Click here to close now.

Welcome!

.NET Authors: Jayaram Krishnaswamy, Adine Deford, Peter Silva, Pat Romanski, Kevin Benedict

News Feed Item

Marlborough Software Development Holdings Inc. Reports Third Quarter Results for 2012

Marlborough Software Development Holdings Inc. (“MSDH”) (OTC: MBGH) today reported revenue of $1,635,000 for the three months ended September 30, 2012, a decrease of $330,000 or 17% as compared to the three months ended June 30, 2012 and a decrease of $478,000 or 23% as compared to revenue of $2,113,000 for the three months ended September 30, 2011. The Company’s cash balance at September 30, 2012 totaled $621,000, an increase of $70,000 from a balance of $551,000 at December 31, 2011 and a decrease of $2,291,000 from a balance of $2,912,000 at June 30, 2012.

MSDH received an equity commitment from two investors in October 2012, scheduled to occur in two tranches. The first in the aggregate amount of $2,000,000 in exchange for 597,000 shares of 6.5% redeemable preferred stock and 2,985,000 common stock warrants closed on October 11, 2012. A second tranche of $1,500,000 of the same securities shall occur in 2013 if certain performance criteria specified in the investment documents are achieved. The two investors were Amos Kaminski, a member of the Company’s board of directors, and The Altshuler Shaham Group, in its management capacity for certain provident and pension funds. In addition, in November 2012 the Company received commitments from certain customers with terms including the prepayment of software licenses in the aggregate amount of $850,000 payable over the course of the next three fiscal quarters.

“We are extremely grateful for the confidence which these investors and customers have shown in us at a pivotal moment. We expect that these investments will strengthen the Company's financial position and reassure the Company's shareholders, partners, employees, and customers that MSDH has the resources it needs to support growth for the future” said Pinhas Romik, President and CEO of MSDH. “In addition to this investment, we have also made progress on our continuing efforts to better align our cost structure with current market conditions. We restructured our global workforce by approximately 26%, eliminating 28 positions, including 7 contractors. We believe these investments, commitments and cost savings will enhance our ability to grow the business. We are also exploring strategic growth initiatives and have engaged Corporate Partners LLC to advise us on strategic alternatives. Although we are disappointed with the sales results in the third quarter, which was primarily due to lower sales in our OEM and reseller channels, we still believe in the long term value of the Pageflex brand of products to the marketplace. This has already been demonstrated in the $850,000 customer commitments we recently received.”

During the third quarter, Pageflex made significant upgrades to its core technology and developed strategic partnerships to further expand its product offering. We released version 8.0 of our Pageflex product line, including Pageflex Storefront, Server, Campaign Manager, and Studio. This release includes support for languages and local business practices that enable users around the globe to successfully create online stores in their region. These globalization features help the company to expand the benefits of the Pageflex product line into new regions where language had been an obstacle. We also released version 6.0 of the Pageflex iWay product. Pageflex iWay is known for helping printers gain efficiencies by automating critical steps in the print production process. Pageflex iWay 6.0 includes new document composition features that will enable those printers to also expand their businesses with new services.

In addition to developments with our own products, we also made progress on products we are creating by forming strategic partnerships. Through a partnership with DynamicVideo, Pageflex is developing Pageflex Dynamic Media, a technology for creating customized web-banner videos that speak directly to the viewer in a personalized, cost-effective, and operationally efficient way. This partnership helps the Company gain a presence in the fast-growing business of personalized video. Pageflex Dynamic Media will be released later this year. Pageflex Connect is the result of a partnership with the cross-channel interaction management company Conversen. Pageflex Connect is a cloud-based solution for creating and deploying multi-channel marketing through a wide range of communication channels. This product is currently available, and expands the Company's presence as a provider of multi-channel marketing solutions.

“As these releases demonstrate, the Company remains committed to the development of the Pageflex brand of products and to expanding the presence of those products to new regions around the world. In addition, our strategic partnerships help us develop and deliver innovative products that will help our customers build on their investment in Pageflex and grow their businesses" said Mr. Romik.

GAAP Loss

Our loss from operations increased $193,000 to $2,219,000 for the three months ended September 30, 2012, as compared to $2,026,000 for the three months ended September 30, 2011. Our net loss increased $145,000 to $2,237,000 or $0.21 per share for the three months ended September 30, 2012, as compared to $2,092,000 or $0.19 per share for the three months ended September 30, 2011.

Our loss from operations decreased $205,000 to $2,219,000 for the three months ended September 30, 2012, as compared to $2,424,000 for the three months ended June 30, 2012. Our net loss decreased $263,000 to $2,237,000 or $0.21 per share for the three months ended September 30, 2012 as compared to $2,500,000 or $0.23 per share for the three months ended June 30, 2012.

Non-GAAP Loss

Our non-GAAP results exclude stock-based compensation expense, allocated costs associated with the resignation in May 2011 of the CEO of our former parent, Bitstream Inc., as well as the amortization of intangible assets primarily acquired from Press-Sense Ltd., and include MSDH expenses charged to Bitstream Inc. via our management fee agreement or allocated to Bitstream Inc. via our allocation methodology. Our non-GAAP loss from operations decreased $958,000 to $2,074,000 for the three months ended September 30, 2012, as compared to $3,032,000 for the three months ended September 30, 2011. Our non-GAAP net loss decreased $1,006,000 to $2,092,000 or $0.19 per share for the three months ended September 30, 2012, as compared to $3,098,000 or $0.29 per share for the three months ended September 30, 2011. A reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

Distribution

On March 14, 2012 MSDH shares were distributed to stockholders of Bitstream common stock. Each taxable U.S. stockholder of Bitstream receiving shares of MSDH common stock in the distribution will generally be treated as if such stockholder received a taxable distribution in an amount equal to the fair market value at the time of the distribution of the MSDH common stock received. We have evaluated the appraisal that was performed and determined $9.3 million to be the appropriate value. Based on shares outstanding of 10,751,609, management expects shareholder tax statements to be issued at $0.8662 per share. Management further expects that none of the distribution will be reported as a dividend due to Bitstream’s current and accumulated deficits and loss. Each shareholder will apply its proportionate amount first to recovery of basis and then to capital gain (long term or short term as applicable). Capital gains may be taxable at a reduced rate of 15% for individuals that have held their shares of Bitstream common stock for more than one year. A stockholder’s tax basis in MSDH common stock will be equal to its fair market value at the time of the spin-off of MSDH and the holding period in MSDH common stock will begin the day after the distribution. Shareholders should consult their tax advisors with respect to the tax consequences of the distribution.

Forward Looking Statements Disclosure

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on management’s current expectations. Forward-looking statements can be identified by the use of the words "may," "will," "should," "could," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "potential," "proposed," or "continue" or the negative of those terms. Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties, including, without limitation, market acceptance of the Company’s products, competition and the timely introduction of new products. Additional information concerning certain risks and uncertainties that would cause actual results to differ materially from those projected or suggested in the forward-looking statements is contained in the Company’s filings with the Securities and Exchange Commission, including MSDH’s Annual Report on Form 10-K for the year ended December 31, 2011, as supplemented by MSDH’s subsequent quarterly reports on Form 10-Q in 2012. We undertake no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise after the date of this document.

Use of Non-GAAP Financial Information

To supplement the financial measures presented in the Company's press release in accordance with accounting principles generally accepted in the United States ("GAAP"), the Company also presents non-GAAP measures relating to income or loss from operations, net income or loss, and net income or loss per diluted share which were adjusted from amounts determined based on GAAP to exclude share-based compensation expenses, allocated resignation costs of the CEO of our former parent, as well as expenses from the amortization of intangible assets primarily acquired from Press-sense Ltd., and include non-transaction related MSDH expenses charged to Bitstream Inc. via our management fee agreement or allocated to Bitstream Inc. via our allocation methodology as discussed further in our Form 10-K filed March 30, 2012.

The Company believes these non-GAAP financial measures will enhance the reader’s overall understanding of MSDH’s current financial performance and the Company's prospects for the future by providing a higher degree of transparency for certain financial measures and providing a level of disclosure that helps investors understand how the Company plans and measures its own business.

These financial measures are not in accordance with GAAP, should not be considered an alternative for measures prepared in accordance with GAAP, and may have limitations in that they do not reflect all of MSDH’s results of operations as determined in accordance with GAAP.

These non-GAAP measures should only be used to evaluate MSDH’s results of operations in conjunction with the corresponding GAAP measures. The presentation of non-GAAP information is not meant to be considered superior to, in isolation from, or as a substitute for results prepared in accordance with GAAP.

About Marlborough Software Development Holdings Inc. (“MSDH”)

MSDH’s Pageflex brand enables companies across the globe to communicate their marketing messages more easily and effectively. The award-winning Pageflex product line sets the standard for excellence and innovation in targeted marketing and brand management. Pageflex offers the ability to personalize any form of communication in print, e-mail, or on the Web. Pageflex pioneered the concepts of variable data and web-to-print storefronts, and has expanded to offer software for multi-channel campaign management, dynamic publishing, and back-end production automation. Pageflex solutions use the patented Pageflex variable publishing engine and Adobe® InDesign®. For more information, visit www.pageflex.com.

Marlborough Software Development Holdings Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Data)

(unaudited)

       

Three Months Ended
September 30,

Nine Months Ended
September 30,

2012

2011

2012

2011

Revenue:
Software licenses $ 347 $ 711 $ 1,391 $ 2,078
Services 1,288   1,402   3,977   4,379  
Total revenue 1,635   2,113   5,368   6,457  
 
Cost of revenue:
Software licenses 237 278 700 859
Services 629   539   1,841   1,519  
Total cost of revenue 866 817 2,541 2,378
       
Gross profit 769   1,296   2,827   4,079  
 
Operating expenses:
Marketing and selling 872 954 3,108 2,652
Research and development 1,343 1,703 4,714 5,154
General and administrative 773   665   2,790   2,453  
 
Total operating expenses 2,988   3,322   10,612   10,259  
 
Operating loss (2,219 ) (2,026 ) (7,785 ) (6,180 )
 

Interest and other (expense)

 income, net

17 (25 ) (26 ) 7
       
Loss before provision for income taxes (2,202 ) (2,051 ) (7,811 ) (6,173 )
Provision for income taxes 35   41   146   132  
 
Net loss $ (2,237 ) $ (2,092 ) $ (7,957 ) $ (6,305 )
 
Basic and diluted net loss per share $ (0.21 ) $ (0.19 ) $ (0.74 ) $ (0.59 )
Basic and diluted weighted average shares outstanding 10,763   10,752   10,755   10,752  
 

Marlborough Software Development Holdings Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In Thousands)

   
September 30, December 31,

2012

2011

(unaudited)
ASSETS
Current assets:
Cash $ 621 $ 551
Accounts receivable, net 388 628
Prepaid expenses and other current assets 497 394
 
Total current assets 1,506 1,573
 
Property and equipment, net 1,819 1,355
Other 528 238
Goodwill 3,297 3,297
Intangible assets, net 2,769 3,070
 
Total assets $ 9,919 $ 9,533
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 375 $ 169
Accrued payroll and other compensation 709 775
Other accrued expenses 663 388
Short-term deferred revenue 1,993 2,200
Total current liabilities 3,740 3,532
 
Long-term deferred revenue 580 526
Long-term deferred rent 480 506
Total liabilities 4,800 4,564
 
Total stockholders’ equity 5,119 4,969
 
Total liabilities and stockholders’ equity $ 9,919 $ 9,533
 

Marlborough Software Development Holdings Inc. and Subsidiaries

Non-GAAP Results

(In Thousands, Except Per Share Data)

(unaudited)

   

The following table shows MSDH’s non-GAAP results reconciled to GAAP results included in this release.

 

Three Months Ended

September 30,

Nine Months Ended

September 30,

2012

 

2011

2012

 

2011

Operating loss:
GAAP operating loss $ (2,219 ) $ (2,026 ) $ (7,785 ) $ (6,180 )
Stock-based compensation 22 82 1,442 303

Amortization of intangible assets and

 capitalized software

123

103

324

307

Allocation to former parent --- (1,191 ) (818 ) (2,656 )
Resignation costs, former CEO ---   ---   ---   347  
Non-GAAP operating loss $ (2,074 ) $ (3,032 ) $ (6,837 ) $ (7,879 )
 
Net loss:
GAAP net loss $ (2,237 ) $ (2,092 ) $ (7,957 ) $ (6,305 )
Stock-based compensation 22 82 1,442 303

Amortization of intangible assets and

 capitalized software

123

103

324

307

Allocation to former parent --- (1,191 ) (818 ) (2,656 )
Resignation costs, former CEO ---   ---   ---   347  
Non-GAAP net loss $ (2,092 ) $ (3,098 ) $ (7,009 ) $ (8,004 )
 
Net loss per share:
GAAP net loss per share $ (0.21 ) $ (0.19 ) $ (0.74 ) $ (0.59 )
Stock-based compensation per share --- --- 0.13 0.03

Amortization of intangible assets and

 capitalized software per share

0.02

0.01

0.03

0.03

Allocation to former parent per share --- (0.11 ) (0.07 ) (0.24 )
Resignation costs, former CEO per share ---   ---   ---   0.03  
Non-GAAP net loss per share $ (0.19 ) $ (0.29 ) $ (0.65 ) $ (0.74 )
 

For the three and nine month periods ended September 30, 2012, net loss per share is based on 10,763,000 and 10,755,000 weighted average shares outstanding, respectively. For both the three and nine months ended September 30, 2011, net loss per share is based on 10,752,000 weighted average shares outstanding. GAAP and Non-GAAP amounts exclude $0 and $2,254,000 for the three and nine months ended September 30, 2012, respectively, for Separation, Distribution, and Merger costs which were incurred by MSDH and subsequently charged to Bitstream Inc. via a management fee agreement.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The WebRTC Summit 2014 New York, to be held June 9-11, 2015, at the Javits Center in New York, NY, announces that its Call for Papers is open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 16th International Cloud Expo, @ThingsExpo, Big Data Expo, and DevOps Summit.
SYS-CON Events announced today that Cisco, the worldwide leader in IT that transforms how people connect, communicate and collaborate, has been named “Gold 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 City, NY. Cisco makes amazing things happen by connecting the unconnected. Cisco has shaped the future of the Internet by becoming the worldwide leader in transforming how people connect, communicate and collaborate. Cisco and our partners are building the platform for the Internet of Everything by connecting the...
15th Cloud Expo, which took place Nov. 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, expanded the conference content of @ThingsExpo, Big Data Expo, and DevOps Summit to include two developer events. IBM held a Bluemix Developer Playground on November 5 and ElasticBox held a Hackathon on November 6. Both events took place on the expo floor. The Bluemix Developer Playground, for developers of all levels, highlighted the ease of use of Bluemix, its services and functionality and provide short-term introductory projects that developers can complete between sessions.
Temasys has announced senior management additions to its team. Joining are David Holloway as Vice President of Commercial and Nadine Yap as Vice President of Product. Over the past 12 months Temasys has doubled in size as it adds new customers and expands the development of its Skylink platform. Skylink leads the charge to move WebRTC, traditionally seen as a desktop, browser based technology, to become a ubiquitous web communications technology on web and mobile, as well as Internet of Things compatible devices.
SYS-CON Events announced today that robomq.io will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. robomq.io is an interoperable and composable platform that connects any device to any application. It helps systems integrators and the solution providers build new and innovative products and service for industries requiring monitoring or intelligence from devices and sensors.
The list of ‘new paradigm’ technologies that now surrounds us appears to be at an all time high. From cloud computing and Big Data analytics to Bring Your Own Device (BYOD) and the Internet of Things (IoT), today we have to deal with what the industry likes to call ‘paradigm shifts’ at every level of IT. This is disruption; of course, we understand that – change is almost always disruptive.
WebRTC is an up-and-coming standard that enables real-time voice and video to be directly embedded into browsers making the browser a primary user interface for communications and collaboration. WebRTC runs in a number of browsers today and is currently supported in over a billion installed browsers globally, across a range of platform OS and devices. Today, organizations that choose to deploy WebRTC applications and use a host machine that supports audio through USB or Bluetooth can use Plantronics products to connect and transit or receive the audio associated with the WebRTC session.
Docker is an excellent platform for organizations interested in running microservices. It offers portability and consistency between development and production environments, quick provisioning times, and a simple way to isolate services. In his session at DevOps Summit at 16th Cloud Expo, Shannon Williams, co-founder of Rancher Labs, will walk through these and other benefits of using Docker to run microservices, and provide an overview of RancherOS, a minimalist distribution of Linux designed expressly to run Docker. He will also discuss Rancher, an orchestration and service discovery platf...
Sonus Networks introduced the Sonus WebRTC Services Solution, a virtualized Web Real-Time Communications (WebRTC) offer, purpose-built for the Cloud. The WebRTC Services Solution provides signaling from WebRTC-to-WebRTC applications and interworking from WebRTC-to-Session Initiation Protocol (SIP), delivering advanced real-time communications capabilities on mobile applications and on websites, which are accessible via a browser.
SYS-CON Events announced today that Aria Systems, the leading innovator in recurring revenue, has been named “Bronze Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Proven by the world’s most demanding enterprises, including AAA NCNU, Constant Contact, Falck, Hootsuite, Pitney Bowes, Telekom Denmark, and VMware, Aria helps enterprises grow their recurring revenue businesses. With Aria’s end-to-end active monetization platform, global brands can get to market faster with a wider variety of products and services, while maximizin...
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
SYS-CON Events announced today that Alert Logic, the leading provider of Security-as-a-Service solutions for the cloud, has been named “Bronze Sponsor” of SYS-CON's 16th International Cloud Expo® and DevOps Summit 2015 New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY, and the 17th International Cloud Expo® and DevOps Summit 2015 Silicon Valley, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Vitria Technology, Inc. will exhibit at SYS-CON’s @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Vitria will showcase the company’s new IoT Analytics Platform through live demonstrations at booth #330. Vitria’s IoT Analytics Platform, fully integrated and powered by an operational intelligence engine, enables customers to rapidly build and operationalize advanced analytics to deliver timely business outcomes for use cases across the industrial, enterprise, and consumer segments.
Wearable technology was dominant at this year’s International Consumer Electronics Show (CES) , and MWC was no exception to this trend. New versions of favorites, such as the Samsung Gear (three new products were released: the Gear 2, the Gear 2 Neo and the Gear Fit), shared the limelight with new wearables like Pebble Time Steel (the new premium version of the company’s previously released smartwatch) and the LG Watch Urbane. The most dramatic difference at MWC was an emphasis on presenting wearables as fashion accessories and moving away from the original clunky technology associated with t...
SYS-CON Events announced today that Solgenia 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, and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Solgenia is the global market leader in Cloud Collaboration and Cloud Infrastructure software solutions. Designed to “Bridge the Gap” between Personal and Professional Social, Mobile and Cloud user experiences, our solutions help large and medium-sized organizations dr...
SYS-CON Events announced today that Liaison Technologies, a leading provider of data management and integration cloud services and solutions, 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. Liaison Technologies is a recognized market leader in providing cloud-enabled data integration and data management solutions to break down complex information barriers, enabling enterprises to make smarter decisions, faster.
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
SYS-CON Events announced today that Akana, formerly SOA Software, has been named “Bronze Sponsor” of SYS-CON's 16th International Cloud Expo® New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Akana’s comprehensive suite of API Management, API Security, Integrated SOA Governance, and Cloud Integration solutions helps businesses accelerate digital transformation by securely extending their reach across multiple channels – mobile, cloud and Internet of Things. Akana enables enterprises to share data as APIs, connect and integrate applications, drive part...
SYS-CON Events announced today that CommVault has been named “Bronze 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 City, NY, and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. A singular vision – a belief in a better way to address current and future data management needs – guides CommVault in the development of Singular Information Management® solutions for high-performance data protection, universal availability and sim...
Cloud is not a commodity. And no matter what you call it, computing doesn’t come out of the sky. It comes from physical hardware inside brick and mortar facilities connected by hundreds of miles of networking cable. And no two clouds are built the same way. SoftLayer gives you the highest performing cloud infrastructure available. One platform that takes data centers around the world that are full of the widest range of cloud computing options, and then integrates and automates everything. Join SoftLayer on June 9 at 16th Cloud Expo to learn about IBM Cloud's SoftLayer platform, explore se...