EAST HANOVER, N.J., May 1 /PRNewswire-FirstCall/ -- Conversion
Services International, Inc. (AMEX:CVN), a premier professional
services firm focused on delivering business intelligence and
business process optimization solutions to Global 2000
organizations and other businesses, has announced its financial
results for year-end 2007. (Logo:
http://www.newscom.com/cgi-bin/prnh/20060421/NYF015LOGO )
Conversion Services ("CSI") reported revenues of $21.5 million for
the year ended December 31, 2007, a decrease of $4.2 million, or
16.4%, compared to revenues of $25.7 million for the year ended
December 31, 2006. The cost of that revenue was $16.3 million, or
75.7% of total revenues for the year ended December 31, 2007, as
compared to cost of revenue of $19.9 million, or 77.6% of total
revenues, for the previous year. Cost of revenue includes payroll,
benefits and other direct costs for the Company's consultants.
Gross profit of $5.2 million, or 24.3% of total revenue for the
year ended December 31, 2007, decreased by $0.5 million, but
increased as a percentage of revenue by 1.9% points, as compared to
gross profit of $5.7 million, or 22.4% of total revenues for the
year ended December 31, 2006. The improvement in the gross profit
percentage reflects the Company's efforts to capture higher margin
business during 2007. Operating expenses for the year ended
December 31, 2007 of $9.0 million declined by $2.7 million, or
23.3%, from operating expenses of $11.7 million for the year ended
December 31, 2006. Loss from operations for the year ended December
31, 2007 of $3.7 million declined by $2.2 million, or 37.0%, from
the loss from operations of $5.9 million for the year ended
December 31, 2006. This reduced loss from operations is the result
of a $2.7 million reduction in operating expenses in 2007 versus
the prior year. The Company reported a net loss for the year ended
December 31, 2007 of $10.2 million, or $0.15 per share on a basic
and diluted basis, as compared to a net loss of $9.6 million, or
$0.19 per share on a basic and diluted basis, for the year ended
December 31, 2006. Net loss attributable to common stockholders for
the year ended December 31, 2007 was $11.0 million, or $0.16 per
share on a basic and diluted basis, as compared to $10.2 million,
or $0.20 per share on a basic and diluted basis, for the prior
year. Scott Newman, chairman and chief executive officer of CSI,
stated, "Our financial results for 2007 have caused us to take
steps to strengthen our balance sheet as we work toward creating a
stronger company. As 2007 ended, we made the final payment of
$250,000 to repay our debt to Sands Brothers Venture Capital LLC,
and we converted $2.5 million of debt to equity. In March 2008, we
converted another $600,000 of long-term debt to equity and we have
replaced our line of credit with the Laurus Master Fund with a
revolver with Access Capital, Inc. that is more attuned to our
long-term goals and short-term needs. He concluded, "We continue to
develop our presence in the market. Most recently CSI, along with
its wholly-owned subsidiary, DeLeeuw Associates, announced a
strategic alliance to sponsor iSixSigma Financial Services, an
Internet portal specifically for the financial services application
of Six Sigma, a rigorous, data-driven method for business process
improvement. The primary purpose for this co-branded portal is to
facilitate improvements in financial services sector quality and
efficiency by providing free and easy access to educational and
reference materials, case studies, best practices and other
information designed for financial services professionals. With
500,000 visitors a month, this portal represents significant
potential." About Conversion Services International, Inc.
Conversion Services International, Inc. (CSI) is a leading provider
of professional services focusing on strategic consulting, data
warehousing, business intelligence, business process reengineering,
as well as integration and information technology management
solutions. CSI offers an array of products and services to help
companies define, develop, and implement the warehousing and
strategic use of both enterprise-wide and specific categories of
strategic data. CSI's current customers include ADP, Coach, Goldman
Sachs, Liberty Mutual, Merck, Morgan Stanley, and Pfizer.
Information about CSI can be found on the web at
http://www.csiwhq.com/ or by calling its corporate headquarters at
888-CSI-5036. Note on Forward-Looking Statements Except for the
historical information contained herein, this press release
contains, among other things, certain forward-looking statements,
within the meaning of the Private Securities Litigation Reform Act
of 1995 that involve risks and uncertainties. Such statements may
include, without limitation, statements with respect to CSI's
plans, objectives, expectations and intentions and other statements
identified by words such as "may," "could," "would," "should,"
"believes," "expects," "anticipates," "estimates," "intends,"
"plans" or similar expressions. Actual results may differ from
those set forth in the forward-looking statements. These
forward-looking statements involve certain risks and uncertainties
that are subject to change based on various factors (many of which
are beyond CSI's control). CSI undertakes no obligation to update
publicly any forward-looking statements. Investor Relations:
Porter, LeVay & Rose, Inc. Michael J. Porter, President Jeffrey
Myhre, VP -- Editorial 212-564-4700 Media Contact: Tracee Lee Beebe
Marketing & Communications Conversion Services International,
Inc. 973-560-9400 Financial Tables to Follow CONVERSION SERVICES
INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2007 2006 ASSETS CURRENT ASSETS Cash $1,506,866
$668,006 Accounts receivable, net of allowance for doubtful
accounts of $142,181 and $279,422 as of December 31, 2007 and 2006,
respectively 3,077,847 3,912,000 Accounts receivable from related
parties, net of allowance for doubtful accounts of $16,244 and
$8,972 as of December 31, 2007 and 2006, respectively 315,503
330,006 Prepaid expenses 199,635 132,087 TOTAL CURRENT ASSETS
5,099,851 5,042,099 PROPERTY AND EQUIPMENT, at cost, net 182,868
265,084 OTHER ASSETS Goodwill 6,135,125 6,826,705 Intangible
assets, net of accumulated amortization of $1,754,344 and
$1,265,958 as of December 31, 2007 and 2006, respectively 778,470
1,266,856 Deferred financing costs, net of accumulated amortization
of $110,000 and $52,609 as of December 31, 2007 and 2006,
respectively - 57,391 Discount on debt issued, net of accumulated
amortization of $1,052,639 and $1,793,921 as of December 31, 2007
and 2006, respectively 447,361 786,079 Equity investments 82,253
176,152 Other assets 85,445 110,445 Total Assets $12,811,373
$14,530,811 CONVERSION SERVICES INTERNATIONAL, INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) DECEMBER 31,
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES
Line of credit $2,056,341 $5,795,552 Current portion of long-term
debt 10,819 578,685 Accounts payable and accrued expenses 1,356,425
1,957,501 Short term notes payable - 2,745,000 Deferred revenue
59,350 74,450 Related party note payable 107,833 110,831 Financial
instruments - 52,228 TOTAL CURRENT LIABILITIES 3,590,768 11,314,247
Long-term debt, net of current portion 1,533,126 1,769,154 Deferred
taxes 363,400 363,400 Total Liabilities 5,487,294 13,446,801
Convertible preferred stock, $0.001 par value, $100 stated value,
20,000,000 shares authorized. Series A convertible preferred stock,
19,000 shares issued and outstanding at December 31, 2007 and 2006,
respectively 728,333 348,333 Series B convertible preferred stock,
20,000 shares issued and outstanding at December 31, 2007 and 2006,
respectively - 1,248,806 COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY (DEFICIT) Common stock, $0.001 par value,
200,000,000 shares authorized; 110,144,462 and 57,625,535 issued
and outstanding at December 31, 2007 and 2006, respectively 111,290
57,625 Series B convertible preferred stock, 20,000 shares issued
and outstanding at December 31, 2007 and 2006, respectively
1,352,883 - Additional paid in capital 66,742,898 50,829,255
Treasury stock, at cost, 1,145,382 shares in treasury as of
December 31, 2007 and 2006 (423,869) (423,869) Accumulated deficit
(61,187,456) (50,976,140) Total Stockholders' Equity (Deficit)
6,595,746 (513,129) Total Liabilities and Stockholders' Equity
(Deficit) $12,811,373 $14,530,811 CONVERSION SERVICES
INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2007 2006 REVENUE:
Services $18,453,197 $22,550,805 Related party services 1,881,803
2,478,342 Reimbursable expenses 946,880 570,121 Other 184,457
74,789 21,466,337 25,674,057 COST OF REVENUE: Services (inclusive
of stock based compensation of $0.3 million and $0.4 million for
the years ended December 31, 2007 and 2006, respectively.)
13,507,340 16,868,554 Related party services 1,698,040 2,305,523
Reimbursable expenses 1,048,611 756,857 16,253,991 19,930,934 GROSS
PROFIT 5,212,346 5,743,123 OPERATING EXPENSES Selling and marketing
(inclusive of stock based compensation of zero and $1.0 million for
the years ended December 31, 2007 and 2006, respectively.)
3,248,410 5,072,532 General and administrative (inclusive of stock
based compensation of $0.1 million and $0.6 million for the years
ended December 31, 2007 and 2006, respectively. 4,155,357 5,451,324
Lease impairment 210,765 - Goodwill & intangibles impairment
691,580 349,000 Depreciation and amortization 646,236 802,386
8,952,348 11,675,242 LOSS FROM OPERATIONS (3,740,002) (5,932,119)
OTHER INCOME (EXPENSE) Equity in earnings (losses) from investments
(18,329) 27,035 Gain (loss) on financial instruments 19,329
(351,132) Loss on extinguishment of debt (2,461,515) (2,311,479)
Interest expense, net (4,010,799) (3,094,083) (6,471,314)
(5,729,659) LOSS BEFORE INCOME TAXES (10,211,316) (11,661,778)
INCOME TAXES - - LOSS FROM CONTINUING OPERATIONS (10,211,316)
(11,661,778) CONVERSION SERVICES INTERNATIONAL, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS
ENDED DECEMBER 31, 2007 2006 DISCONTINUED OPERATIONS: Gain on
disposal of discontinued operations - 2,050,000 NET LOSS
(10,211,316) (9,611,778) Accretion of issuance costs associated
with convertible preferred stock (484,075) (429,747) Dividends on
convertible preferred stock (263,212) (162,603) NET LOSS
ATTRIBUTABLE TO COMMON STOCKHOLDERS $(10,958,603) $(10,204,128)
Basic and diluted loss per common share from continuing operations
$(0.15) $(0.23) Basic and diluted income per common share from
discontinued operations $- $0.04 Basic and diluted loss per common
share $(0.15) $(0.19) Basic and diluted loss per common share
attributable to common stockholders $(0.16) $(0.20) Weighted
average common shares used to compute income (loss) per common
share: Basic and diluted 67,541,607 51,792,504
http://www.newscom.com/cgi-bin/prnh/20060421/NYF015LOGO
http://photoarchive.ap.org/ DATASOURCE: Conversion Services
International, Inc. CONTACT: Investor Relations, Porter, LeVay
& Rose, Inc., Michael J. Porter, President, Jeffrey Myhre, VP -
Editorial, +1-212-564-4700; or Media Contact, Tracee Lee Beebe,
Marketing & Communications, Conversion Services International,
Inc., +1-973-560-9400, Web site: http://www.csiwhq.com/
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