HOUSTON, Jan. 26 /PRNewswire-FirstCall/ -- US Dataworks (AMEX:UDW),
a leading developer of payment processing solutions, today
announced financial results for its fiscal 2006 third quarter ended
December 31, 2005. Revenues for the fiscal 2006 third quarter were
$1,087,000 compared with revenues of $518,000 for the same period a
year ago. Operating loss for the quarter was $587,000 compared to
an operating loss of $1,386,000 for the quarter ended December 31,
2004. Net loss for the third quarter was $875,000 or $0.03 per
share, compared to a net loss of $1,320,000 or $0.05 per share, for
the corresponding period in the prior year. Revenues for the third
quarter in the current fiscal year 2006 include approximately
$448,000 of license revenue and professional service revenues
attributable to a previously announced integrated license,
maintenance and services agreement with one of the nation's largest
financial services companies. In accordance with generally accepted
accounting principles, license revenues attributable to this
integrated contract are being recorded on a
percentage-of-completion basis. "We are pleased to report our third
consecutive quarter with revenues in excess of $1 million and
record revenues through nine months," stated Charles E. Ramey, CEO
of US Dataworks. "The results for the quarter were below our prior
guidance due to customer and third party delays related to a large
contract that is being recorded on a percentage-of-completion
basis. We expect these delayed revenues to be recorded during the
next two quarters. "We are also pleased with two additional
competitive wins during the third quarter brought about by our
direct sales efforts. We were chosen by one of the nation's leading
retailers to provide our industry leading Accounts Receivable
Conversion ("ARC") software. We were also selected and have
installed our Clearingworks(TM) product to process telephone
initiated payments for one of the nation's largest credit card
processing companies. "In addition, during the quarter we completed
important strategic alliances with two much larger partners to
jointly capitalize on what we perceive as a significant revenue
opportunity in the retail sector as regulations are approved in the
latter half of 2006 for 'back office conversion'. While maintaining
existing 'in lane' business practices of accepting paper checks
presented as payment at the cash register, back office conversion
will allow retailers to convert these payments at a later time to
electronic items and present them as electronic deposits to their
financial institutions," concluded Ramey. FY 2006 OUTLOOK The
following statements are based on current expectations. These
statements are forward-looking and actual results may differ
materially. US Dataworks expects revenues for the fourth quarter of
fiscal 2006 to range from $1.3 million to $1.5 million and loss per
share to be approximately $(0.01). For the full fiscal year ending
March 31, 2006, the company expects revenues to range from $6.2
million to $6.4 million and loss per share to be approximately
($0.04). CONFERENCE CALL US Dataworks has scheduled a conference
call for today, January 26, 2006 at 5:00 p.m. eastern time. To
participate in the conference call, dial (303) 262-2141 at least
ten minutes before the call begins and ask for the US Dataworks
conference call. A replay of the call will be available
approximately two hours after the live broadcast ends and will be
accessible until February 2, 2006. To access the replay, dial (303)
590-3000 using a pass code of 11052093. Investors, analysts and the
general public will also have the opportunity to listen to the
conference call over the Internet by visiting
http://www.usdataworks.com/ . To listen to the live call on the
web, please visit the company's web site at least fifteen minutes
before the call begins to register, download and install any
necessary audio software. For those who cannot listen to the live
web cast, an archive will be available shortly after the call.
ABOUT US DATAWORKS US Dataworks is a developer of payment
processing solutions, focused on the Financial Services market,
Federal, State and local governments, billers and retailers.
Software developed by US Dataworks is designed to enable
organizations to transition from traditional paper-based payment
and billing processes to electronic solutions that automate
end-to-end processes for accepting and clearing checks. Except for
the historical information contained herein, the matters set forth
in this press release, including, but not limited to the Company's
leadership in the payment processing software market and our belief
that back office conversion regulations may be approved in the
latter half of 2006 are forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially, including, but not limited to, the Company's
position in the marketplace, our ability to develop and timely
introduce products that address market demand, the impact of
alternative technological advances and competitive products, market
fluctuations, the timeliness of completing the phases for
accounting purposes in our referenced integrated license,
maintenance and services agreement, our ability to obtain future
financing and other risks detailed from time to time in the SEC
reports of US Dataworks, Inc., including its annual report on Form
10-KSB/A for the period ended March 31, 2005 and its quarterly
report on Form 10-QSB for the period ended September 30, 2005.
These forward-looking statements speak only as of the date hereof.
US Dataworks disclaims any obligation to update these
forward-looking statements. - Tables to Follow - STATEMENTS OF
OPERATIONS For the Three and Nine Months Ended December 31, 2005
and 2004 (UNAUDITED) For the Three Months For the Nine Months Ended
Ended December 31, December 31, 2005 2004 2005 2004 Revenues
Software licensing revenues $89,109 $95,000 $1,840,029 $595,732
Software transactional revenues 236,848 156,458 649,452 444,161
Software maintenance revenues 104,477 89,997 331,369 262,222
Professional service revenues 656,119 176,480 2,078,335 728,785
Total revenues 1,086,553 517,935 4,899,185 2,030,900 Cost of sales
321,100 147,689 1,103,956 666,337 Gross profit 765,453 370,246
3,795,229 1,364,563 Operating expenses General and administrative
1,261,557 1,674,255 4,167,079 4,637,577 Depreciation and
amortization 91,163 81,727 269,645 237,499 Total operating expense
1,352,720 1,755,982 4,436,724 4,875,076 Loss from operations
(587,267) (1,385,736) (641,495) (3,510,513) Other income (expense)
Financing costs (268,846) --- (357,208) (419,903) Interest expense
(27,605) (22,730) (79,143) (187,686) Accrued costs of litigation
settlement --- 75,800 --- (924,199) Other income 8,249 12,761
24,467 30,448 Total other income (expense) (288,202) 65,831
(411,884) (1,501,340) Loss before provision for income taxes
(875,469) (1,319,905) (1,053,379) (5,011,853) Provision for income
taxes --- --- --- --- Net loss $(875,469) $(1,319,905) $(1,053,379)
$(5,011,853) Basic and diluted loss per share $(0.03) $(0.05)
$(0.04) $(0.19) Basic and diluted weighted-average shares
outstanding 30,037,020 27,800,238 29,684,597 26,725,216 BALANCE
SHEET December 31, 2005 (UNAUDITED) ASSETS Current assets Cash and
cash equivalents $1,114,002 Accounts receivable, net of allowance
for doubtful accounts of $0 658,983 Costs and estimated earnings in
excess of billings on uncompleted contracts 937,323 Prepaid
expenses and other current assets 221,323 Total current assets
2,931,631 Property and equipment, net 517,120 Goodwill, net
14,133,629 Other assets 43,224 Total Assets $17,625,604 LIABILITIES
AND SHAREHOLDERS' EQUITY Current liabilities Note payable- related
party $39,000 Deferred revenue 309,904 Accounts payable 142,251
Accrued expenses 261,685 Interest payable 22,467 Current portion of
convertible notes payable, net of unamortized discount of $426,067
548,066 Total current liabilities 1,323,373 Long-term portion of
convertible notes payable, net of unamortized discount of $219,708
344,358 Deferred revenue 8,359 Total liabilities 1,676,090
Commitments Shareholders' equity Convertible Series B preferred
stock, $0.0001 par value 700,000 shares authorized, 549,667 shares
issued and outstanding, $0.75 liquidation preference, dividends of
$200,597 in arrears 55 Common stock, $0.0001 par value 90,000,000
shares authorized and 30,037,020 shares issued and outstanding
3,004 Additional paid-in capital 63,292,016 Accumulated deficit
(47,345,561) Total shareholders' equity 15,949,514 Total
Liabilities and Shareholders' Equity $17,625,604 Contacts: John
Reiland, CFO John Figone, VP-Business Development US Dataworks,
Inc. (713) 934-3855 http://www.usdataworks.com/ Ken Dennard,
Managing Partner DRG&E (713) 529-6600 FCMN Contact:
ksdennard@drg-e.com DATASOURCE: US Dataworks, Inc. CONTACT: John
Reiland, CFO, or John Figone, VP-Business Development, both of US
Dataworks, Inc., +1-713-934-3855; or Ken Dennard, Managing Partner
of DRG&E, +1-713-529-6600, or , for US Dataworks, Inc. Web
site: http://www.usdataworks.com/
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