Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,424.85 162.29 1.00%
S&P 500 1,862.31 19.33 1.05%
NASDAQ 4,086.22 52.06 1.29%
Ticker Volume Price Price Delta
STOXX 50 3,139.26 47.74 1.54%
FTSE 100 6,584.17 42.56 0.65%
DAX 9,317.82 144.11 1.57%
Ticker Volume Price Price Delta
NIKKEI 14,417.68 420.87 3.01%
TOPIX 1,166.55 30.46 2.68%
HANG SENG 22,696.01 24.75 0.11%

Crexendo Reports Second Quarter 2013 Financial Results


Crexendo Reports Second Quarter 2013 Financial Results

PHOENIX, AZ -- (Marketwired) -- 08/13/13 -- Crexendo, Inc. (NYSE MKT: EXE), a hosted services company that provides web hosting, hosted telecommunications services, search engine optimization management, link building, e-commerce software, website development and broadband internet services for businesses and entrepreneurs, today reported financial results for its second quarter of 2013.

Financial highlights for Crexendo's second quarter 2013 included:

Consolidated revenue for the second quarter of 2013 decreased 45% to $2.7 million compared to $4.9 million for the second quarter of prior year.

Net loss for the second quarter of 2013 was $(1.1) million or $(0.10) per diluted common share, compared to net loss of $(117,000) or $(0.01) per diluted common share for the second quarter of prior year.

Cash used for operations for the second quarter of 2013 was $(585,000) compared to cash used for operations of $(1.8) million in first quarter of 2013 and cash provided by operations of $759,000 for the second quarter of prior year.

Segment Results

The Company has three operating segments, which consist of Crexendo Network Services, Crexendo Web Services and StoresOnline. Effective October 1, 2012, the Company changed its reporting segments to reflect the allocation of previously unallocated corporate expenses to each of the three operating segments. The Company revised its segment reporting to reflect changes in how the Chief Operating Decision Maker (CODM) internally measures performance and allocates resources. Segment operating results for the prior year has been revised to conform to current year segment operating results presentation.

StoresOnline

Revenue for the second quarter of 2013 decreased 59% to $1.7 million compared to $4.0 million for the prior year quarter.

Total segment operating expenses decreased 56% to $1.0 million compared to $ 2.4 million for the prior year quarter.

Segment other income, primarily related to interest on the collection of accounts receivable for the second quarter of 2013 decreased 76% to $120,000 compared to $504,000 in the prior year quarter.

Total segment income before income taxes for the second quarter of 2013 decreased 66% to $ 749,000 compared to $2.2 million in the prior year quarter.

Crexendo Web Services

Revenue for the second quarter of 2013 decreased 18% to $569,000 from $692,000 in the prior year quarter. Web Services backlog, which is anticipated to be recognized within the next twelve months, was $1.2 million at June 30, 2013 compared to a backlog of $1.0 million at June 30, 2012.

Total segment operating expenses for the second quarter of 2013 decreased 35% to $1.2 million compared to $1.8 million in the prior year quarter.

Total segment loss before income taxes for the second quarter of 2013 decreased 46% to $(594,000) compared to $(1.1) million in the prior year quarter.

Crexendo Network Services

Revenue for the second quarter of 2013 increased 192% to $491,000 compared to $168,000 in the prior year quarter. Network Services backlog, which is anticipated to be recognized within the next thirty-six to sixty months, was $4.3 million at June 30, 2013 compared to a backlog of $1.3 million at June 30, 2012.

Total Network Services operating expenses for the second quarter of 2013 increased 28% to $1.7 million compared to $1.4 million in the prior year quarter.

Total segment loss before income taxes for the second quarter of 2013 increased 5% to $(1.3) million compared to $(1.2) million in the prior year quarter.

Steven G. Mihaylo, Chief Executive Officer, commented, "The operating loss this quarter is in line with expectations. As we have discussed the revenues from our legacy business have decreased drastically as our payment arrangements from those customers come to an end. Our telecom and web service revenues are in line with our internal plan, but we are always working to improve results. We continue to experience some growing pains with finding the right mix in our sales force, and I continue to work with Doug Gaylor to find the best sales force we can assemble. We have added internal resources to our dealer program, and we continue to add dealers that I believe will have a long term benefit to Crexendo. I know from experience that with the right dealers you can build a very successful recurring revenue stream. Our dealer sales to date are encouraging. We are also working to build our affiliate program which I also believe can have a long term benefit and particularly drive telecom sales. We continue to improve our telecom product, and I am convinced that the service, features and benefits that we provide are cutting edge and compare favorably to any competing product offering."

Mihaylo continued, "We are integrating our acquisition of PBX Central into Crexendo; we are closely monitoring our progress and our processes so we can improve those to accommodate additional and hopefully larger acquisitions. I am presently working with our team reviewing potential acquisitions. The acquisition process is time consuming, and for competitive reasons we obviously cannot discuss what is on our radar screen, I do hope to grow the business with appropriate and accretive acquisitions. We continue to believe in the University Program, but we are waiting to expand the program until our new web-builder, 'Slingshot,' is completed. Once Slingshot is completed, we will continue expanding our University Program and expand the use of our web-builder software to the developer community. The entire management team is taking steps to assure liquidity and continue our path toward profitability."

Conference Call

The Company is hosting a conference call today, August 13, 2013 at 5:00 PM EDT. The conference call will be broadcast live over the Internet at http://www.crexendo.com. If you do not have Internet access, the telephone dial-in number is 800-768-6544 for domestic participants and 785-830-7990 for international participants. The conference ID to join the call is 7276122. Please dial in five to ten minutes prior to the beginning of the call at 5:00 PM EDT.

About Crexendo

Crexendo is a hosted services company that provides web hosting, hosted telecommunications services, search engine optimization management, link building, e-commerce software, website development and broadband internet services for businesses and entrepreneurs. Our services are designed to make enterprise-class hosting services available to small and medium-sized businesses at affordable monthly rates.

Safe Harbor Statement

This press release contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. The words "believe," "expect," "anticipate," "estimate," "will" and other similar statements of expectation identify forward-looking statements. Specific forward-looking statements in this press release include information about Crexendo (i) operating loss this quarter and telecom and web service revenues meeting internal plans and expectations; (ii) always working to improve results; (iii) experiencing some growing pains finding the right mix in the sales force while working to find the best sales force that can be assembled; (iv) continuing to add dealers that will have a long term benefit to Crexendo; (v) having the right dealers building a very successful recurring revenue stream; (vii) dealer sales being encouraging ; (vii) building its affiliate program which can have a long term benefit and particularly drive telecom sales; (vii) improving its telecom product with service, features and benefits that are cutting edge and compare favorably to any competing product offering; (viii) integrating the acquisition of PBX Central and closely monitoring progress and our processes to accommodate additional and larger acquisitions; (ix) growing the business with appropriate and accretive acquisitions; (x) continuing to believe in the University Program but waiting to expand the program; (xi) completing the new web-builder, "Slingshot" and (xi) taking steps to assure liquidity and continue our path toward profitability.

For a more detailed discussion of risk factors that may affect Crexendo's operations and results, please refer to the company's Form 10-K for the year ended December 31, 2012, and Form 10Q for the period ending June 30, 2013. These forward-looking statements speak only as of the date on which such statements are made, and the company undertakes no obligation to update such forward-looking statements, except as required by law.


 
                                                                            
                                                                            
                      CREXENDO, INC. AND SUBSIDIARIES                       
                   Condensed Consolidated Balance Sheets                    
              (In thousands, except par value and share data)               
                                (Unaudited)                                 
                                                                            
                                         June 30, 2013    December 31, 2012 
                                       -----------------  ----------------- 
Assets                                                                      
                                                                            
Current Assets:                                                             
  Cash and cash equivalents            $           4,930  $           7,440 
  Restricted cash                                  1,444              1,444 
  Trade receivables, net of allowance                                       
   of doubtful accounts of $641 as of                                       
   June 30, 2013 and $1,326 as of                                           
   December 31, 2012                               1,341              3,043 
  Inventories                                        131                171 
  Equipment financing receivables                     51                 28 
  Income taxes receivable                             63                434 
  Prepaid expenses and other                         510                333 
                                       -----------------  ----------------- 
    Total Current Assets                           8,470             12,893 
                                                                            
Certificate of deposit                               250                500 
Long-term trade receivables, net of                                         
 allowance of doubtful accounts of                                          
 $106 as of June 30, 2013 and $196 as                                       
 of December 31, 2012                                152                395 
Long-term equipment financing                                               
 receivables                                         196                 96 
Property and equipment, net                        2,658              3,172 
Deferred income tax assets, net                      105                103 
Intangible assets                                    671                  6 
Goodwill                                             340                265 
Other long-term assets                                95                 97 
                                       -----------------  ----------------- 
    Total Assets                       $          12,937  $          17,527 
                                       =================  ================= 
                                                                            
Liabilities and Stockholders' Equity                                        
                                                                            
Current Liabilities:                                                        
  Accounts payable                     $             307  $             418 
  Accrued expenses and other                       1,307              3,010 
  Deferred income tax liability                      105                103 
  Deferred revenue, current portion                1,348              3,052 
  Contingent consideration                            87                  - 
                                       -----------------  ----------------- 
    Total Current Liabilities                      3,154              6,583 
                                                                            
Deferred revenue, net of current                                            
 portion                                             143                399 
Other long-term liabilities                            -                253 
                                       -----------------  ----------------- 
    Total Liabilities                              3,297              7,235 
                                       -----------------  ----------------- 
                                                                            
Stockholders' Equity:                                                       
  Preferred stock, par value $0.001                                         
   per share - authorized 5,000,000                                         
   shares; none issued                                 -                  - 
  Common stock, par value $0.001 per                                        
   share - authorized 100,000,000                                           
   shares; 10,709,904 shares                                                
   outstanding as of June 30, 2013 and                                      
   10,669,201 shares outstanding as of                                      
   December 31, 2012                                  11                 11 
  Additional paid-in capital                      50,364             49,824 
  Contingent consideration                           276                  - 
  Accumulated deficit                            (41,011)           (39,543)
                                       -----------------  ----------------- 
    Total Stockholders' Equity                     9,640             10,292 
                                       -----------------  ----------------- 
    Total Liabilities and                                                   
     Stockholders' Equity              $          12,937  $          17,527 
                                       =================  ================= 
                                                                            
                                                                            
                                                                            
                      CREXENDO, IN
C. AND SUBSIDIARIES                       
              Condensed Consolidated Statements of Operations               
              (In thousands, except per share and share data)               
                                (Unaudited)                                 
                                                                            
                          Three Months Ended June    Six Months Ended June  
                                    30,                       30,           
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
                                                                            
Revenue                  $     2,737  $     4,914  $     5,759  $    10,169 
                                                                            
Operating expenses:                                                         
  Cost of revenue                970        1,298        2,012        2,719 
  Selling and marketing          717          984        1,625        1,917 
  General and                                                               
   administrative              1,852        2,741        3,290        5,774 
  Research and                                                              
   development                   414          505          895        1,099 
                         -----------  -----------  -----------  ----------- 
    Total operating                                                         
     expenses                  3,953        5,528        7,822       11,509 
                         -----------  -----------  -----------  ----------- 
                                                                            
Loss from operations          (1,216)        (614)      (2,063)      (1,340)
                         -----------  -----------  -----------  ----------- 
                                                                            
Other income (expense):                                                     
  Interest income                146          524          365        1,266 
  Other income                                                              
   (expense), net                (26)         (14)         (33)          14 
                         -----------  -----------  -----------  ----------- 
    Total other income,                                                     
     net                         120          510          332        1,280 
                         -----------  -----------  -----------  ----------- 
                                                                            
Loss before income tax                                                      
 provision                    (1,096)        (104)      (1,731)         (60)
                                                                            
Income tax benefit                                                          
 (provision)                      26          (13)         263          140 
                                                                            
                         -----------  -----------  -----------  ----------- 
Net income (loss)        $    (1,070) $      (117) $    (1,468) $        80 
                         ===========  ===========  ===========  =========== 
                                                                            
Net income (loss) per                                                       
 common share:                                                              
  Basic                  $     (0.10) $     (0.01) $     (0.14) $      0.01 
  Diluted                $     (0.10) $     (0.01) $     (0.14) $      0.01 
                                                                            
Dividends per common                                                        
 share:                  $         -  $         -  $         -  $      0.02 
                                                                            
Weighted average common                                                     
 shares outstanding:                                                        
  Basic                   10,682,393   10,634,104   10,675,990   10,582,372 
  Diluted                 10,682,393   10,634,104   10,675,990   10,614,888 
                                                                            
                                                                            
                                                                            
                      CREXENDO, INC. AND SUBSIDIARIES                       
         Condensed Consolidated Statements of Stockholders' Equity          
                       Six Months Ended June 30, 2013                       
                     (In thousands, except share data)                      
                                (Unaudited)                                 
                                                                            
                                                         
                                               Contin-   Total              
                     Common Stock   Additional  gent     Accumu-   Stock-       
             
                  -----------------   Paid-in  Consi-     lated     holders'    
   
                    Shares   Amount   Capital  deration  Deficit   Equity  
                  ---------- ------ ---------- -------- ---------  -------- 
Balance, January                                                            
 1, 2013          10,669,201 $   11 $   49,824 $      - $ (39,543) $ 10,292 
  Expense for                                                               
   stock options                                                            
   granted to                                                               
   employees               -      -        430        -         -       430 
  Proceeds from                                                             
   the exercise                                                             
   of stock                                                                 
   options             2,187      -          3        -         -         3 
  Contingent                                                                
   consideration           -      -          -      276         -       276 
  Issuance of                                                               
   common stock                                                             
   for business                                                             
   acquisition        38,516      -        107        -         -       107 
  Net loss                 -      -          -        -    (1,468)   (1,468)
                  ---------- ------ ---------- -------- ---------  -------- 
Balance, June 30,                                                           
 2013             10,709,904 $   11 $   50,364 $    276 $ (41,011) $  9,640 
                  ---------- ------ ---------- -------- ---------  -------- 
                                                                            
                                                                            
                                                                           
                                                                            
                                                                            
                      CREXENDO, INC. AND SUBSIDIARIES                       
              Condensed Consolidated Statements of Cash Flows               
                               (In thousands)                               
                                (Unaudited)                                 
                                                 Six Months Ended June 30,  
                                 
              ---------------------------- 
                                                    2013           2012     
                                               -------------  ------------- 
CASH FLOWS FROM OPERATING ACTIVITIES                                        
Net (loss) income                              $      (1,468) $          80 
Adjustments to reconcile net (loss) income to                               
 net cash provided by (used for) operating                                  
 activities:                                                                
  Lease abandonment                                     (606)             - 
  Depreciation and amortization                          598            759 
  Expense for stock options issued to                                       
   employees                                             430            455 
  Change in uncertain tax positions                     (253)          (167)
Changes in assets and liabilities:                                          
  Trade receivables                                    1,945          6,157 
  Equipment financing receivables                       (123)           (25)
  Inventories                                             40             28 
  Income taxes receivable                                371             38 
  Prepaid expenses and other                            (177)           (37)
  Other long-term assets                                   2             20 
  Accounts payable, accrued expenses and other        (1,202)          (573)
  Deferred revenue                                    (1,960)        (6,000)
  Other long-term liabilities                              -              4 
                                               -------------  ------------- 
    Net cash (used for) provided by operating                               
     activities                                       (2,403)           739 
                                               -------------  ------------- 
CASH FLOWS FROM INVESTING ACTIVITIES                                        
  Release of certificate of deposit                      250              - 
  Acquisition of property and equipment                  (60)        (1,024)
  Acquisition of PBX Central                            (300)             - 
                                               -------------  ------------- 
    Net cash used for investing activities              (110)        (1,024)
                                               -------------  ------------- 
CASH FLOWS FROM FINANCING ACTIVITIES                                        
  Proceeds from exercise of stock options                  3            498 
  Payments made on contingent consideration                -             (6)
  Dividend payments                                        -           (422)
                                               -------------  ------------- 
    Net cash provided by financing activities              3             70 
                                               -------------  ------------- 
                                                                            
NET DECREASE IN CASH AND CASH EQUIVALENTS             (2,510)          (215)
                                                                            
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD         7,440          8,658 
                                               -------------  ------------- 
CASH AND CASH EQUIVALENTS, END OF PERIOD       $       4,930  $       8,443 
                                               =============  ============= 
                                                                            
Supplemental disclosure of cash flow                                        
 information:                                                               
Cash received during the period:                                            
  Income taxes                                 $        (382) $         (11)
Supplemental disclosure of non-cash investing                               
 and financing information:                                                 
  Purchases of property and equipment included                              
   in accounts payable                         $           -  $          16 
  Business acquisition with stock              $         107  $           - 
  Contingent consideration related to                                       
   acquisition                                 $         363  $           - 

Crexendo, Inc. Steven G. Mihaylo CEO 602-345-7777 Smihaylo@crexendo.com

Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement