Message #23 From:
Stock News Bot Date: November 14, 2005 07:29:00 AM
PPID News Prescient Applied Intelligence Reports Third Quarter 2005 Results
WEST CHESTER, Pa.--(BUSINESS WIRE)--Nov. 14, 2005--Prescient Applied Intelligence, Inc., (OTCBB:PPID), a leading provider of technology-driven supply chain and advanced commerce solutions for retailers and suppliers, announced today financial results for the third quarter ended September 30, 2005.
"This quarter has had its challenges and its achievements," said Jane Hoffer, President and CEO of Prescient. "It has taken longer than anticipated to ramp up the organization's sales efforts, which impacted third quarter revenue. We have completed most of the sales management hiring, and are working diligently to fill the remaining positions."
"Highlighting the third quarter was the signing of a pilot with a major grocery chain to conduct warehouse scan based trading (SBT). Although SBT has its roots in direct store delivery (DSD) products, warehouse products are easily adapted to this. Warehouse SBT works much the same way as DSD SBT - suppliers deliver goods to the warehouse and are paid once they scan at the point of sale. This pilot validates the market's growing interest in SBT, particularly in non-traditional areas. As part of the pilot, the grocer's trading partners will participate in a vendor-managed inventory (VMI) program, where they will replenish inventory based on scan sales visibility. This initiative supports the synergies of Prescient's end-to-end solution and showcases the value of the combined organization."
Results for the consolidated statements of operations for 2004 contain only the results of the former viaLink Company prior to the merger with Prescient Systems, Inc., which was effective December 31, 2004.
Total revenue in the third quarter was $2,349,000, which represents a 79% increase over the third quarter of 2004 and a 4% decrease over the second quarter of 2005. Included is $966,000 in revenues from the merged entity of Prescient Systems, Inc., which accounts for 74% of the total company revenue growth as compared to the third quarter of 2004.
Subscription revenue in the third quarter was $1,321,000, which represents an 8% increase over the third quarter of 2004, and is approximately equal to the second quarter of 2005.
New sources of revenues for the third quarter include the following: license revenues of $55,500; maintenance revenues of $432,000; and services revenues of $479,000. As compared to the second quarter of 2005, license revenues decreased 81%, maintenance revenues increased 23%, and services revenue is approximately the same.
Total operating expenses in the third quarter were $2.7 million, including $0.1 million of depreciation and amortization. Operating expenses increased $962,000 or 54% from the third quarter of 2004 and are approximately the same from the second quarter of 2005. These expense increases over the prior year are a result of incurring costs to support the newly acquired activities from the merger with Prescient Systems, Inc.
The company reported a net loss of $0.4 million, or $0.01 per share. This compares to a loss of $1.4 million for the third quarter of 2004 and $0.2 million for the second quarter of 2005.
"Even with the positive momentum of the third quarter, we are behind plan on hiring and growth. Our original guidance anticipated that we would achieve positive EBITDA and $10 million in revenue by the end of 2005. Based on third quarter performance, it is unlikely that we will achieve our anticipated financial goals," said Hoffer.
Prescient provides a continuum of solutions for retailers and suppliers that translate consumer insight into better execution at the store shelf by capturing scan-sales data, improving forecast accuracy, and increasing supply chain efficiencies.
About Prescient Applied Intelligence, Inc.
Prescient Applied Intelligence, Inc. enables retail trading partners to align planning and execution with changing market needs to maximize relationships and deliver on the promise of collaborative commerce. The company's retailer-centric and collaborative commerce solutions are designed with the understanding that product demand and business processes are fluid. Prescient's solutions capture information at the point of sale, provide greater visibility into real-time demand, and turn data into actionable information across the entire supply chain. As a result, the company's products and services enable trading partners to compete effectively, increase profitability, and excel in today's retail business climate. Household brand names like Ahold, AutoZone, Coors, Domino's Pizza, Rite Aid, Sara Lee, Schwan's, and Wyeth rely on Prescient. For more information, go to www.prescient.com.
Forward-looking Statement
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions as they relate to Prescient Applied Intelligence, Inc. are intended to identify such forward-looking statements. Prescient may from time to time update these publicly announced projections, but it is not obligated to do so. Any projections of future results of operations should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. For a discussion of such risks and uncertainties, see "Risk Factors" in Prescient's most recent report on Form 10-KSB filed with the Securities and Exchange Commission and its other filings under the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.
PRESCIENT APPLIED INTELLIGENCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2005 and December 31, 2004
September 30, December 31,
2005 2004
-------------- --------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 1,313,574 $ 1,476,975
Accounts receivable - net of
allowance for doubtful accounts of
$106,000 in 2005 and $199,000 in
2004 1,757,286 1,604,573
Prepaid and other current assets 269,743 232,703
-------------- --------------
Total current assets 3,340,603 3,314,251
Furniture, equipment and leasehold
improvements, net 216,489 198,578
Intangible assets, net 1,981,615 2,243,750
Goodwill 17,669,259 17,495,727
Other assets 49,842 83,456
-------------- --------------
Total Assets $ 23,257,808 $ 23,335,762
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 348,366 $ 730,688
Accrued liabilities 866,668 1,154,516
Deferred revenues 1,054,368 1,038,350
-------------- --------------
Total current liabilities 2,269,402 2,923,554
Deferred maintenance - long term
portion 30,536 -
Commitments and contingencies
Stockholders' equity
Series E Preferred Stock, $.001 par
value; 1,700 shares authorized; 1657
shares issued and outstanding at
December 31, 2004 and September 30,
2005, respectively (liquidation
value $16,567,747 at September 30,
2005 and December 31, 2004) 16,567,747 16,567,747
Series F Preferred Stock, $.001 par
value; 395 shares authorized; 352
shares issued and outstanding at
December 31, 2004 - 3,524,400
Series G Preferred Stock, $.001 par
value; 300 shares authorized; 240
shares issued and outstanding at
September 30, 2005 (liquidation
value $2,399,419 at September 30,
2005) 2,399,419 -
Common stock, $.001 par value;
400,000,000 shares authorized;
40,287,958 and 26,686,807 shares
issued and outstanding at September
30, 2005 and December 31, 2004,
respectively 40,289 26,687
Additional paid-in-capital 105,951,203 102,993,888
Due from stockholder - sale of stock (13,151) -
Accumulated deficit (103,984,086) (102,700,514)
Cumulative translation adjustment (3,550) -
-------------- --------------
Total stockholder's equity 20,957,871 20,412,208
-------------- --------------
Total liabilities and
stockholders' equity $ 23,257,808 $ 23,335,762
============== ==============
PRESCIENT APPLIED INTELLIGENCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
For the Three and Nine Months Ended September 30, 2005 and 2004
Three months ended Nine months ended
September 30, September 30,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenue:
Subscription
services $ 1,321,465 $ 1,226,099 $ 3,971,205 $ 3,611,455
Implementation
fees 61,609 85,442 154,502 221,958
Licenses 55,500 - 426,121 -
Maintenance 431,525 - 1,152,660 -
Professional
services 478,770 - 1,407,174 -
------------ ------------ ------------ ------------
Total
revenue 2,348,870 1,311,541 7,111,662 3,833,413
------------ ------------ ------------ ------------
Operating
expenses:
Customer
operations and
support 1,090,202 854,764 3,267,564 2,530,731
Development 333,504 369,723 1,090,259 1,172,672
Selling and
marketing 468,141 189,652 1,601,002 584,592
General and
administrative 723,796 350,245 2,077,851 1,032,987
Non-cash stock
compensation - - - 81,250
Depreciation
and
amortization 122,645 11,979 363,552 126,217
------------ ------------ ------------ ------------
Total
operating
expenses 2,738,288 1,776,363 8,400,227 5,528,449
------------ ------------ ------------ ------------
Loss from
operations (389,417) (464,822) (1,288,565) (1,695,036)
Interest
expense (454) (599,675) (5,090) (2,858,978)
Interest income 1,378 - 10,083 -
------------ ------------ ------------ ------------
Net loss (388,493) (1,064,497) (1,283,572) (4,554,014)
Stated
preferred
dividends - (305,895) - (911,035)
Payment of
damages to
certain
preferred
shareholders (40,500) - (40,500) -
------------ ------------ ------------ ------------
Net loss
applicable to
common stock $ (428,993) $(1,370,392) $(1,324,072) $(5,465,049)
============ ============ ============ ============
Net loss
applicable to
common stock per
common share -
basic and diluted $ (0.01) $ (0.14) $ (0.04) $ (0.57)
============ ============ ============ ============
Weighted average
common shares
outstanding -
basic and diluted 36,450,294 9,967,901 31,746,718 9,558,270
============ ============ ============ ============
Comprehensive
loss:
Net loss $ (388,493) $(1,064,497) $(1,283,572) $(4,554,014)
Foreign
currency
translation
adjustment (474) - (3,550) -
------------ ------------ ------------ ------------
Comprehensive loss $ (388,967) $(1,064,497) $(1,287,122) $(4,554,014)
============ ============ ============ ============
Other Information
EBITDA for the third quarter of 2005 is a loss of $0.3 million. This compares to a loss of $1.7 million for the third quarter of 2004 and $0.1 million for the second quarter of 2005.
Non-GAAP Financial Measures: A reconciliation of EBITDA to net income, the most directly comparable financial measure presented in accordance with GAAP, is set forth in this attachment to this release.
EBITDA, which is Earnings before Interest, Taxes, Depreciation and Amortization, is used by management, bankers, and investors to evaluate the company.
PRESCIENT APPLIED INTELLIGENCE, INC.
Earnings before Interest, Taxes, Depreciation and Amortization
For the Three and Nine Months Ended September 30, 2005 and 2004
Three months ended Nine months ended
September 30, September 30,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net loss $ (388,493) $(1,064,497) $(1,283,572) $(4,554,014)
Add back:
Depreciation
and
amortization 122,645 11,979 363,552 126,217
Interest
expense, net 924 (599,675) 4,993 (2,858,978)
Provision for
income taxes - - - -
------------ ------------ ------------ ------------
EBITDA $ (264,925) $(1,652,193) $ (915,028) $(7,286,775)
============ ============ ============ ============
