SNTO...Fourth Quarter Revenues Increase 116% Leading to Profitable Quarter
Sento Corporation Reports Fourth Quarter and Fiscal 2000 Year End
Results
Fourth Quarter Revenues Increase 116% Leading to Profitable Quarter
AMERICAN FORK, Utah, April 26 /PRNewswire/ -- Sento Corporation (Nasdaq: SNTO) announced today its fourth
quarter and full fiscal year 2000 audited results.
For the quarter, the Company reported revenues from continuing operations of $6.4 million compared to $3.0 million for the
same quarter in the previous year, an increase of approximately 116 percent. Income from continuing operations for the fourth
quarter of fiscal 2000 was $381,000, or $.05 per basic share, excluding the write-down of Sento's investment in EchoPass,
compared to a loss from continuing operations of $2,003,000, or $.34 per share, for the quarter ended March 31, 1999. Net
income, including the write-down of Sento's investment in EchoPass, for the current quarter was $187,000, or $.02 per share,
compared to the net loss, including loss from discontinued operations of $2,004,000, or $.34 per share, for the quarter ended
March 31, 1999.
For the year ended March 31, 2000, revenues from continuing operations were $18.8 million compared to $7.9 million for the
previous year, an increase of approximately 138 percent. Income from continuing operations for the full year of fiscal 2000 was
$133,000, or $.02 per share, excluding the write-down of Sento's investment in EchoPass, compared to a loss from continuing
operations of $6,582,000, or $1.11 per share, for the year ended March 31, 1999. EBITDA from continuing operations was
$1.2 million for the year ended March 31, 2000. For the fiscal year ended March 31, 2000, the net loss, including loss from
discontinued operations and the write down of the investment in EchoPass, was $112,000, or $.01 per share, compared to the
net loss, including loss from discontinued operations, of $7,755,000, or $1.31 per share, for the year ended March 31, 1999.
After the write-down of the investment in EchoPass, due to accounting for this investment under the equity method of
accounting, there remains on the balance sheet of Sento a $150,000 investment, which is expected to be fully written-off during
the quarter ended June 30, 2000. After this write-off there will be no further recognition of losses under the equity method of
accounting for EchoPass.
Sento's new chief executive officer, Dennis Herrick, stated, "Fiscal 2000 has been an eventful year for us at Sento Corporation,
with continued strong growth in our eCustomer Contact Center operations. Revenue from these operations were $5.3 million
for the quarter and $14.0 million for the year ended March 31, 2000, compared to $1.6 million and $3.0 million for the same
periods a year earlier, an increase of 231% and 367%, respectively. In addition, we have spun out our EchoPass technology
into a separate company that has received $27.5 million in funding. We have more than doubled our agent head count, raised
additional equity funding for Sento, discontinued non core operations and entered into an agreement with the State of Wyoming
and the City of Evanston which provides funding of up to $1.3 million for Sento to establish a new state of the art eCustomer
Contact Center using voice over Internet Protocol technology. These actions have strengthened our financial position with
working capital of $3.7 million as of March 31, 2000 compared to a working capital deficit as of March 31, 1999."
Mr. Herrick continued, "The start up of our Evanston facility has been postponed due to delays caused by difficulties being
experienced by our carrier in establishing the communication lines to the facility. We anticipate we will begin operations there
during the first quarter of fiscal 2001 rather than the fourth quarter of fiscal 2000 as originally anticipated."
In addition, stated Mr. Herrick, "We expect our eCustomer Contact Center business for fiscal year 2001 to continue its growth
pattern with the first quarter revenues being slightly up over the quarter ended March 31, 2000 (up more than 100% over the
first quarter of fiscal 2000) and then beginning to increase at a more rapid pace as our current client base begins to ramp for the
fall season, and we bring on new customers. For the full fiscal year 2001, we expect revenue growth to exceed 100%."
"Due to the fact Sento has a $4.7 million tax net operating loss carryforward, we do not expect our earnings to have a tax
provision, nor do we expect to make any income tax payments during fiscal 2001. This further enhances the Company's cash
flow and future earnings per share."
Finally, Mr. Herrick added, "We believe our facilities are in place to accommodate this anticipated growth, and we will not
need to seek additional funding for this growth. We have, as discussed below, an equipment line of credit in place to fund the
purchase of computers and office equipment, and any additional funding will be provided by state or county incentives to create
jobs in their localities."
The training division experienced revenue growth for the quarter and year. The multi-week classroom training courses, a core
component of the training division, continue to show positive revenue growth, but the revenues for the remainder of the
operations of this division were less than expected, resulting in a loss for the division during the quarter and the year. We expect
good growth in the training division during fiscal 2001.
Selling, general and administrative expenses for fiscal 2000 decreased 48 percent to $4.5 million from $8.7 million for fiscal
1999, principally as a result of management's aggressive cost reduction efforts and a reduction in the level of expenditures
associated with the start-up of the eCustomer Contact Center and the operation of the training division last year.
As previously reported, Sento management has completed the financing of its near term growth plans by obtaining financing for
the Wyoming eCustomer Contact Center, the sale of a $1.3 million convertible debenture, the completion of the EchoPass
financing, and the establishment of a new bank line of credit for a $3 million revolving line of credit and a $500,000 equipment
line of credit. The new bank line of credit, which expires in April 2002 and replaces the prior $2 million line of credit, has
substantially better terms than the previous bank line of credit, and the interest rate is reduced from prime plus 2% to prime plus
1.25%. This financing, together with the $2.4 million cash as of March 31, 2000, allows the Company to proceed with its
current growth plans.
Sento Corporation provides technical services for organizations using Windows NT and UNIX client-server computing
environments. These services include Contract Technical Support, Help Desk Services, Technical Training and Education.
Sento conducts its business through its operating divisions, including Sento Training and Sento Technical Services. For more
information, visit Sento's home page at www.sento.com.
Statements in this press release which are not purely historical are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements encompass Sento's beliefs, expectations, hopes or intentions
regarding future events. Words such as "expects," "intends," "believes," "anticipates," and "likely" also identify forward-looking
statements. All forward-looking statements included in this release are made as of the date hereof and are based on information
available to Sento as of such date. Sento assumes no obligation to update any forward-looking statement. Actual results could
differ materially from those anticipated for a number of reasons, including, among others: the Company's loss of, or the failure to
retain a significant amount of business with any key customer; demands associated with the Company's redirected strategy to
develop and market new and additional information technology services and products; the Company's ability to attract, retain
and train highly-qualified scientific, technical, managerial and marketing personnel with IT expertise; uncertainties and expenses
resulting from the implementation of the Company's efforts to identify, acquire and integrate additional businesses; the highly
competitive environment faced by information technology businesses; a downturn in the market for hardware and/or software
products; economic fluctuations; the formation of an independent Internet technology company that is pursuing development
and commercialization of the Company's integrated voice and Internet customer care technology; and other unanticipated
factors. Risk factors, cautionary statements and other conditions which could cause actual results to differ from the Company's
current expectations are contained in the Company's filings with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-KSB.
SENTO CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
Assets
March 31, 2000 March 31, 1999
Current assets:
Cash $2,382,321 $275,893
Accounts receivable (net) 3,422,359 3,075,460
Prepaid taxes -- 375,148
Other current assets 216,207 391,882
Total current assets 6,020,887 4,118,383
Property and equipment (net) 2,158,887 2,907,897
Other assets 217,026 274,891
Total Assets $8,396,800 $7,301,171
Liabilities and Stockholders' Equity
Current liabilities:
Line of credit $-- $1,000,000
Current portion of long-term debt 80,492 409,923
Accounts payable 752,976 2,197,129
Accrued liabilities 1,278,420 1,548,779
Deferred revenue 247,540 500,321
Total current liabilities 2,359,428 5,656,152
Long-term liabilities:
Long-term debt, net of
current portion 140,677 286,317
Convertible Bonds 998,414 472,266
Total long-term liabilities 1,139,091 758,583
Stockholders' equity 4,898,281 886,436
Total liabilities and
stockholders' equity $8,396,800 $7,301,171
SENTO CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Quarters Unaudited)
Three months Three months Year Year
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
2000 1999 2000 1999
Revenue $6,368,767 $2,950,890 $18,768,774 $7,886,994
Cost of sales 4,784,984 2,148,525 14,017,316 5,770,381
Gross profit 1,583,783 802,365 4,751,458 2,116,613
Costs and expenses:
Selling,
general and
administrative 1,108,023 2,211,681 4,523,236 8,703,737
Amortization
of intangible
assets -- 147,521 -- 523,098
Research and
development 48,550 30,673 242,225 177,009
Write-off of
in-process
research and
development -- -- -- 92,095
Impairment of
assets -- 454,546 -- 880,842
Total costs
and expenses 1,156,573 2,844,421 4,765,461 10,376,781
Operating
income (loss) 427,210 (2,042,056) (14,003) (8,260,168)
Other income
(loss), net (218,550) 7,525 (114,151) 1,171,852
Income (loss)
before taxes 208,660 (2,034,531) (128,154) (7,088,316)
Income tax
(expense)
benefit (21,459) 31,985 67,832 506,083
Income (loss)
from continuing
operations 187,201 (2,002,546) (60,322) (6,582,233)
Loss on
discontinued
operations, net
of income taxes -- (1,386) (51,389) (1,172,570)
Net income (loss) $187,201 $(2,003,932) $(111,711) $(7,754,803)
Basic earnings
per share:
Income (loss)
from continuing
operations 0.02 (0.34) (0.01) (1.11)
Income (loss)
from discontinued
operations -- -- -- (0.20)
Net income (loss) $0.02 $(0.34) $(0.01) $(1.31)
Diluted earnings
per share:
Income (loss)
from continuing
operations 0.02 (0.34) (0.01) (1.11)
Income (loss)
from discontinued
operations -- -- -- (0.20)
Net income (loss) $0.02 $(0.34) $(0.01) $(1.31)
Weighted average
number of common
and common
equivalent shares
outstanding:
Basic 8,154,437 5,920,912 7,565,810 5,901,959
Diluted 9,885,641 5,920,912 7,565,810 5,901,959
SOURCE: Sento Corporation
CONTACT: Gary Filler, Chief Financial Officer, Gary_Filler@sento.com, or Stan Cutler, Controller, Stanley_Cutler@sento.com,
801-492-2000, both of Sento Corporation; or investor relations, Scott Liolios, or Ron Both, ron@liolios.com, 949-574-3860, both of Liolios
Group, Inc. |
