Aftersoft Group Reports Third Quarter Financial Results

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Apr 27, 2010, 12:36 ET

BARNSLEY, England, April 27 /PRNewswire-FirstCall/ -- Aftersoft Group, Inc. (OTC Bulletin Board: ASFG), a leading provider of business automation and ecommerce solutions for the automotive aftermarket, announced the following financial results for its fiscal third quarter and three and nine months ended March 31, 2010, through the filing on April 26, 2010 of its Quarterly Report on Form 10-Q with the Securities and Exchange Commission:

(In thousands, except share and per share data)		For the Three Months Ended		For the Three Months Ended		For the Nine Months Ended		For the Nine Months Ended
		March 31, 2010		March 31, 2009		March 31, 2010		March 31, 2009
Revenues	$	5,550	$	5,027	$	18,508	$	15,877
Gross profit	$	3,058	$	2,902	$	10,582	$	8,762
Operating income (loss)	$	(211)	$	244	$	644	$	(61)
Total comprehensive loss	$	(1,156)	$	(492)	$	(1,421)	$	(8,676)
Loss per share attributed to common stockholders - basic and diluted		(0.01)		0.00		(0.01)		(0.07)
Weighted average shares outstanding - basic and diluted		84,028,138		79,123,769		83,761,308		88,291,870

The Company reported revenue of $5,550,000 for the three months ended March 31, 2010 as compared to $5,027,000 for the three months ended March 31, 2009 an increase of $523,000 or 10.5%. Operating loss was $211,000 for the three month ended March 31, 2010 as compared to income of $244,000 for March 31, 2009. Net loss before income taxes was $587,000 for the three months ended March 31, 2010 which included $62,000 of expenses from the Change in Fair Value of Derivative Liabilities, compared to a loss of $163,000 for the three months ended March 31, 2009. The Net loss was $719,000 and $315,000 for the three month periods ended March 31, 2010 and 2009 respectively.

The Company reported revenue of $18,508,000 for the nine months ended March 31, 2010 as compared to $15,877,000 for the nine months ended March 31, 2009 an increase of $2,631,000 or 16.6%. Operating income was $644,000 for the nine month ended March 31, 2010 as compared to a loss of $61,000 for March 31, 2009. Net loss before income taxes was $98,000 for the nine months ended March 31, 2010 which included $253,000 of income from the Change in Fair Value of Derivative Liabilities, compared to a loss of $5,199,000 for the nine months ended March 31, 2009. The Net Loss was $876,000 and $5,664,000 for the nine month periods ended March 31, 2010 and 2009 respectively.

Gross margins for the three month and nine month periods ended March 31, 2010 were 55% and 57% respectively and gross margins for the three month and nine month periods ended March 31, 2009 were 58% and 55% respectively.

The Company reported revenue of $1,568,000 and $3,982,000 from its US and UK operations, respectively, for the three month period ended March 31, 2010, compared to $1,769,000 and $3,257,000, respectively, during the same period in 2009. Revenue from the Company's UK operations was negatively impacted by the effect of a stronger US Dollar versus the British Pound relative to the same period a year ago. Revenue in GBP from UK operations increased from 1,988,000 GBP for the three months ended March 31, 2009 to 2,637,000 GBP for the three months ended March 31, 2010.

The Company reported revenue of $4,817,000 and $13,691,000 from its US and UK operations, respectively, for the nine month period ended March 31, 2010, compared to $4,387,000 and $11,490,000, respectively, during the same period in 2009. Revenue from the Company's UK operations was negatively impacted by the effect of a stronger US Dollar versus the British Pound relative to the same period a year ago. Revenue in GBP from UK operations increased from 7,019,000 GBP for the nine months ended March 31, 2009 to 8,567,000 GBP for the nine months ended March 31, 2010.

Commenting on the quarter, Aftersoft's CEO, Michael Jamieson, said, "The last quarter has continued to build upon the results achieved in the first six months. MAM Software in the US and UK continues to grow both revenue and income and Aftersoft Network N.A.'s revenues remain consistent with a positive increase in income. These together have enabled us to increase our Gross Profit for the three months and nine month periods and we are optimistic about the future for our Company."

About Aftersoft Group, Inc.

Aftersoft Group, Inc. (OTC Bulletin Board: ASFG) is a supplier of business and ERP supply chain management solutions to automotive parts manufacturers, distributors and retailers. Aftersoft Group provides the automotive aftermarket with a combination of business management systems, information products, and online services that together deliver benefits for all parties involved in the timely repair of a vehicle. For further information, please visit http://www.aftersoftgroup.com.

This press release contains forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the company's business including, increased competition; the ability of the company to expand its operations through either acquisitions or internal growth, to attract and retain qualified professionals, and to expand commercial relationships; technological obsolescence; general economic conditions; and other risks detailed time to time in the Company's filings with the Securities and Exchange Commission.

AFTERSOFT GROUP, INC. Consolidated Balance Sheets (In thousands, except share and per share data)
		March 31,		June 30,
		2010		2009
		(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	1,457	$	1,663
Accounts receivable, net of allowance of $161 and $87		2,445		2,154
Inventories		337		318
Prepaid expenses and other current assets		469		507
Total Current Assets		4,708		4,642

Property and Equipment, Net		891		1,028

Other Assets
Goodwill		8,924		9,548
Amortizable intangible assets, net		2,933		3,566
Software development costs, net		1,565		1,691
Other long-term assets		64		179
Total Assets	$	19,085	$	20,654

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	1,573	$	1,386
Accrued expenses and other		2,970		3,162
Payroll and other taxes		279		278
Derivative liabilities		305		-
Current portion of long-term debt, net of debt discount		5,540		1,598
Current portion of deferred revenue		386		482
Current portion of litigation liability		699		-
Taxes payable		648		708
Total Current Liabilities		12,400		7,614

Long-Term Liabilities
Deferred revenue, net of current portion		295		748
Deferred income taxes		710		880
Long-term debt, net of current portion		187		4,713
Litigation liability, net of current portion		551		-
Other		183		199
Total Liabilities		14,326		14,154

Commitments and contingencies

STOCKHOLDERS' EQUITY
Preferred stock:
Par value $0.0001 per share; 10,000,000 shares authorized, none issued and outstanding		-		-
Common stock:
Par value $0.0001 per share; 150,000,000 shares authorized, 84,042,708 and 83,462,337 shares issued and outstanding, respectively		8		8
Additional paid-in capital		29,438		30,219
Accumulated other comprehensive loss		(1,027)		(482)
Accumulated deficit		(23,660)		(23,245)
Total Stockholders' Equity		4,759		6,500

Total Liabilities and Stockholders' Equity	$	19,085	$	20,654

AFTERSOFT GROUP, INC. Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
		For the Three Months Ended March 31,				For the Nine Months Ended March 31,
		2010		2009		2010		2009
Revenues	$	5,550	$	5,027	$	18,508	$	15,877
Cost of revenues		2,492		2,125		7,926		7,115
Gross profit		3,058		2,902		10,582		8,762

Operating expenses
Research and development		754		721		2,361		2,215
Sales and marketing		493		550		1,757		1,710
General and administrative		1,746		1,134		4,973		4,117
Depreciation and amortization		276		253		847		781
Total operating expenses		3,269		2,658		9,938		8,823

Operating income (loss)		(211)		244		644		(61)

Other income (expense)
Interest expense		(314)		(413)		(1,044)		(1,213)
Write down of investment available-for-sale securities		-		-		-		(3,957)
Interest income		-		8		-		21
Change in fair value of derivative liabilities		(62)		-		253		-
Gain on settlement of liability		-		-		50		-
Other, net		-		(2)		(1)		11
Total other expense, net		(376)		(407)		(742)		(5,138)

Loss before provision for income taxes		(587)		(163)		(98)		(5,199)
Provision for income taxes		132		152		778		465
Net Loss		(719)		(315)		(876)		(5,664)

Reversal of unrealized loss on investments in available-for-sale securities		-		281		-		1,089
Foreign currency translation loss		(437)		(458)		(545)		(4,101)
Total comprehensive loss	$	(1,156)	$	(492)	$	(1,421)	$	(8,676)

Loss per share attributed to common stockholders - basic and diluted	$	(0.01)	$	-	$	(0.01)	$	(0.07)

Weighted average shares outstanding - basic and diluted		84,028,138		79,123,769		83,761,308		88,291,870