Some good earnings on one of our rats (TWNE) - Murphy
Towne Services, Inc. Announces Fourth Quarter and Year-end 1999 Results
SUWANEE, Ga., Mar 2, 2000 (BUSINESS WIRE) -- Towne Services, Inc. (Nasdaq/NM:TWNE) today reported financial and operating results for the fourth quarter and year ended December 31, 1999.
Net revenues for the fourth quarter ended December 31, 1999 totaled $7.1 million, a 15% increase compared with $6.2 million for the fourth quarter ended December 31, 1998. Recurring revenue for the fourth quarter increased 41% to $5.6 million, compared with $4.0 million in recurring revenue in the fourth quarter of 1998. The Company reported an adjusted net loss of $2.4 million, or $0.09 per share for the fourth quarter ended December 31, 1999, versus an adjusted net loss of $1.2 million, or $0.06 per share, for the fourth quarter ended December 31, 1998. During the fourth quarter of 1999, the Company had one-time charges totaling $3.8 million, or $0.14 per share, $3.2 million of which was a non-cash charge resulting from a cumulative effect of change in accounting principle discussed below, and $595,000 of which was a non-cash charge related to a deferred tax asset from a corporation Towne acquired in 1999.
For the fourth quarter of 1999, in response to the issuance of the Securities and Exchange Commission Staff Accounting Bulletin No. 101 - "Revenue Recognition in Financial Statements," Towne began recognizing all revenues for set-up fees on a deferred basis. The adoption of SAB 101 was accounted for as a change in accounting principle and applied cumulatively as if the change occurred as of the beginning of the fourth quarter 1999.
Net revenues for the twelve months ended December 31, 1999 totaled $29.8 million, a 64% increase compared with $18.1 million for the twelve months ended December 31, 1998. Recurring revenue for 1999 increased 75% to $21.9 million compared with $12.5 million in recurring revenue in 1998. The Company reported an adjusted net loss of $7.9 million, or $0.32 per share, for the year ended December 31, 1999, compared with an adjusted net loss of $5.9 million, or $0.34 per share, reported for the same period of 1998. For the year ended December 1999, the Company had one-time charges totaling $7.8 million, or $0.32 per share. These non-recurring charges included a non-cash charge of $3.2 million from a cumulative effect of accounting change resulting from the adoption of Staff Accounting Bulletin No. 101, a charge of $2.3 million related to Forseon Corporation in the second quarter, charges of $1.6 million related to severance packages and a loss on a sublease agreement and a non-cash charge of $595,000 related to a deferred tax asset from Forseon Corporation.
"We believe the results for the fourth quarter and full year reflect continued growth in our core business in spite of a challenging year for Towne Services," commented G. Lynn Boggs, chairman of the board and chief executive officer of Towne Services. "While our financial results for the year did not meet some expectations, we are confident that our fundamental business strategy is sound. The Company has been in a period of management transition since the second half of 1999. However, our new management team is focused on our core business operations and on implementing a number of strategic initiatives designed to foster more positive trends in the future. We are strengthening our sales efforts and continue to enhance our product and service offerings in tandem with market demand for more Internet-enabled services. Our recently announced launch of The Business Suite reflects our continued commitment to our customers by offering an innovative Internet product that facilitates a host of business solutions designed to service the e-commerce needs of our banks and business customers.
"We are pleased with the progress we have made in the integration of acquired companies and operations. In addition, we are focused on expense control throughout the Company to help ensure that we effectively manage our operations and service our growing customer base. Looking ahead, our strategy is to continue to provide our business and community bank customers with the innovative financial management tools and e-commerce solutions we believe they require to prosper in today's competitive marketplace. We are optimistic about our future growth prospects and our ability to recapture the momentum in our business. Our goal is to return the Company to improved earnings performance in 2000 and to meet our primary objective as a public company - to build value for our shareholders," concluded Boggs.
Towne Services, Inc., based in the metropolitan Atlanta area, is a leading provider of services and products that process sales and payment information and related financing transactions for small and mid-sized retail and commercial businesses and community banks in the United States. The Company delivers these services and products on-line by linking its business and bank customers to its processing systems using the Internet and telecommunications lines. Towne's systems also act as a hub, or electronic gateway, through which customers can access a variety of e-commerce business and management tools provided by Towne and other companies.
This release contains "forward-looking statements" concerning Towne's operations, prospects, business strategies and financial condition. These statements are based upon assumptions and estimates which are subject to significant uncertainties and many of which are beyond Towne's control. Words such as "may," "would," "could," "will," "expect," "anticipate," "believe," "intend," "plan," "optimistic," "return," "recapture," "future," and "estimate" are meant to identify such forward-looking statements. Actual results may differ materially from those expressed or implied by such forward-looking statements due to, among other things: whether Towne can successfully complete transitions in its management and operations and whether its management team can attain its goals and improve its financial condition; the possible negative impact of previously discussed lawsuits on the company's stock price and ability to meet its sales and other business objectives; the distraction of management's time and attention and other possible adverse effects on the company's business and operations as a result of the foregoing factors; market acceptance of new products and services including the recently-announced business suite of products offered by Towne; whether Towne can successfully complete the integration of acquired businesses and products without incurring significant costs or changes; Towne's limited operating history and whether it will be able to achieve or maintain profitability or other desired results of operations; and other factors discussed in Towne's filings with Securities and Exchange Commission, including its registration statement on Form S-1 (333-76859) declared effective on June 23, 1999, and the "Risk Factors" sections contained therein, and its annual, quarterly and periodic reports filed on Forms 10K, 10-Q and 8-K.
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