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Press Release
FOR IMMEDIATE RELEASE
Sento Corporation Reports Financial Results for the Fourth Quarter and Year ended March 31, 2003
Profitable in the fourth quarter; Completes Loan Agreement with its Bank and Refinances its Convertible Debentures
AMERICAN FORK, Utah - April 24, 2003 - Sento Corporation (Nasdaq: SNTO - news) announced today financial results for its fourth quarter and year ended March 31, 2003.
For the quarter, the Company reported revenues of $5.8 million compared to $6.4 million for the same quarter in the previous year. Net income for the quarter ended March 31, 2003 was $65,000, or $0.03 per diluted share, compared to net income of $134,000, or $0.06 per diluted share, for the quarter ended March 31, 2002.
For the year, revenues were $17.5 million compared to $23.0 million for the previous year. Net loss was ($2.1) million, or $(1.01) per diluted share, compared to net income of $561,000 or $0.27 per diluted share, for the year ended March 30, 2002.
From operations, the Company generated $1.5 million in cash during the year to complete the year with $2.6 million in cash, compared to $2.0 million at the end of fiscal 2002. In addition, as announced April 16, 2003, the Company completed the refinancing and retirement of its $1.3 million in convertible subordinated debentures that matured in February 2003 and agreed to a new loan arrangement with Silicon Valley Bank to provide a revolving line of credit in the amount of $2.5 million and the refinancing of equipment loans
"Sento's fourth quarter revenue was the highest for any quarter during the fiscal year, as we helped our clients provide exceptional customer service during the heaviest periods of the year," stated Patrick O'Neal, Sento's president and chief executive officer. "The higher quarterly revenue, coupled with strict cost controls, enabled us to improve gross margin percent to 14 percent compared to a gross margin of 8 percent for our third quarter and negative gross margins during the first two quarters of our fiscal year. Our fourth quarter profitability also allowed the Company to enhance its cash balance by almost 60 percent. This occurrence, coupled with the completion of the refinancing of Sento's convertible debentures, and the completion of a new loan agreement with Silicon Valley Bank, solidifies our balance sheet substantially. With these critical financing issues complete, we can more acutely focus on increasing revenues on a more consistent basis and enhancing shareholder value going forward."
Conference Call
Sento senior management will host a conference call today at 2:15 Mountain Time, 4:15 Eastern Time, to discuss the fourth quarter and fiscal year results. Senior management will also discuss business developments and future earning and growth opportunities. To access the call dial: (800) 810-0924 five minutes before start time. The confirmation number will be 485711. A replay of the conference call will be available for seven days following the call at (719) 457-0820 by entering reservation number 485711. The replay will be available until May 1, 2003.
Pro Forma Financial Measures
In this earnings release and during our earnings conference call to be held on July 24, 2003 as described above, Sento uses or plans to discuss certain pro forma financial measures, which may be considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States, ("GAAP"). A reconciliation between pro forma and GAAP measures can be found in the accompanying tables. The Company believes that, while these pro forma measures are not a substitute for GAAP results, they provide the best basis for evaluating the Company's cash requirements for ongoing operating activities. These pro forma measures have been reconciled to the nearest GAAP measure as is now required under new SEC rules regarding the use of non-GAAP financial measures. The Company computes pro forma net income by adjusting GAAP net income for stock-based compensation and valuation of warrants and conversion of debentures.
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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