LOS GATOS, Calif., Aug. 12, 2005 (PRIMEZONE) -- Semotus Solutions (AMEX:DLK), an innovative provider of real-time professional market data and intelligent wireless communications software, reported its first quarter financial results for the three months ended June 30, 2005. The Company's focus on marketing and sales, and the acquisition of new wireless products, was reflected in an 8 percent increase in revenues to $477,345 in the three months ended June 30, 2005 from $440,574 in the three months ended June 30, 2004. The revenue increase reflects continued emphasis on marketing and sales. As a consequence of recent acquisitions, shareholder equity was increased 66 percent to $5,083,650 on June 30th, 2005 from $3,048,456 on June 30th, 2004.
On March 28, 2005 Semotus acquired Expand Beyond Corporation for 1,910,961 shares of common stock. Through the acquisition of Expand Beyond, Semotus acquired additional enterprise wireless messaging and communications software applications, including PocketDBA and PocketAdmin. On June 23, 2005, Semotus acquired Clickmarks, Inc. for 4,107,982 shares of common stock. Through the acquisition of Clickmarks, Semotus acquired a patented Presentation Level Integration (PLI) technology which enables back end application integration.
Semotus is eager to leverage the $41 million in Venture Capital invested in Clickmarks and Expand Beyond. The Expand Beyond products are synergistic with Semotus' HiplinkXS product family and have already strengthened the Company's competitive position in that market place. Clickmarks generated approximately $1.75 million (unaudited) of revenue in 2004. Semotus is reducing Clickmarks expenses through consolidation while continuing to grow its revenue base in 2005. Although some initial mergers and acquisitions expenses have been incurred, Semotus is expecting a positive contribution to both the top line revenues and the bottom line expenses from these acquisitions in the current fiscal year.
Although revenues increased, Semotus' operating expenses in the first quarter of this fiscal year ending June 30th, 2005 were higher due to mergers and acquisitions expenses and the integration of the acquisitions of Expand Beyond and Clickmarks. Additional one-time overhead expenses, such as legal and investment banking fees and management time, have been spent in order to complete the acquisitions and transition the acquired operations. The expectation is that this integration effort has largely been completed and future operating improvements should be accomplished. The first quarter ended June 30, 2005 also was affected by increasing data feed costs which affected the gross profit, which declined to $337,120 from $372,154 in the first quarter ended June 30, 2004. It is expected that future sales of Semotus and its subsidiaries' products should offset some of that increase in cost. The Company believes its cash position of $1,206,405 at June 30, 2005 provides sufficient reserves to execute its current business plan.
Semotus reported a net loss of $(472,469) or $(0.02) per share for the three months ended June 30, 2005 versus net income of $314,959 or $0.01 per share for the three months ended June 30, 2004. The net income in the last fiscal year was after the reversal of the re-priced options expense of $555,191 due to the decline in the Semotus stock price at that time. On a net basis removing the one time reversal of the re-priced option expense of $555,191, the resulting net loss in the June 30th, 2004 quarter was $(240,242), or $(0.01) per share. The net loss in the three months ended June 30, 2005 was negatively affected and the net income in the three months ended June 30, 2004, 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-QSB, in Note 4 to the Consolidated Financial Statements, "Stock Based Compensation," in accordance with generally accepted accounting principles.
Stated Anthony LaPine, Semotus CEO, "I expect the investments we have made in our recent acquisitions to manifest in higher revenues and improved bottom line performance later in this fiscal year. You have to plant if you want to harvest; the added expense this quarter is the seed of our harvest tomorrow."
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. For further information, contact www.semotus.com; www.hiplinkwireless.com; www.clickmarks.com; or www.xb.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.