- Professional Services revenues for the quarter ended March 31, 2012 increased 14.2% to $1.3 million from $1.1 million in the year-ago period driven by early adopters of Cover-All’s new NexGen Policy and Business Intelligence solutions.
- Balance sheet remains solid with stockholders’ equity at $15.6 million as of March 31, 2012. The Company completed the first quarter of 2012 with $1.2 million in cash, $1.2 million in working capital and no long-term debt.
- Cover-All’s newest acquisition, BlueWave Claims, created significant interest in the property and casualty marketplace as Cover-All broadened its solution suite, representing a major milestone in Cover-All’s strategy to expand from a niche product provider to one providing an enterprise suite of products and services.
- Since December 31, 2011, Cover-All released the latest addition to the NexGen products offering, NexGen BOP, which supports the full policy lifecycle of ISO® based Businessowners Policy (BOP) line of business, as well as both Commercial Package and Commercial Automobile for our customers in Puerto Rico.
- Cover-All’s newly acquired claim management system for property/casualty insurance companies, BlueWave Claims, was recently profiled in a report evaluating insurance claim systems published by CEB TowerGroup, a Boston-based research and consulting firm focused on the global financial services industry.
- Cover-All’s business intelligence solution, NexGen Business Intelligence, was recently included in a report profiling insurance BI solutions published by Novarica, a research and advisory firm focused on insurance technology strategy. The Novarica report, “Business Intelligence Solutions for US Insurers 2012 (Q1),” profiled 19 vendors with BI solutions available today, and describes the growing importance of BI, as well as key areas of use by property/casualty insurance companies.
“The optimism about our estimated growth in 2012 expressed at the conclusion of the last fiscal year was based upon the anticipated adoption of our new Policy products by existing customers, cross-selling and attracting new customers with our new expanded capabilities. Although we were disappointed by our license revenue results for the first quarter of 2012, we believe that this is due to the nature of the sales and customers’ decision cycles, which in some cases have extended beyond what we had anticipated. To be sure, we expected, in general, that our revenue for 2012 would be skewed toward the latter part of the year. In other words, the underlying rationale for our previous guidance of record revenue for 2012 has not changed. Accordingly, as discussed further below, I am reiterating our previous guidance estimates based on an expanding and deepening interest from both existing and prospective customers.“Our results in the first quarter 2012 include an EBITDA*, a non-GAAP metric, loss of $.02 per diluted share caused by an increase in expense for sales/marketing and the increased costs associated with the acquisition of BlueWave Claims. Our GAAP loss of $.06 per diluted share includes approximately $.04 per diluted share which was largely attributable to the continued amortization of the development costs of our new products. Financial Results for the Quarter Ended March 31, 2012 Total revenues for the quarter ended March 31, 2012 were $3.6 million, compared to $5.2 million for the same period in 2011, a decrease of 31.7%. License revenue for the first quarter of 2012 was $130,000, compared to $2.0 million for the same period in 2011. Support Services revenue for the first quarter of 2012 was $2.1 million, essentially unchanged compared to $2.1 million for the same quarter last year. Professional Services revenue for the first quarter of 2012 was $1.3 million compared to $1.1 million for the same quarter in 2011.
Total expenses (cost of revenue and operating expenses) for the three months ended March 31, 2012 increased 26.6% to $5.0 million, from $4.0 million in the same quarter last year. EBITDA was $(628,000), or $(0.02) per diluted share, for first quarter, compared to $1.6 million, or $0.06 per diluted share, for the first quarter of 2011. Net loss for the three months ended March 31, 2012 was $(1.5 million), or $(0.06) per diluted share (based on 25.9 million diluted weighted average shares), compared to net income of $1.2 million, or $0.05 per basic and diluted share (based on 25.1 million basic and 26.2 million diluted weighted average shares, respectively), in the same quarter of 2011.Outlook Given the current pipeline of new customers and indications of interest from existing customers for upgrades, management today reiterated that its full-year 2012 revenue goal is between $22 million and $25 million. This would represent an increase of between 25% and 42% compared to 2011 revenue levels. This goal is based on the Company's current business forecast as of the date of this press release and may be subject to risks and uncertainties (see the “Forward-looking Statements” heading below), which could therefore cause actual results to differ from those projected above. Balance Sheet Stockholders’ equity was $15.6 million as of March 31, 2012 compared to $16.9 million as of December 31, 2011. Total assets decreased to $19.8 million as of March 31, 2012 compared to $20.5 million as of December 31, 2011. As of March 31, 2012, the Company had $1.2 million in cash, $1.2 million in working capital and no debt. Conference Call Information Management will conduct a live teleconference to discuss its 2012 first quarter financial results at 4:30 p.m. ET on Monday, May 14, 2012. Anyone interested in participating should call 1-877-941-4774 if calling from the United States, or 1-480-629-9760 if dialing internationally. A replay will be available until May 21, 2012, which can be accessed by dialing 1-877-870-5176 within the United States and 1-858-384-5517 if dialing internationally. Please use passcode 4536696 to access the replay.
Additional information is available online at www.cover-all.com.Cover-All®, My Insurance Center™ (MIC) NexGen and Insurance Policy Database™ (IPD) 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 ended March 31, 2012 and 2011, respectively, and the consolidated balance sheet as of March 31, 2012 and 2011, respectively:
|Cover-All Technologies Inc. and Subsidiaries Consolidated Statement of Operations|
|Three months ended March 31,|
|Cost of Revenues:|
|Total Cost of Revenues||3,764,559||2,964,471|
|Sales and Marketing||536,447||390,142|
|General and Administrative||421,481||452,326|
|Research and Development||154,175||153,812|
|Total Operating Expenses||1,249,060||996,280|
|Other (Income) Expense:|
|Total Other (Income)||(130||)||(6,042||)|
|(Loss) Income Before Income Taxes||(1,461,395||)||1,242,734|
|Net (Loss) Income||$||(1,461,395||)||$||1,205,349|
|Basic Earnings (Loss) Per Common Share||$||(0.06||)||$||0.05|
|Diluted Earnings (Loss) Per Common Share||$||(0.06||)||$||0.05|
|Weighted Average Number of Common Shares Outstanding for Basic Earnings (Loss) Per Common Share||25,858,000||25,085,000|
|Weighted Average Number of Common Shares Outstanding for Diluted Earnings (Loss) Per Common Share||25,858,000||26,208,000|
|Cover-All Technologies Inc. and Subsidiaries Consolidated Balance Sheet|
|March 31, 2012||December 31, 2011|
|Cash and Cash Equivalents||$||1,190,745||$||3,281,965|
|Accounts Receivable (Less Allowance for Doubtful Accounts of $25,000)||1,999,569||1,817,793|
|Deferred Tax Asset||1,099,000||1,099,000|
|Total Current Assets||5,436,049||6,775,280|
|Property and Equipment – At Cost:|
|Furniture, Fixtures and Equipment||976,153||912,527|
|Less: Accumulated Depreciation||(630,429||)||(633,356||)|
|Property and Equipment – Net||345,724||279,171|
|Capitalized Software (Less Accumulated Amortization of $14,871,794 and $14,134,024, Respectively)||10,317,293||8,799,711|
|Customer Lists/Relationships (Less Accumulated Amortization of $165,426 and $126,093, Respectively)||236,574||93,907|
|Non-Competition Agreements (Less Accumulated Amortization of $126,044 and $110,044, Respectively)||33,956||49,956|
|Deferred Tax Asset||2,168,500||2,168,500|
|Liabilities and Stockholders’ Equity:|
|Accrued Expenses Payable||586,974||753,888|
|Total Current Liabilities||4,221,072||3,537,296|
|Commitments and Contingencies||—||—|
|Stockholders’ Equity: Common Stock, $.01 Par Value, Authorized 75,000,000 Shares; 25,857,730 and 25,782,730 Shares Issued and 25,857,730 and 25,782,730 Shares Outstanding in 2012 and 2011, Respectively||258,577||257,827|
|Total Stockholders’ Equity||15,573,109||16,921,135|
|Total Liabilities and Stockholders’ Equity||$||19,794,181||$||20,458,431|
|Cover-All Technologies Inc. and Subsidiaries EBITDA Reconciliation to U.S. GAAP Net Income (unaudited)|
|Three months ended March 31,|
|Net (Loss) Income||$||(1,461,395||)||$||1,205,349|
|Interest Income (Expense), Net||32||(3,667||)|
|Income Tax Expense||––||37,385|
|EBITDA per Common Share:|