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| CallWave Announces Financial Results for First Quarter of Fiscal 2006 |
SANTA BARBARA, Calif.--(BUSINESS WIRE)--Nov. 2, 2005--CallWave, Inc. (Nasdaq:CALL), a leading provider of VOIP enhanced services, today reported financial results for the first quarter ended September 30, 2005. For the first quarter of fiscal 2006, CallWave reported total revenue of $10.6 million, compared to $11 million reported in the first quarter of fiscal 2005. Net income for the first quarter of 2006 was $932,000, or $0.04 per diluted share, compared to $2.9 million, or $0.17 per diluted share reported in the prior year. Net income for the 2006 first quarter includes a tax provision of $633,000, compared to the same period last year which included a tax benefit of $66,000. Gross margins for the first quarter were 64% and operating margins were 10%. CallWave generated $3.4 million in cash in its operations and closed the quarter with $61.9 million in cash, cash equivalents and marketable securities. At September 30, 2005, CallWave had 790,000 total subscribers, including 10,000 mobile subscribers up from 5,000 in the prior quarter. "CallWave is in an important transition phase as we deliver new services that simplify the convergence of fixed and mobile phones," commented David Hofstatter, President and CEO of CallWave. "When you look at our sequential mobile subscriber growth and the validation of mobile services, at both the end-user and carrier/channel level, we are encouraged by the early results. Our mobile subscriber base doubled to 10,000 users this quarter with minimal marketing, and our efforts to maximize cash flow in our landline business resulted in generating $3.4 million in cash this quarter." The company reaffirmed its previous guidance for fiscal 2006 expecting revenue of approximately $40 million with pretax margins of approximately 10%. Conference Call Details The CallWave First Quarter 2006 teleconference and Webcast is scheduled to begin at 5:00 p.m. Eastern Time, on Wednesday, November 2, 2005. To access the live Webcast, please visit the investor relations section of the Company's website http://www.callwave.com at least 30 minutes prior to the scheduled time to download any necessary audio or plug-in software. An audio replay of the call will also be available to investors beginning at 8:00 p.m. ET on November 2, 2005, through November 16, 2005, by dialing (800) 405-2236 and entering the passcode 11041665#. About CallWave CallWave (Nasdaq:CALL) is a leader in VoIP enhanced services for the consumer and small business markets. The company provides VoIP application services on a subscription basis that add features and functionality to both the landline and wireless telecommunications services used in homes and small offices. CallWave's proprietary VoIP software allows subscribers to get more out of their existing personal communications networks -- landline, mobile and IP -- by adding software-based call-handling features and by bridging all three networks to help subscribers get their important calls. Founded in 1998, CallWave is headquartered in Santa Barbara, California. For further information, please visit www.callwave.com. Safe Harbor Statement Except for the historical statements contained herein, the foregoing release contains forward-looking statements, including statements regarding, among other matters, our future financial performance. These forward-looking statements are subject to risks and uncertainties, and actual results could differ materially due to several factors, including but not limited to the ability to forecast consumer behavior and recognize or respond to emerging trends, changing preferences or competitive factors, the market acceptance of our new products and product enhancements, claims regarding alleged infringement of third parties' intellectual property rights, the ability to maintain or expand our customer and partner relationships and other risks and uncertainties. Please consult the various reports and documents filed by CallWave with the U.S. Securities and Exchange Commission, including but not limited to CallWave's annual report on Form 10-K for the fiscal year ended June 30, 2005, for factors potentially affecting the Company's future financial results. All forward-looking statements are made as of the date hereof and CallWave disclaims any responsibility to update or revise any forward-looking statement provided in this news release. The results for the first quarter of fiscal 2006 are not necessarily indicative of CallWave's operating results for any future periods. CallWave is a registered trademark of CallWave, Inc. All other trademarks are the property of their respective holders.
Callwave, Inc.
Condensed Consolidated Statement of Operations
(unaudited, in thousands, except per share data)
For the Three Months Ending
9/30/2005 9/30/2004
----------- -----------
Revenues $10,572 $11,045
Cost of Sales 3,761 3,202
Gross Profit 6,811 7,843
Operating Expenses:
Sales and Marketing 2,109 2,116
Research and Development 1,216 1,668
General and Administrative 2,182 1,276
Impairment of long-lived assets 243 -
-------- --------
Total operating expenses 5,750 5,060
Operating income 1,061 2,783
Interest Income, net 506 52
Income before income taxes 1,565 2,835
Income tax provision 633 (66)
Net income $ 932 $ 2,901
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EPS
Basic $ 0.05 $ 0.44
Diluted $ 0.04 $ 0.17
Weighted average shares 20,374 6,540
Fully diluted weighted average shares 21,160 17,365
Callwave, Inc.
Condensed Consolidated Balance Sheet
(In thousands)
9/30/2005 6/30/2005
----------- ----------
(unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents $34,883 $16,828
Marketable Securities 26,653 39,996
Restricted Cash 335 335
Accounts Receivable; net of allowance for
doubtful accounts 4,867 5,676
Inventory - 454
Prepaid Income Tax 336 113
Other Current Assets 199 476
Total Current Assets 67,273 63,878
Property and Equipment, net 1,867 2,024
Deferred Tax Asset 2,295 2,929
Other Assets 156 414
Total Assets $71,591 $69,245
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 798 $ 801
Accrued Payroll 1,037 1,014
Deferred Revenues 1,398 1,587
Income Taxes Payable 2 -
Other Current Liabilities 1,526 1,447
Total Current Liabilities 4,761 4,849
Total Liabilities 4,761 4,849
Stockholders' equity:
Common Stock 71,311 70,296
Deferred Compensation - (545)
Unrealized Gains/Losses (82) (24)
Accumulated Deficit (4,399) (5,331)
Total Stockholders' equity 66,830 64,396
Total Liabilities and stockholders' equity $71,591 $69,245
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CALLWAVE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the three
months ended
September 30,
-----------------
2005 2004
-------- --------
(unaudited)
Cash flows from operating activities:
Net income $ 932 $ 2,901
Operating activity adjustments
Depreciation and amortization 217 194
Impairment of long lived assets 243 -
Share based compensation 107 46
Deferred tax asset 634 485
Bad debt expense 542 191
Changes in operating assets & liabilities:
Accounts receivable, net of bad debt expense 267 (759)
Inventory 454 -
Prepaid income tax (223) (58)
Other assets 292 608
Accounts payable (3) (42)
Accrued payroll 23 (133)
Deferred revenue (189) (54)
Income taxes payable 2 (781)
Accrued other liabilities 79 571
-------- --------
Net cash provided by operating activities 3,377 3,169
Cash flows from investing activities:
Purchases of marketable securities (3,180) (2,997)
Sales of marketable securities 16,465 -
Purchases of property and equipment (60) (159)
-------- --------
Net cash provided by (used in) investing activities 13,225 (3,156)
-------- --------
Cash flows from financing activities:
Exercises of stock options and warrants 1,453 137
Costs incurred in initial public offering - (1,522)
-------- --------
Net cash provided by (used in) financing activities 1,453 (1,385)
-------- --------
Net increase in cash and cash equivalents 18,055 (1,372)
Cash and cash equivalents at beginning of the period 16,828 6,187
-------- --------
Cash and cash equivalents at end of the period $34,883 $ 4,815
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CONTACT: The Blueshirt Group for CallWave |
