PPID News Prescient Applied Intelligence Reports Second Quarter Results
WEST CHESTER, Pa.--(BUSINESS WIRE)--Aug. 11, 2006--Prescient Applied Intelligence, Inc. (OTCBB:PPID), a leading provider of supply chain and advanced commerce solutions for retailers and suppliers, today reported results for the second quarter ended June 30, 2006.
For the second quarter, the Company reported a net loss of $0.5 million, or $0.01 per share that includes compensation expense of $0.1 million as a result of the Company's adoption of SFAS No. 123R (accounting for stock-based employee compensation) in the first quarter of 2006. This compares to a net loss of $0.2 million, or $0.01 per share for the prior year quarter.
For the second quarter, total revenue was $2,379,000 down 4% from $2,472,000 in the prior year quarter. As compared to the prior year quarter, there was a 4% increase in subscription revenue to $1,384,000 and a 9% increase in maintenance revenue to $382,000, which was offset by a 24% decrease in license revenue to $217,000 and a 22% decrease in consulting services revenue to $395,000. The decrease in services revenue is related to one large implementation completed in the comparable period last year.
"Attitudes toward licensed software have shifted, and companies are looking at more cost-effective models," said Jane Hoffer, President and CEO, Prescient. "To address the accelerating changes in the market, Prescient will continue its expansion of subscription-based services, with an aggressive push to convert its supply chain business from license to subscription. These efforts are in addition to the numerous cost cutting measures taken since the end of the second quarter, which are anticipated to result in improved bottom-line performance in later periods."
Cash used in operations was $0.1 million during the second quarter as compared to $1.0 million used in the prior year quarter. Cash and cash equivalents were $587,260 as of June 30, 2006, down from $716,345 as of December 31, 2005.
Highlights for the second quarter include:
Existing client expansion:
In a scan based trading (SBT) expansion, a national grocery retailer who has been conducting SBT with Prescient since 2002 in two of its divisions, began an SBT expansion across five of its remaining 14 divisions.
A Northeast grocery retailer expanded its Prescient supply chain footprint in a second quarter deal that included: a move from limited use to an enterprise agreement; an upgrade to Prescient 7.0; and a hosting agreement to support its technology expansion.
Integration of Advanced Commerce and Supply Chain
During the second quarter, Prescient released Store Level Replenishment (SLR), an on demand solution designed for Prescient scan based trading (SBT) suppliers who deliver product directly to the store. This offering uses the data gathered at the point of sale as the data stream to feed its supply chain planning software. SLR integrates Prescient's advanced commerce and supply chain solutions, and helps Prescient's direct store delivery clients optimize store-level replenishment execution with the ultimate goal of having product on the shelf when it needs to be.
"By using scan sales data to drive forecasting and replenishment execution, retailers and suppliers are better able to reduce out of stocks and meet consumer demand," said Hoffer. "Prescient's Store Level Replenishment offering supports our vision of the retail supply chain - the Consumer ZOOM Demand Network(TM) -- by providing solutions that put the consumer at the center of the retail transaction."
About Prescient Applied Intelligence:
Prescient, founded in 1985 (OTCBB:PPID), is a leading provider of supply chain and advanced commerce solutions for retailers and suppliers. 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," "if", "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 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.
(Tables Follow)
Prescient Applied Intelligence, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2006 and December 31, 2005
June 30, December 31,
2006 2005
------------- -------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $587,260 $716,345
Accounts receivable, net of allowance for
doubtful accounts of $124,000 at June
30, 2006 and $168,000 at December 31,
2005 1,742,805 1,957,173
Prepaid and other current assets 175,915 138,009
------------- -------------
Total current assets 2,505,980 2,811,527
Furniture, equipment and leasehold
improvements, net 206,132 224,419
Intangible assets, net 1,943,750 2,143,750
Goodwill 17,380,456 17,380,456
Other assets 49,342 49,342
------------- -------------
Total Assets $22,085,660 $22,609,494
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under accounts receivable
financing arrangement $223,516 $-
Accounts payable 542,216 299,514
Accrued expenses 1,310,399 1,340,864
Deferred revenues 1,005,673 1,083,216
------------- -------------
Total Current Liabilities 3,081,804 2,723,594
Deferred maintenance - long-term portion 2,746 12,672
Stockholders' equity
Series E Preferred Stock, $.001 par
value; 1,660 shares authorized; 1,657
shares issued and outstanding at June
30, 2006 and December 31, 2005
(liquidation value $16,567,747 at June
30, 2006 and December 31, 2005) 16,567,747 16,567,747
Series G Preferred Stock, $.001 par
value; 480 shares authorized; 479.9
shares issued and outstanding at June
30, 2006 and December 31, 2005
(liquidation value $4,798,838 at June
30, 2006 and December 31, 2005) 4,798,838 4,798,838
Common stock, $.001 par value;
400,000,000 shares authorized;
43,645,703 shares issued and outstanding
at June 30, 2006 and December 31, 2005 43,645 43,645
Additional paid-in-capital 103,773,863 103,501,178
Accumulated deficit (106,177,079) (105,034,162)
Cumulative translation adjustment (5,904) (4,018)
------------- -------------
Total stockholders' equity 19,001,110 19,873,228
------------- -------------
Total Liabilities and Stockholders'
Equity $22,085,660 $22,609,494
============= =============
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
For the Three and Six Months Ended June 30, 2006 and 2005
Three months ended Six months ended
June 30, June 30,
2006 2005 2006 2005
----------- ----------- ------------ -----------
Revenue:
Subscription
services $1,384,166 $1,326,234 $2,813,190 $2,649,740
Licenses 217,224 286,588 437,224 370,621
Maintenance 382,492 352,039 797,971 721,135
Professional services 395,351 506,733 743,389 1,021,296
----------- ----------- ------------ -----------
Total
revenue 2,379,233 2,471,594 4,791,774 4,762,792
Operating expenses:
Customer operations
and support 909,340 1,085,233 1,999,178 2,177,362
Development 319,720 341,381 674,353 756,755
Selling and marketing 576,881 563,056 1,210,030 1,132,861
General and
administrative 906,090 607,209 1,728,129 1,354,055
Depreciation and
amortization 117,468 121,402 236,389 240,907
----------- ----------- ------------ -----------
Total
operating
expenses 2,829,499 2,718,281 5,848,079 5,661,940
----------- ----------- ------------ -----------
Loss from operations (450,266) (246,687) (1,056,305) (899,148)
Interest expense (911) (3,273) (2,937) (4,636)
Interest income - 5,953 - 8,705
----------- ----------- ------------ -----------
Net loss (451,177) (244,007) (1,059,242) (895,079)
Deemed Dividend on
Series E Preferred
Stock - - (83,675) -
----------- ----------- ------------ -----------
Net loss applicable to
common stockholder $(451,177) $(244,007) $(1,142,917) $(895,079)
=========== =========== ============ ===========
Net loss per common
share - Basic and
diluted $(0.01) $(0.01) $(0.03) $(0.03)
=========== =========== ============ ===========
Weighted average
common shares
outstanding - basic
and diluted 43,645,703 31,995,769 43,645,703 29,355,951
=========== =========== ============ ===========
Comprehensive loss:
Net loss $(451,177) $(244,007) $(1,059,242) $(895,079)
Foreign currency
translation
adjustment (648) (1,957) (1,886) (3,076)
----------- ----------- ------------ -----------
Comprehensive (loss) $(451,825) $(245,964) $(1,061,128) $(898,155)
=========== =========== ============ ===========
