Click here to close now.

Welcome!

Cloud Expo Authors: Carmen Gonzalez, Liz McMillan, Roger Strukhoff, Pat Romanski, Plutora Blog

News Feed Item

Marlborough Software Development Holdings Inc. Reports Third Quarter Results for 2012

Marlborough Software Development Holdings Inc. (“MSDH”) (OTC: MBGH) today reported revenue of $1,635,000 for the three months ended September 30, 2012, a decrease of $330,000 or 17% as compared to the three months ended June 30, 2012 and a decrease of $478,000 or 23% as compared to revenue of $2,113,000 for the three months ended September 30, 2011. The Company’s cash balance at September 30, 2012 totaled $621,000, an increase of $70,000 from a balance of $551,000 at December 31, 2011 and a decrease of $2,291,000 from a balance of $2,912,000 at June 30, 2012.

MSDH received an equity commitment from two investors in October 2012, scheduled to occur in two tranches. The first in the aggregate amount of $2,000,000 in exchange for 597,000 shares of 6.5% redeemable preferred stock and 2,985,000 common stock warrants closed on October 11, 2012. A second tranche of $1,500,000 of the same securities shall occur in 2013 if certain performance criteria specified in the investment documents are achieved. The two investors were Amos Kaminski, a member of the Company’s board of directors, and The Altshuler Shaham Group, in its management capacity for certain provident and pension funds. In addition, in November 2012 the Company received commitments from certain customers with terms including the prepayment of software licenses in the aggregate amount of $850,000 payable over the course of the next three fiscal quarters.

“We are extremely grateful for the confidence which these investors and customers have shown in us at a pivotal moment. We expect that these investments will strengthen the Company's financial position and reassure the Company's shareholders, partners, employees, and customers that MSDH has the resources it needs to support growth for the future” said Pinhas Romik, President and CEO of MSDH. “In addition to this investment, we have also made progress on our continuing efforts to better align our cost structure with current market conditions. We restructured our global workforce by approximately 26%, eliminating 28 positions, including 7 contractors. We believe these investments, commitments and cost savings will enhance our ability to grow the business. We are also exploring strategic growth initiatives and have engaged Corporate Partners LLC to advise us on strategic alternatives. Although we are disappointed with the sales results in the third quarter, which was primarily due to lower sales in our OEM and reseller channels, we still believe in the long term value of the Pageflex brand of products to the marketplace. This has already been demonstrated in the $850,000 customer commitments we recently received.”

During the third quarter, Pageflex made significant upgrades to its core technology and developed strategic partnerships to further expand its product offering. We released version 8.0 of our Pageflex product line, including Pageflex Storefront, Server, Campaign Manager, and Studio. This release includes support for languages and local business practices that enable users around the globe to successfully create online stores in their region. These globalization features help the company to expand the benefits of the Pageflex product line into new regions where language had been an obstacle. We also released version 6.0 of the Pageflex iWay product. Pageflex iWay is known for helping printers gain efficiencies by automating critical steps in the print production process. Pageflex iWay 6.0 includes new document composition features that will enable those printers to also expand their businesses with new services.

In addition to developments with our own products, we also made progress on products we are creating by forming strategic partnerships. Through a partnership with DynamicVideo, Pageflex is developing Pageflex Dynamic Media, a technology for creating customized web-banner videos that speak directly to the viewer in a personalized, cost-effective, and operationally efficient way. This partnership helps the Company gain a presence in the fast-growing business of personalized video. Pageflex Dynamic Media will be released later this year. Pageflex Connect is the result of a partnership with the cross-channel interaction management company Conversen. Pageflex Connect is a cloud-based solution for creating and deploying multi-channel marketing through a wide range of communication channels. This product is currently available, and expands the Company's presence as a provider of multi-channel marketing solutions.

“As these releases demonstrate, the Company remains committed to the development of the Pageflex brand of products and to expanding the presence of those products to new regions around the world. In addition, our strategic partnerships help us develop and deliver innovative products that will help our customers build on their investment in Pageflex and grow their businesses" said Mr. Romik.

GAAP Loss

Our loss from operations increased $193,000 to $2,219,000 for the three months ended September 30, 2012, as compared to $2,026,000 for the three months ended September 30, 2011. Our net loss increased $145,000 to $2,237,000 or $0.21 per share for the three months ended September 30, 2012, as compared to $2,092,000 or $0.19 per share for the three months ended September 30, 2011.

Our loss from operations decreased $205,000 to $2,219,000 for the three months ended September 30, 2012, as compared to $2,424,000 for the three months ended June 30, 2012. Our net loss decreased $263,000 to $2,237,000 or $0.21 per share for the three months ended September 30, 2012 as compared to $2,500,000 or $0.23 per share for the three months ended June 30, 2012.

Non-GAAP Loss

Our non-GAAP results exclude stock-based compensation expense, allocated costs associated with the resignation in May 2011 of the CEO of our former parent, Bitstream Inc., as well as the amortization of intangible assets primarily acquired from Press-Sense Ltd., and include MSDH expenses charged to Bitstream Inc. via our management fee agreement or allocated to Bitstream Inc. via our allocation methodology. Our non-GAAP loss from operations decreased $958,000 to $2,074,000 for the three months ended September 30, 2012, as compared to $3,032,000 for the three months ended September 30, 2011. Our non-GAAP net loss decreased $1,006,000 to $2,092,000 or $0.19 per share for the three months ended September 30, 2012, as compared to $3,098,000 or $0.29 per share for the three months ended September 30, 2011. A reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

Distribution

On March 14, 2012 MSDH shares were distributed to stockholders of Bitstream common stock. Each taxable U.S. stockholder of Bitstream receiving shares of MSDH common stock in the distribution will generally be treated as if such stockholder received a taxable distribution in an amount equal to the fair market value at the time of the distribution of the MSDH common stock received. We have evaluated the appraisal that was performed and determined $9.3 million to be the appropriate value. Based on shares outstanding of 10,751,609, management expects shareholder tax statements to be issued at $0.8662 per share. Management further expects that none of the distribution will be reported as a dividend due to Bitstream’s current and accumulated deficits and loss. Each shareholder will apply its proportionate amount first to recovery of basis and then to capital gain (long term or short term as applicable). Capital gains may be taxable at a reduced rate of 15% for individuals that have held their shares of Bitstream common stock for more than one year. A stockholder’s tax basis in MSDH common stock will be equal to its fair market value at the time of the spin-off of MSDH and the holding period in MSDH common stock will begin the day after the distribution. Shareholders should consult their tax advisors with respect to the tax consequences of the distribution.

Forward Looking Statements Disclosure

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on management’s current expectations. Forward-looking statements can be identified by the use of the words "may," "will," "should," "could," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "potential," "proposed," or "continue" or the negative of those terms. Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties, including, without limitation, market acceptance of the Company’s products, competition and the timely introduction of new products. Additional information concerning certain risks and uncertainties that would cause actual results to differ materially from those projected or suggested in the forward-looking statements is contained in the Company’s filings with the Securities and Exchange Commission, including MSDH’s Annual Report on Form 10-K for the year ended December 31, 2011, as supplemented by MSDH’s subsequent quarterly reports on Form 10-Q in 2012. We undertake no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise after the date of this document.

Use of Non-GAAP Financial Information

To supplement the financial measures presented in the Company's press release in accordance with accounting principles generally accepted in the United States ("GAAP"), the Company also presents non-GAAP measures relating to income or loss from operations, net income or loss, and net income or loss per diluted share which were adjusted from amounts determined based on GAAP to exclude share-based compensation expenses, allocated resignation costs of the CEO of our former parent, as well as expenses from the amortization of intangible assets primarily acquired from Press-sense Ltd., and include non-transaction related MSDH expenses charged to Bitstream Inc. via our management fee agreement or allocated to Bitstream Inc. via our allocation methodology as discussed further in our Form 10-K filed March 30, 2012.

The Company believes these non-GAAP financial measures will enhance the reader’s overall understanding of MSDH’s current financial performance and the Company's prospects for the future by providing a higher degree of transparency for certain financial measures and providing a level of disclosure that helps investors understand how the Company plans and measures its own business.

These financial measures are not in accordance with GAAP, should not be considered an alternative for measures prepared in accordance with GAAP, and may have limitations in that they do not reflect all of MSDH’s results of operations as determined in accordance with GAAP.

These non-GAAP measures should only be used to evaluate MSDH’s results of operations in conjunction with the corresponding GAAP measures. The presentation of non-GAAP information is not meant to be considered superior to, in isolation from, or as a substitute for results prepared in accordance with GAAP.

About Marlborough Software Development Holdings Inc. (“MSDH”)

MSDH’s Pageflex brand enables companies across the globe to communicate their marketing messages more easily and effectively. The award-winning Pageflex product line sets the standard for excellence and innovation in targeted marketing and brand management. Pageflex offers the ability to personalize any form of communication in print, e-mail, or on the Web. Pageflex pioneered the concepts of variable data and web-to-print storefronts, and has expanded to offer software for multi-channel campaign management, dynamic publishing, and back-end production automation. Pageflex solutions use the patented Pageflex variable publishing engine and Adobe® InDesign®. For more information, visit www.pageflex.com.

Marlborough Software Development Holdings Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Data)

(unaudited)

       

Three Months Ended
September 30,

Nine Months Ended
September 30,

2012

2011

2012

2011

Revenue:
Software licenses $ 347 $ 711 $ 1,391 $ 2,078
Services 1,288   1,402   3,977   4,379  
Total revenue 1,635   2,113   5,368   6,457  
 
Cost of revenue:
Software licenses 237 278 700 859
Services 629   539   1,841   1,519  
Total cost of revenue 866 817 2,541 2,378
       
Gross profit 769   1,296   2,827   4,079  
 
Operating expenses:
Marketing and selling 872 954 3,108 2,652
Research and development 1,343 1,703 4,714 5,154
General and administrative 773   665   2,790   2,453  
 
Total operating expenses 2,988   3,322   10,612   10,259  
 
Operating loss (2,219 ) (2,026 ) (7,785 ) (6,180 )
 

Interest and other (expense)

 income, net

17 (25 ) (26 ) 7
       
Loss before provision for income taxes (2,202 ) (2,051 ) (7,811 ) (6,173 )
Provision for income taxes 35   41   146   132  
 
Net loss $ (2,237 ) $ (2,092 ) $ (7,957 ) $ (6,305 )
 
Basic and diluted net loss per share $ (0.21 ) $ (0.19 ) $ (0.74 ) $ (0.59 )
Basic and diluted weighted average shares outstanding 10,763   10,752   10,755   10,752  
 

Marlborough Software Development Holdings Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In Thousands)

   
September 30, December 31,

2012

2011

(unaudited)
ASSETS
Current assets:
Cash $ 621 $ 551
Accounts receivable, net 388 628
Prepaid expenses and other current assets 497 394
 
Total current assets 1,506 1,573
 
Property and equipment, net 1,819 1,355
Other 528 238
Goodwill 3,297 3,297
Intangible assets, net 2,769 3,070
 
Total assets $ 9,919 $ 9,533
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 375 $ 169
Accrued payroll and other compensation 709 775
Other accrued expenses 663 388
Short-term deferred revenue 1,993 2,200
Total current liabilities 3,740 3,532
 
Long-term deferred revenue 580 526
Long-term deferred rent 480 506
Total liabilities 4,800 4,564
 
Total stockholders’ equity 5,119 4,969
 
Total liabilities and stockholders’ equity $ 9,919 $ 9,533
 

Marlborough Software Development Holdings Inc. and Subsidiaries

Non-GAAP Results

(In Thousands, Except Per Share Data)

(unaudited)

   

The following table shows MSDH’s non-GAAP results reconciled to GAAP results included in this release.

 

Three Months Ended

September 30,

Nine Months Ended

September 30,

2012

 

2011

2012

 

2011

Operating loss:
GAAP operating loss $ (2,219 ) $ (2,026 ) $ (7,785 ) $ (6,180 )
Stock-based compensation 22 82 1,442 303

Amortization of intangible assets and

 capitalized software

123

103

324

307

Allocation to former parent --- (1,191 ) (818 ) (2,656 )
Resignation costs, former CEO ---   ---   ---   347  
Non-GAAP operating loss $ (2,074 ) $ (3,032 ) $ (6,837 ) $ (7,879 )
 
Net loss:
GAAP net loss $ (2,237 ) $ (2,092 ) $ (7,957 ) $ (6,305 )
Stock-based compensation 22 82 1,442 303

Amortization of intangible assets and

 capitalized software

123

103

324

307

Allocation to former parent --- (1,191 ) (818 ) (2,656 )
Resignation costs, former CEO ---   ---   ---   347  
Non-GAAP net loss $ (2,092 ) $ (3,098 ) $ (7,009 ) $ (8,004 )
 
Net loss per share:
GAAP net loss per share $ (0.21 ) $ (0.19 ) $ (0.74 ) $ (0.59 )
Stock-based compensation per share --- --- 0.13 0.03

Amortization of intangible assets and

 capitalized software per share

0.02

0.01

0.03

0.03

Allocation to former parent per share --- (0.11 ) (0.07 ) (0.24 )
Resignation costs, former CEO per share ---   ---   ---   0.03  
Non-GAAP net loss per share $ (0.19 ) $ (0.29 ) $ (0.65 ) $ (0.74 )
 

For the three and nine month periods ended September 30, 2012, net loss per share is based on 10,763,000 and 10,755,000 weighted average shares outstanding, respectively. For both the three and nine months ended September 30, 2011, net loss per share is based on 10,752,000 weighted average shares outstanding. GAAP and Non-GAAP amounts exclude $0 and $2,254,000 for the three and nine months ended September 30, 2012, respectively, for Separation, Distribution, and Merger costs which were incurred by MSDH and subsequently charged to Bitstream Inc. via a management fee agreement.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@CloudExpo Stories
Hadoop as a Service (as offered by handful of niche vendors now) is a cloud computing solution that makes medium and large-scale data processing accessible, easy, fast and inexpensive. In his session at Big Data Expo, Kumar Ramamurthy, Vice President and Chief Technologist, EIM & Big Data, at Virtusa, will discuss how this is achieved by eliminating the operational challenges of running Hadoop, so one can focus on business growth. The fragmented Hadoop distribution world and various PaaS soluti...
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, will analyze a range of cloud offerings (IaaS, PaaS, SaaS) and discuss the benefits/challenges of migrating to each of...
Cloud data governance was previously an avoided function when cloud deployments were relatively small. With the rapid adoption in public cloud – both rogue and sanctioned, it’s not uncommon to find regulated data dumped into public cloud and unprotected. This is why enterprises and cloud providers alike need to embrace a cloud data governance function and map policies, processes and technology controls accordingly. In her session at 15th Cloud Expo, Evelyn de Souza, Data Privacy and Compliance...
Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 16th Cloud Expo at the Javits Center in New York June 9-11 will find fresh new content in a new track called PaaS | Containers & Microservices Containers are not being considered for the first time by the cloud community, but a current era of re-consideration has pushed them to the top of the cloud agenda. With the launch ...
Platform-as-a-Service (PaaS) is a technology designed to make DevOps easier and allow developers to focus on application development. The PaaS takes care of provisioning, scaling, HA, and other cloud management aspects. Apache Stratos is a PaaS codebase developed in Apache and designed to create a highly productive developer environment while also supporting powerful deployment options. Integration with the Docker platform, CoreOS Linux distribution, and Kubernetes container management system ...
The Workspace-as-a-Service (WaaS) market will grow to $6.4B by 2018. In his session at 16th Cloud Expo, Seth Bostock, CEO of IndependenceIT, will begin by walking the audience through the evolution of Workspace as-a-Service, where it is now vs. where it going. To look beyond the desktop we must understand exactly what WaaS is, who the users are, and where it is going in the future. IT departments, ISVs and service providers must look to workflow and automation capabilities to adapt to growing ...
As organizations shift toward IT-as-a-service models, the need for managing and protecting data residing across physical, virtual, and now cloud environments grows with it. CommVault can ensure protection &E-Discovery of your data – whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise. In his session at 16th Cloud Expo, Randy De Meno, Chief Technologist - Windows Products and Microsoft Partnerships, will disc...
VictorOps is making on-call suck less with the only collaborative alert management platform on the market. With easy on-call scheduling management, a real-time incident timeline that gives you contextual relevance around your alerts and powerful reporting features that make post-mortems more effective, VictorOps helps your IT/DevOps team solve problems faster.
Skeuomorphism usually means retaining existing design cues in something new that doesn’t actually need them. However, the concept of skeuomorphism can be thought of as relating more broadly to applying existing patterns to new technologies that, in fact, cry out for new approaches. In his session at DevOps Summit, Gordon Haff, Senior Cloud Strategy Marketing and Evangelism Manager at Red Hat, will discuss why containers should be paired with new architectural practices such as microservices ra...
Roberto Medrano, Executive Vice President at SOA Software, had reached 30,000 page views on his home page - http://RobertoMedrano.SYS-CON.com/ - on the SYS-CON family of online magazines, which includes Cloud Computing Journal, Internet of Things Journal, Big Data Journal, and SOA World Magazine. He is a recognized executive in the information technology fields of SOA, internet security, governance, and compliance. He has extensive experience with both start-ups and large companies, having been ...
HP and Aruba Networks on Monday announced a definitive agreement for HP to acquire Aruba, a provider of next-generation network access solutions for the mobile enterprise, for $24.67 per share in cash. The equity value of the transaction is approximately $3.0 billion, and net of cash and debt approximately $2.7 billion. Both companies' boards of directors have approved the deal. "Enterprises are facing a mobile-first world and are looking for solutions that help them transition legacy investme...
The industrial software market has treated data with the mentality of “collect everything now, worry about how to use it later.” We now find ourselves buried in data, with the pervasive connectivity of the (Industrial) Internet of Things only piling on more numbers. There’s too much data and not enough information. In his session at @ThingsExpo, Bob Gates, Global Marketing Director, GE’s Intelligent Platforms business, to discuss how realizing the power of IoT, software developers are now focu...
Operational Hadoop and the Lambda Architecture for Streaming Data Apache Hadoop is emerging as a distributed platform for handling large and fast incoming streams of data. Predictive maintenance, supply chain optimization, and Internet-of-Things analysis are examples where Hadoop provides the scalable storage, processing, and analytics platform to gain meaningful insights from granular data that is typically only valuable from a large-scale, aggregate view. One architecture useful for capturing...
SYS-CON Events announced today that Vitria Technology, Inc. will exhibit at SYS-CON’s @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Vitria will showcase the company’s new IoT Analytics Platform through live demonstrations at booth #330. Vitria’s IoT Analytics Platform, fully integrated and powered by an operational intelligence engine, enables customers to rapidly build and operationalize advanced analytics to deliver timely business outcomes ...
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, it is now feasible to create a rich desktop and tuned mobile experience with a single codebase, without compromising performance or usability.
SYS-CON Events announced today Arista Networks will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Arista Networks was founded to deliver software-driven cloud networking solutions for large data center and computing environments. Arista’s award-winning 10/40/100GbE switches redefine scalability, robustness, and price-performance, with over 3,000 customers and more than three million cloud networking ports depl...
The speed of software changes in growing and large scale rapid-paced DevOps environments presents a challenge for continuous testing. Many organizations struggle to get this right. Practices that work for small scale continuous testing may not be sufficient as the requirements grow. In his session at DevOps Summit, Marc Hornbeek, Sr. Solutions Architect of DevOps continuous test solutions at Spirent Communications, will explain the best practices of continuous testing at high scale, which is r...
Thanks to Docker, it becomes very easy to leverage containers to build, ship, and run any Linux application on any kind of infrastructure. Docker is particularly helpful for microservice architectures because their successful implementation relies on a fast, efficient deployment mechanism – which is precisely one of the features of Docker. Microservice architectures are therefore becoming more popular, and are increasingly seen as an interesting option even for smaller projects, instead of bein...
The explosion of connected devices / sensors is creating an ever-expanding set of new and valuable data. In parallel the emerging capability of Big Data technologies to store, access, analyze, and react to this data is producing changes in business models under the umbrella of the Internet of Things (IoT). In particular within the Insurance industry, IoT appears positioned to enable deep changes by altering relationships between insurers, distributors, and the insured. In his session at @Things...
Security can create serious friction for DevOps processes. We've come up with an approach to alleviate the friction and provide security value to DevOps teams. In her session at DevOps Summit, Shannon Lietz, Senior Manager of DevSecOps at Intuit, will discuss how DevSecOps got started and how it has evolved. Shannon Lietz has over two decades of experience pursuing next generation security solutions. She is currently the DevSecOps Leader for Intuit where she is responsible for setting and driv...