NGRU Netguru

netGuru, Inc. (Nasdaq:NGRU) reported financial results for fiscal 2006 first quarter ended June 30, 2005. Net revenues for the quarter were $3.85 million compared to $3.52 million in fiscal 2005 first quarter. Engineering and collaborative software sales rose 23.3% to $3.01 million from $2.44 million due to growing use of the Company's engineering software by major corporate clients under three-year software licensing contracts, and higher engineering-related maintenance sales and services. IT services revenues fell to $834,000 from $1.08 million. Gross profit rose to $3.09 million, or 80.3% of net revenues, from $2.52 million, or 71.5% of net revenues, in first-quarter fiscal 2005, due to higher gross margin from our engineering and collaborative software segment. Operating expenses were $3.26 million, compared to $3.06 million. Operating expenses as a percent of net revenues improved from fiscal 2005 first quarter. Operating losses narrowed to $171,000 from $535,000 for first-quarter last fiscal year. Net loss also narrowed to $334,000, or two cents per share on 19,117,154 shares outstanding, compared to a net loss of $617,000, or three cents per share on 18,626,165 shares outstanding, in the first quarter of fiscal 2005. netGuru Chairman and Chief Executive Amrit Das remarked: "We are pleased with the Company's continuing year-over-year growth in revenues and improving margins. As a result, we have generated positive cash flows from operations for three consecutive quarters and substantial improvement in net results. "A first-quarter ramp up in personnel to expand engineering business process outsourcing (EBPO) in India resulted in an increase in sales, general, and administrative (SG&A) expenses," Das continued. "This expanded capability now enables us to launch our new estimation services, which are expected to result in additional billings, as well as handle up to 2000 tons per month in steel detailing. Billings during the first quarter were at approximately one-half that rate due to start-up and training. Generally, by continuing to scale up sales and by keeping costs and expenses under control, we remain confident in our outlook for revenue growth and profitability for fiscal 2006." Teleconference information: The Company will hold a teleconference today at 1:30 p.m. PDT (4:30 p.m. EDT) to review financial results, including a Q&A session. To participate in the teleconference, call toll-free 800-608-3625 (or 706-634-0478 for international callers) approximately 10 minutes prior to the above start time. The Company will also archive the call on its website, www.netguru.com (requires RealPlayer streaming audio software, available at www.real.com). Additionally, a telephone playback will be available for 48 hours beginning at 5 p.m. PDT today. The playback can be accessed by dialing 800-642-1687 (or 706-645-9291 for international callers) and providing Conference ID 8501003. About netGuru, Inc. netGuru is an engineering information technology and services company offering engineering analysis and design software, collaborative software solutions, and professional and technical IT services and support to businesses worldwide. netGuru serves its global markets and clients through offices located in the United States, Europe, Asia, and the Middle East, and through distributors in 40 countries. The Company licenses its engineering software and solutions to more than 19,000 businesses in 100 countries. For more information, please visit www.netguru.com. Safe Harbor Statement: With the exception of historical or factual information, the matters discussed in this press release, including sales/revenue growth, cost and expense controls, expected profitability, and timing of profitability are forward-looking statements that involve risks and uncertainties. Actual future results may differ. Factors that could cause or contribute to such differences in results include, but are not limited to, market acceptance and use of the Company's products, market conditions in Asia and worldwide, engineering needs, our ability to increase revenue and control costs and expenses, and technological change, economic conditions, changes in governmental regulations and policies, competitive products and services, unforeseen technical issues, and other factors discussed in the "Risk Factors" Section of the company's Form 10-KSB for the fiscal year ended March 31, 2005, as filed with the U.S. Securities and Exchange Commission. -0- *T NETGURU, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) ($ in thousands except share and per share amounts) Three Months Ended June 30, ------------------------- 2005 2004 ----------- ----------- Net revenues: Engineering and collaborative software solutions $ 3,014 $ 2,444 IT services 834 1,080 ----------- ----------- Total net revenues 3,848 3,524 Cost of revenues: Engineering and collaborative software solutions 125 245 IT services 633 758 ----------- ----------- Total cost of sales 758 1,003 ----------- ----------- Gross profit 3,090 2,521 ----------- ----------- Operating expenses: Selling, general and administrative 2,454 2,235 Research and development 382 415 Bad debt expense 208 165 Depreciation 217 241 ----------- ----------- Total operating expenses 3,261 3,056 ----------- ----------- Operating loss (171) (535) ----------- ----------- Other (income) expense: Interest, net 138 138 Other 10 (33) ----------- ----------- Total other expense 148 105 ----------- ----------- Loss from continuing operations before income taxes (319) (640) Income tax expense 15 6 ----------- ----------- Net loss from continuing operations (334) (646) Gain from discontinued operations - 29 ----------- ----------- Net loss $ (334) $ (617) =========== =========== Net loss per common share: Basic $ (0.02) $ (0.03) =========== =========== Diluted $ (0.02) $ (0.03) =========== =========== Common shares used in computing net loss per common share: Basic 19,117,154 18,626,165 =========== =========== Diluted 19,117,154 18,626,165 =========== =========== NETGURU, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) June 30, March 31, 2005 2005 ---------- ---------- Assets Current assets: Cash and cash equivalents $ 3,791 $ 3,619 Restricted cash 60 62 ---------- ---------- Total cash and cash equivalents 3,851 3,681 Accounts receivable (net of allowance for doubtful accounts of $777 and $705, as of June 30, 2005 and March 31, 2005, respectively) 3,302 4,334 Income tax receivable 12 15 Notes and related party loans receivable 11 12 Deposits 100 96 Prepaid expenses and other current assets 1,150 1,343 ---------- ---------- Total current assets 8,426 9,481 Property, plant and equipment, net 1,593 1,682 Goodwill and intangible assets 3,088 3,088 Other assets 306 242 ---------- ---------- $ 13,413 $ 14,493 ========== ========== Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt, net of discount of $221 and $222, as of June 30, 2005 and March 31, 2005, respectively $ 1,509 $ 1,297 Related party loans payable 100 100 Current portion of capital lease obligations 155 144 Accounts payable 505 464 Income taxes payable 28 29 Accrued expenses 857 1,136 Deferred revenues 2,297 2,697 Other liabilities 158 212 -------- ---------- Total current liabilities 5,609 6,079 Long-term debt, net of current portion, net of discount of $144 and $200 as of June 30, 2005 and March 31, 2005, respectively 1,884 2,108 Capital lease obligations, net of current portion 325 343 Deferred gain on sale-leaseback and other long-term liabilities 683 678 -------- ---------- Total liabilities 8,501 9,208 -------- ---------- Stockholders' equity: Preferred stock, par value $.01; authorized 5,000,000 shares; no shares issued and outstanding - - Common stock, par value $.01; authorized 150,000,000 shares; 19,117,154 shares issued and outstanding 191 191 Additional paid-in capital 36,869 36,869 Accumulated deficit (31,566) (31,232) Accumulated other comprehensive loss: Cumulative foreign currency translation adjustments (582) (543) -------- ---------- Total stockholders' equity 4,912 5,285 -------- ---------- $ 13,413 $ 14,493 ======== ========== *T