EX-99.1 2 w39865exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1
(ACECOMM LETTERHEAD)
ACE*COMM REPORTS RESULTS
FOR THE FOURTH QUARTER AND FISCAL YEAR 2007
Fourth Quarter Fiscal 2007 Highlights
    Revenue increased 29% over 3Q FY07
 
    $4.2 million in new growth financing secured
 
    Increased to 4 the number of wireless operators implementing Parent Patrol®
Gaithersburg, MD — September 18, 2007 - ACE*COMM Corporation (ACEC.PK), a global provider of network business support and advanced operations support systems (BSS and OSS) solutions, today reported financial results for the fourth quarter and fiscal year 2007, both ending June 30, 2007.
Revenues for the fourth quarter of 2007 totaled $4.0 million compared to $3.1 million in Q3, 2007 and $6.5 million for the same quarter in fiscal year 2006. Net loss for the quarter was $1.6 million, or $0.09 per fully diluted share, compared to net loss of $2.6 million or $0.14 per share for Q3, and $0.5 million, or $0.03 per fully diluted share, for the same quarter a year ago.
For the year ended June 30, 2007, the Company recorded revenues of $13.3 million, compared to $26.7 million for fiscal year 2006. The Company had a net loss and loss per fully diluted share of $9.5 million and $0.53, respectively, compared to a net income and income per fully diluted share of $0.3 million and $0.02 for fiscal year 2006.
“After three quarters of weak results, our numbers are moving in the right direction this quarter and we are at the top of the range we pre-announced last month,” said Jim Greenwell CEO of ACE*COMM. “Although the target markets we are now focusing on are still developing, the actions we took to align our business with industry dynamics in these areas are starting to pay off. The restructuring of our organization, introduction of new management and our recent new financing are all helping position ACE*COMM for possible growth next fiscal year. We are also encouraged by the growing opportunities we are seeing for sales of our new products.
“Recent indications are that a number of Tier 1 and Tier 2 market operators who will be offering new value-added services — like Parent Patrol® — to their subscribers will be deciding how best to move forward in the coming year. Some of these are already using our technology in their service offerings and we consequently expect that the number of opportunities to which we will be exposed will increase. We now have four wireless operator customers in various stages of deployment of Parent Patrol® and continue in discussions with some of the largest mobile service providers, both directly and through our channel partners, Alcatel-Lucent and VeriSign. We believe that with AT&T’s recent announcement about its launch of wireless controls, this market will now move at a more robust pace and we are prepared for the challenge.”
 
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Steve Delmar, CFO of ACE*COMM, added, “Since our management change and reorganization, the business has been rationalized and we continue to benefit from our actions. We realized notable improvements in revenue and the bottom line in the fourth quarter as we benefited from actions taken in the third quarter that reduced costs by about $3.0 million annually. In addition, the money we raised in the fourth quarter has provided the foundation to carry out our plan to penetrate the value-added services market and ultimately return to profitability.”
Mr. Greenwell concluded, “In the year ahead, we will build on the promising base of business we have established, capture our share of the additional opportunities that are presented, and continue to develop new technology in the markets that show the most potential for us to succeed. In addition to focusing on innovation and growth, the management team of ACE*COMM is committed to controlling expenses and achieving profitable growth.”
ACE*COMM will host an earnings teleconference call Wednesday afternoon, September 19, 2007 at 4:00 pm, Eastern Daylight Time, to discuss the fourth quarter fiscal year 2007 results. To participate, please call (866) 261-7147. When prompted, provide the operator with the ACE*COMM reservation number 1143572 and the title of the call “ACE*COMM 4th Quarter 2007 Earnings”. An audio replay of the call will be made available after 7:00 pm, on September 19, 2007 through 11:59 pm on September 26, 2007 and can be accessed by dialing (888) 266-2081 using access code 1143572.
About ACE*COMM
ACE*COMM is a global provider of advanced operations support systems (OSS) and service delivery solutions for telecommunications service providers and enterprises. ACE*COMM’s advanced OSS solutions are applicable to a range of legacy through next-generation networks that include wired, wireless, voice, data, multimedia and Internet communications networks. Network operators use them for revenue management, cost reduction, improved operational efficiency, acceleration of time-to-market for new services, and more effective customer care. ACE*COMM’s service delivery solutions provide mobile service providers with award-winning, in-demand consumer-oriented services to help them achieve and sustain market share, generate new revenue and position themselves as market innovators.
For more than 20 years, ACE*COMM technology has been effectively deployed for more than 300 customers, spanning more than 4,000 installations in 70 countries worldwide. ACE*COMM-installed products are currently enabling the success of customers and partners such as Alcatel-Lucent, AT&T, Bell Aliant, Cincinnati Bell, Cisco, General Dynamics, IBM, Motorola, Northrop Grumman, Siemens, and VeriSign. Headquartered in Gaithersburg, MD, ACE*COMM has corporate offices in Australia, Canada and the UK. ACE*COMM is an ISO 9001 quality standard compliant company. For more information, visit www.acecomm.com.
 
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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: the failure of anticipated demand to materialize, delays or cancellations of orders due to various factors, including business and economic conditions in the U.S. and foreign countries; industry-wide slowdowns, any limitations on customers’ financial resources, the continued convergence of voice and data networks, the continuing success of the Company’s strategic alliances for product development and marketing, customer purchasing and budgetary patterns or lack thereof; pricing pressures and the impact of competitive products; the timely development and acceptance of new products; the Company’s ability to adequately support its operations, and other risks detailed from time to time in the Company’s Report on Form 10-Q and other reports filed with the Securities Exchange Commission.
     
Media Relations Contact:
  Investor Relations Contacts:
media@acecomm.com
  Jody Burfening/Harriet Fried
+1 301.721.3000
  hfried@lhai.com
 
  +1 212.838.3777
 
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ACE*COMM CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share amounts)
                 
    June 30,     June 30,  
    2007     2006  
Assets
 
Current assets:
               
Cash and cash equivalents
  $ 2,622     $ 946  
Restricted cash
    349        
Accounts receivable, net
    3,831       10,981  
Inventories, net
    769       838  
Deferred contract costs
          18  
Prepaid expenses and other
    688       571  
 
           
Total current assets
    8,259       13,354  
Property and equipment, net
    749       787  
Goodwill
    386       522  
Acquired intangibles, net
    512       1,041  
Other non-current assets
    597       657  
 
           
Total assets
  $ 10,503     $ 16,361  
 
           
 
               
Liabilities and Stockholders’ Equity
 
Current liabilities:
               
Borrowings
  $     $ 2,970  
Accounts payable
    880       1,114  
Accrued expenses
    1,758       1,940  
Accrued compensation
    878       606  
Deferred revenue
    3,798       3,617  
 
           
Total current liabilities
    7,314       10,247  
Long-term notes payable
    3,018       17  
 
           
Total liabilities
    10,332       10,264  
 
           
 
               
Commitments and contingencies
               
 
               
Stockholders’ equity:
               
 
               
Preferred stock, $.01 par value, 5,000,000 shares authorized, none issued and outstanding
           
Common stock, $.01 par value, 45,000,000 shares authorized, 18,647,962 and 17,788,032 shares issued and outstanding
    186       178  
Additional paid-in capital
    38,722       35,257  
Other accumulated comprehensive loss
    (28 )     (91 )
Accumulated deficit
    (38,709 )     (29,247 )
 
           
Total stockholders’ equity
    171       6,097  
 
           
 
               
Total liabilities and stockholders’ equity
  $ 10,503     $ 16,361  
 
           
 
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ACE*COMM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
                                 
    For the three months ended     For the twelve months ended  
    June 30,     June 30,  
    2007     2006     2007     2006  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
Revenue
                               
Licenses and hardware
  $ 1,363     $ 2,714     $ 3,670     $ 12,875  
Services
    2,645       3,831       9,612       13,796  
 
                       
Total revenue
    4,008       6,545       13,282       26,671  
 
                               
Cost of licenses and hardware revenue
    470       1,165       1,900       2,970  
Cost of services revenue
    2,059       1,899       7,489       7,171  
 
                       
Total cost of revenue
    2,529       3,064       9,389       10,141  
 
                               
Gross profit
    1,479       3,481       3,893       16,530  
 
                               
Selling, general, and administrative
    2,548       2,923       10,862       12,159  
Research and development
    375       1,040       2,229       3,866  
 
                       
Income (loss) from operations
    (1,444 )     (482 )     (9,198 )     505  
 
                               
Interest expense
    76       48       208       223  
 
                       
Income (loss) before income taxes
    (1,520 )     (530 )     (9,406 )     282  
Income tax (benefits) expense
    55       (38 )     56       (37 )
 
                       
Net income (loss)
  $ (1,575 )   $ (492 )   $ (9,462 )   $ 319  
 
                       
 
                               
Basic net income (loss) per share
  $ (0.09 )   $ (0.03 )   $ (0.53 )   $ 0.02  
 
                       
Diluted net income (loss) per share
  $ (0.09 )   $ (0.03 )   $ (0.53 )   $ 0.02  
 
                       
 
                               
Shares used in computing net income (loss) per share:
                               
Basic
    18,006       17,082       17,861       16,899  
 
                       
Diluted
    18,006       17,082       17,861       17,442  
 
                       
 
© 2007 ACE*COMM   News Release   5 of 5
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