LOS GATOS, Calif., Feb. 7, 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 three and nine months ended December 31, 2004. The Company's focus on marketing and sales was reflected in a 65% increase in revenues in the three months ended December 31, 2004 versus 2003 to $466,952 from $283,846 and an increase in revenues of 35% in the nine months ended December 31, 2004 versus 2003 to $1,365,088 from $1,010,680. 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 58%. Gross profit margin increased to 84% for the three and nine months ended December 31, 2004 versus 72% in the three months and 78% for the nine months ended December 31, 2003.
Semotus reported a net loss of $(840,306) or $(0.04) per share and $(681,246) and $(0.03) per share for the three and nine months ended December 31, 2004, respectively. The Company reported a net loss of $(71,516) or $(0.00) per share and $(1,900,295) or $(0.09) per share for the three and nine months ended December 31, 2003. The net losses in the three and nine months periods of 2004 and 2003 were affected by a non-cash stock compensation expense except for the three months ended December 31, 2003 for which there was a reversal of that stock compensation expense.
After eliminating the non cash stock option related expense and the reversal of that expense, the Company improved its operations considerably. The net loss in the three and nine months ended December 31, 2004 becomes $(148,515) or $(0.01) per share and $(582,576) or $(0.03) per share, respectively. In the comparable periods of 2003, the net loss becomes $(351,570) or $(0.02) per share and $(886,972) or $(0.04) per share, respectively. This operating improvement was accomplished through increased revenues, adding new customers and a continuing reduction in operating costs.
The net loss in the three and nine months ended December 31, 2004 and in the nine months ended December 31, 2003 was negatively affected and the net loss in the three months ended December 31, 2003, 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 10-QSB, in Note 4 to the Consolidated Financial Statements, "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 84% for the three and nine months ended December 31, 2004 versus 72% and 78% for the three and nine months ended December 31, 2003, respectively. Also furthering the Company's goal of cash breakeven, Semotus reduced its overall use of cash by 56% to $284,327 from $652,371 in the periods ended December 31, 2004 versus 2003. 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 $1,432,725 at December 31, 2004 provides sufficient reserves to execute its current business plan.
"I am encouraged by the 65% revenue increase that we have achieved and the 56% reduction in our cash burn rate," stated CEO Anthony LaPine. "I grow more confident every quarter as we demonstrate our ability to produce consistent improvement in our financial results. I sense 2005 could be an exciting breakout year for the company."
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.