ZTM 1.47 x 1.48 gaining momentum! Got CAPA 6.82 -2.06 also on .08 earnings vs .06 estimated but a downgrade: Captaris Reports EPS of $0.08 in the Fourth Quarter of 2006
Thursday February 15, 4:15 pm ET
EPS of $0.14 in 2006 compares to a loss of $0.14 Per Share in 2005
BELLEVUE, Wash., Feb. 15 /PRNewswire-FirstCall/ -- Captaris, Inc. (Nasdaq: CAPA - News), a leading provider of software products that automate document-centric business processes, today reported financial results for its 2006 fourth quarter and fiscal year ended December 31, 2006.
Total revenue for the fourth quarter was $25.2 million, a 2% increase over the prior year's fourth quarter and a 3% increase over the preceding quarter. Revenue by category compared to the fourth quarter of 2005 was as follows:
-- Software revenue was $9.3 million, a decrease of $427,000 or 4%
-- Maintenance, support and service revenue was $9.5 million, an
increase of $901,000 or 10%
-- Hardware revenue was $6.5 million, an increase of $86,000 or 1%
Gross profit was $17.4 million, or comparable with the same quarter last year, and gross margin was 68.8%, down from 70.5% in the same quarter last year.
Total operating expenses were $15.1 million for the fourth quarter of 2006, a decrease of approximately $2.8 million, or 16%, from total operating expenses of $17.8 million for the same quarter last year. The decline in operating expenses reflects continued effective cost controls and the results of actions initiated in the fourth quarter of 2005 to reduce the Company's operating cost structure.
"Our strong earnings reflect the improved execution and increased operating leverage we are achieving as our business expands," said David P. Anastasi, President and CEO of Captaris. "As we significantly improved our cost structure, we also made significant progress toward other key goals in 2006, including strategic product development and expanding our market presence. We are excited about our growth prospects in 2007 and are well positioned to leverage our solid customer base and portfolio of attractive technologies to expand our business."
The Company recognized stock-based compensation expense of $201,000 in the fourth quarter of 2006, compared to a benefit of $7,000 in the fourth quarter of 2005. Amortization of intangible assets for the fourth quarter of 2006 was $693,000, including $481,000 in cost of revenue and $212,000 in operating expenses, compared to $868,000 in the fourth quarter of 2005, including $481,000 in cost of revenue and $387,000 in operating expenses. Depreciation was $697,000 in the fourth quarter of 2006, compared to $867,000 in the fourth quarter of 2005.
Operating income in the fourth quarter of 2006 was $2.3 million, compared to an operating loss of $427,000 in the fourth quarter of 2005, and operating income of $2.0 million in the third quarter of 2006.
Net income for the fourth quarter of 2006 was $2.2 million, or $0.08 per basic and diluted share, compared to net income of $44,000, or break even per share, in the same quarter last year and $1.6 million or $0.06 per share in the third quarter of 2006.
For the year ended December 31, 2006, total revenue of $92.0 million increased $5.6 million or 6%; operating expenses of $60.4 million decreased $7.3 million or 11%; and net income of $4.0 million increased $8.0 million compared to 2005.
Cash flow from operations was $1.9 million in the fourth quarter of 2006, compared to $1.6 million in the fourth quarter in 2005. For the year ended December 31, 2006, cash flow from operations was $13.9 million, an increase of $12.5 million compared to cash from operations of $1.4 million in 2005.
Consolidated cash, cash equivalents and investment balances as of December 31, 2006 totaled $59.4 million, an increase of $2.5 million from September 30, 2006, and an increase of $7.8 million from December 31, 2005. Deferred revenue at December 31, 2006 was $25.9 million, an increase of $2.1 million over the preceding quarter and an increase of $3.7 million from December 31, 2005.
Stock Repurchase
During the quarter, the Company repurchased 550,000 shares of its outstanding common stock at a cost of approximately $3.5 million and an average purchase price of $6.45 per share. For the full year 2006, the Company repurchased approximately 2.1 million shares at a cost of $11.3 million, compared to approximately 1.3 million shares at a cost of about $4.9 million in 2005. Captaris may repurchase shares under its stock repurchase program subject to overall market conditions, stock prices and its cash position and requirements.
On December 31, 2006, the total number of outstanding common shares was 27.6 million. As of December 31, 2006, $12.6 million was available for repurchases under the Company's repurchase program.
Conference Call
The Company will discuss its 2006 fourth quarter and full year results and business outlook for the first quarter of 2007 on its regularly scheduled conference call today, February 15, at 1:45 pm PT/ 4:45 p.m. ET. The live web cast of the conference call can be accessed from the Investor Relations section of the Captaris Web site at www.captaris.com or at www.mkr-group.com (under featured events). To access the live conference call, dial (800) 218-0713 and give the Company name "Captaris." An audio replay of the conference call can be accessed at (800) 405-2236. The replay will be available starting two hours after the call and remain in effect until Thursday, February 22 at 11:59 PT. The required pass code is 11081537#.
About Captaris, Inc.
Captaris, Inc. is a leading provider of software products that automate business processes, manage documents electronically and provide efficient information delivery. Our product suite of Captaris RightFax, Captaris Workflow and Captaris Alchemy Document Management is distributed through a global network of leading technology partners. We have customers in financial services, healthcare, government and many other industries, and our products are installed in all of the Fortune 100 and many Global 2000 companies. Headquartered in Bellevue, Washington, Captaris was founded in 1982 and is publicly traded on the NASDAQ National Market under the symbol CAPA. For more information please visit www.captaris.com.
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding our belief that we have positioned ourselves for improving operating leverage in future quarters and our plan to repurchase shares under our stock repurchase plan. Forward-looking statements include all passages containing verbs such as "aims," "anticipates," "estimates," "expects," "intends," "plans," "predicts," "projects" or "targets" or nouns corresponding to such verbs. Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be evaluated by events that will occur in the future. Forward-looking statements are based on the opinions and estimates of the management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could affect Captaris' actual results include, among others, the impact, if any, of stock-based compensation charges, the potential failure to maintain and expand Captaris' network of dealers and resellers or to establish and maintain strategic relationships, inability to integrate recent and future acquisitions, inability to develop new products or product enhancements on a timely basis, inability to protect our proprietary rights or to operate without infringing the patents and proprietary rights of others, and quarterly and seasonal fluctuations in operating results. More information about factors that potentially could affect Captaris' financial results is included in Captaris' quarterly reports on Form 10-Q filed in 2006 and most recent annual report on Form 10-K filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Except as required by law, Captaris undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise.
NOTE: The following are registered trademarks and trademarks of Captaris: Captaris, Alchemy, RightFax, Captaris Document Management, Captaris Interchange and Captaris Workflow. All other brand names and trademarks are the property of their respective owners.
Captaris, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
December 31, December 31,
2006 2005
Assets
Current assets:
Cash and cash equivalents $10,695 $6,420
Short-term investments, available-for-sale 7,084 17,506
Accounts receivable, net 21,347 18,776
Inventories, net 961 534
Prepaid expenses and other assets 2,971 1,759
Income tax receivable and deferred
tax assets, net 3,052 4,141
Total current assets 46,110 49,136
Long-term investments, available-for-sale 41,584 27,601
Restricted cash 1,000 1,000
Other long-term assets 303 337
Equipment and leasehold improvements,
net 4,340 6,200
Intangible assets, net 6,570 9,767
Goodwill 32,199 32,313
Deferred tax assets, net 3,842 4,849
Total assets $135,948 $131,203
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $5,308 $4,665
Accrued compensation and benefits 4,522 3,764
Other accrued liabilities 1,920 2,390
Income taxes payable 192 80
Deferred revenue 20,328 18,104
Total current liabilities 32,270 29,003
Accrued liabilities - noncurrent 307 317
Deferred revenue - noncurrent 5,544 4,104
Total liabilities 38,121 33,424
Shareholders' equity:
Common stock 275 284
Additional paid-in capital 46,614 50,835
Retained earnings 49,790 45,809
Accumulated other comprehensive
income 1,148 851
Total shareholders' equity 97,827 97,779
Total liabilities and
shareholders' equity $135,948 $131,203
Captaris, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Quarter Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
Net revenue:
Software revenue $9,264 $9,691 $34,428 $32,860
Maintenance, support and services
revenue 9,490 8,589 36,183 31,997
Hardware revenue 6,469 6,383 21,375 21,523
Net revenue 25,223 24,663 91,986 86,380
Cost of revenue 7,865 7,266 27,720 26,925
Gross profit 17,358 17,397 64,266 59,455
Operating expenses:
Research and development 2,840 3,748 12,227 13,976
Selling and marketing 8,051 9,251 31,830 34,448
General and administrative 3,964 4,438 16,103 18,529
Amortization of intangible assets 212 387 1,274 1,749
Gain on sale of discontinued
CallXpress product line - - (1,000) (1,000)
Total operating expenses 15,067 17,824 60,434 67,702
Operating income (loss) 2,291 (427) 3,832 (8,247)
Other income (expense):
Interest 500 287 1,894 1,121
Other, net 292 (1) 55 (210)
Other income 792 286 1,949 911
Income (loss) from continuing
operations before income tax
expense (benefit) 3,083 (141) 5,781 (7,336)
Income tax expense (benefit) 827 (182) 1,816 (3,319)
Income (loss) from continuing
operations 2,256 41 3,965 (4,017)
Discontinued operations:
Gain(loss) from sale of MediaTel
assets, net of income tax
expense (benefit) (11) 3 16 38
Income (loss) from discontinued
operations (11) 3 16 38
Net income (loss) $2,245 $44 $3,981 $(3,979)
Basic net income (loss) per common
share:
Income (loss) from continuing
operations $0.08 $0.00 $0.14 $(0.14)
Income(loss) from discontinued
operations (0.00) 0.00 0.00 0.00
Net income (loss) $0.08 $0.00 $0.14 $(0.14)
Diluted net income (loss) per common
share:
Income (loss) from continuing
operations $0.08 $0.00 $0.14 $(0.14)
Income(loss) from discontinued
operations (0.00) 0.00 0.00 0.00
Net income (loss) $0.08 $0.00 $0.14 $(0.14)
Weighted average basic common
shares 27,206 28,400 27,899 28,907
Weighted average diluted common
shares 28,506 28,557 28,514 28,907
Captaris, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Year Ended
December 31,
2006 2005
Cash flows from operating
activities:
Net income (loss) $3,981 $(3,979)
Adjustments to reconcile net income
(loss) to net cash provided
by operating activities:
Depreciation 3,104 3,474
Amortization 3,198 3,675
Stock-based compensation expense
(benefit) 677 (246)
Loss on disposition of equipment 74 10
Impairment of long-lived assets and
intangibles - 607
Provision for doubtful accounts 29 572
Changes in assets and
liabilities:
Accounts receivables,
net (2,563) (1,108)
Inventories, net (411) 411
Prepaid expenses and
other assets (1,159) (448)
Income tax receivable
and deferred income
taxes, net 2,292 (2,987)
Accounts payable 622 (2,222)
Accrued compensation
and benefits 765 (623)
Other accrued
liabilities (489) 813
Income taxes payable 111 (343)
Deferred revenue 3,692 3,802
Net cash flow provided
by operating
activities 13,923 1,408
Cash flows from investing
activities:
Purchase of equipment and
leasehold improvements (1,284) (3,045)
Purchase of investments (71,242) (50,951)
Proceeds from disposals of fixed
assets 14 26
Proceeds from sales and
maturities of investments 67,790 55,721
Net cash provided by
(used in) investing
activities (4,722) 1,751
Cash from financing activities:
Proceeds from exercises of stock
options 5,278 574
Repurchase of common stock (11,301) (4,942)
Excess tax benefits from stock-
based compensation 1,117 28
Net cash used in
financing activities (4,906) (4,340)
Net increase (decrease) in
cash 4,295 (1,181)
Effect of exchange rate changes on
cash (20) 38
Cash and cash equivalents at
beginning of period 6,420 7,563
Cash and cash equivalents at end of
period $10,695 $6,420
Cash paid during the period for
income taxes $141 $404
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Source: Captaris, Inc. |
