BELLEVUE, Wash., Nov. 10, 2004 (PRIMEZONE) -- Timeline, Inc. (OTCBB:TMLN) today reported a loss of $137,000, or $0.03 per share, in its second quarter of fiscal 2005 ended September 30, 2004. In the second quarter a year ago, the company had a loss of $4,000, or $0.00 per share. Despite increased revenue from maintenance, total revenue decreased to $834,000, from $1,139,000 for the year ago quarter, on lower license and consulting fees. For the six-month period ended September 30, 2004, the company's loss was $528,000 compared to a loss of $270,000 for the comparable six-month period ended September 30, 2003.
"We continue to trail the prior year's software and patent license revenue," said Charles Osenbaugh, President. "Lower license revenue also negatively affected revenue from consulting, which is driven in large part by new installations. On the positive side, we did improve revenue in every category over the previous sequential quarter. We are currently focusing efforts to enlist new OEM resellers on software providers servicing vertical markets. While these potential resellers will on average have smaller installed bases than traditional generic ERP vendors, we believe the continuing consolidation of the more generalized ERP vendors limit our growth potential. As was the case in previous quarters, the impact of mergers and acquisitions on our reseller base has made expanding distribution in this channel more difficult.
"We have also responded to the changing marketplace by continuing to cut costs. This focus on operations allowed us to offset over half of the decrease in revenue for the quarter," said Osenbaugh. "We remain committed to growing by adding to and supporting our reseller network, but must do so within the constraints of our cash flow."
Cost of revenues and operating expenses both declined in the second quarter and six-month periods compared to the year ago period. Second quarter cost of revenues dropped 34% to $119,000 from $182,000 in the second quarter a year ago, reflecting the full amortization of previously acquired and internally developed products. Cost of revenue year-to-date dropped 43% to $208,000 from $363,000 in the first six months of fiscal 2004. Operating expenses dropped 12% to $845,000 in the second quarter and 8% to $1.9 million year-to-date, compared to $965,000 and $2.0 million in the respective periods of fiscal 2004.
"We continued to expand our intellectual capital base in the second quarter with the addition of our first patent in China and a second patent in Australia," Osenbaugh noted. "We remain confident that our proprietary technologies have significant value in the marketplace, and we continue to work to capitalize on their unique abilities to automate data mart design and workflow. Our efforts on this part of the business are constant, but the resulting rewards can be unpredictable and sporadic."
About Timeline
Timeline develops, markets and supports proven, Microsoft Windows-based financial management reporting software suitable for complex applications such as those found in medium to large, multinational corporations. Timeline Analyst was developed for Windows and Office and takes full advantage of Microsoft's latest operating systems and Version 2.9 allows for the deployment of target analytical data marts on Oracle 8 or 9i and IBM's DB2 Universal Data Bases Versions 7 & 8 as well as Microsoft SQL Server. The Analyst Suite of products allows target data marts on which Timeline's reporting, budgeting and consolidation applications reside to be built on all of these three of the most popular computing platforms. Timeline can be reached at 800-342-3365 or on the web at www.timeline.com. WorkWise Software, Inc., a subsidiary of Timeline, is the leading provider of event-based notifications, application integration and process automation systems to the mid-market. The WorkWise solutions are exclusively available through authorized OEM and Reseller Business Partners. For more information on WorkWise Software, Inc., visit its website at www.workwise.com. Analyst Financials Ltd., a London-based subsidiary of Timeline, markets, licenses and provides consulting for Timeline Analyst products in Europe and Africa.
The Timeline company logo can be found at http://www.primezone.com/newsroom/prs/?pkgid=1295
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this news release looking forward in time involve risks and uncertainties, including the ability of third party partners and direct sales to generate sales, market acceptance of product upgrades introduced by the company, risks associated with international operations, corporate spending patterns, the company's ability to realize value from patented technology, the ability of the company to control and reduce expenses and increase working capital, and other risk factors detailed in the Company's Securities and Exchange Commission filings. Use of the words "believe" and "continue" in this news release is intended to identify these forward-looking statements, although it is not the exclusive means of doing so.
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
($ in 000's)
As of
September 30, As of
2004 March 31,
(Unaudited) 2004
------------ ------------
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 92,261 $ 511,483
Accounts receivable, net
of allowance for doubtful
accounts of $12,086 and
$12,326 522,377 423,085
Prepaid expenses and other 104,581 171,456
------------ ------------
Total current assets 719,219 1,106,024
PROPERTY AND EQUIPMENT, net
of accumulated depreciation
of $891,784 and $875,625 63,271 74,761
CAPITALIZED PATENTS, net of
accumulated amortization of
$70,959 and $60,069 260,714 253,932
GOODWILL, net of accumulated
amortization of $123,938 70,183 70,183
------------ ------------
Total assets $ 1,113,387 $ 1,504,900
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 97,883 $ 46,589
Accrued expenses 316,928 297,570
Line of Credit 36,410 --
Deferred revenues 625,259 619,036
------------ ------------
Total current liabilities 1,076,480 963,195
------------ ------------
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value,
20,000,000 shares authorized,
4,190,998 and 4,178,498 shares
issued and outstanding 41,910 41,785
Additional paid-in capital 10,578,447 10,564,347
Accumulated other comprehensive
loss (88,626) (97,433)
Accumulated deficit (10,494,824) (9,966,994)
------------ ------------
Total shareholders' equity 36,907 541,705
------------ ------------
Total liabilities and
shareholders' equity $ 1,113,387 $ 1,504,900
============ ============
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
Unaudited
---------
($ in 000's)
Three Months Ended Six Months Ended
September 30, September 30,
---------------------- ----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
REVENUES:
Software license $ 305,451 $ 449,596 $ 570,385 $ 890,119
Patent license -- 150,000 -- 150,000
Maintenance 368,804 299,055 699,710 590,772
Consulting and other 160,024 240,411 283,177 450,490
---------- ---------- ---------- ----------
Total revenues 834,279 1,139,062 1,553,272 2,081,381
---------- ---------- ---------- ----------
COST OF REVENUES:
Software license -- 69,659 -- 139,319
Patent license 5,487 4,642 10,890 9,074
Maintenance,
consulting and other 113,173 107,967 197,031 214,836
---------- ---------- ---------- ----------
Total cost of
revenues 118,660 182,268 207,921 363,229
---------- ---------- ---------- ----------
Gross profit 715,619 956,794 1,345,351 1,718,152
---------- ---------- ---------- ----------
OPERATING EXPENSE:
Sales and marketing 250,275 250,903 573,364 526,184
Research and
development 208,874 242,149 422,824 442,075
General and
administrative 362,384 430,573 806,795 888,634
Patents 14,942 25,059 37,898 44,750
Depreciation 8,371 16,182 16,394 33,289
Amortization of
intangibles -- -- -- 83,539
---------- ---------- ---------- ----------
Total operating
expenses 844,846 964,866 1,857,275 2,018,471
---------- ---------- ---------- ----------
Loss from
operations (129,227) (8,072) (511,924) (300,319)
---------- ---------- ---------- ----------
OTHER (EXPENSE)
INCOME:
Interest income and
other (7,917) 3,964 (15,906) 30,235
---------- ---------- ---------- ----------
Total other
(expense)/income (7,917) 3,964 (15,906) 30,235
---------- ---------- ---------- ----------
Loss before income
taxes (137,144) (4,108) (527,830) (270,084)
Provision for income
tax -- -- -- --
---------- ---------- ---------- ----------
Net loss $ (137,144) $ (4,108) $ (527,830) $ (270,084)
========== ========== ========== ==========
Basic and diluted net
loss per common
share $ (0.03) $ (0.00) $ (0.13) $ (0.06)
========== ========== ========== ==========
Shares used in
calculation of basic
and diluted loss
per share 4,190,998 4,190,998 4,190,998 4,190,998
========== ========== ========== ==========
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
Unaudited
---------
($ in 000's)
2004 2003
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash used in operating activities $(437,416) $(125,332)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (5,091) (10,613)
Capitalized patent & software
development costs (17,672) (22,120)
Line of credit borrowings 40,250 --
Line of credit repayments (3,840) --
--------- ---------
Net cash (used in) provided by
investing activities 13,647 (32,733)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock warrants 4,725 83,994
--------- ---------
Net cash provided by financing activities 4,725 83,994
--------- ---------
EFFECT OF FOREIGN EXCHANGE RATE (178) 2,648
NET CHANGE IN CASH AND CASH EQUIVALENTS (419,222) (71,423)
CASH AND CASH EQUIVALENTS,
beginning of period 511,483 167,908
--------- ---------
CASH AND CASH EQUIVALENTS,
end of period $ 92,261 $ 96,485
========= =========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid for interest during year $ 724 $ 3,803
Non-cash transactions:
Unrealized loss on available
for sale securities $ -- $ 119