Exhibit 99.1
DOCUMENT SCIENCES ANNOUNCES ANNUAL RESULTS
COMPANY RECORDS RECORD ANNUAL, QUARTERLY REVENUES
CARLSBAD, Calif., March 16 /PRNewswire-FirstCall/ -- Document Sciences
Corporation (Nasdaq: DOCX) today reported revenues of $33.4 million for the year
ended December 31, 2006, a record for the company and an increase of 13% from
revenues of $29.6 million for the year ended December 31, 2005. Net loss for the
year ended December 31, 2006, was $1,478,644 compared with net income of $19,255
for the year ended December 31, 2005. Net loss per share for the year ended
December 31, 2006, was $0.35 based on 4,264,482 diluted shares outstanding,
compared with net income per share of $0.00, based on 5,333,868 diluted shares
outstanding for the year ended December 31, 2005.
For the quarter ended December 31, 2006, revenues were $8.8 million,
compared with revenues of $8.0 million for the same quarter in 2005,
representing an increase of 9%. For the three months ending December 31, 2006,
the company reported a net loss of $1,279,246, or $0.30 per share based on
4,305,833 diluted shares outstanding, compared with a net income of $345,486, or
$0.06 per share based on 5,459,680 diluted shares outstanding, for the three
months ending December 31, 2005.
Included in expenses for the three months and year ended December 31, 2006
are $213,000 and $577,000, respectively, of stock-based compensation expenses,
compared to $58,000 for the three months and year ended December 31, 2005.
Jack McGannon, Document Sciences' President and CEO, stated that "while our
reported earnings for year 2006 were disappointing, there were several positive
outcomes during the year. Importantly, license contract bookings were up by
nearly 40% over 2005. As previously reported, we were not able to recognize a
substantial amount of these orders to revenue due to our revenue recognition
policies. As a result, our Deferred Revenue balance rose by nearly $2.0 million
during the year up to $16.8 million. Additionally, other components of our
Balance Sheet grew stronger during the year. Net working capital, including Cash
but excluding Deferred Revenue, grew by over $2.2 million during 2006. Our
Accounts Receivable balance was up by over $3.5 million from year end 2005,
reflecting higher bookings during the year, although Cash and Investments were
down by around $800,000."
McGannon further stated that, "our cost structure increased considerably
during the latter part of the year as we continued to invest in areas closely
tied to revenue generation. Costs rose most significantly in the areas of Sales
& Marketing and Professional Services, where we have increased headcount to
drive and support anticipated continued growth in our software and services
business areas. We believe that we are at a turning point in our business. Our
portfolio is in the strongest competitive position ever and our global services
delivery capacity is high. We made the strategic decision to aggressively
increase our sales and marketing investments to capitalize on these two factors.
While it's too early to be completely confident that this strategy will pay off,
early indications are positive and it appears that our ability to execute will
be the governing factor, not market demand or interest."
McGannon added that "the fourth quarter represented our tenth consecutive
quarter of year-over-year revenue growth. However, extensive spending in Sales &
Marketing drove our loss for the quarter. Starting late in the third quarter,
the company has added substantial headcount in both our inside and outside sales
groups, nearly doubling our North America sales force. Additionally, we have
increased our marketing expenditures to drive awareness and lead generation."
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 http://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 that
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 dynamic content
publishing software; (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, 2006. We do not undertake, and specifically
disclaim, any obligation to update forward-looking statements
DOCUMENT SCIENCES CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2006 2005
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 5,657,380 $ 6,692,642
Short-term investments 1,437,214 1,179,851
Accounts receivable, net 11,165,100 7,564,929
Other current assets 1,888,203 1,666,382
Total current assets 20,147,897 17,103,804
Property and equipment, net 725,029 788,567
Software development costs, net 746,282 1,698,394
Goodwill, net 4,495,192 4,495,192
Total assets $ 26,114,400 $ 24,085,957
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 342,103 $ 160,160
Accrued compensation 2,169,320 1,719,869
Other accrued liabilities 615,195 445,659
Deferred revenue 16,785,570 14,861,856
Total current liabilities 19,912,188 17,187,544
Obligations under capital leases 6,699 27,521
STOCKHOLDERS' EQUITY
Common stock, $.001 par value 4,424 4,315
Treasury stock (362,889) (344,858)
Additional paid-in capital 14,079,885 13,258,962
Accumulated comprehensive income 302 18
Retained deficit (7,526,209) (6,047,545)
Total stockholders' equity 6,195,513 6,870,892
Total liabilities and
stockholders' equity $ 26,114,400 $ 24,085,957
DOCUMENT SCIENCES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Fiscal Year Ended
December 31, December 31,
---------------------------- ----------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Revenues:
License fees $ 6,125,171 $ 5,217,410 $ 22,367,923 $ 19,926,392
Services and other 2,642,795 2,799,988 11,042,630 9,647,452
Total revenues 8,767,966 8,017,398 33,410,553 29,573,844
Cost of revenues:
License fees 1,019,281 1,107,435 4,204,971 4,425,290
Services and other 2,748,812 2,461,945 10,211,437 8,029,637
Total cost of
revenues 3,768,093 3,569,380 14,416,408 12,454,927
Gross margin 4,999,873 4,448,018 18,994,145 17,118,917
Operating expenses:
Research and
development 1,556,416 1,108,324 5,912,828 5,419,808
Selling and
marketing 3,269,909 1,959,713 10,300,470 8,221,788
General and
administrative 1,226,621 1,051,147 4,171,594 3,624,037
Total operating
expenses 6,052,946 4,119,184 20,384,892 17,265,633
Income (loss) from
operations (1,053,073) 328,834 (1,390,747) (146,716)
Interest and other
income, net 67,961 36,071 237,272 204,930
Income (loss) before
income taxes (985,112) 364,905 (1,153,475) 58,214
Provision for
income taxes 294,134 19,419 325,189 38,959
Net income (loss) $ (1,279,246) $ 345,486 $ (1,478,664) $ 19,255
Net income per
share - basic $ (0.30) $ 0.08 $ (0.35) $ 0.00
Weighted average
shares used in
basic calculation 4,305,833 4,205,337 4,264,482 4,147,622
Net income per
share - diluted $ (0.30) $ 0.06 $ (0.35) $ 0.00
Weighted average
shares used in
diluted calculation 4,305,833 5,459,680 4,264,482 5,333,868
SOURCE Document Sciences Corporation
-0- 03/16/2007
/CONTACT: Editorial, Todd Schmidt, +1-760-602-1597,
tschmidt@docscience.com, or Leslie Weller, +1-760-602-1524,
lweller@docscience.com, both of Document Sciences Corporation/
/Web site: http://www.docscience.com /
(DOCX)