PHOENIX, May 8, 2012 (GLOBE NEWSWIRE) -- Crexendo, Inc. (AMEX:EXE), a provider of Cloud based infrastructure services to businesses, including telecom and website hosting services, e-commerce software, website development, and internet marketing services, today reported financial results for its first quarter ended March 31, 2012.
First Quarter 2012 Compared to 2011
Net income for the first quarter of 2012 was $197,000 or $0.02 per diluted common share, compared to a net loss of $1,851,000 or $0.17 per diluted common share in the prior year quarter. Income before income tax provision for the first quarter of 2012 was $44,000 compared to a loss of $2,973,000 in the prior year quarter. The income tax benefit for the first quarter of 2012 was $153,000, compared to an income tax benefit of $1,122,000 in the prior year quarter.
Cash from operations for the first quarter of 2012 was $652,000 compared to cash used in operations of $3,307,000 for the prior year quarter. As of March 31, 2012, cash, cash equivalents, and restricted cash were $10,688,000 working capital was $8,999,000, and working capital excluding deferred revenue was $17,869,000. Total current and long-term trade receivables were $12,338,000 as of March 31, 2012.
Segment Results
StoresOnline
Revenue for the first quarter of 2012 decreased 69% to $4,410,000 compared to $14,089,000 for the prior year quarter. Total segment operating expenses decreased 92% to $1,224,000 compared to $14,874,000 for the prior year quarter.
Segment other income, primarily related to interest on the collection of accounts receivable decreased 34% to $764,000 during the first quarter of 2012 from $1,158,000 in the prior year quarter.
Total segment income before income tax provision increased 959% to $3,950,000 in the first quarter of 2012 from $373,000 in the prior year quarter.
Crexendo Web Services
Revenue for the first quarter of 2012 increased 61% to $770,000, from $479,000 in the prior year quarter. Crexendo backlog, which is anticipated to be recognized within the next twelve months, was $1,212,000 at March 31, 2012 compared to a backlog of $972,000 at March 31, 2011.
Total segment operating expenses increased 16% to $1,333,000 during the current quarter compared to $1,149,000 in the prior year quarter. The increase in segment operating expenses is primarily due to an increase in fulfillment costs associated with increase in sales. Total segment operating loss decreased 16% to $563,000 in the first quarter of 2012 compared to $670,000 in the prior year quarter.
Crexendo Network Services
Revenue for the first quarter of 2012 was $75,000 compared to no revenue in the prior year quarter. Total Crexendo Network Services operating expenses were $763,000 for the first quarter of 2012 compared to $486,000 in the prior year quarter.
Steven G. Mihaylo, Chief Executive Officer of Crexendo, stated, "I am pleased with the advances we made this quarter as we are starting to see improvements in our sales process and sales efforts specifically in our telecom division. This quarter was a milestone for us as we rolled out our nationwide telecom offering, including our home state of Arizona. As a result of this roll out, we had telecom bookings of over $800,000 this quarter. We are starting to see the progress we were seeking in our hiring process as we have seen improved success with our recent new hires and believe we will have improved retention rates going forward. As of today we have 24 direct sales representatives selling both our web services and our telecom offerings, which is flat with the prior quarter with several more representatives in the pipeline. We are building sales momentum and expect continued improvements.
I continue to be impressed with how our products and services continue to improve and develop. I am absolutely convinced we are focused on the right market segment and know our products and services can compete with anyone's. Our primary job continues to be to grow and develop our sales teams, and I am confident with the changes we have made that we will be able to attract and retain quality sales representatives to sell the highest quality products. We are working toward expanding our product offerings to include other cloud based services, with the continued goal of creating a sustainable recurring revenue model."
Conference Call
The Company is hosting a conference call today, May 8, 2012 at 4:30 pm ET (1:30 pm PT). The conference call will be broadcast live over the Internet at http://www.crexendo.com. If you do not have Internet access, the telephone dial-in number is 800-479-9001 for non-domestic participants and 719-457-2662 for international participants. The conference ID to join the call is 5948878. Please dial in five to ten minutes prior to the beginning of the call at 4:30 PM EDT.
About Crexendo
Crexendo provides Cloud-based infrastructure services to businesses, which includes telecom and website hosting services, ecommerce software, website development and internet marketing services. These Cloud-based services help businesses build internet strategies to market and sell their products, accept online orders, analyze marketing performance and manage pricing and customers over the Internet. In addition to software, training and Cloud-based telecom and website hosting services, Crexendo offers site development, search engine optimization (SEO), link building and training. Crexendo, Crexendo Business Solutions, Crexendo Network Services are trademarks of Crexendo, Inc.
The Crexendo, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7604
Safe Harbor Statement
This press release contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. The words "believe," "expect," "anticipate," "estimate," "will" and other similar statements of expectation identify forward-looking statements. Specific forward-looking statements in this press release include information about Crexendo (i)being pleased with the improvements made this quarter, (ii) realizing and sustaining improvements in its sales process and sales efforts specifically in the telecom division, (iii) starting to see progress in its hiring process, (iv) having seen improved success with recent hires and having the belief that retention rates will improve on a go forward, (v) building sales momentum and expecting continued improvements, (vi) continuing to be impressed with how products and services continue to improve and develop, (vii) being convinced it is focused on the right market segment and that its products and services can compete with anyone's, (viii) primary job continuing to be to grow and develop its sales teams, (ix) being confident with the changes made it will be able to attract and retain quality sales reps and (x) working toward expanding product offerings to include other cloud based services, with the continued goal of creating a sustainable recurring revenue model.
For a more detailed discussion of risk factors that may affect Crexendo's operations and results, please refer to the company's Form 10-K for the period ended December 31, 2011 These forward-looking statements speak only as of the date on which such statements are made, and the company undertakes no obligation to update such forward-looking statements, except as required by law.
| CREXENDO, INC. AND SUBSIDIARIES | ||
| Condensed Consolidated Balance Sheets | ||
| (In thousands, except par value and share data) | ||
| (unaudited) | ||
| March 31, 2012 | December 31, 2011 | |
| Assets | ||
| Current Assets: | ||
| Cash and cash equivalents | $ 8,723 | $ 8,658 |
| Restricted cash | 1,965 | 1,965 |
| Trade receivables, net of allowance for doubtful accounts of $1,626 as of March 31, 2012 and $3,512 as of December 31, 2011 | 9,012 | 9,420 |
| Inventories | 263 | 232 |
| Income taxes receivable | 534 | 552 |
| Prepaid expenses and other | 590 | 725 |
| Total Current Assets | 21,087 | 21,552 |
| Certificate of deposit | 500 | 500 |
| Long-term trade receivables, net of allowance for doubtful accounts of $814 as of March 31, 2012 and $1,949 as of December 31, 2011 | 3,326 | 6,097 |
| Property and equipment, net | 3,863 | 4,055 |
| Deferred income tax assets, net | 272 | 279 |
| Intangible assets | 61 | 79 |
| Goodwill | 265 | 265 |
| Other long-term assets | 231 | 233 |
| Total Assets | $ 29,605 | $ 33,060 |
| Liabilities and Stockholders' Equity | ||
| Current Liabilities: | ||
| Accounts payable | $ 1,059 | $ 1,153 |
| Accrued expenses and other | 1,676 | 2,240 |
| Dividend payable | 211 | 211 |
| Deferred income tax liability | 272 | 279 |
| Deferred revenue, current portion | 8,870 | 9,288 |
| Total Current Liabilities | 12,088 | 13,171 |
| Deferred revenue, net of current portion | 3,344 | 6,123 |
| Other long-term liabilities | 251 | 419 |
| Total Liabilities | 15,683 | 19,713 |
| Stockholders' Equity: | ||
| Preferred stock, par value $0.001 per share - authorized 5,000,000 shares; none issued | -- | -- |
| Common stock, par value $0.001 per share - authorized 100,000,000 shares; 10,623,081 shares outstanding as of March 31, 2012 and 10,523,078 shares outstanding as of December 31, 2011 | 11 | 11 |
| Additional paid-in capital | 49,316 | 48,938 |
| Accumulated deficit | (35,405) | (35,602) |
| Total Stockholders' Equity | 13,922 | 13,347 |
| Total Liabilities and Stockholders' Equity | $ 29,605 | $ 33,060 |
| CREXENDO, INC. AND SUBSIDIARIES | ||
| Condensed Consolidated Statements of Operations | ||
| (In thousands, except per share and share data) | ||
| (unaudited) | ||
| Three Months Ended March 31, | ||
| 2012 | 2011 | |
| Revenue | $ 5,255 | $ 14,568 |
| Operating expenses: | ||
| Cost of revenue | 1,421 | 6,305 |
| Selling and marketing | 933 | 8,763 |
| General and administrative | 3,033 | 2,759 |
| Research and development | 594 | 872 |
| Total operating expenses | 5,981 | 18,699 |
| Loss from operations | (726) | (4,131) |
| Other income (expense): | ||
| Interest income | 742 | 1,153 |
| Interest expense | -- | (1) |
| Other income (expense), net | 28 | 6 |
| Total other income, net | 770 | 1,158 |
| Income (loss) before income tax benefit (provision) | 44 | (2,973) |
| Income tax benefit (provision) | 153 | 1,122 |
| Net income (loss) | $ 197 | $ (1,851) |
| Net income (loss) per common share: | ||
| Basic | $ 0.02 | $ (0.17) |
| Diluted | $ 0.02 | $ (0.17) |
| Dividends per common share: | $ 0.02 | $ 0.02 |
| Weighted average common shares outstanding: | ||
| Basic | 10,530,066 | 10,638,597 |
| Diluted | 10,559,273 | 10,638,597 |
| CREXENDO, INC. AND SUBSIDIARIES | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (In thousands) | ||
| (unaudited) | ||
| Three Months Ended March 31, | ||
| 2012 | 2011 | |
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Net income (loss) | $ 197 | $ (1,851) |
| Adjustments to reconcile net income to net | ||
| cash provided by (used for) operating activities: | ||
| Depreciation and amortization | 391 | 349 |
| Expense for stock options issued to employees | 253 | 174 |
| Deferred income tax benefit | -- | (1,103) |
| Change in uncertain tax positions | (167) | -- |
| Changes in assets and liabilities net of effects from acquisition: | ||
| Trade receivables | 3,179 | (1,725) |
| Inventories | (31) | 27 |
| Income taxes receivable | 18 | 641 |
| Prepaid expenses and other | 135 | (831) |
| Other long-term assets | 2 | 2 |
| Accounts payable, accrued expenses and other | (128) | (1,351) |
| Deferred revenue | (3,197) | 2,397 |
| Other long-term liabilities | -- | (36) |
| Net cash provided by (used for) operating activities | 652 | (3,307) |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Acquisition of property and equipment | (711) | (54) |
| Investment in subsidiary | -- | (56) |
| Net cash used for investing activities | (711) | (110) |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Proceeds from exercise of stock options and related income tax benefit | 336 | 25 |
| Repurchase of common stock | -- | (89) |
| Payments made on contingent consideration | (1) | -- |
| Dividend payments | (211) | (214) |
| Net cash provided by (used for) financing activities | 124 | (278) |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | 65 | (3,695) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 8,658 | 14,207 |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 8,723 | $ 10,512 |
| Supplemental disclosure of cash flow information: | ||
| Cash paid (received) during the period: | ||
| Interest | $ -- | $1 |
| Income taxes | (4) | (618) |
| Supplemental disclosure of non-cash investing and financing information: | ||
| Dividends declared | 211 | 213 |
| Purchase of property and equipment included in accounts payable | 125 | 57 |