Crexendo, Inc. (EXE)
Q2 2012 Earnings Call
August 9, 2012 4:30 PM ET
Steve Mihaylo – CEO and Chairman
Jeff Korn – Chief Legal Officer
Ron Vincent – CFO
Doug Gaylor – President and COO
Satish Bhagavatula – Chief Technology Officer and Chief Investment Officer
Craig Samuels – Samuels Capital
Robin Lochner – Private Investor
Jeff Bash – Private Investor
Jay Harris – Goldsmith & Harris
Austin Hopper – AWH Capital
Previous Statements by EXE
» Crexendo's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Crexendo's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» Crexendo's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Crexendo CEO Discusses Q2 2011 Results - Earnings Call Transcript
Good day and welcome to the Second Quarter Crexendo Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Steve Mihaylo, CEO and Chairman of the Board. Please go ahead sir.
Thank you, Maurice. Good afternoon everyone. This is Steve Mihaylo, I am the Chairman and CEO of Crexendo. I want to welcome you to the Crexendo’s second quarter conference call. With me today are Doug Gaylor, our President and COO; Satish Bhagavatula, our CTO and CIO; Ron Vincent, our CFO; David Krietzberg, our Chief Administrative Officer; and Jeff Korn, our Chief Legal Officer.
I am going to ask Jeff to read our Safe Harbor statement, after that I will give a brief overview of the quarter and some operational highlights. Ron will provide some color on the numbers. Doug will provide business and sales update and Satish will give a technical update. Then we will open up the call to questions. Jeff, would you please read the safe harbor statement?
Thank you, Steve. I want to take this opportunity to remind listeners that this call will contain forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for such forward-looking statements. All statements made in this conference call other than statements of historical fact are forward-looking statements.
Forward-looking statements include, but are not limited to words like belief, expect, anticipate, estimate, will and other similar statements of expectations identifying forward-looking statements. Investors should be aware that any forward-looking statements are based on assumptions, and are subject to risks and uncertainties that could cause actual results to differ materially from those discussed here today.
These risk factors are explained in detail in the Company’s filings with the Securities and Exchange Commission, including the Form 10-K for the fiscal year ended December 31, 2011 and the Form 10-Q for the periods ending March 30, 2012 and June 30, 2012.
Crexendo does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
I’d now like to turn the call back to Steve. Steve?
Thanks Jeff. Before we get started, I am not sure whether or not our press release is hit the wire yet but it should in the next five or 10 minutes. So I am sure it will be available to all of you when we open this up to questions. For the second quarter of 2012, we had a net loss $117,000 or $0.01 per diluted common share compared to a net loss of $9,345,000 or $0.88 per diluted common share in the prior year quarter.
Loss before income tax provisions for the second quarter of 2012 was $104,000 compared to a loss of $3,183,000 in the prior quarter of the prior year. The income tax for the second quarter of 2012 was $13,000 compared to an income tax provision of $6,162,000 in the prior year quarter. Cash from operations for the second quarter of 2012 was generated from operations in 2012 was $739,000 compared to cash used in operations of $10,769,000 for the prior year quarter. As of June 30, 2012, cash and cash equivalents and restricted cash were $10,408,000, working capital was $9,405,000 and working capital excluding deferred revenue was $17,179,000.
Total current and long-term trade receivables were $9,360,000 as of June 30, 2012. As I have indicated before, we are working diligently on our sales efforts in our products and services. We are fully aware of the downward ramp of receivables and the sales – and when the sales from the Crexendo products must fully carry us. We are watching this closely and I am pleased with our progress, we are closely monitoring our sales progress and lead generation efforts. Doug will comment on this in the next few minutes.
I do want to give a brief update of our University Program. As you may recall the University Program takes the Crexendo software and uses that as the foundation to train students on a choosing classroom settings. In the curriculum, the student does a fully functioning e-commerce website for an actual business. We see two big benefits from this. First, the business will have a website that will be hosted on our platform which we will be able to service up-sell, cross-sell and use as a lead generator for our products.
We envision every website built to be a Crexendo affiliate which will supply the Company with customer leads. Secondly, we are training the next generation of business owners, both business owners that have businesses today and students that may have businesses tomorrow on our platform. We fully expect them to become Crexendo converts and to be a strong voice for our products and services. We are finishing our first test of the Crexendo University Program at one university and the initial results are very promising.
We will increase the rollout gradually over the next six quarters and we expect to have the offering in large numbers with the universities by the end of 2013. While we expect this to be a lead generation opportunity for the Company and its clients, all means not the only thing we are doing. Doug Gaylor will discuss this in more detail later.