-- Revenue up 7% to $9.3 million in Q3 and $26.9 million YTD
-- Adjusted EBITDA of $1.8 million in Q3, $4.4 million YTD
-- Net income of $569,000 in Q3, $314,000 YTD
-- Fifth straight quarter of positive operating income -- $1.1 million
vs. $629,000 in Q2 and $230,000 in Q1
-- $4.4 million in operating cash flow YTD vs. $2.7 million a year ago
Evolving Systems, Inc. (
Consolidated Statements of Operations
(In thousands except per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
------- ------- -------- ---------
Revenue:
License fees and services $ 4,692 $ 3,990 $ 13,425 $ 11,855
Customer support 4,619 4,677 13,468 13,180
------- ------- -------- ---------
Total revenue 9,311 8,667 26,893 25,035
------- ------- -------- ---------
Costs of revenue and operating
expenses:
Costs of license fees and
services, excluding
depreciation and amortization 2,097 1,991 5,962 5,523
Costs of customer support,
excluding depreciation and
amortization 1,532 1,235 4,741 4,412
Sales and marketing 2,003 2,123 6,228 6,919
General and administrative 1,350 1,171 4,549 3,959
Product development 665 848 1,572 2,394
Depreciation 189 285 729 861
Amortization 396 336 1,176 2,126
Impairment of goodwill and
intangible assets - - - 16,516
Restructuring and other expense
(recovery) - - (1) (23)
------- ------- -------- ---------
Total costs of revenue and operating
expenses 8,232 7,989 24,956 42,687
------- ------- -------- ---------
Income (loss) from operations 1,079 678 1,937 (17,652)
------- ------- -------- ---------
Interest and other income
(expense), net (165) (460) (1,054) (1,421)
------- ------- -------- ---------
Income (loss) before income taxes 914 218 883 (19,073)
Income tax expense (benefit) 345 176 569 (1,278)
------- ------- -------- ---------
Net income (loss) $ 569 $ 42 $ 314 $ (17,795)
======= ======= ======== =========
Basic income (loss) per common
share $ 0.03 $ 0.00 $ 0.02 $ (0.93)
======= ======= ======== =========
Diluted income (loss) per common
share $ 0.03 $ 0.00 $ 0.02 $ (0.93)
======= ======= ======== =========
Weighted average basic shares
outstanding 19,201 19,112 19,178 19,089
Weighted average diluted shares
outstanding 19,550 19,310 19,546 19,089
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(In thousands)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
------- ------- -------- ---------
Net income (loss) $ 569 $ 42 $ 314 $ (17,795)
Depreciation 189 285 729 861
Amortization 396 336 1,176 2,126
Impairment of goodwill &
intangible assets - - - 16,516
Stock-based compensation expense 162 181 543 625
Interest expense and other, net 165 460 1,054 1,421
Income tax expense (benefit) 345 176 569 (1,278)
-------- -------- -------- ---------
Adjusted EBITDA $ 1,826 $ 1,480 $ 4,385 $ 2,476
======== ======== ======== =========
Evolving Systems reports its financial results in accordance with
accounting principles generally accepted in the U.S. (GAAP). In addition,
the Company is providing in this news release non-GAAP information in the
form of adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, impairment, stock compensation and gain/loss on foreign
exchange transaction.) Management believes adjusted EBITDA is useful to
investors and lenders in evaluating the overall financial health of the
Company in that it allows for greater transparency of additional financial
data routinely used by management to evaluate performance. Adjusted EBITDA
relates to a covenant contained in the Company's loan agreements and
therefore can be useful for lenders as an indicator of earnings available
to service debt. Readers of this adjusted EBITDA information are reminded
that adjusted EBITDA is not a recognized term under GAAP and does not
purport to be an alternative to income (loss) from operations, an indicator
of cash flow from operations or a measure of liquidity. Not all companies
calculate adjusted EBITDA identically, so this presentation may not be
comparable to similar presentations of other companies.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30, December 31,
2007 2006
---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $ 7,607 $ 5,076
Current portion of restricted cash - 300
Contract receivables, net 4,940 9,206
Unbilled work-in-progress 2,253 1,064
Prepaid and other current assets 1,384 1,701
---------- ----------
Total current assets 16,184 17,347
Property and equipment, net 1,013 1,349
Amortizable intangible assets, net 5,180 6,155
Goodwill 26,931 26,027
Long-term restricted cash 100 -
Other long-term assets 343 460
---------- ----------
Total assets $ 49,751 $ 51,338
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and
capital lease obligations $ 2,394 $ 2,037
Accounts payable and accrued liabilities 4,798 4,428
Unearned revenue 7,137 10,079
---------- ----------
Total current liabilities 14,329 16,544
Long-term liabilities:
Long-term debt and other obligations 10,677 12,153
Deferred foreign income taxes 1,052 1,202
---------- ----------
Total liabilities 26,058 29,899
Preferred stock 5,892 11,281
Stockholders' equity:
Common stock 18 16
Additional paid-in capital 74,826 68,825
Accumulated other comprehensive income 2,792 1,466
Accumulated deficit (59,835) (60,149)
---------- ----------
Total stockholders' equity 17,801 10,158
---------- ----------
Total liabilities and stockholders' equity $ 49,751 $ 51,338
========== ==========
Contact Information: Contacts: Investor Relations Jay Pfeiffer Pfeiffer High Investor Relations, Inc. 303.393.7044 Press Relations Sarah Hurp Marketing Communications Manager Evolving Systems +44 1225 478060