Attached files
file | filename |
---|---|
8-K - 8-K - COVER ALL TECHNOLOGIES INC | d29728.htm |
EX-10.1 - EX-10.1 - COVER ALL TECHNOLOGIES INC | d29728_ex10-1.htm |
Exhibit 99.1
Cover-All Technologies Inc. 55 Lane Road, Suite 300 Fairfield, NJ 07004 Tel: 973.461.5200 | FOR IMMEDIATE RELEASE |
Cover-All Announces Second Quarter 2012 Financial Results
Second Quarter, 2012 Revenues Increase 8.9% Vs. Second
Quarter, 2011
FAIRFIELD, NEW JERSEY
(August 14, 2012) Cover-All Technologies Inc. (NYSE MKT: COVR), a Delaware corporation (Cover-All or the Company), today
announced financial results for the quarter ended June 30, 2012.
Operational Highlights:
|
For the three months ended June 30, 2012, revenues were $5.4 million compared to $5.0 million for the comparable period in 2011, an increase of 8.9%. | |
|
License revenue for the three months ended June 30, 2012 was $2.3 million compared to $1.9 million for the same period in 2011, an increase of 21.8%. | |
|
Support Services revenue for the three months ended June 30, 2012 was $2.1 million compared to $2.1 million in the same period in 2011, relatively flat. | |
|
Professional Services revenue for the three months ended June 30, 2012 was $1.0 million compared to $1.0 million in the year-ago period, relatively flat. | |
|
Balance sheet remains solid with stockholders equity at $15.7 million as of June 30, 2012. The Company completed the second quarter of 2012 with $562,000 in cash, $763,000 in working capital and no long-term debt. | |
|
The release of Cover-Alls Test Studio which facilitates the automated testing of complex insurance transactions, Cover-Alls new Business Intelligence iPad app and full support for the Businessowners Policy (BOP) along with its new Policy Solution, acquisition of BlueWave claims, new Billing solution (in development), and new marketing initiatives is creating significant interest in the property and casualty marketplace and a growing pipeline. These announcements represent milestones in Cover-Alls strategy to expand from a niche product provider to one providing an enterprise suite of products and services. |
John Roblin, Chairman of the Board of Directors and Chief
Executive Officer of the Company, commented, We continue to make solid progress against both our growth and product development goals, as
evidenced by the 53.1% sequential increase in revenues and the $1.5 million positive swing in EBITDA*, a non-GAAP metric, to $830,877. As expected, our
growth is uneven from quarter to quarter reflecting the unpredictability of the exact timing of customer decisions. We continue to believe that our
total revenue for 2012 will represent a sixth consecutive year of record revenues. Our full-year outlook was based on a growing pipeline of potential
business, for both new business and upgrades for existing customers, and the sequential and year-over-year financial progress validates this
confidence. The license growth in the second quarter came from two important customers. One of them significantly upgraded to Cover-Alls new
Policy Administration platform and also licensed our Business Intelligence solution and Test Studio product. The second customer was Universal Group,
Inc., which upgraded to Cover-Alls new Policy Administration platform and its Commercial Lines products including Commercial Auto, Commercial
Package (Property, General Liability, Inland Marine, Crime), Boiler & Machinery, EPLI and Umbrella. Our overall revenue outlook includes revenue
from additional upgrades and new customers. We believe our ability to close more sales and upgrades will improve as we deploy additional systems to
serve as reference accounts.
Simultaneously, we are continuing to develop, market,
and deploy solutions to bolster our competitive position, Mr. Roblin continued. Earlier in August, we released a new
automated
testing solution, Cover-All Test Studio. This innovative
tool enables property and casualty insurers to rapidly institute and adopt product updates and changes while still being assured of quality. We also
launched our industry leading Business Intelligence App for the iPad improving the speed and ease-of-use for our customers with powerful and
configurable graphic tools and reports. Although our new billing solution and Development Studio will not be released until early in the first quarter
of 2013, we are already seeing significant interest in these offerings. Our new and focused marketing outreach is gaining traction in the marketplace,
as the industry is recognizing that Cover-All has reinvented itself and beginning to take a fresh look at us as an entirely new company, with
state-of-the-art, comprehensive offerings. Our marketplace is very competitive and the sales cycles are long (and unpredictable in many cases) but we
believe we have the modern, function-rich products, knowledgeable people and customer base to compete and win. Our second quarter progress, coupled
with our continued development and marketing progress, gives me tremendous enthusiasm for the future.
Financial Results for the Six Months Ended June 30,
2012
Total revenues for the six months ended June 30, 2012 were
$9.0 million compared to $10.2 million for the same period in 2011, a decrease of 11.8%. License revenue for the six months ended June 30, 2012 was
$2.4 million compared to $3.8 million for the same period in 2011. Support Services revenue (which represents contracted continuing revenue) was $4.3
million for the six months ended June 30, 2012, up 1.5% from $4.2 million in the same period in 2011. Professional Services revenue for the six months
ended June 30, 2012 was $2.3 million, up 7.3% compared to $2.1 million for the same period in 2011.
Total expenses (cost of revenue and operating expenses) for
the six months ended June 30, 2012 were $10.5 million, up 26.9% compared to $8.3 million in the comparable period of 2011. Operating income for the six
months ended June 30, 2012 was ($1.5 million) compared to $1.9 million in the comparable period in 2011. EBITDA was $202,000, or $0.01 per diluted
share, for the six months ended June 30, 2012 compared to $2.7 million, or $0.10 per diluted share, for the six months ended June 30, 2011. Net loss
for the six months ended June 30, 2012 was $(1.5 million), or $(0.06) per basic and diluted share (based on 25.9 million basic and diluted weighted
average shares), compared to a net income of $1.9 million, or $0.08 per basic and $0.07 per diluted share (based on 25.1 million basic and 26.4 million
diluted weighted average shares, respectively), in the same period of 2011.
Financial Results for the Three Months Ended June 30,
2012
Total revenues for the three months ended June 30, 2012
were $5.4 million compared to $5.0 million for the same period in 2011, an increase of 8.9%. License revenue for the three months ended June 30, 2012
was $2.3 million compared to $1.9 million for the same period in 2011. Support Services revenue (which represents contracted continuing revenue) was
$2.1 million for the three months ended June 30, 2012, up 1.7% from $2.1 million in the same period in 2011. Professional Services revenue for the
three months ended June 30, 2012 was $1.0 million compared to $1.0 million for the same period in 2011, staying relatively flat.
Total expenses (cost of revenue and operating expenses) for
the three months ended June 30, 2012 were $5.5 million, up 27.1% compared to $4.3 million in the comparable period of 2011. Operating income for the
three months ended June 30, 2012 was $(54,000) compared to $675,000 in the comparable period in 2011. EBITDA was $831,000, or $0.03 per diluted share,
for the three months ended June 30, 2012 compared to $1.0 million, or $0.04 per diluted share, for the three months ended June 30, 2011. Net loss for
the three months ended June 30, 2012 was $(39,000), or $(0.00) per basic and diluted share (based on 25.9 million basic and diluted weighted average
shares), compared to a net income of $681,000, or $0.03 per basic and diluted share (based on 25.2 million basic and 26.6 million diluted weighted
average shares, respectively), in the same period of 2011.
Page 2 of 7
Our results in the second quarter 2012 include an
EBITDA gain of $0.03 per diluted share caused by an increase in expense for sales/marketing and the increased costs associated with the acquisition of
the PipelineClaimsTM assets of BlueWave Technology, concluded Mr. Roblin. Our
GAAP loss of $(0.00) per diluted share includes approximately $0.03 per diluted share which was largely attributable to the continued amortization of
the development costs of our new products.
Outlook
Given the current pipeline of new customers and indications
of interest from existing customers for upgrades but taking into account the uncertainty of the timing of customer decisions as well as the reduced
amount of time remaining in 2012 to recognize professional services and support revenues, management today revised its full-year 2012 revenue goal of
between $19 million and $23 million, down from their earlier projection of $22 million to $25 million. This would represent an increase of between 8%
and 30% compared to 2011 revenue level, which was a Cover-All record.
This goal is based on the Companys current business
forecast as of the date of this press release and may be subject to risks and uncertainties (see the Forward-looking Statements heading
below), which could therefore cause actual results to differ from those projected above.
Balance Sheet
Stockholders equity was $15.7 million as of June 30,
2012 compared to $16.9 million as of December 31, 2011. Total assets increased to $20.9 million as of June 30, 2012 compared to $20.5 million as of
December 31, 2011. As of June 30, 2012, the Company had $562,000 in cash, $763,000 in working capital and no long-term debt.
Conference Call Information
Management will conduct a live teleconference to discuss
its 2012 second quarter financial results at 5:00 p.m. ET on Tuesday, August 14, 2012. Anyone interested in participating should call 1-877-941-4774 if
calling from the United States, or 1-480-629-9860 if dialing internationally. A replay will be available until August 21, 2012, which can be accessed
by dialing 1-877-870-5176 within the United States and 1-858-384-5517 if dialing internationally. Please use passcode 4558552 to access the
replay.
In addition, the call will be webcast and will be available
on the Companys website at www.cover-all.com or by visiting http://public.viavid.com/index.php?id=101379.
*Use of Non-GAAP Financial Measures
In evaluating its business, Cover-All considers and uses
EBITDA as a supplemental measure of its operating performance. The Company defines EBITDA as earnings before interest, taxes, depreciation and
amortization. The Company presents EBITDA because it believes it is frequently used by securities analysts, investors and other interested parties as a
measure of financial performance.
The term EBITDA is not defined under U.S. generally
accepted accounting principles (U.S. GAAP) and is not a measure of operating income, operating performance or liquidity presented in
accordance with U.S. GAAP. EBITDA has limitations as an analytical tool, and when assessing the Companys operating performance, investors should
not consider EBITDA in isolation or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S.
GAAP. Among other things, EBITDA does not reflect the Companys actual cash expenditures. Other companies may calculate similar measures
differently than Cover-All, limiting their usefulness as comparative tools. Cover-All compensates for these limitations by relying on its U.S. GAAP
results and using EBITDA only supplementally.
Page 3 of 7
About Cover-All Technologies Inc.
Cover-All Technologies Inc., since 1981, has been a leader
in developing sophisticated software solutions for the property and casualty insurance industry the first to deliver PC-based commercial
insurance rating and policy issuance software. Currently, Cover-All is building on its reputation for quality insurance solutions, knowledgeable people
and outstanding customer service by creating new and innovative insurance solutions that leverage the latest technologies and bring its customers
outstanding capabilities and value. With its extensive insurance knowledge, experience and commitment to quality, Cover-All continues its tradition of
developing technology solutions designed to revolutionize the way the property and casualty insurance business is conducted.
Additional information is available online at www.cover-all.com.
Cover-All®, My Insurance CenterTM (MIC) NexGen, Insurance Policy DatabaseTM (IPD) and
PipelineClaimsTM are trademarks or registered trademarks of Cover-All Technologies Inc. All
other company and product names mentioned are trademarks or registered trademarks of their respective holders.
Forward-looking Statements
Statements in this press release, other than statements of
historical information, are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements involve known and unknown risks which may cause the Companys actual results in future periods to differ
materially from expected results. Those risks include, among others, risks associated with increased competition, customer decisions, the successful
completion of continuing development of new products, the successful negotiations, execution and implementation of anticipated new software contracts,
the successful implementation of our acquisition strategies and our ability to complete or integrate acquisitions, the successful addition of personnel
in the marketing and technical areas, our ability to complete development and sell and license our products at prices which result in sufficient
revenues to realize profits and other business factors beyond the Companys control. Those and other risks are described in the Companys
filings with the Securities and Exchange Commission (SEC) over the last 12 months, including but not limited to the Companys Annual
Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on April 2, 2012, copies of which are available from the SEC or may be
obtained upon request from the Company.
For information on Cover-All, contact:
Ann Massey
Chief Financial Officer
(973) 461-5190
amassey@cover-all.com
Chief Financial Officer
(973) 461-5190
amassey@cover-all.com
Investor Contact:
Hayden IR
Brett Maas, Principal
(646) 536-7331
brett@haydenir.com
Hayden IR
Brett Maas, Principal
(646) 536-7331
brett@haydenir.com
Page 4 of 7
The following is a summary of operating highlights for the
three months and six months ended June 30, 2012 and 2011, respectively, the consolidated balance sheets as of June 30, 2012 and December 31, 2011,
respectively, and EBITDA reconciliation to net income for the three and six months ended June 30, 2012 and 2011, respectively:
Cover-All Technologies Inc. and Subsidiaries
Consolidated Statement of Operations
(Unaudited)
Consolidated Statement of Operations
(Unaudited)
Three months ended June 30, |
Six months ended June 30, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 |
2011 |
2012 |
2011 |
||||||||||||||||
Revenues: |
|||||||||||||||||||
Licenses |
$ | 2,296,000 | $ | 1,884,433 | $ | 2,425,998 | $ | 3,845,594 | |||||||||||
Support
Services |
2,141,182 | 2,105,692 | 4,281,359 | 4,219,935 | |||||||||||||||
Professional
Services |
1,001,164 | 1,005,467 | 2,283,083 | 2,127,506 | |||||||||||||||
Total
Revenues |
5,438,346 | 4,995,592 | 8,990,440 | 10,193,035 | |||||||||||||||
Cost of
Revenues: |
|||||||||||||||||||
Licenses |
1,187,770 | 869,481 | 2,155,540 | 1,386,725 | |||||||||||||||
Support
Services |
1,549,203 | 1,187,050 | 3,047,702 | 2,325,170 | |||||||||||||||
Professional
Services |
1,287,877 | 1,100,388 | 2,566,167 | 2,409,495 | |||||||||||||||
Total Cost
of Revenues |
4,024,850 | 3,156,919 | 7,789,409 | 6,121,390 | |||||||||||||||
Direct
Margin |
1,413,496 | 1,838,673 | 1,201,031 | 4,071,645 | |||||||||||||||
Operating
Expenses: |
|||||||||||||||||||
Sales and
Marketing |
812,137 | 481,915 | 1,348,584 | 872,057 | |||||||||||||||
General and
Administrative |
449,642 | 521,770 | 871,123 | 974,096 | |||||||||||||||
Acquisition
Costs |
| | 136,957 | | |||||||||||||||
Research and
Development |
205,331 | 160,425 | 359,506 | 314,237 | |||||||||||||||
Total
Operating Expenses |
1,467,110 | 1,164,110 | 2,716,170 | 2,160,390 | |||||||||||||||
Operating
(Loss) Income |
(53,614 | ) | 674,563 | (1,515,139 | ) | 1,911,255 | |||||||||||||
Other
(Income) Expense |
|||||||||||||||||||
Interest
Expense |
| | | 3,750 | |||||||||||||||
Interest
Income |
(5 | ) | (2,996 | ) | (37 | ) | (3,079 | ) | |||||||||||
Other
Income |
(14,441 | ) | (3,821 | ) | (14,539 | ) | (13,530 | ) | |||||||||||
Total
Other (Income) Expense |
(14,446 | ) | (6,817 | ) | (14,576 | ) | (12,859 | ) | |||||||||||
(Loss)
Income Before Income Taxes |
(39,168 | ) | 681,380 | (1,500,563 | ) | 1,924,114 | |||||||||||||
Income
Taxes |
| | | 37,385 | |||||||||||||||
Net (Loss)
Income |
$ | (39,168 | ) | $ | 681,380 | $ | (1,500,563 | ) | $ | 1,886,729 | |||||||||
Basic
(Loss) Earnings Per Common Share |
$ | (0.00 | ) | $ | 0.03 | $ | (0.06 | ) | $ | 0.08 | |||||||||
Diluted
(Loss) Earnings Per Common Share |
$ | (0.00 | ) | $ | 0.03 | $ | (0.06 | ) | $ | 0.07 | |||||||||
Weighted
Average Number of Common Shares Outstanding for Basic Earnings Per Common Share |
25,858,000 | 25,183,000 | 25,858,000 | 25,134,000 | |||||||||||||||
Weighted
Average Number of Common Shares Outstanding for Diluted Earnings Per Common Share |
25,858,000 | 26,615,000 | 25,858,000 | 26,426,000 |
Page 5 of 7
Cover-All Technologies Inc. and Subsidiaries
Consolidated Balance Sheet
Consolidated Balance Sheet
June 30, 2012 |
December 31, 2011 |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(unaudited) | |||||||||||
Assets: |
|||||||||||
Current
Assets: |
|||||||||||
Cash and Cash
Equivalents |
$ | 561,718 | $ | 3,281,965 | |||||||
Accounts
Receivable (Less Allowance for Doubtful Accounts of $25,000) |
3,245,380 | 1,817,793 | |||||||||
Prepaid
Expenses |
1,045,268 | 576,522 | |||||||||
Deferred Tax
Asset |
1,099,000 | 1,099,000 | |||||||||
Total Current
Assets |
5,951,366 | 6,775,280 | |||||||||
Property and
Equipment At Cost: |
|||||||||||
Furniture,
Fixtures and Equipment |
983,866 | 912,527 | |||||||||
Less:
Accumulated Depreciation |
608,480 | 633,356 | |||||||||
Property and
Equipment Net |
375,386 | 279,171 | |||||||||
Goodwill |
1,039,114 | 1,039,114 | |||||||||
Capitalized
Software (Less Accumulated Amortization of $15,654,916 and $14,134,024, Respectively) |
10,787,916 | 8,799,711 | |||||||||
Customer
Lists/Relationships (Less Accumulated Amortization of $193,093 and $126,093, Respectively) |
208,908 | 93,907 | |||||||||
Non-Competition Agreements (Less Accumulated Amortization of $142,044 and $110,044, Respectively) |
17,956 | 49,956 | |||||||||
Deferred Tax
Asset |
2,168,500 | 2,168,500 | |||||||||
Business
Acquisition |
| 1,035,821 | |||||||||
Other
Assets |
365,261 | 216,971 | |||||||||
Total
Assets |
$ | 20,914,407 | $ | 20,458,431 | |||||||
Liabilities and Stockholders Equity: |
|||||||||||
Current
Liabilities: |
|||||||||||
Accounts
Payable |
$ | 1,941525 | $ | 440,635 | |||||||
Accrued
Expenses Payable |
847,344 | 753,888 | |||||||||
Deferred
Charges |
17,515 | 43,788 | |||||||||
Unearned
Revenue |
2,381,609 | 2,298,985 | |||||||||
Total Current
Liabilities |
5,187,993 | 3,537,296 | |||||||||
Long-Term
Liabilities: |
|||||||||||
Deferred
Charges |
| | |||||||||
Total
Liabilities |
5,187,993 | 3,537,296 | |||||||||
Commitments
and Contingencies |
| | |||||||||
Stockholders Equity: |
|||||||||||
Common Stock,
$.01 Par Value, Authorized 75,000,000 Shares; 25,857,730 and 25,782,730 Shares Issued and Outstanding in 2012 and 2011, Respectively |
258,577 | 257,827 | |||||||||
Paid-In
Capital |
31,117,151 | 30,812,059 | |||||||||
Accumulated
Deficit |
(15,649,314 | ) | (14,148,751 | ) | |||||||
Total
Stockholders Equity |
15,726,414 | 16,921,135 | |||||||||
Total
Liabilities and Stockholders Equity |
$ | 20,914,407 | $ | 20,458,431 |
Page 6 of 7
Cover-All Technologies Inc. and Subsidiaries
EBITDA Reconciliation to U.S. GAAP Net Income
(unaudited)
EBITDA Reconciliation to U.S. GAAP Net Income
(unaudited)
Three months ended June 30, |
Six months ended June 30, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 |
2011 |
2012 |
2011 |
||||||||||||||||
Net (Loss)
Income |
$ | (39,168 | ) | $ | 681,380 | $ | (1,500,563 | ) | $ | 1,886,729 | |||||||||
Interest
Income (Expense), Net |
5 | 2,996 | 37 | (671 | ) | ||||||||||||||
Income Tax
Expense |
| | | 37,385 | |||||||||||||||
Depreciation |
43,252 | 38,333 | 83,112 | 81,019 | |||||||||||||||
Amortization |
826,788 | 321,601 | 1,619,891 | 650,791 | |||||||||||||||
EBITDA |
$ | 830,877 | $ | 1,044,310 | $ | 202,477 | $ | 2,655,253 | |||||||||||
EBITDA per
Common Share: |
|||||||||||||||||||
Basic |
$ | 0.03 | $ | 0.04 | $ | 0.01 | $ | 0.10 | |||||||||||
Diluted |
$ | 0.03 | $ | 0.04 | $ | 0.01 | $ | 0.10 |
Page 7 of 7