ACEC NEWS
biz.yahoo.com
Tuesday January 26, 8:31 pm Eastern Time
Company Press Release
SOURCE: ACE*COMM Corporation
ACE*COMM(R) Announces Preliminary Estimates of
Q2 Financial Results
GAITHERSBURG, Md., Jan. 26 /PRNewswire/ -- ACE*COMM Corporation (Nasdaq: ACEC - news) reported
preliminary estimates of its financial results for the second quarter endednDecember 31, 1998. The Company expects to report
revenues in the range of $7 million to $7.5 million for the second quarter, compared to $5.4 million for the second quarter of
last year.
The estimated results reflect significant new deliveries of DCMS® units to Korea Telecom, restarting a program that had been
suspended a year ago as a result of the Asian crisis. Also included are deliveries of the Company's N*VISION® product,
including an advanced telecom data warehousing technology, to two new carriers in the Integrated Services and CLEC
markets, and new orders for enterprise products from Bell Atlantic Federal in conjunction with a major Y2r program for the
U.S. Army.
The Company's order volume for the second quarter exceeded $10 million, which represents one of the largest order flows for
a single quarter in the Company's history. Included are orders from the US Air Force, under a previously suspended contract,
34 DCMS units for a telephone company in the Middle East, follow-on business with Telmex and WinStar and orders through
new channel partners in the UK and Beijing.
The Company also expects to report an improved cash position, estimating cash on hand of approximately $3 million at
December 31, 1998, compared to $2.75 million at September 30, 1998, reflecting improved payment terms on new contracts
and the results of aggressive collection of aged receivables. At the same time, the Company expects to report that debt
decreased by approximately $0.8 million from September 30 to December 30, 1998, leaving essentially no bank debt at
December 31.
The Company also announced that, as of January 1, 1999, it initiated a comprehensive corporate reorganization focusing on
business areas and markets as well as internal operations. This reorganization will lead to a greater focus on measuring profit of
the Company's key product lines and services, and enhancing the future capacity of the Company to measure profitability and
manage customer accounts below the corporate level. In support of the restructuring new talent has been added to the
management staff.
To energize sales activity across all units in this structure, the Company brought in a new sales executive with extensive
experience: Steve Norris, who was recently named Vice President of Sales and Marketing. Formerly with TCSI for over 10
years, Mr. Norris was instrumental in growing that company and making it a major OSS provider. Prior to his tenure at TCSI,
Mr. Norris was a Regional Vice President of Sales with Telco Research, formerly a division of NYNEX, managing both direct
and distributor sales organizations for the western United States. Mr. Norris was also a Director of Industry and Horizontal
Marketing with BellSouth's Advanced Systgms group, managing BellSouth's entry into software sales and support.
The Company also appointed James K. Eckler to be its Executive Vice President - Finance and Administration. Mr. Eckler
initially joined the Company in September and is leading the Company's reorganization of its finance and accounting
department. He has nearly 30 years of experience in senior management roles in finance and business operations. He served as
Vice President and Director of Management Accounting for First Kentucky National Corporation, a bank holding company
that was acquired by National City, and then Senior Vice President and Chief Financial Officer for First Tennessee National
Corporation. He also served on the Management Committee of the NYSE-listed investment bank Morgan Keegan. He
worked at Tandem Computers, managing two of its five largest partnering relationships and its marketing for their highest
market share market (stock exchanges). Most recently he was a consultant, advisor and interim Chief Financial Officer of a
privately held telecommunications hardware, software and systems integration company.
The Company also announced that a new Director has been elected to its Board of Directors: Harry Linowes. With over 40
years in accounting, Mr. Linowes adds considerable financial experience to the Company's Board. He was a partner of BDO
Seidman and one of its predecessors for over ten years, and served as its Managing Partner from 1986 to 1992. Mr. Linowes
is the recipient of numerous civic awards and is extensively involved in professional and civic activities, including as President of
the Greater Washington CPA Association. Mr. Linowes was previously on the Board of Directors of The Dart Group, where
he assisted in its restructuring.
ACE*COMM also announced today that, following discussions about its relationship with PricewaterhouseCoopers LLP
(''PwC''), the parties agreed to a cessation of the relationship and PwC resigned effective January 19, 1999, as the Company's
independent accountants. The Company is in active discussions with five accounting firms to replace PwC and believes that it
will have selected and engaged a new auditing firm by February 15, 1999. In the meantime, the Board of Directors has
engaged a first tier (''big 5'') accounting firm to assist the Company in reviewing it's accounting policies and practices and their
application in the financial statements for the quarter ended December 31, 1998. The Company expects to report full second
quarter results when the Accounting Firm has completed its activity with respect to the second quarter.
In connection with cessation of the relationship with PwC, there were no disagreements with PwC on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to
the satisfaction of PwC, would have caused them to make reference to the subject matter of the disagreements in connection
with their report. In a Report on Form 8-K filed today with the Securities and Exchange Commission, the Company discussed
certain matters raised by PwC in connection with cessation of the relationship which the Company believes it has fully
addressed.
''We are pleased to report progress, in a number of the business fundamentals that are important to the financial health of our
enterprise including increased revenues, bookings and cash. We are equally pleased about the structural changes we are
implementing to position our company for future growth in an active market,'' said George T. Jimenez, ACE*COMM's Chief
Executive Officer. ''Further, the additions of Mr. Eckler and Mr. Norris to our management team, as well as the additions of
Mr. Linowes and earlier Mr. Newlin, who was appointed a Director in November at the last annual meeting, I believe bring to
the Company the caliber of people who will enable world class performance from our organization. I am ost impressed,
however, with the commitment and persistence of the highly talented staff that developed new technologies and shaped the
course of future events for us, during some really difficult periods. Although there are still difficult challenges ahead, we are
building the mommntum necessary to fully reach our potential going forward.''
Except for historical information, the matters discussed in this news release include forward-looking statements that are subject
to certain risks and uncertainties that could cause the actual results to differ materially from those projected, including, but not
limited to: Delays or cancellations of orders due to various factors, including business and economic conditionn in the U.S. and
foreign countries, government priorities, industry-wide slowdowns or customer purchasing and budgetary patterns or lack
thereof; pricing pressures and the impact of competitive products; the timely deveeopment and acceptance of new products;
manufacturing efficiencies and other risks detailed from time to time in the Company's reports filed with the Securities and
Exchange Commission.
About ACE*COMM
ACE*COMM provides operations support systems (OSS) products for networks deployed by telecommunications service
providers, such as wireless carriers, competitive local exchange carriers (CLECs), incumbent local exchange carriers (ILECs),
national and international long distance carriers, and other public and private carriers worldwide. The Company also markets
service and network provisioning systems to telcos and large enterprises operating data and voice networks. ACE*COMM's
products perform such functions as billing data collection, billing, customer care, network performance monitoring, alarm
processing, and network traffic management for some of the largest carriers and enterprises in over 40 countries.
The Company incorporates the latest in scaleable, client server systems, data warehousing and real-time data access
technology, in its products for carriers and enterprises worldwide. ACE*COMM is a registered ISO 9001 quality standard
company. For more information, visit ACE*COMM on the internet at acecomm.com.
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