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Press Release
FOR IMMEDIATE RELEASE
Sento Corporation Reports Third Quarter Results for Fiscal 2003
Profitable in the fourth quarter; Completes Loan Agreement with its Bank and Refinances its Convertible Debentures
AMERICAN FORK, Utah - January 23, 2003 - Sento Corporation (Nasdaq: SNTO - news) today announced financial results for the third quarter and nine-month period ended December 31, 2002.
For the quarter, the Company reported revenue of $4 million compared with revenue of $5.4 million for the same quarter last year. Net loss for the quarter was $373,000, or $(0.18) per share, compared with net income of $229,000, or $0.11 per share for the same period last year. Compared to the second quarter, the Company's revenues increased 13 percent and the net loss decreased by nearly 64 percent
"Sento made distinct progress during the third quarter, maintaining its Nasdaq listing, completing a reverse split and maintaining our cash position," commented Patrick O'Neal, Sento's president and chief executive officer. "We have continued to carefully manage our expenses, narrowing SG&A expenses from the last quarter by 4.3 percent, and our focus has resulted in improved income from continuing operations. Conditions remain challenging throughout the technology sector, but Sento has shown modest improvement in sales despite the prevailing environment."
Mr. O'Neal continued, "in addition, our gross margin has improved from a gross margin loss during the first two quarters of fiscal 2003 to an 8 percent gross profit margin in this third quarter. This was accomplished as a result of additional revenue sources with higher margins, and from cost cutting in our operations coupled with increased utilization of our facilities. We still have a significant amount of unutilized contact center capacity, particularly at our Evanston, Wyoming facility, but we anticipate filling this capacity as our sales grow. As we utilize our excess capacity, our gross margins will likely improve even more as we absorb more of our fixed overhead. In the event that we are unable to fill the unutilized capacity at our Evanston facility, we may have to record an impairment charge related to those assets."
Mr. O'Neal continued, "We continue to focus on generating new business. As we look to attract additional contact center business we are continuing to expand our Services Portal business. Potential clients are struggling to maintain market share while reducing expenses. Sento can play a key role in this equation by reducing customer service and support costs while providing exceptional customer service."
Mr. O'Neal concluded, "Finally, we are optimistic with the prospects of refinancing or retiring our debentures that come due in February. We are in active negotiations with four groups who have expressed interest in providing capital to retire or to re-finance these debentures. Assuming that this transaction comes to fruition, our financial picture improves dramatically."
SENTO PROFILE
Sento Corporation (www.sento.com) is one of the industry's most innovative providers of outsourced customer support services. Sento employs right channeling to create custom solutions that integrate live support with the company's best-in-class software solutions. Sento's Customer Choice PlatformSM allows customers to make choices in communication channels from a range of web-enabled self-service options with live support available at every critical point. Sento focuses on the inter-relationship among voice, chat, email, self-service and web forums. Sento targets its customer acquisition, customer service and technical support solutions to a diversified portfolio of clients in multiple vertical segments. Sento's solutions can provide value-added customer support at significant cost reductions when compared to other, traditional outsourced models. With operations in the U.S., The Netherlands, and France, plus partnerships in India and other low-cost regions, Sento provides customer support in 19 languages.
FORWARD LOOKING STATEMENTS
Statements in this press release, which are not purely historical, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass Sento's beliefs, expectations, goals, hopes or intentions regarding future events. Words such as "expects," "intends," "estimates," "believes," "anticipates," "should" and "likely" also identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to Sento as of such date. Sento assumes no obligation to update any forward-looking statement. Actual results could differ materially from those anticipated for a number of reasons, including, among others: the Company's stock price has historically been volatile; difficulties encountered in post-acquisition integration and operation of the acquired assets including retaining existing clients of the acquired company; variations in market and economic conditions; the effect on the Company's earnings of the repricing of options; the Company's dependence on its limited number of key clients; failure to renew existing client contracts for continuation of services; reduction in services requested by the Company's clients resulting in lower revenues for the Company; the Company's ability to complete negotiations and execute client agreements; risk of emergency interruption of the Customer Contact Solutions operations; and other unanticipated factors. Risk factors, cautionary statements and other conditions, which could cause actual results to differ from the Company's current expectations, are contained in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-KSB, as amended.
Contact:
Patrick O'Neal
President, Chief Executive Officer and Director
Sento Corporation
801-772-1417
pat_oneal@sento.com
Anthony J. Sansone
Chief Finance Officer and Corporate Secretary
Sento Corporation
801-772-1410
tony_sansone@sento.com
Brokers and financial industry members
Laurie S. Roop
President, Shareholder Relations
435-652-3884
laurie@shareholder-relations.net
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