EX-99.1 2 file2.htm PRESS RELEASE


   

Company Contact:

Investor Contact:

Sal Quadrino, CFO

Joseph M. Zappulla

Helios & Matheson North America Inc.

Grannus Financial Advisors, Inc.

732-499-8228

212-681-4100

squadrino@hmna.com

jzappulla@grannusfinancial.com
   
   

Helios & Matheson North America Reports Second Quarter Financial Results

NEW YORK, New York, August 8, 2007 – Helios & Matheson North America Inc. (“Helios & Matheson”) (Nasdaq Capital Market: HMNA), an IT and Business Process Outsourcing (“BPO”) services provider to Fortune 1000 Companies and other large organizations, today reported financial results for its second quarter ended June 30, 2007. The Company reported revenue of $4.7 million for the second quarter 2007 compared to $5.9 million in the first quarter of the current year and $6.7 million for the second quarter of the previous year. Revenue for the first six months of 2007 was $10.6 million, a decrease of $2.0 million or 16 percent compared to the same period in 2006. The Company reported a net loss for the second quarter of $(568,000) or $(0.24) per basic share compared to net earnings of $211,000 or $0.09 per diluted share for the first quarter of 2007 and net earnings of $682,000 or $0.28 per diluted share for the second quarter in 2006. During the first six months of 2007, the Company incurred a net loss of $(356,000) or $(0.15) per basic share compared to net earnings of $543,000 or $0.23 per diluted share for the same period of the previous year, which included $881,000 of net proceeds received by the Company in connection with the release of claims relating to the terminated transaction with Vanguard Info-Solutions Corporation.

 

(In 000s except per share amounts)

 

Three Months Ended

 

Six Months Ended

 

 

 

6-30-07

 

6-30-06¹

 

3-31-07

 

6-30-07

 

6-30-06¹

 

Revenue

 

$

4,733

 

$

6,738

 

$

5,876

 

$

10,610

 

$

12,648

 

Gross Profit

 

$

1,159

 

$

1,813

 

$

1,971

 

$

3,130

 

$

3,425

 

Income/(loss) from operations

 

$

(597

)

$

683

 

$

159

 

$

(437

)

$

543

 

Net Income/(loss)

 

$

(568

)

$

682

 

$

211

 

$

(356

)

$

543

 

EPS per basic share

 

$

(0.24

)

$

0.29

 

$

0.09

 

$

(0.15

)

$

0.23

 

EPS per diluted share

 

$

(0.24

)

$

0.28

 

$

0.09

 

$

(0.15

)

$

0.23

 

 

¹

Includes net proceeds received by the Company in connection with the release of claims relating to the terminated transaction with Vanguard Info-Solution Corporation of $881,000 in the three and six month periods ended June 30, 2006 respectively.

The Company’s gross margin was 24.5 percent in the second quarter of 2007 compared to 33.5 percent in the first quarter of 2007 and 26.9 percent during the second quarter of 2006. The decrease in gross margin in the second quarter from the prior quarter was due to the completion of higher margin projects and lower utilization of billable professionals. For the six month period ended June 30, 2007 gross margin increased to 29.5 percent from 27.1 percent for the same period in the previous year. Selling, general and administrative costs (“SG&A”) were $1.7 million in the second quarter, a decrease of $60,000 or 3 percent from the prior quarter and compares to $2.0 million (excluding the $881,000 proceeds received by the Company in

 

 

connection with the release of claims relating to the terminated Vanguard transaction) in the second quarter of 2006. SG&A for the first six months of 2007 was $3.5 million, a decrease of $212,000 or 6 percent when compared to the comparable prior year period costs of $3.7 million (excluding the $881,000 proceeds received).

“In the second quarter, we continued to experience a decline in consulting revenue that began in the first quarter. We also completed a high margin fixed price project in the first quarter that has yet to be replaced. This, coupled with a larger mix of lower margin time and material engagements, contributed to lower revenue and gross margin,” commented Shmuel BenTov, Helios & Matheson’s president and CEO. “As we work our way through the sales cycle process to replace projects that have been completed, we are also working diligently to expand our revenue base by capitalizing on our on-shore/off-shore value proposition.”

Helios & Matheson has scheduled a conference call to present its second quarter financial results today, Wednesday, August 8, 2007, at 4:15 pm (EDT). Interested parties may access the conference call by dialing 800-926-5093 and providing the following reservation number: 21345675. The live conference call and a replay of the conference call in its entirety will be available via the Internet through MarketWire at http://www.visualwebcaster.com/event.asp?id=41588. A copy of this press release is also available at the Company’s website at http://www.easyir.com/easyir/prss.do?easyirid=F1550FDE4659A723.

About Helios & Matheson North America

Helios & Matheson has built a reputation for cutting-edge IT and BPO solutions that is exemplified by its impressive roster of Fortune 1000 customers and other large organizations. The Company focuses on a business-oriented, value-added approach to its end-to-end, IT services and business process outsourcing solutions, which include staffing, projects and outsourcing. For over 20 years, the Company has provided complete project life-cycle services in the areas of business intelligence, custom application development, support and maintenance, data supply chain, collaboration, quality assurance, project and application portfolio management, and other specific vertical solutions. The Company has offices in New York City, Clark, New Jersey, and Bangalore, India. More information about the Company can be found at its web site at www.hmna.com.

“Safe Harbor” Statements under the Private Securities Litigation Reform Act of 1995: Statements made in this press release which are not historical facts, including those that refer to Helios & Matheson North America’s plans, beliefs and intentions, are “forward-looking statements” that involve risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from the forward-looking statements, and include, but are not limited to, Helios & Matheson North America’s ability to scale its existing and any new businesses. For a more complete description of the risks that apply to the Company’s business, please refer to the Company’s filings with the Securities and Exchange Commission. The Company’s actual results may differ materially from the results anticipated in these forward-looking statements as a result of certain factors set forth under Risk Factors and elsewhere in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 29, 2007.

 

 

* * * * * Financial Statements Follow * * * * *

 

 

HELIOS & MATHESON NORTH AMERICA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Six Months Ended
June 30,

 

Three Months Ended
June 30,

 

 

 

2007

 

2006

 

2007

 

2006

 

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

10,609,764

 

$

12,648,493

 

$

4,733,370

 

$

6,737,842

 

Cost of revenues

 

 

7,480,251

 

 

9,223,831

 

 

3,574,608

 

 

4,925,055

 

Gross profit

 

 

3,129,513

 

 

3,424,662

 

 

1,158,762

 

 

1,812,787

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general & administrative

 

 

3,472,664

 

 

2,804,240

 

 

1,706,205

 

 

1,088,695

 

Depreciation & amortization

 

 

94,157

 

 

77,482

 

 

49,246

 

 

40,798

 

 

 

 

3,566,821

 

 

2,881,722

 

 

1,755,451

 

 

1,129,493

 

(Loss)/Income from operations

 

 

(437,308

)

 

542,940

 

 

(596,689

)

 

683,294

 

Other income(expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income-net

 

 

92,911

 

 

17,060

 

 

37,992

 

 

11,276

 

 

 

 

92,911

 

 

17,060

 

 

37,992

 

 

11,276

 

(Loss)/Income before income taxes

 

 

(344,397

)

 

560,000

 

 

(558,697

)

 

694,570

 

Provision for income taxes

 

 

11,832

 

 

17,500

 

 

9,000

 

 

12,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss)/income

 

 

(356,229

)

 

542,500

 

 

(567,697

)

 

681,770

 

Other comprehensive income/(loss) - foreign currency adjustment

 

 

5,227

 

 

(4,486

)

 

6,214

 

 

(2,321

)

Comprehensive (loss)/income

 

$

(351,002

)

$

538,014

 

$

(561,483

)

$

679,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss)/income per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.15

)

$

0.23

 

$

(0.24

)

$

0.29

 

Diluted

 

$

(0.15

)

$

0.23

 

$

(0.24

)

$

0.28

 

 

 

HELIOS & MATHESON NORTH AMERICA INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,
2007

 

December 31,
2006

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

3,363,789

 

$

3,849,056

 

Accounts receivable- less allowance for doubtful accounts of $215,103 at June 30, 2007, and $225,741 at December 31, 2006

 

 

3,388,705

 

 

3,676,869

 

Unbilled receivables

 

 

92,388

 

 

316,156

 

Prepaid expenses and other current assets

 

 

209,461

 

 

159,398

 

Total current assets

 

 

7,054,343

 

 

8,001,479

 

Property and equipment, net

 

 

416,708

 

 

457,223

 

Goodwill

 

 

1,140,964

 

 

1,140,964

 

Deposits and other assets

 

 

141,002

 

 

189,620

 

Total assets

 

$

8,753,017

 

$

9,789,286

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

1,785,960

 

$

2,294,929

 

Deferred revenue

 

 

37,260

 

 

285,227

 

Total current liabilities

 

 

1,823,220

 

 

2,580,156

 
               

Shareholders’ equity:

 

 

 

 

 

 

 

Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued and outstanding as of June 30, 2007, and December 31, 2006.

 

 

—

 

 

—

 

Common stock, $.01 par value; 30,000,000 shares authorized; 2,388,795 issued and outstanding as of June 30, 2007; 2,382,801 issued and outstanding as of December 31, 2006.

 

 

23,888

 

 

23,828

 

Paid-in capital

 

 

34,679,260

 

 

34,607,651

 

Accumulated other comprehensive income - foreign currency translation

 

 

9,176

 

 

3,949

 

Accumulated deficit

 

 

(27,782,527

)

 

(27,426,298

)

Total shareholders’ equity

 

 

6,929,797

 

 

7,209,130

 

Total liabilities and shareholders’ equity

 

$

8,753,017

 

$

9,789,286