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2007 Press Releases
Workstream Inc. Announces Fiscal 2007 Third Quarter Results
MAITLAND, Fla.--(BUSINESS WIRE)-- Workstream Inc. (NASDAQ - WSTM), a leading provider of On-Demand Compensation, Performance and Talent Management Solutions, today announced its fiscal 2007 third quarter results for the period ended February 28, 2007. All figures are in U.S. dollars.Total revenue for the third quarter was $7.0 million compared to $6.7 million in the prior year's comparable period, an increase of $0.3 million or 4%. EBITDA for the third quarter of fiscal 2007, before non-cash compensation expense, amounted to ($1.4) million or ($.03) per share, compared to an EBITDA loss of ($1.8) million, or ($.04) per share in the third quarter of fiscal 2006 (GAAP reconciliation shown below). The Company's net loss for the quarter ended February 28, 2007 was $4.4 million, or ($.09) per share, compared to a net loss of $3.4 million, or ($.07) per share, in last year's comparable quarter. Significantly contributing to the increased loss were interest and related charges associated with the $15 million financing that was put in place in October 2006.
I am firmly convinced that the market opportunity and growth potential for our Company is as strong as ever," said Deepak Gupta, President and CEO of Workstream. "Over the past few months, we have put in place and are now executing on a very focused strategy to strengthen our existing business and products and more importantly, to accelerate our revenue growth."
"The marketplace is rapidly migrating from recruiting applications to highly configurable and functional Compensation and Performance products," Gupta went on to say. "With our already established and market leading products in these two Talent Management solutions, we are taking immediate steps to institute the appropriate sales and marketing execution engines to take full advantage of this market shift."
Total revenue for the nine months ended February 28, 2007 was $21.9 million compared to $20.3 million in the prior year's comparable period, an increase of $1.6 million or 7.9%. EBITDA for the nine months of fiscal 2007, before non-cash compensation expense, amounted to ($2.3) million or ($.05) per share, compared to an EBITDA loss of ($5.5) million, or ($.11) per share for the nine months of fiscal 2006 (GAAP reconciliation shown below), an improvement of $3.2 million or 58%. The Company's net loss for the nine months ended February 28, 2007 was $9.7 million, or ($.19) per share, compared to a net loss of $10.6 million, or ($.21) per share, in last year's comparable quarter.
Management will host a conference call at 5:00 p.m. ET on Wednesday, April 4, 2007. The dial in number to participate in the call is 866-898-9626 for North American participants and 800-8989-6323 for those outside of North America. The passcode is 3217918#. The instant replay number for the call will be available until April 11, 2007 by calling 800-408-3053 access code 3217918#.
EBITDA and EBITDA per share are non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. EBITDA is commonly defined as earnings before interest, taxes, depreciation and amortization. We believe that EBITDA provides useful information to investors as it excludes transactions not related to the core cash operating business activities. We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash operations. All companies do not calculate EBITDA in the same manner, and EBITDA as presented by Workstream may not be comparable to EBITDA presented by other companies. Workstream defines EBITDA as earnings or loss before interest, taxes, depreciation amortization and non-recurring goodwill impairment. Included, following the financial statements, is a reconciliation of net loss to EBITDA loss and EBITDA per share that should be read in conjunction with the financial statements.
About Workstream Inc.
Workstream provides on-demand Human Capital Management solutions and services that help companies manage the entire employee lifecycle - from recruitment to retirement. Workstream's TalentCenter provides a unified view of all Workstream products and services including Recruitment, Performance, Compensation, Development and Transition. Access to TalentCenter is offered on a monthly subscription basis under an on-demand software delivery model to help companies build high performing workforces, while controlling costs. With offices across North America, Workstream services customers including Chevron, The Gap, Home Depot, Kaiser Permanente, Motorola, Nordstrom, Samsung, Sony Music Canada, VISA and Wells Fargo. For more information visit www.workstreaminc.com or call toll free 1-866-470-WORK.
This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations or beliefs of Workstream's management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: inability to grow our client base and revenue because of the number of competitors and the variety of sources of competition we face; client attrition; inability to offer services that are superior and cost effective when compared to the services being offered by our competitors; inability to further identify, develop and achieve success for new products, services and technologies; increased competition and its effect on pricing, spending, third-party relationships and revenues; as well as the inability to enter into successful strategic relationships and other risks detailed from time to time in filings with the Securities and Exchange Commission.
WORKSTREAM INC. |
CONSOLIDATED BALANCE SHEETS |
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February 28, 2007 |
May 31, 2006 |
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(unaudited) |
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ASSETS |
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Current assets: |
Cash and cash equivalents |
$3,254,089 |
$4,577,040 |
Restricted cash |
493,320 |
3,095,348 |
Short-term investments |
3,389 |
302,197 |
Accounts receivable, net |
4,325,032 |
3,100,779 |
Prepaid expenses and other assets |
867,026 |
527,876 |
Total current assets |
8,942,856 |
11,603,240 |
Cash held as compensating balance |
10,000,000 |
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Property and equipment, net |
2,595,592 |
1,789,739 |
Other assets |
210,330 |
87,468 |
Acquired intangible assets, net |
3,897,159 |
8,067,423 |
Goodwill |
45,276,411 |
44,721,859 |
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TOTAL ASSETS |
$70,922,348 |
$66,269,729 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
Accounts payable |
$1,540,267 |
$2,476,980 |
Accrued liabilities |
2,253,878 |
2,345,878 |
Line of credit |
- |
2,537,246 |
Accrued compensation |
1,196,597 |
1,073,239 |
Current portion of long-term obligations |
664,888 |
896,293 |
Deferred revenue |
3,631,046 |
3,360,766 |
Total current liabilities |
9,286,676 |
12,690,402 |
Long-term obligations |
14,569,587 |
288,269 |
Deferred revenue |
184,784 |
268,727 |
Total liabilities |
24,041,047 |
13,247,398 |
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Commitments and contingencies |
- |
- |
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STOCKHOLDERS’ EQUITY |
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Common stock, no par value: 51,531,152 and 50,960,845 |
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shares issued and outstanding, respectively |
112,549,177 |
111,991,328 |
Additional paid-in capital |
10,613,403 |
7,547,393 |
Accumulated other comprehensive loss |
(914,202) |
(871,781) |
Accumulated deficit |
(75,367,077) |
(65,644,609) |
Total stockholders’ equity |
46,881,301 |
53,022,331 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$70,922,348 |
$66,269,729 |
WORKSTREAM INC. |
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS |
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Three Months ended February 28, |
Nine Months ended
February 28, |
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2007 |
2006 |
2007 |
2006 |
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Revenues: |
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Software |
$2,497,246 |
$2,748,900 |
$7,607,435 |
$7,703,253 |
Professional services |
888,777 |
612,808 |
3,334,811 |
2,195,233 |
Rewards and discount products |
1,365,064 |
1,582,087 |
4,441,049 |
4,877,777 |
Career services |
2,261,335 |
1,791,250 |
6,549,687 |
5,500,717 |
Revenues, net |
7,012,422 |
6,735,045 |
21,932,982 |
20,276,980 |
Cost of revenues: |
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Rewards and discount products |
1,170,280 |
1,169,312 |
3,578,714 |
3,683,797 |
Other |
728,990 |
600,484 |
2,111,824 |
2,386,804 |
Cost of revenues (exclusive of the amortization and depreciation expense noted below) |
1,899,270 |
1,769,796 |
5,690,538 |
6,070,601 |
Gross profit |
5,113,152 |
4,965,249 |
16,242,444 |
14,206,379 |
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Operating expenses: |
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Selling and marketing |
1,995,558 |
1,813,258 |
5,553,445 |
4,879,292 |
General and administrative |
3,876,064 |
3,606,542 |
10,890,740 |
11,064,856 |
Research and development |
896,733 |
1,407,341 |
2,794,359 |
3,816,118 |
Amortization and depreciation |
1,677,404 |
1,570,251 |
4,888,531 |
5,031,208 |
Total operating expenses |
8,445,759 |
8,397,392 |
24,127,075 |
24,791,474 |
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(3,332,607) |
(3,432,143) |
(7,884,631) |
(10,585,095) |
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Interest and other income |
188,274 |
50,269 |
430,830 |
177,774 |
Interest and other expense |
(1,206,883) |
(44,727) |
(2,168,033) |
(111,738) |
Other income (expense), net |
(1,018,609) |
5,542 |
(1,737,203) |
66,036 |
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Loss before income tax |
(4,351,216) |
(3,426,601) |
(9,621,834) |
(10,519,059) |
Current income tax (expense)benefit |
(29,428) |
7,276 |
(100,626) |
(41,355) |
NET LOSS FOR THE PERIOD |
$(4,380,644) |
$(3,419,325) |
$(9,722,460) |
$(10,560,414) |
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Weighted average number of common shares outstanding |
51,258,672 |
49,994,178 |
51,531,152 |
49,457,662 |
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Basic and diluted net loss per share |
$(0.09) |
$(0.07) |
$(0.19) |
$(0.21) |
WORKSTREAM INC. |
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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Nine Months ended February 28, |
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2007 |
2006 |
Cash provided by (used in) operating activities: |
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Net loss for the period |
(9,772,464) |
(10,560,414) |
Adjustments to reconcile net loss to net cash used in |
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operating activities: |
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Amortization and depreciation |
4,851,418 |
4,991,076 |
Provision for bad debt |
271,892 |
399,725 |
Non-cash compensation |
673,510 |
172,569 |
Non-cash interest expense |
1,372,801 |
- |
Non-cash payment to consultants |
- |
42,061 |
Change in long-term portion of deferred revenue |
(83,943) |
- |
Net change in operating components of working capital: |
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Accounts receivable |
(1,752,127) |
(62,958) |
Prepaid expenses and other assets |
(164,090) |
(69,868) |
Accounts payable and accrued expenses |
(923,254) |
1,061,993 |
Deferred revenue |
278,050 |
923,030 |
Net cash used in operating activities |
(5,198,208) |
(3,102,786) |
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Cash provided by (used in) investing activities: |
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Purchase of property and equipment |
(1,595,392) |
(990,784) |
Decrease in restricted cash |
2,747,943 |
298,474 |
Sale of short-term investments |
77,889 |
72,699 |
Net cash provided by/used in investing activities |
1,230,440 |
(619,611) |
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Cash provided by (used in) financing activities: |
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Proceeds from financing, net of financing costs |
14,650,000 |
- |
Cash equivalents held as compensating balances |
(10,000,000) |
- |
New Capital leases |
1,097,501 |
- |
Repayment of long-term obligations |
(827,728) |
(1,628,960) |
Line of credit, net activity |
(2,387,351) |
138,696 |
Proceeds from exercise of options and warrants |
- |
10,836 |
Net cash provided by/(used in) financing activities |
2,532,422 |
(1,479,428) |
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Effect of exchange rate changes on cash and cash equivalents |
112,394 |
(277,743) |
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Net decrease in cash and cash equivalents |
(1,332,951) |
(5,479,568) |
Cash and cash equivalents, beginning of period |
4,557,040 |
11,811,611 |
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Cash and cash equivalents, end of period |
3,254,089 |
6,332,043 |
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WORKSTREAM INC. |
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UNAUDITED RECONCILIATION OF EARNINGS OR LOSS
BEFORE INTEREST, DEPRECIATION, AMORTIZATION (EBITDA) |
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Three Months ended
February 28, |
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2007 |
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2006 |
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Net loss, per GAAP |
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($4,380,645) |
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($3,419,325) |
Income tax expense |
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29,428 |
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(7,276) |
Interest and other expense |
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1,206,883 |
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44,727 |
Interest and other income |
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(188,274) |
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(50,269) |
Amortization and depreciation |
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1,677,404 |
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1,570,251 |
Non-cash compensation |
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245,686 |
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44,558 |
EBITDA (loss) |
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$(1,409,517) |
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$(1,817,334) |
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Weighted average number of common shares outstanding |
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51,258,672 |
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49,994,178 |
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Basic and diluted loss per share, per GAAP |
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$(0.09) |
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$(0.07) |
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Basic and diluted EBITDA loss per share |
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$(0.03) |
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$(0.04) |
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Nine Months ended
February 28, |
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2007 |
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2006 |
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Net loss, per GAAP |
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($9,722,460) |
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($10,560,414) |
Income tax expense |
|
100,626 |
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41,355 |
Interest and other expense |
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2,168,033 |
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111,738 |
Interest and other income |
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(430,830) |
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(177,774) |
Amortization and depreciation |
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4,888,531 |
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5,031,208 |
Non-cash compensation |
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673,510 |
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44,558 |
EBITDA (loss) |
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$(2,322,591) |
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$(5,509,329) |
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Weighted average number of common shares outstanding |
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51,258,672 |
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49,457,622 |
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Basic and diluted loss per share, per GAAP |
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$(0.19) |
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$(0.21) |
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Basic and diluted EBITDA loss per share |
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$(0.05) |
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$(0.11) |
Contact:
Investor Relations:
Workstream Inc.
Steve Lerch,
866-953-8800 ext. 888
investorrelations@workstreaminc.com
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Customer Success
UHN Streamlines Recruitment Process and Improves HR Service Level with Workstream’s
On-Demand Recruitment Solution.
Learn more »
White Paper
Compensation Is Serious Business - Using spreadsheets to manage
compensation is a bad practice.
Download now » |
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