Welcome!

Wireless Authors: Liz McMillan, Avi Rosenthal, Elizabeth White, Trevor Parsons, Christophe Primault

News Feed Item

Crexendo Reports Third Quarter 2012 Financial Results

PHOENIX, AZ -- (Marketwire) -- 11/05/12 -- Crexendo, Inc. (NYSE MKT: EXE), a hosted services company that provides e-commerce software, website development, web hosting, search engine optimization, link building, hosted telecommunication services and broadband internet for businesses and entrepreneurs, today reported financial results for its third quarter ended September 30, 2012.

Third Quarter 2012 Compared to 2011

Net loss for the third quarter of 2012 was $806,000 or $0.08 per diluted common share, compared to net income of $4,507,000 or $0.42 per diluted common share in the prior year quarter. Loss before income tax provision for the third quarter of 2012 was $796,000 compared to income of $4,546,000 in the prior year quarter. The income tax provision for the third quarter of 2012 was $10,000, compared to an income tax provision of $39,000 in the prior year quarter.

Cash provided from operations for the nine month period ended September 30, 2012 was $248,000 compared to cash used for operations of $3,089,000 for the prior year quarter. As of September 30, 2012, cash, cash equivalents, and restricted cash were $9,604,000 working capital was $8,707,000, and working capital excluding deferred revenue was $12,941,000. Total current and long-term trade receivables were $5,046,000 as of September 30, 2012.

Segment Results

StoresOnline

Revenue for the third quarter of 2012 decreased 68% to $3,055,000 compared to $9,542,000 for the prior year quarter. Total segment operating expenses decreased 72% to $791,000 compared to $2,850,000 for the prior year quarter.

Segment other income, primarily related to interest on the collection of accounts receivable for the third quarter of 2012 decreased 67% to $406,000 compared to $1,241,000 in the prior year quarter.

Total segment income before income taxes for the third quarter of 2012 decreased 66% to $2,670,000 compared to $7,933,000 in the prior year quarter.

Crexendo Web Services

Revenue for the third quarter of 2012 decreased 11% to $575,000, from $648,000 in the prior year quarter. Web Services backlog, which is anticipated to be recognized within the next twelve months, was $904,000 at September 30, 2012 compared to a backlog of $1,135,000 at September 30, 2011.

Total segment operating expenses for the third quarter of 2012 increased 19% to $1,406,000 compared to $1,185,000 in the prior year quarter. The increase in segment operating expenses is primarily due to higher expenses associated with the increase in our sales representatives. Total segment operating loss increased 55% to $831,000 compared to $537,000 in the prior year quarter.

Crexendo Network Services

Revenue for the third quarter of 2012 increased 352% to $235,000 from $52,000 in the prior year quarter. Network Services backlog, which is anticipated to be recognized within the next thirty-six months, was $2,221,000 at September 30, 2012 compared to no backlog at September 30, 2011.

Total Network Services operating expenses for the third quarter of 2012 increased 44% to $827,000 compared to $573,000 in the prior year quarter. The increase in segment operating expenses is primarily related to increased customer support and sales representative's salaries and benefits and bandwidth costs as revenue in our Network Services segment continues to increase each quarter. Total segment operating loss increased 14% to $592,000 compared to $521,000 in the prior year quarter.

Steven G. Mihaylo, Chief Executive Officer, commented, "While we are disappointed with the results, I believe we are still on track to achieve profitability by the end of 2013. I had expected sales to ramp up faster than they have, but for the most part we are operating as anticipated. I am particularly pleased with the fact that we have grown our Network Services backlog to $2M and I fully expect that number will continue to multiply. As we discussed previously, we are essentially in a startup mode and we are operating the Company on that premise. We have the benefit of having an excellent infrastructure including our web building software, which we are utilizing in our University Program. Our telecom products are world class, and we are working to improve our sales processes and infrastructure to increase productivity of our direct sales representatives. We are starting to sign up dealers in our dealer programs and I have high expectations of sales and recurring revenue being derived from that channel. We believe that the dealer program will work as a supplement to our direct sales channel. I am working with our sales management team to continue to improve our training and lead generation. The University Program continues to gain acceptance and we now have three universities teaching on our web builder, with five classes. We expect to have 30 schools and 60 classes on line by the end of 2013 and we also believe there are big opportunities with junior colleges, community colleges, vocational schools, trade schools and high schools, which we will start to address. I have very high expectations of our University Program increasing our brand recognition, leads and cross sell opportunities."

Mihaylo added, "I am very excited by what we are working on. We work on improving our products and services every day. We need to make a few changes to our mobile apps, but when we have that completed, I have expectations that we should be amongst the lowest cost providers in the market with excellent products and services. Our Engineering team continues to add enhancements to our mobile offering and we will enhance our marketing of the product in the summer. We believe this will be a substantial value to our customers and build additional sales. We continue to have very positive feedback from our telecom and web customers and I am convinced that our products and services will be what drive sales, profits and shareholder value. We are watching our expenses very carefully and running a lean and aggressive Company. Our team and I are fully aware of our need to increase shareholder value."

Conference Call

The Company is hosting a conference call tomorrow, November 6, 2012 at 8:30 AM EST. The conference call will be broadcast live over the Internet at http://www.crexendo.com. If you do not have Internet access, the telephone dial-in number is 888-427-9419 for domestic participants and 719-325-2323 for international participants. The conference ID to join the call is 3994287. Please dial in five to ten minutes prior to the beginning of the call at 8:30 AM EST.

About Crexendo

Crexendo is a hosted services company that provides e-commerce software, website development, web hosting, search engine optimization, link building, hosted telecommunication services, and broadband Internet for businesses and entrepreneurs. Crexendo's services are designed to make enterprise-class hosting services available to small and medium-sized businesses without any capital expense, at affordable monthly rates.

Safe Harbor Statement

This press release contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. The words "believe," "expect," "anticipate," "estimate," "will" and other similar statements of expectation identify forward-looking statements. Specific forward-looking statements in this press release include information about Crexendo (i) continuing to be on track to achieve profitability by the end of 2013; (ii) for the most part operating as anticipated; (iii) Network Services backlog continuing to multiply; (iv) being essentially in startup mode and operating the Company on that premise; (v) having the benefit of an excellent infrastructure; (vi) telecom product being world class; (vii) working to improve its sales process and infrastructure; (viii) having high expectations of sales and recurring revenue being derived from the Dealer channel; (ix) working to continue to improve training and lead generation; (x) University Program continuing to gain acceptance; (xi) having a big opportunity with vocational schools in the University Program as well as having that program increase name recognition and cross sell opportunities; (xii) improving our products and services every day; (xii) mobile apps allowing it to be amongst the lowest cost providers in the market (xiv) enhancing our marketing of the product in the summer;(xv) products and services will be what drive sales profits and shareholder value, and (xvi) watching its expenses very carefully and running a lean and aggressive Company with the management team working to increase shareholder value.

For a more detailed discussion of risk factors that may affect Crexendo's operations and results, please refer to the company's Form 10-K for the period ended December 31, 2011 and Forms 10Q for the periods ending March 31, 2012 and June 30, 2012. These forward-looking statements speak only as of the date on which such statements are made, and the company undertakes no obligation to update such forward-looking statements, except as required by law.


                      CREXENDO, INC. AND SUBSIDIARIES
                   Condensed Consolidated Balance Sheets
              (In thousands, except par value and share data)
                                (unaudited)

                                               September 30,   December 31,
                                                    2012           2011
                                               -------------  -------------
Assets

Current Assets:
  Cash and cash equivalents                    $       7,639  $       8,658
  Restricted cash                                      1,965          1,965
  Trade receivables, net of allowance of
   doubtful accounts of $1,993 as of September
   30, 2012 and $3,512 as of December 31, 2011         4,326          9,420
  Inventories                                            185            232
  Equipment financing receivables                         11              -
  Income taxes receivable                                339            552
  Prepaid expenses and other                             821            725
                                               -------------  -------------
    Total Current Assets                              15,286         21,552

Certificate of deposit                                   500            500
Long-term trade receivables, net of allowance
 of doubtful accounts of $349 as of September
 30, 2012 and $1,949 as of December 31, 2011             720          6,097
Long-term equipment financing receivables                 48              -
Property and equipment, net                            3,568          4,055
Deferred income tax assets, net                          272            279
Intangible assets                                         24             79
Goodwill                                                 265            265
Other long-term assets                                   188            233
                                               -------------  -------------
    Total Assets                               $      20,871  $      33,060
                                               =============  =============

Liabilities and Stockholders' Equity

Current Liabilities:
  Accounts payable                             $         638  $       1,153
  Accrued expenses and other                           1,435          2,240
  Dividend payable                                         -            211
  Deferred income tax liability                          272            279
  Deferred revenue, current portion                    4,234          9,288
                                               -------------  -------------
    Total Current Liabilities                          6,579         13,171

Deferred revenue, net of current portion                 728          6,123
Other long-term liabilities                              252            419
                                               -------------  -------------
    Total Liabilities                                  7,559         19,713
                                               -------------  -------------

Stockholders' Equity:
  Preferred stock, par value $0.001 per share
   - authorized 5,000,000 shares; none issued              -              -
  Common stock, par value $0.001 per share -
   authorized 100,000,000 shares; 10,669,201
   shares outstanding as of September 30, 2012
   and 10,523,078 shares outstanding as of
   December 31, 2011                                      11             11
  Additional paid-in capital                          49,629         48,938
  Accumulated deficit                                (36,328)       (35,602)
                                               -------------  -------------
    Total Stockholders' Equity                        13,312         13,347
                                               -------------  -------------

    Total Liabilities and Stockholders' Equity $      20,871  $      33,060
                                               =============  =============



                      CREXENDO, INC. AND SUBSIDIARIES
              Condensed Consolidated Statements of Operations
              (In thousands, except per share and share data)
                                (unaudited)

                            Three Months Ended         Nine Months Ended
                               September 30,             September 30,
                         ------------------------  ------------------------
                             2012         2011         2012         2011
                         -----------  -----------  -----------  -----------

Revenue                  $     3,865  $    10,242  $    14,034  $    42,306
Operating expenses:
  Cost of revenue              1,233        2,057        3,952       16,037
  Selling and marketing          987          806        2,904       19,645
  General and
   administrative              2,440        3,276        8,214        9,368
  Research and
   development                   420          807        1,519        2,550
                         -----------  -----------  -----------  -----------
    Total operating
     expenses                  5,080        6,946       16,589       47,600
                         -----------  -----------  -----------  -----------

Income (loss) from
 operations                   (1,215)       3,296       (2,555)      (5,294)
                         -----------  -----------  -----------  -----------

Other income (expense):
  Interest income                383        1,306        1,649        3,775
  Interest expense                 -            -            -           (2)
  Other income
   (expense), net                 36          (56)          50          (89)
                         -----------  -----------  -----------  -----------
    Total other income,
     net                         419        1,250        1,699        3,684
                         -----------  -----------  -----------  -----------

Income (loss) before
 income tax provision           (796)       4,546         (856)      (1,610)

Income tax benefit
 (provision)                     (10)         (39)         130       (5,079)

                         -----------  -----------  -----------  -----------
Net income (loss)        $      (806) $     4,507  $      (726) $    (6,689)
                         ===========  ===========  ===========  ===========

Net income (loss) per
 common share:
  Basic                  $     (0.08) $      0.43  $     (0.07) $     (0.63)
  Diluted                $     (0.08) $      0.42  $     (0.07) $     (0.63)

Dividends per common
 share:                  $      0.02  $      0.02  $      0.04  $      0.06

Weighted average common
 shares outstanding:
  Basic                   10,666,816   10,589,132   10,610,813   10,623,341
  Diluted                 10,666,816   10,618,254   10,610,813   10,623,341



                      CREXENDO, INC. AND SUBSIDIARIES
          Condensed Consolidated Statement of Stockholders' Equity
                    Nine Months Ended September 30, 2012
                     (In thousands, except share data)
                                (unaudited)

                    Common Stock     Additional                   Total
                -------------------   Paid-in    Accumulated  Stockholders'
                 Shares     Amount    Capital      Deficit        Equity
               ---------- --------- -----------  -----------  -------------
Balance,
 January 1,
 2012          10,523,078 $      11 $    48,938  $   (35,602) $      13,347
  Expense for
   stock
   options
   granted to
   employees            -         -         617            -            617
  Proceeds
   from the
   exercise of
   stock
   options        146,123         -         498            -            498
  Dividends
   declared             -         -        (424)           -           (424)
  Net loss              -         -           -         (726)          (726)
               ---------- --------- -----------  -----------  -------------
Balance,
 September 30,
 2012          10,669,201 $      11 $    49,629  $   (36,328) $      13,312
               ========== ========= ===========  ===========  =============



                      CREXENDO, INC. AND SUBSIDIARIES
              Condensed Consolidated Statements of Cash Flows
                               (In thousands)
                                (unaudited)

                                                       Nine Months Ended
                                                         September 30,
                                                   ------------------------
                                                       2012         2011
                                                   -----------  -----------

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                           $      (726) $    (6,689)
Adjustments to reconcile net loss to net cash
 provided by (used for) operating activities:
  Depreciation and amortization                          1,042        1,000
  Impairment of inventory and intangible assets              -        1,169
  Loss on subsidiary                                         -           56
  Expense for stock options issued to employees            617          686
  Deferred income tax provision                              -        5,973
  Change in uncertain tax positions                       (165)           -
Changes in assets and liabilities:
  Trade receivables                                     10,471        2,216
  Equipment financing receivables                          (59)           -
  Inventories                                               47          419
  Income taxes receivable                                  213          583
  Prepaid expenses and other                               (96)         557
  Other long-term assets                                    45          (15)
  Accounts payable, accrued expenses and other            (696)      (4,171)
  Deferred revenue                                     (10,449)      (3,942)
  Other long-term liabilities                                4         (931)
                                                   -----------  -----------
    Net cash provided by (used for) operating
     activities                                            248       (3,089)
                                                   -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Acquisition of property and equipment                 (1,124)        (764)
  Investment in subsidiary                                   -          (56)
                                                   -----------  -----------
    Net cash used for investing activities              (1,124)        (820)
                                                   -----------  -----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from exercise of stock options                  498           68
  Repurchase of common stock                                 -         (682)
  Payments made on contingent consideration                 (6)         (36)
  Dividend payments                                       (635)        (640)
                                                   -----------  -----------
    Net cash used for financing activities                (143)      (1,290)
                                                   -----------  -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS               (1,019)      (5,199)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD           8,658       14,207
                                                   -----------  -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD           $     7,639  $     9,008
                                                   ===========  ===========

Supplemental disclosure of cash flow information:
Cash received during the period:
  Income taxes                                     $       178  $       530
Supplemental disclosure of non-cash investing and
 financing information:
  Dividends declared                                         -          211
  Purchase of property and equipment included in
   accounts payable                                         31          313

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada. Our partner network encompasses some 300 of the world's leading systems integrators and security s...
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...

The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Nigeria has the largest economy in Africa, at more than US$500 billion, and ranks 23rd in the world. A recent re-evaluation of Nigeria's true economic size doubled the previous estimate, and brought it well ahead of South Africa, which is a member (unlike Nigeria) of the G20 club for political as well as economic reasons. Nigeria's economy can be said to be quite diverse from one point of view, but heavily dependent on oil and gas at the same time. Oil and natural gas account for about 15% of Nigera's overall economy, but traditionally represent more than 90% of the country's exports and as...
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...
"At our booth we are showing how to provide trust in the Internet of Things. Trust is where everything starts to become secure and trustworthy. Now with the scaling of the Internet of Things it becomes an interesting question – I've heard numbers from 200 billion devices next year up to a trillion in the next 10 to 15 years," explained Johannes Lintzen, Vice President of Sales at Utimaco, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"For over 25 years we have been working with a lot of enterprise customers and we have seen how companies create applications. And now that we have moved to cloud computing, mobile, social and the Internet of Things, we see that the market needs a new way of creating applications," stated Jesse Shiah, CEO, President and Co-Founder of AgilePoint Inc., in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the industry’s first all flash version of HyperConverged Appliances that include both compute and storag...
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
Code Halos - aka "digital fingerprints" - are the key organizing principle to understand a) how dumb things become smart and b) how to monetize this dynamic. In his session at @ThingsExpo, Robert Brown, AVP, Center for the Future of Work at Cognizant Technology Solutions, outlined research, analysis and recommendations from his recently published book on this phenomena on the way leading edge organizations like GE and Disney are unlocking the Internet of Things opportunity and what steps your organization should be taking to position itself for the next platform of digital competition.
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at @ThingsExpo, Andrew Bolwell, Director of Innovation for HP's Printing and Personal Systems Group, discussed how key attributes of mobile technology – touch input, sensors, social, and ...