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Mobius Management Systems, Inc. Reports Results for Fiscal Fourth Quarter and Year-End 2005; Fourth Quarter Marks Third Quarter of Sequential Revenue Growth and Return To ProfitabilityRYE, N.Y. --(Business Wire)-- Aug. 3, 2005 -- Mobius Management Systems, Inc. (Nasdaq: MOBI), a leading provider of software for total content management (TCM), today announced results for its fiscal fourth quarter and year-end 2005. Total consolidated revenues for the fiscal fourth quarter ended June 30, 2005 were $23.1 million, compared with $23.6 million for the same period last year. Software license revenues for the fiscal fourth quarter of 2005 were $11.1 million, compared with $12.4 million in the fiscal fourth quarter of the prior year. Maintenance revenues were $10.6 million in the fiscal fourth quarter of this year, compared with $10.1 million in the fiscal fourth quarter of the prior year. Net income for the fiscal fourth quarter of 2005 was $615,000, or $0.03 per diluted share, as compared with $1.8 million, or $0.09 per diluted share, in last year's fourth quarter. These results are in line with the Company's previously issued guidance which accompanied the issuance of its financial results for the fiscal third quarter ended March 31, 2005. Revenue in the fiscal fourth quarter of this year included a contract for $5.7 million in software license fees with a major international financial institution. Included in the current quarter's earnings was a $250,000 pre-tax charge ($0.01 per diluted share) related to the accelerated vesting of certain employee stock options. Included in the fiscal fourth quarter of the prior year was a $1.0 million pre-tax charge ($0.03 per diluted share) for acquired in-process R&D related to the Company's acquisition of the technology and certain other assets of eManage Inc. For the fiscal year ended June 30, 2005, total consolidated revenues were $77.7 million, compared with $88.1 million in the prior fiscal year. Net loss for the fiscal year ended June 30, 2005 was $2.7 million, or $0.15 per share, as compared with net income of $4.8 million, or $0.24 per diluted share, in the prior fiscal year. Included in fiscal 2005 and 2004 were pre-tax charges of $250,000 and $1.0 million, respectively, related to special charges as discussed above. As of June 30, 2005, cash totaled $33.7 million, compared with $33.6 million at June 30, 2004. As of June 30, 2005, total software license installments receivable amounted to $30.9 million, as compared with the June 30, 2004 balance of $36.5 million. The Company had no bank debt outstanding at June 30, 2005. Commenting on the results, Mitch Gross, President and CEO of Mobius, said, "We continue to see positive signs at Mobius, including returning to profitability in the fourth quarter, delivering a third quarter of sequential revenue growth and increasing our cash balance by over $6.0 million in the fourth quarter to end the year with slightly higher cash than the prior year. In addition, we have announced senior personnel appointments, including our most recent addition of David Barton as our new Senior Vice President of World Wide Sales at the end of June. David brings a wealth of sales management experience in delivering software solutions and I am confident he will build the efficiency and effectiveness of our sales force. His appointment follows that of Mauricio Barberi as Senior Vice President of Marketing, which we announced earlier in the year, and rounds out our senior management staff. These new additions to our management team will be key to generating future revenue growth." Guidance In conclusion, Mr. Gross noted, "I believe we can continue to make improvements in our business as our new leaders gain experience with Mobius and, as a Company, we execute on our strategy. We are currently forecasting revenue in our fiscal first quarter ending September 30, 2005, which is seasonally one of our slowest periods, to be between $20.0 million and $21.5 million, which would result in earnings per share of between breakeven and a loss of $(0.05) per diluted share. As previously announced, we will be adopting the provisions of Financial Accounting Standards Board's Statement No. 123 (revised 2004), "Share-Based Payment" (FAS 123R) in the first quarter, which will require the Company to record stock-based employee compensation expense in the Income Statement rather than as a footnote disclosure. The impact of FAS123R included in our first quarter projection is expected to be approximately $0.01 per share." Recent Highlights Mobius Names David B. Barton New Senior Vice President of Worldwide Sales: Mobius announced the appointment of David B. Barton, 48, as Senior Vice President of Worldwide Sales, effective as of June 22, 2005. Mr. Barton previously served as Vice President - Financial Services Global Accounts at StorageTek, a leader in the storage and management of critical business information. Prior to joining StorageTek, he held positions of increasing responsibility at Computer Network Technology (CNT), culminating with his appointment as Vice President & General Manager - Worldwide Professional Services. While with CNT, a storage networking solutions company, Mr. Barton was responsible for $185 million in revenue and managed a staff of 175. Mobius Announces Next-Generation Content Integration: Mobius announced version 2.2 of ViewDirect(R) Total Content Integrator, a Web services-based facility for cross-repository, cross-platform access to content in any format from any source. Mobius Accelerates Stock Option Vesting: Mobius announced that its Board of Directors approved a plan, effective June 14, 2005, to accelerate the vesting of all unvested employee stock options other than those options awarded to officers of the Company. Mobius Presents at the AeA Micro Cap Financial Conference: On May 16, 2005, the management of Mobius presented to investors at the AeA Micro Cap Financial Conference at the Monterey Plaza Hotel in Monterey, CA. The presentation was also available via Web cast. Mobius Names Louis Hernandez, Jr. to Board of Directors: Mobius announced that Louis Hernandez, Jr., Chairman and Chief Executive Officer of Open Solutions Inc. (Nasdaq: OPEN), has joined the Company's Board of Directors effective May 3, 2005. With his election, the Company's Board expands to eight members. Mr. Hernandez will also serve on the Board's Audit Committee. Open Solutions is a leading provider of enterprise-wide enabling technologies for financial institutions throughout North America. Conference Call Information Mobius will hold its quarterly conference call today at 10:00 AM EST to discuss its fiscal fourth quarter and year-end 2005 results. Interested persons wishing to listen to the conference call via Web cast may access it at: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c= 113759&eventID=1099343 (Due to its length, the preceding URL may need to be copy/pasted into your internet browser's address field.) The conference call will be available for playback following the live call from approximately 12:00 p.m. (Eastern) on Wednesday, August 3, until 11:59 p.m. (Eastern) on Tuesday, August 9. The number for the replay is 877-519-4471. Callers should enter pin number 6258341. About Mobius Mobius Management Systems, Inc. (www.mobius.com) is a leading provider of integrated solutions for total content management (TCM). The company's ViewDirect(R) TCM is a comprehensive suite that integrates content across disparate repositories, supports regulatory compliance, and provides content-enabled applications that automate business processes. Mobius solutions have achieved industry-wide recognition for breadth of functionality, breadth of supported formats, and high-volume, high-demand performance. The Mobius customer base is made up of leading companies across all industries, including more than sixty percent of the Fortune 100. The company, founded in 1981, is headquartered in Rye, New York, with sales offices in the U.S., Canada, the United Kingdom, France, Germany, Italy, Sweden, the Netherlands, Switzerland, Australia, Japan and Singapore, as well as a network of agents in Central and South America, Europe, Middle East, Africa and Asia. Statements contained in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. In particular, any statements contained herein regarding expectations with respect to future sales and profitability, as well as product development and/or introductions, are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the company's control, which may cause actual results, performance or achievements to differ materially from those projected or implied in such forward-looking statements. Important factors that might affect actual results, performance or achievements include, among other things, statements regarding market acceptance of Mobius's products, ability to manage expenses, fluctuations in period to period results, seasonality, uncertainty of future operating results, cost of compliance with the Sarbanes-Oxley Act, long and unpredictable sales cycles, technological change, extended payment risk, product concentration, competition, international sales and operations, expansion of indirect channels, increased investment in professional services, protection of intellectual property, dependence on licensed technology, risk of product defects, product liability, management of growth, dependence on executive management, other key employees and subcontractors, concerns about transaction security on the Internet, factors affecting valuation of stock option expense, changes in prevailing equity-based compensation practices, general conditions in the economy and the impact of recently enacted or proposed regulations. These risks and uncertainties are described in detail from time to time in Mobius's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, filed on September 10, 2004, and its Quarterly Reports on Form 10-Q. Mobius accepts no obligation to update these forward-looking statements and does not intend to do so. ViewDirect and DocumentDirect are registered trademarks of Mobius Management Systems, Inc. All other trademarks are property of their respective owners. -0- *T MOBIUS MANAGEMENT SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except per share data) Three Months Twelve Months Ended Ended 6/30/05 6/30/04 6/30/05 6/30/04 -------- -------- -------- -------- Revenues: Software license $11,053 $12,444 $30,883 $42,858 Maintenance 10,611 10,081 41,416 40,151 Professional service and other 1,426 1,025 5,374 5,079 -------- -------- -------- -------- Total revenues 23,090 23,550 77,673 88,088 -------- -------- -------- -------- Cost of revenues: Software license 267 243 1,773 1,115 Maintenance 2,012 2,062 8,094 7,048 Professional service and other 1,431 970 4,782 5,506 -------- -------- -------- -------- Total cost of revenues 3,710 3,275 14,649 13,669 -------- -------- -------- -------- Gross profit 19,380 20,275 63,024 74,419 -------- -------- -------- -------- Operating expenses: Sales and marketing 10,529 8,576 36,402 35,090 Research and development 5,547 5,488 22,722 20,797 General and administrative 3,135 2,920 12,000 11,397 Acquired in-process R&D -- 956 -- 956 -------- -------- -------- -------- Total operating expenses 19,211 17,940 71,124 68,240 -------- -------- -------- -------- Income (loss) from operations 169 2,335 (8,100) 6,179 Miscellaneous income, net 735 468 2,368 1,750 -------- -------- -------- -------- Income (loss) before income taxes 904 2,803 (5,732) 7,929 Provision for (benefit from) income taxes 289 989 (3,037) 3,127 ----------------- ----------------- Net income (loss) $615 $1,814 $(2,695) $4,802 ================= ================= Basic weighted average shares 18,509 18,272 18,409 17,964 Basic earnings (loss) per share $0.03 $0.10 $(0.15) $0.27 Diluted weighted average shares 19,749 19,708 18,409 19,937 Diluted earnings (loss) per share $0.03 $0.09 $(0.15) $0.24 MOBIUS MANAGEMENT SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS (unaudited, in thousands) 6/30/05 6/30/04 -------- -------- Assets: Current Assets: Cash and cash equivalents $33,726 $33,592 Accounts receivable, net 10,519 11,874 Software license installments, current 12,926 14,172 Other current assets 2,310 2,348 -------- -------- Total Current Assets 59,481 61,986 Property and equipment, net 3,663 4,257 Software license installments, non-current 17,991 22,358 Deferred income taxes, non-current 5,996 2,514 Other non-current assets 3,963 4,461 -------- -------- Total Assets $91,094 $95,576 ======== ======== Liabilities & Stockholders' Equity Current Liabilities: Accounts payable and accrued expenses $14,363 $18,039 Deferred revenues, current 23,344 21,973 Deferred income taxes, current 5,229 5,482 -------- -------- Total Current Liabilities 42,936 45,494 Deferred revenues, non-current 3,091 4,704 Deferred income taxes, non-current 779 239 Other non-current liabilities 721 -- Total Stockholders' Equity 43,567 45,139 -------- -------- Total Liabilities and Stockholders' Equity $91,094 $95,576 ======== ======== *T |
