2014

SEDONA Announces Third Quarter Operating Results

KING OF PRUSSIA, Pa., Nov. 18 /PRNewswire-FirstCall/ -- SEDONA(R) Corporation (OTC Bulletin Board: SDNA) (http://www.sedonacorp.com), a leading provider of Customer and Member Relationship Management (CRM/MRM) solutions for the financial services market, today announced operating results for the three and nine month periods ended September 30, 2008.

Total revenues increased 10% to $1,081,000 for the nine months ended September 30, 2008 compared to $984,000 reported in the nine months ended September 30, 2007.

Total revenues for the three months ended September 30, 2008 and 2007 were $307,000 and $354,000, respectively, a decrease of 13%. License fee revenues totaled $94,000 and $167,000, respectively. Revenues from license fees decreased 43% due to a decline in the number of indirect license sales completed during the quarter ended September 30, 2008 as compared to the same period in 2007. The decline in license fees was offset by an increase in royalty fees from our distribution partners' software as a service (SaaS) contracts. The amount of license and services revenues that are recorded in a quarter is dependent upon many variables, including the size, complexity and delivery requirements of a transaction. For example, from time to time, the Company may enter into license and services contracts which are significantly higher than average causing a variance in quarterly comparisons. The Company does not believe that the decline in license revenue was a result of the turmoil in the current economic environment. In fact, it is possible that our target market segment may find the functionality of our CRM/MRM software to be beneficial in coping with the current economic environment by identifying and improving upon key performance metrics which strengthen their position in the market.

Services revenues totaled $213,000 for the three months ended September 30, 2008, compared to $187,000 reported during the same three months in 2007, an increase of 14% or $26,000. The increase in services revenue was primarily due to growth in recurring maintenance revenue from our entire client base.

For the nine months ended September 30, 2008, revenue from license fees increased to $442,000 compared to $390,000 reported for the same period in 2007, an increase of 13% or $52,000. The increase in license revenue is due to additional direct license sales in the nine months ended September 30, 2008 as compared to 2007. Services revenues also increased to $639,000 for the nine months ended September 30, 2008 compared to $594,000 reported in the same period in 2007, an increase of 8% or $45,000. The increase in services revenue is attributable to increases in professional services and maintenance from the Company's expanding customer base.

In addition, as of September 30, 2008, deferred revenue from our partners' SaaS product sales to new customers increased 40% to $697,000 compared to the $499,000 reported as of September 30, 2007.

Gross profit reported for the third quarter of 2008 was $240,000, or 78% of revenues, compared to $272,000, or 77% of revenues, in the third quarter 2007. For the nine month period, gross profit was $927,000, or 86% of revenues, compared to $712,000, or 72% of revenues, a year ago. The increases in gross profit as a percentage of revenue are primarily due to the stability of the current version of the Company's CRM/MRM application as well as efficiencies in delivering services which resulted in lower cost of sales.

Total operating expenses, excluding certain litigation costs, increased 14% to $668,000 in the third quarter of 2008, compared to $586,000 in the quarter ended September 30, 2007, mainly due to accrued compensation relating to the departure of the Company's former CEO. In addition, in 2006, the Company brought an action against another party to protect the Company's intellectual property. Litigation fees and expenses related to this matter increased 252% from $66,000 to $232,000, as the discovery phase of the litigation was completed.

For the nine month period ended September 30, 2008, total operating expenses, excluding certain litigation costs, increased 3% or $61,000 to $1,881,000 compared to $1,820,000 reported in the same period in 2007. The increase in such operating expenses is a result of accrued compensation related to the departure of the Company's former CEO during the nine months ended September 30, 2008. Litigation fees and expenses related to the protection of the Company's intellectual property increased 186% or $453,000, from $243,000 to $696,000 for the nine months ended September 30, 2008, as the litigation progressed.

For the three months ended September 30, 2008, including the cost of litigation related to the Company's intellectual property rights, the Company reported a basic and diluted net loss of $827,000, or ($0.01) per share compared to a basic and diluted net loss of $538,000, or ($0.01) per share in the quarter ended September 30, 2007. For the nine month period ended September 30, 2008, including the cost of litigation related to intellectual property rights, the Company reported a basic and diluted net loss of $2,390,000 or ($0.02) per share, compared to $1,810,000 or ($0.02) per share, in the same quarter a year ago.

Recent developments in the third quarter include:

-- NE PA Community Federal Credit Union selected SEDONA for their MRM solution; (see press release dated September 30, 2008)

-- Post Office Employees Credit Union selected Intarsia, SEDONA's MRM technology and services solution; (see press release dated July 18, 2008)

For more details concerning the Company's operating results, please consult the Company's Form 10-Q filed with the Securities and Exchange Commission on November 14, 2008.

About SEDONA Corporation

SEDONA(R) Corporation (OTC Bulletin Board: SDNA) provides multi-vertical Customer/Member Relationship Management (CRM/MRM) solutions and services specifically tailored to the financial services market. SEDONA's CRM/MRM solution, Intarsia(R), is designed and priced to support and meet the needs of the multiple lines of business of banks and credit unions. Intarsia provides the entire financial services institution with a complete and accurate view of their customers' and prospects' relationships and interactions. By utilizing SEDONA's CRM/MRM solution and services, SEDONA's clients effectively identify, acquire, foster, and retain loyal, profitable customers. For additional information, visit the SEDONA web site at http://www.sedonacorp.com or call 1-800-815-3307.

Forward-Looking Statements

Statements made in this news release that relate to future plans, events or performances are forward-looking statements. Any statement containing words such as "believes," "anticipates," "plans," or "expects," and other statements which are not historical facts contained in this release are forward-looking, and these statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements.

  SEDONA(R) and Intarsia(R) are registered trademarks of SEDONA Corporation.
      All other trade names are the property of their respective owners.
          This press release and prior releases are available on the
          SEDONA Corporation web site at http://www.sedonacorp.com.

SOURCE SEDONA Corporation



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http://www.sedonacorp.com

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