Exhibit 99.1
DOCUMENT SCIENCES ANNOUNCES THIRD QUARTER RESULTS
CARLSBAD, Calif., Nov. 1 /PRNewswire-FirstCall/ -- Document Sciences
Corporation (Nasdaq: DOCX), a global leader in providing customer communications
management solutions, today reported revenues of $8.4 million for the quarter
ended September 30, 2006, an increase of 13% over revenues of $7.4 million for
the quarter ended September 30, 2005. Net income for the quarter ended September
30, 2006, was $115,000 compared with a net loss of $69,000 for the quarter ended
September 30, 2005. Net income per share for the quarter ended September 30,
2006, was $0.02 based on 5,324,126 diluted shares outstanding, compared with net
loss per share of $0.02, based on 4,158,371 diluted shares outstanding for the
quarter ended September 30, 2005.
For the nine months ended September 30, 2006, revenues were $24.6 million,
compared with revenues of $21.6 million for the same period in 2005,
representing an increase of 14%. For the nine months ending September 30, 2006,
the company reported a net loss of $199,000, or $0.05 per share based on
4,250,690 shares outstanding, compared with a net loss of $326,000, or $0.08 per
share based on 4,128,384 shares outstanding, for the nine months ending
September 30, 2005.
Jack McGannon, Document Sciences' President and CEO, stated that "this
quarter represented the best quarter of the year for the company in terms of
license bookings. Due to our revenue recognition policy, a significant amount of
these bookings were not recognized to revenue during the quarter but have
contributed to the noteworthy growth in our deferred revenue. However, we were
still able to achieve our ninth consecutive quarter of year-over-year quarterly
revenue growth."
McGannon further stated that "the Company's balance sheet strengthened
during the quarter. Our cash and short-term investments balances of $6.9 million
at September 30, 2006, while down by $971,000 from year end balances due to
typical seasonality, were nearly $700,000 higher than the third quarter of 2005.
Our accounts receivable balance continues to grow in concert with the licensing
of our products and the execution of professional services contracts and is up
by nearly $4.3 million since the end of last year. Deferred revenue remains
significant, with a balance of approximately $16.7 million at the end of the
third quarter. Increases were recorded in accounts receivable and deferred
revenue resulting from our normal invoicing for the renewal of annual license
and maintenance fees for customers whose contracts expire at year-end.
Additionally, these two accounts grew with the signing of two license agreements
totaling approximately $2.5 million, for which revenue will be recognized over
the respective term of the arrangement."
Also included in expenses for the three and nine months ended September 30,
2006 are $155,000 and $364,000, respectively, of stock-based compensation
expenses, including $36,000 and $128,000, respectively, resulting from the
adoption of Statement of Financial Accounting Standards No. 123 (revised 2004),
Share-Based Payment.
About Document Sciences
Document Sciences is a market-leading global solutions provider for customer
communications management. Our award-winning xPression software suite enables
organizations to automate the creation and delivery of well-designed, highly
personalized communications -- from customized marketing collaterals, contracts
and policies to high-volume relationship statements and correspondence. More
than 500 content-driven organizations worldwide, including over 60 FORTUNE
Global 500 companies, use Document Sciences' solutions to reduce development
costs by up to 90%, improve time-to-revenue by as much as 75%, and enhance the
overall customer experience with highly effective 1:1 communications. Based in
Carlsbad, California, with award-winning offshore services operations in
Beijing, China and offices across the U.S. and in London, Document Sciences also
markets its products in Europe, Australia, Canada, New Zealand, Latin America
and Asia. For more information about Document Sciences Corporation, call
888.4.DOC.SCI or visit www.docscience.com.
This press release may contain "forward-looking" statements about possible
or assumed future results of our financial condition, operations, plans,
objectives and performance. You can identify these statements by the fact they
use words such as "believe," "expect," "anticipate," "estimate," "project,"
"intend," "plan" or similar expressions. Many possible events or factors could
affect our future financial results and performance. This could cause our
results or performance to differ materially from those expressed in these
forward-looking statements. Some of these events or factors include the
following: (i) national, international, regional and local economic, competitive
and regulatory conditions and developments; (ii) the market for document
automation software (including the emerging content processing market); (iii)
market acceptance of enhancements to our existing products and introduction of
new products; (iv) continued profitability of our professional services; (v)
maintaining our relationships with Xerox Corporation and our other distribution
partners and/or other risks detailed from time-to-time in our SEC reports,
including the report on Form 10-K for the fiscal year ended December 31, 2005.
We do not undertake, and specifically disclaim, any obligation to update
forward-looking statements.
DOCUMENT SCIENCES CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, December 31,
2006 2005
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 5,260,433 $ 6,692,642
Short-term investments 1,641,414 1,179,851
Accounts receivable, net 11,810,125 7,564,929
Other current assets 1,445,102 1,666,382
Total current assets 20,157,074 17,103,804
Property and equipment, net 744,189 788,567
Software development costs, net 984,310 1,698,394
Goodwill, net 4,495,192 4,495,192
Total assets $ 26,380,765 $ 24,085,957
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 471,114 $ 160,160
Accrued compensation 1,237,907 1,719,869
Other accrued liabilities 693,403 445,659
Deferred revenue 16,697,872 14,861,856
Total current liabilities 19,100,296 17,187,544
Obligations under capital leases 11,905 27,521
STOCKHOLDERS' EQUITY
Common stock, $.001 par value 4,377 4,315
Treasury stock (293,123) (344,858)
Additional paid-in capital 13,803,612 13,258,962
Accumulated other comprehensive income 661 18
Retained deficit (6,246,963) (6,047,545)
Total stockholders' equity 7,268,564 6,870,892
Total liabilities and stockholders'
equity $ 26,380,765 $ 24,085,957
DOCUMENT SCIENCES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- -------------------------------
2006 2005 2006 2005
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Revenues:
License fees $ 5,509,267 $ 5,128,929 $ 16,242,752 $ 14,708,982
Services and other 2,889,103 2,286,510 8,399,835 6,847,464
Total revenues 8,398,370 7,415,439 24,642,587 21,556,446
Cost of revenues:
License fees 966,455 1,078,795 3,185,690 3,317,855
Services and other 2,471,598 2,081,653 7,462,625 5,567,692
Total cost of
revenues 3,438,053 3,160,448 10,648,315 8,885,547
Gross margin 4,960,317 4,254,991 13,994,272 12,670,899
Operating expenses:
Research and
development 1,590,614 1,613,984 4,356,412 4,311,484
Selling and
marketing 2,313,439 1,976,649 7,030,561 6,262,075
General and
administrative 975,875 773,927 2,944,973 2,572,890
Total operating
expenses 4,879,928 4,364,560 14,331,946 13,146,449
Income (loss) from
operations 80,389 (109,569) (337,674) (475,550)
Interest and
other income, net 60,452 47,314 169,311 168,859
Income (loss) before
income taxes 140,841 (62,255) (168,363) (306,691)
Provision for
income taxes 25,670 6,375 31,055 19,540
Net income (loss) $ 115,171 $ (68,630) $ (199,418) $ (326,231)
Net income (loss)
per share - basic $ 0.03 $ (0.02) $ (0.05) $ (0.08)
Weighted average
shares used in
basic calculation 4,281,906 4,158,371 4,250,690 4,128,384
Net income (loss)
per share - diluted $ 0.02 $ (0.02) $ (0.05) $ (0.08)
Weighted average
shares used in
diluted calculation 5,324,126 4,158,371 4,250,690 4,128,384
SOURCE Document Sciences Corporation
-0- 11/01/2006
/CONTACT: Editorial, Todd Schmidt, tschmidt@docscience.com,
+1-760-602-1597, or Investors, Leslie Weller, +1-760-602-1524,
lweller@docscience.com, both of Document Sciences Corporation /
/Web site: http://www.docscience.com /