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Third quarter revenues from continuing operations decreased 69% to approximately $282,000 during the third quarter of fiscal 2009 as compared to $903,000 during the third quarter in 2008. The net loss from continuing operations was approximately ($700,000) or ($.05) per share for the third quarter in 2009 compared to a net loss of ($1,018,000) or ($.09) per share for the same period in 2008. Net loss from discontinued operations was approximately ($198,000) or ($.01) per share for the quarter ended July 31, 2009 compared to income from discontinued operations of $388,000 or $.03 per share for the same period in fiscal 2008.
Third Quarter Highlights:
-- In June, the Company's board members each made an equity investment
in the Company
-- The Company executed a loan of $250,000 with Caledonia Capital in July
for working capital purposes
-- SteelCloud sold its integration business
-- The Company announced that it had signed an OEM agreement with Dell,
whereby Dell would build and support its SteelWorks branded appliance
-- SteelCloud announced deliveries of its SteelWorks(R) FedMobile to
multiple domestic and international DoD installations
-- Product revenues increased 55% in Q3 2009 compared to Q3 2008
-- Gross profit percentage increased to 42% in Q3 2009 compared to 21% in
Q3 2008
-- Operating expenses decreased 34% in Q3 2009 from Q3 2008
"While our third quarter results met our expectations, it is easy to see that our business has been substantially affected by the downturn in the economy and the shedding of our hardware integration business," said Brian Hajost, SteelCloud President and CEO. "We took decisive steps during the quarter to restructure our Company, reducing headcount, and refocusing our resources on market opportunities for our proprietary BlackBerry-related software and appliances. With the elimination of our hardware integration business and the signing of the Dell OEM agreement, SteelCloud is now squarely focused on penetrating the BlackBerry market with our software and appliance products."
Quarterly Conference Call
The Company will hold a conference call at 10:00 AM ET on Tuesday, September 15, 2009 to discuss the third quarter results. Brian Hajost, SteelCloud President and Chief Executive Officer, will host the call. For investors interested in listening to the earnings call, please dial 866-939-3921, or for international callers, dial 678-302-3550 and reference SteelCloud. A recording of the earnings call will be available until 11:59 PM ET, September 25, 2009, and will be accessible by dialing 866-939-0581 (USA) or 678-302-3540 and keying in 4804300#. Press 4 to listen, enter confirmation: 20090902419971#.
About the Company
SteelCloud is a developer and integrator of mobility computing appliance solutions. The Company designs, architects and develops specialized appliance solutions for mobile computing technologies including the BlackBerry Enterprise Server technology from Research In Motion. For both commercial and government markets, the Company delivers integrated hardware/software appliance solutions that focus on ease of deployment, policy compliance, and high availability. Over its 20-year history, the Company has won numerous awards for technical excellence and customer satisfaction. The Company can be reached at (703) 674 5500. Additional information is available at www.steelcloud.com. Email: info@steelcloud.com.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: Except for historical information, all of the statements, expectations and assumptions contained in the foregoing are forward looking statements that involve a number of risks and uncertainties. It is possible that the assumptions made by management are not necessarily the most likely and may not materialize. In addition, other important factors that could cause actual results to differ materially include the following: SteelCloud's ability to obtain financing in the short term, risks associated with the integration of business following an acquisition, business conditions and the amount of growth in the computer industry and general economy; competitive factors; ability to attract and retain personnel, including key sales and management personnel; the price of SteelCloud's stock; and the risk factors set forth from time to time in SteelCloud's SEC reports, including but not limited to its annual report on Form 10-K and its quarterly reports on Forms 10-Q; and any reports on Form 8K. SteelCloud takes no obligation to update or correct forward-looking statements.
STEELCLOUD, INC
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
October 31, July 31,
2008 2009
---- ----
ASSETS (unaudited)
Current assets
Cash and cash equivalents $752,351 $366,210
Accounts receivable, net 1,571,673 202,201
Inventory, net 521,920 111,457
Prepaid expenses and other current assets 130,446 249,362
Deferred contract costs - 38,140
-- ------
Total current assets 2,976,390 967,370
Property and equipment, net 626,440 477,643
Equipment on lease, net 442,099 1,818
Other assets 7,020 11,102
----- ------
Total assets $4,051,949 $1,457,933
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $718,316 $614,365
Accrued expenses 561,009 224,078
Notes payable, current 7,538 176,910
Unearned revenue 8,882 96
----- --
Total current liabilities 1,295,745 1,015,449
Long-term liabilities
Notes payable, long-term 7,903 -
Other long-term 132,055 223,906
------- -------
Total long-term liabilities 139,958 223,906
Stockholders' equity
Preferred stock, $.001 par value:
2,000,000 shares authorized, no
shares issued and outstanding at
October 31, 2008 and July 31, 2009 - -
Common stock, $.001 par value:
50,000,000 shares authorized,
15,138,376 and 15,733,376 shares
issued at October 31, 2008 and July
31, 2009, respectively 15,138 15,733
Additional paid in capital 50,902,172 51,256,046
Treasury stock, 400,000 shares at
October 31, 2008 and July 31, 2009 (3,432,500) (3,432,500)
Accumulated deficit (44,868,564) (47,620,701)
----------- -----------
Total stockholders' equity 2,616,246 218,578
--------- -------
Total liabilities and stockholders' equity $4,051,949 $1,457,933
========== ==========
STEELCLOUD, INC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
July 31, July 31,
------------------ -----------------
2008 2009 2008 2009
---- ---- ---- ----
Revenues
Products $57,228 $88,518 $1,863,083 $188,319
Services 846,215 193,187 1,954,564 971,945
------- ------- --------- -------
Total revenues 903,443 281,705 3,817,647 1,160,264
Cost of revenues
Products 34,152 35,502 1,569,694 87,226
Services 675,966 126,997 1,596,479 740,555
------- ------- --------- -------
Total cost of
revenues 710,118 162,499 3,166,173 827,781
Gross profit 193,325 119,206 651,474 332,483
Selling and
marketing 248,557 153,412 640,738 369,276
Research and
product
development 58,066 53,637 179,523 151,869
General and
administrative 899,042 591,397 2,635,418 1,886,485
Severance and
restructuring - - - 73,205
- - - ------
Operating loss
from continuing
operations (1,012,340) (679,240) (2,804,205) (2,148,352)
Interest (expense)
income, net (5,825) (20,761) 5,417 (20,351)
------ ------- ----- -------
Loss from
continuing
operations before
income taxes (1,018,165) (700,001) (2,798,788) (2,168,703)
Provision
(benefit) for
income taxes (312,096) - 393,596 -
-------- -- ------- --
Loss from
continuing
operations (1,330,261) (700,001) (2,405,192) (2,168,703)
Discontinued
Operations:
Loss from disposal
of discontinued
operations (net
of applicable
taxes of $0) - (19,565) - (19,565)
Income (loss) from
discontinued
operations, net
of tax 388,575 (178,868) 797,350 (563,869)
------- -------- ------- --------
Income (loss) from
discontinued
operations, net
of tax 388,575 (198,433) 797,350 (583,434)
Net loss $(941,686) $(898,434) $(1,607,842) $(2,752,137)
========= ========= =========== ===========
Basic and diluted
(loss) income per
share:
Continuing
Operations $(0.09) $(0.05) $(0.17) $(0.14)
Discontinued
Operations 0.03 (0.01) 0.06 (0.04)
---- ----- ---- -----
Net loss $(0.06) $(0.06) $(0.11) $(0.18)
====== ====== ====== ======
Weighted-average
shares
outstanding:
Basic 14,595,649 15,140,024 14,426,565 14,903,494
Diluted 14,595,649 15,140,024 14,426,565 14,903,494
SOURCE SteelCloud, Inc.
http://www.steelcloud.com
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