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Cover-All Announces Second Quarter 2012 Financial Results

Additional information is available online at www.cover-all.com.

Cover-All®, My Insurance Center™ (MIC) NexGen, Insurance Policy Database™ (IPD) and PipelineClaims TM are trademarks or registered trademarks of Cover-All Technologies Inc. All other company and product names mentioned are trademarks or registered trademarks of their respective holders.

Forward-looking Statements

Statements in this press release, other than statements of historical information, are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks which may cause the Company’s actual results in future periods to differ materially from expected results. Those risks include, among others, risks associated with increased competition, customer decisions, the successful completion of continuing development of new products, the successful negotiations, execution and implementation of anticipated new software contracts, the successful implementation of our acquisition strategies and our ability to complete or integrate acquisitions, the successful addition of personnel in the marketing and technical areas, our ability to complete development and sell and license our products at prices which result in sufficient revenues to realize profits and other business factors beyond the Company’s control. Those and other risks are described in the Company’s filings with the Securities and Exchange Commission (“SEC”) over the last 12 months, including but not limited to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on April 2, 2012, copies of which are available from the SEC or may be obtained upon request from the Company.

The following is a summary of operating highlights for the three months and six months ended June 30, 2012 and 2011, respectively, the consolidated balance sheets as of June 30, 2012 and December 31, 2011, respectively, and EBITDA reconciliation to net income for the three and six months ended June 30, 2012 and 2011, respectively:

Cover-All Technologies Inc. and Subsidiaries

Consolidated Statement of Operations

(Unaudited)

 
  Three months ended June 30,     Six months ended June 30,
2012   2011 2012   2011
Revenues:

Licenses

$

2,296,000

$

1,884,433

$

2,425,998

$

3,845,594

Support Services 2,141,182 2,105,692 4,281,359 4,219,935
Professional Services   1,001,164     1,005,467     2,283,083     2,127,506  
Total Revenues   5,438,346     4,995,592     8,990,440     10,193,035  
 

Cost of Revenues:

Licenses 1,187,770 869,481 2,155,540 1,386,725
Support Services 1,549,203 1,187,050 3,047,702 2,325,170
Professional Services   1,287,877     1,100,388     2,566,167     2,409,495  
Total Cost of Revenues   4,024,850     3,156,919     7,789,409     6,121,390  
Direct Margin   1,413,496     1,838,673     1,201,031     4,071,645  
 

Operating Expenses:

Sales and Marketing 812,137 481,915 1,348,584 872,057
General and Administrative 449,642 521,770 871,123 974,096
Acquisition Costs 136,957
Research and Development   205,331     160,425     359,506     314,237  
Total Operating Expenses   1,467,110     1,164,110     2,716,170     2,160,390  
Operating (Loss) Income   (53,614 )   674,563     (1,515,139 )   1,911,255  
 

Other (Income) Expense

Interest Expense 3,750
Interest Income (5 ) (2,996 ) (37 ) (3,079 )
Other Income   (14,441 )   (3,821 )   (14,539 )   (13,530 )
Total Other (Income) Expense   (14,446 )   (6,817 )   (14,576 )   (12,859 )
(Loss) Income Before Income Taxes   (39,168 )   681,380     (1,500,563 )   1,924,114  
Income Taxes               37,385  
 

Net (Loss) Income

$ (39,168 ) $ 681,380   $ (1,500,563 ) $ 1,886,729  
 

Basic (Loss) Earnings Per Common Share

$ (0.00 ) $ 0.03   $ (0.06 ) $ 0.08  
 

Diluted (Loss) Earnings Per Common Share

$ (0.00 ) $ 0.03   $ (0.06 ) $ 0.07  
 

Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share

  25,858,000     25,183,000     25,858,000     25,134,000  
 

Weighted Average Number of Common Shares Outstanding for Diluted Earnings Per Common Share

  25,858,000     26,615,000     25,858,000     26,426,000  
 

Cover-All Technologies Inc. and Subsidiaries

Consolidated Balance Sheet

 
 

June 30,

 

December 31,

2012

2011

(unaudited)
Assets:
Current Assets:
Cash and Cash Equivalents $ 561,718 $ 3,281,965

Accounts Receivable (Less Allowance for Doubtful Accounts of $25,000)

3,245,380 1,817,793
Prepaid Expenses 1,045,268 576,522
Deferred Tax Asset   1,099,000     1,099,000  
Total Current Assets   5,951,366     6,775,280  
Property and Equipment – At Cost:
Furniture, Fixtures and Equipment 983,866 912,527
Less: Accumulated Depreciation   608,480     633,356  
Property and Equipment – Net   375,386     279,171  
Goodwill   1,039,114     1,039,114  

Capitalized Software (Less Accumulated Amortization of $15,654,916 and $14,134,024, Respectively)

  10,787,916     8,799,711  

Customer Lists/Relationships (Less Accumulated Amortization of $193,093 and $126,093, Respectively)

  208,908     93,907  

Non-Competition Agreements (Less Accumulated Amortization of $142,044 and $110,044, Respectively)

  17,956     49,956  
Deferred Tax Asset   2,168,500     2,168,500  
Business Acquisition       1,035,821  
Other Assets   365,261     216,971  
Total Assets $ 20,914,407   $ 20,458,431  
 
Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts Payable $ 1,941525 $ 440,635
Accrued Expenses Payable 847,344 753,888
Deferred Charges 17,515 43,788
Unearned Revenue   2,381,609     2,298,985  
Total Current Liabilities   5,187,993     3,537,296  
Long-Term Liabilities:
Deferred Charges        
Total Liabilities   5,187,993     3,537,296  
Commitments and Contingencies

Stockholders’ Equity:

Common Stock, $.01 Par Value, Authorized 75,000,000 Shares; 25,857,730 and 25,782,730 Shares Issued and Outstanding in 2012 and 2011, Respectively

258,577 257,827
Paid-In Capital 31,117,151 30,812,059
Accumulated Deficit   (15,649,314 )   (14,148,751 )
Total Stockholders’ Equity   15,726,414     16,921,135  
Total Liabilities and Stockholders’ Equity $ 20,914,407   $ 20,458,431  
 

Cover-All Technologies Inc. and Subsidiaries

EBITDA Reconciliation to U.S. GAAP Net Income

(unaudited)

 
  Three months ended June 30,     Six months ended June 30,
2012   2011 2012   2011
 
Net (Loss) Income $ (39,168 ) $

681,380

 

$ (1,500,563 ) $ 1,886,729
 
Interest Income (Expense), Net 5 2,996 37 (671 )
Income Tax Expense 37,385
Depreciation 43,252 38,333 83,112 81,019
Amortization   826,788     321,601     1,619,891     650,791  
 
EBITDA $ 830,877   $ 1,044,310   $ 202,477   $ 2,655,253  
 
EBITDA per Common Share:
Basic $ 0.03   $ 0.04   $ 0.01   $ 0.10  
Diluted $ 0.03   $ 0.04   $ 0.01   $ 0.10  




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