Company's Form 10-KSB, in Note 3 to the Consolidated Financial Statements, "Summary of Significant Accounting Policies: Stock Based Compensation," in accordance with generally accepted accounting principles.
Semotus' operating performance continued to improve, as evidenced by a continued increase in its gross profit margin to 80% for the year ended March 31, 2005 versus 76% for the year ended March 31, 2004. Also furthering the Company's goal of cash breakeven, Semotus reduced its overall use of cash in operations by 51% to $676,618 from $1,384,378 in fiscal year 2005 versus 2004. The reduction is the result of the improvement in cash from operations as the Company has continued to grow its revenues while at the same time reducing its operating expenses. The Company believes its cash position of $1,435,246 at March 31, 2005 provides sufficient reserves to execute its current business plan.
"In fiscal 2005 Semotus achieved the best financial performance of its 10 year history including its first profitable quarter," stated Semotus CEO Anthony LaPine. "I am encouraged by the 35% revenue increase and the 75% reduction in our net loss. I grow more confident every year as we demonstrate our ability to produce consistent improvement in our financial results. Our acquisition of Expand Beyond brought us a complementary mobile product line representing an investment of over $14,000,000, along with almost $400,000 in cash."
"Semotus has excellent gross profit margins (80%), a Fortune 1000 customer base, leading edge products, cash reserves, a low burn rate, a pristine equity structure with common stock and no toxic preferred or convertibles, no litigation, no debt, and an experienced and talented management team," further stated Anthony LaPine.
About Semotus Solutions
Founded in 1993, Semotus Solutions (AMEX:DLK) is the premier provider of software for the mobile enterprise, connecting employees to critical business systems, information and processes. Semotus has a Fortune 1000 installed customer base and more than 600 corporate clients including Lockheed Martin, Blue Cross Blue Shield, Coca-Cola, Hewlett Packard, Nextel Communications, JP Morgan-Chase and The United Nations. Semotus Solutions' software provides mobility, convenience, efficiency and profitability in the areas of workforce automation, finance, healthcare and m-commerce. www.semotus.com; www.hiplinkwireless.com
This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "intends," "believes" and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from any forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.