NEW YORK--(BUSINESS WIRE)--Nov. 4, 1999--
ASI Solutions Incorporated (Nasdaq:ASIS) reported today that revenue for its fiscal 2000 second quarter ended September 30, 1999, increased to $15.2 million, but, as expected, net income declined to $175,000, or $0.03 per diluted share.
One year ago, the company -- a leader in human resources outsourcing services -- reported second-quarter net income of $914,000, or $0.14 per diluted share on revenue of $14.8 million.
In late September, ASI announced that earnings would be lower than anticipated as a result of lower volume and a pricing concession related to a broader extension of a current contract. The company said that these developments would affect earnings in the fiscal second and third quarters.
For the first half of fiscal 2000, ASI revenue was $31.1 million, and net income was $1.2 million, or $0.18 per diluted share. Through six months of fiscal 1999, ASI reported revenue of $26.9 million, net income of $1.8 million, and diluted earnings per share of $0.27.
Reporting on its three business segments for the period, revenue from ASI's Performance Improvement Services increased to $4.7 million, up 16% from $4.0 million one year ago. Employment Process Outsourcing revenue rose 4.8% to $5.6 million from $5.4 million. In the company's Compensation Services and Market Share Studies unit, second-quarter revenue of $4.9 million was down 9.7% from last year's $5.4 million, reflecting client commitments to annual surveys earlier in the year. Year-to-date revenue is up 17% on continued strong growth in this business segment.
Management Commentary
Discussing ASI's report for the second quarter, Bernard F. Reynolds, chairman and chief executive officer, said: "Our results came in essentially as anticipated and as communicated in September. While we are clearly disappointed with the quarter's results, we are already beginning to experience higher levels of activity in key business segments. In addition, we have reduced expenses to improve profitability. The combination of these factors should produce improved performance now and in the future."
"Looking ahead," Reynolds stated, "we are optimistic about current new business prospects. This heightened level of activity is especially strong in our Performance Improvement Services segment."
Reynolds concluded his remarks by saying: "We are confident that our businesses are strong and well positioned, and that our client relationships will continue to grow and prosper. In that way, our performance in the quarters and years to come should improve steadily, and generate reliable and profitable growth."
About ASI
ASI Solutions Incorporated is a leading national provider of a unique blend of human resources outsourcing services for organizations seeking to hire, train and develop a higher quality, more effective workforce. The company offers services in three areas: Performance Improvement; Employment Process Outsourcing; and Compensation & Market Share Studies (McLagan Partners). These services are provided to major corporations and other large organizations, primarily in the telecommunications, financial services, information technology and healthcare industries. ASI's Internet address is www.asisolutions.com.
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such statements are subject to risks that could cause the actual results to vary materially, including those discussed in the company's quarterly and annual filings with the Securities and Exchange Commission, negative developments relating to unforeseen order cancellations or push-outs, ASI's strategic relationships, the impact of intense competition on ASI'S ability to maintain existing business and generate new business, and changes in ASI's industry. ASI wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. ASI will not undertake and ASI specifically disclaims any obligation to announce revisions to any such forward-looking statements to reflect events or circumstances occurring after such statements were made. -0-
ASI SOLUTIONS INCORPORATED UNAUDITED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Six Months Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 1999 1998 1999 1998 Revenue $15,239,394 $14,844,144 $31,138,636 $26,856,850 Cost of services 8,376,543 7,214,098 16,688,876 13,077,631 ----------- ----------- ----------- ----------- Gross profit 6,862,851 7,630,046 14,449,760 13,779,219 Operating expenses: General and administrative 4,143,654 3,723,006 7,783,631 6,282,258 Sales and marketing 1,474,545 1,416,703 2,795,910 2,550,345 Research and development 558,953 456,974 1,060,905 916,506 ----------- ----------- ----------- ----------- Income from operations 685,699 2,033,363 2,809,314 4,030,110 Interest expense, net 382,193 462,987 781,268 954,871 ----------- ----------- ----------- ----------- Income before provision for income taxes 303,506 1,570,376 2,028,046 3,075,239 Provision for income taxes 128,520 656,556 845,262 1,306,975 ----------- ----------- ----------- ----------- Net income $ 174,986 $ 913,820 $ 1,182,784 $ 1,768,264 =========== =========== =========== =========== Basic earnings per share $ .03 $ .14 $ .18 $ .27 =========== =========== =========== =========== Diluted earnings per share $ .03 $ .14 $ .18 $ .27 =========== =========== =========== =========== Weighted average common shares outstanding: Basic shares 6,538,813 6,476,874 6,538,813 6,476,874 Diluted effect of stock options and warrants 205,521 85,073 194,611 136,723 ----------- ----------- ----------- ----------- Diluted shares 6,744,334 6,561,947 6,733,424 6,613,597 =========== =========== =========== =========== ASI SOLUTIONS INCORPORATED CONSOLIDATED BALANCE SHEETS September 30, March 31, 1999 1999 (Unaudited) ASSETS: Current Assets: Cash and cash equivalents $ 799,896 $ 7,595,366 Accounts receivable, net 11,315,246 12,874,967 Prepaid expenses and other current assets 574,939 576,424 Income taxes receivable 580,997 -- Deferred income taxes 299,478 299,478 ------------ ------------ Total current assets 13,570,556 21,346,235 Property and equipment, net 5,248,505 5,218,408 Intangible assets, net 22,820,694 23,258,472 Deferred financing costs 357,234 391,386 Other assets 355,036 325,518 ------------ ------------ Total assets $ 42,352,025 $ 50,540,019 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY: Current Liabilities: Current portion, notes payable to bank $ 2,952,794 $ 7,143,658 Current portion, subordinated notes payable 1,666,667 1,666,666 Other debt 13,485 66,501 Accounts payable and accrued expenses 6,082,309 7,946,658 Accrued income taxes -- 326,964 ------------ ------------ Total current liabilities 10,715,255 17,150,447 Deferred income taxes 543,593 543,593 Notes payable to bank, less current portion 9,621,166 11,224,900 Subordinated notes payable, less current portion -- 1,666,667 Other liabilities 299,974 268,373 ------------ ------------ Total liabilities 21,179,988 30,853,980 Stockholders' Equity: Common stock 65,844 65,432 Additional paid in capital 11,265,369 11,038,250 Accumulated other comprehensive income 67,844 (7,839) Retained earnings 10,165,711 8,982,927 Treasury stock, 45,534 shares, at cost (392,731) (392,731) ------------ ------------ Total stockholders' equity 21,172,037 19,686,039 Total liabilities & stockholders' equity $ 42,352,025 $ 50,540,019 ============ ============
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