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WELLPOINT SYSTEMS REPORTS RESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2010

^{Published on 2010-08-30 15:35:24 - Market Wire}
 

 Financial Summary for the second quarter and six months ended June 30, 2010 ------------------------------------------------------------------------- Qtr 2 Qtr 2 % Change YTD YTD % Change In Thousands 2009 - 2009 - CND$ 2010 2009 2010 2010 2009 2010 ------------------------------------------------------------------------- Revenue 6,852 8,734 (21.5%) 13,100 19,117 (31.5%) ------------------------------------------------------------------------- Gross Profit 3,917 6,187 (36.7%) 6,722 13,246 (49.3%) ------------------------------------------------------------------------- Adjusted EBITDA 605 2,026 (70.1%) 85 4,615 (98.2%) ------------------------------------------------------------------------- Net income (loss) (2,335) 1,559 (249.8%) (4,472) 1,030 (534.2%) ------------------------------------------------------------------------- Adjusted EBITDA per share 0.01 0.04 (75.0%) 0.00 0.10 (100.0%) ------------------------------------------------------------------------- Income (loss) per share (0.05) 0.03 (266.7%) (0.09) 0.02 (550.0%) ------------------------------------------------------------------------- 

 - Excluding exchange rate effects and non-recurring license sales from previous quarter results, Q2 2010 license sales grew by 23%; - Average deal size trend is positive, growing approximately 30% from beginning of 2009; - Closed a $650K sale of the Company's BOLO product line to a US Independent. Recent sales are expected to drive improved services revenues in the second half of 2010; - Revised focus from large platform sales to connected applications that may be cross-sold to the Company's growing installed base; - Extended the distribution channel into the Asia Pacific market with the appointment of Sales Agent, focused on key energy markets including Indonesia, Malaysia, India and China; - Attained Certified for Microsoft Dynamics (CFMD) status for WellPoint's Energy Financial Management (EFM) product, the highest level of certification Microsoft assigns following rigorous tests and customer references; - Delivered the Revenue Distribution module extending the EFM product for the US market with functionality to manage AFE tracking, joint interest billing, division of interest, international compliance & revenue distribution; - Welcomed more than 300 customers to the WellPoint User conferences in Houston and Denver; - Announced participation in Microsoft Upstream Reference Architecture, joining an ecosystem of leading software vendors and systems integrators in an ongoing collaborative effort to create a common architectural approach to IT for the oil and gas industry; - Adoption of WellPoint's Intelligent Dashboard into existing and new customers accelerating above plan; and - Delivered the Transportation module, a major enhancement to the Energy Broker (ENB) product family. 

 Notes (1) "EBITDA" is a financial measure that does not have any standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP") and may not be comparable to similar measures presented by other companies. EBITDA is a measure of the Company's operating profitability. EBITDA provides an indication of the results generated by the Company's principal business activities prior to how these activities are financed, assets are amortized or how results are taxed in various jurisdictions. Adjusted EBITDA is Standardized EBITDA(1), excluding foreign exchange gains primarily related to the US dollar denominated debt of the Company and can vary significantly depending on exchange rate fluctuations, which are beyond the control of the Company, and write downs of deferred development and intangible costs, goodwill impairment, financing costs, stock based compensation, fees and expenses on settlement of debt and losses on extinguishment of debt and after deducting the annual amount invested in respect of deferred development costs. (2) "Gross Profit" is a financial measure that does not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. Gross profit is provided to assist investors in determining WellPoint's ability to generate earnings from the sales of its products and services. Gross profit is calculated by subtracting direct expenses from revenue. 

 WELLPOINT SYSTEMS INC. Consolidated Balance Sheets (Unaudited) (in thousands of dollars) ------------------------------------------------------------------------- June 30 December 31 2010 2009 ------------------------------------------------------------------------- Assets Current assets: Cash $ - $ 505 Accounts receivable 3,458 3,189 Prepaid expenses 508 333 ----------------------------------------------------------------------- 3,966 4,026 Property and equipment 848 920 Deferred development costs 1,123 1,386 Intangible assets 9,910 10,999 Goodwill 21,284 21,091 Future income taxes 1,753 1,132 ------------------------------------------------------------------------- $ 38,884 $ 39,554 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities: Line Of Credit $ 524 $ - Accounts payable and accrued liabilities 3,959 3,274 Current income tax liability - 83 Deferred revenue 2,741 2,062 Other deferred credits 51 55 Note Payable 5,518 5,472 Current portion of capital lease obligations 54 61 Convertible debentures 9,542 8,880 ----------------------------------------------------------------------- 22,389 19,885 Capital lease obligations 76 63 Other deferred credits - 23 Convertible debentures 18,589 17,658 ------------------------------------------------------------------------- 41,054 37,629 Shareholders' equity: Share capital 14,621 14,621 Contributed surplus 2,144 2,009 Convertible debentures 8,706 8,864 Accumulated other comprehensive income (488) (888) Deficit (27,153) (22,681) ------------------------------------------------------------------------- (27,640) (23,569) ------------------------------------------------------------------------- Total shareholders' equity (2,170) 1,925 Basis of presentation ------------------------------------------------------------------------- $ 38,884 $ 39,554 ------------------------------------------------------------------------- ------------------------------------------------------------------------- WELLPOINT SYSTEMS INC. Consolidated Statements of Operations and Retained Earnings (deficit) (unaudited) (in thousands of dollars, except per share amounts) ------------------------------------------------------------------------- Three months ended Six months ended June 30 June 30 2010 2009 2010 2009 ------------------------------------------------------------------------- Revenue: License $ 2,192 $ 3,157 $ 3,970 $ 6,559 Maintenance 2,459 2,661 4,994 5,781 Professional services 2,201 2,916 4,136 6,777 ------------------------------------------------------------------------- 6,852 8,734 13,100 19,117 Direct costs 2,935 2,547 6,378 5,871 ------------------------------------------------------------------------- Gross margin 3,917 6,187 6,722 13,246 Expenses: Sales, general and administrative 1,983 2,434 3,899 5,073 Interest 1,593 1,469 3,153 2,918 Research and development 1,106 1,381 2,239 2,857 Depreciation and amortization 778 859 1,598 1,744 Facilities 310 388 634 764 Financing and amortization of debt and note payable issue costs 46 63 98 144 Foreign exchange loss (gain) 693 (1,635) 12 (828) ----------------------------------------------------------------------- 6,509 4,959 11,633 12,672 ------------------------------------------------------------------------- Net income (loss) before income taxes (2,592) 1,228 (4,911) 574 Income taxes Current expense - - - - Future expense (reduction) (257) (331) (439) (456) ------------------------------------------------------------------------- (257) (331) (439) (456) ------------------------------------------------------------------------- Net income (loss) (2,335) 1,559 (4,472) 1,030 Deficit, beginning of period (24,818) (26,398) (22,681) (25,869) ------------------------------------------------------------------------- Deficit, end of period $ (27,153) $ (24,839) $ (27,153) $ (24,839) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net income (loss) per share Basic and diluted $ (0.05) $ 0.03 $ (0.09) $ 0.02 ------------------------------------------------------------------------- -------------------------------------------------------------------------