IRVINE, Calif., May 21 /PRNewswire-FirstCall/ -- BPO Management Services, Inc., (BULLETIN BOARD: BPOM) , a full service business process outsourcing company focused on serving middle market enterprises, today announced its financial results for the first quarter ended March 31, 2007.
FIRST QUARTER 2007 HIGHLIGHTS
* Completed merger and integration of netGuru.
* Achieved Bulletin Board Listing.
* Hired New Chief Financial Officer.
* Announced significant contract wins with Triangle Services and City of
Winnipeg.
* Continued revenue growth from consolidated operations.
* Announced intended acquisition of DocuCom, pending the satisfactory
completion of financing and definitive agreements with each of the
parties
* Announced intended acquisition of HRMS, pending the satisfactory
completion of financing and definitive agreements with each of the
parties.
FINANCIAL RESULTS
"The last twelve months have been an exciting and important period of transition for BPO Management Services," commented Patrick Dolan, Chief Executive Officer. "We completed our reverse merger to become a publicly traded company, through which we acquired the services and business of netGuru, including its Web4 and IT Services units. We have completed the integration of netGuru into the BPOMS platform, announced our intent to make the strategic acquisitions of DocuCom and HRMS, and received approval for a bulletin board listing. In addition, we have recently announced key contract wins and continue to build a strong pipeline of new business opportunities which we fully expect will allow us to accelerate our growth in the coming quarters.
"Looking ahead, we remain focused on managing daily operations and executing against our business plan, which we believe will ultimately maximize shareholder value. Our long-term strategy is to offer a comprehensive suite of end-to-end back office outsourcing services that are uniquely designed to solve the needs of the middle market enterprise, a market that is fragmented and too small to be adequately served by Tier 1 providers. We completed a number of acquisitions over the past two years and will continue to selectively pursue strategic acquisitions to maximize cross-selling opportunities and better penetrate the middle market," Dolan continued.
Enterprise Content Management (ECM) experienced continued growth and new contract wins include the City of Winnipeg, and an add-on business with Canadian Tire Financial Services.
IT Infrastructure and Outsourcing (ITO) also saw continued growth and new contract wins including Triangle Services, Richmond Events, BBK Healthcare, Health Dialog as well as a contract renewal with Agility Logistics.
First quarter total revenue for the three months ended March 31, 2007 were $2.0 million, compared to total revenue of $1.6 million for the three months ended March 31, 2006. However, if the effect of a discontinued operation is eliminated from the March 31, 2006 results the total revenue increase in Q1'07 compared to Q1'06 is a net increase of approximately $800,000 or 66%.
The Company's net loss available to common shareholders for the three months ended March 31, 2007 was $1,357,531, or a loss of $0.16 per share, compared to a net loss of $470,508, or a loss of $0.07 per share, for the same period 2006. This loss includes approximately $0.6 million in non-cash charges related to the issue of bridge loan warrants, management stock options and balance sheet amortization/depreciation expense items. In addition, the Company experienced higher than normal SG&A expenses associated with integration activities related to recently acquired business units and professional service expenses associated with new acquisition activity.
The company closed the quarter with $612,017 in cash and cash equivalents.
The company became public in the fourth quarter of 2006.
OUTLOOK FOR 2007
"Looking to the second quarter of 2007, we plan to complete our previously announced capital raise with C. E. Unterberg, Towbin, the integration of Novus and the acquisition of both DocuCom and HRMS. While we are not going to give formal guidance for the second quarter at this time, as we strive toward profitability, we will expect to see strong sales momentum and revenue growth across all divisions and a reduction in non-cash interest expense in the second quarter," Dolan concluded.
About BPO Management Services, Inc.
BPO Management Services (BPOMS) is a business process outsourcing (BPO) service provider that offers a diversified range of on-demand services, including human resources, information technology, enterprise content management, and finance and accounting, to support the back-office business functions of middle-market enterprises on an outsourced basis. BPOMS supports middle-market businesses new to the BPO market, established businesses that already outsource, and businesses seeking to maximize return-on-investment from their in-house workforce. For more information, please visit http://www.bpoms.com/.
DocuCom: http://www.docucom.ca/.
DocuCom is recognized as a leading provider of document management solutions across Canada and offers a wide range of document management products and service solutions to government and middle market enterprises. Approximately 50% of its existing business is provided under recurring revenue customer service contracts through which DocuCom supports its clients' document management and imaging based requirements. In addition to expanding BPOMS' document management service offering, this acquisition will greatly enhance BPOMS' market presence with both corporate and government organizations located in the strategic Toronto-Ottawa-Montreal business corridor and provide ready access to the large US marketplace located in the nearby northeastern United States. BPOMS plans to merge DocuCom with its existing ECM/Document Management division based in Winnipeg, Canada. For the most recent fiscal year ended as of October 31, 2006, DocuCom reported annual revenues of approximately $12 million dollars.
Human Resource MicroSystems (HRMS): http://www.hrms.com/.
HRMS provides comprehensive HRIS Software Solutions to Human Resource departments across a broad range of middle market industries. Its current install base includes more than 100 middle market companies located throughout the United States. The company combines the human resource and technical expertise to deliver HRIS products and services that meet the immediate and ongoing HR software needs of middle market enterprises. In addition to licensing this product, BPOMS plans to provide this HRIS software to its customers on a software-as-a-service ("SaaS") basis hosted from a BPOMS data center facility where it is intended to serve as the anchor offering for its HRO division headquartered in San Francisco, CA. To date approximately 50% of HRMS revenues are derived from recurring revenue maintenance and support contracts.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
With the exception of historical or factual information, the matters discussed in this press release, including without limitation the completion of any and/or all of the proposed acquisitions, obtaining additional financing for these acquisitions, and the ability of the Company's common stock to be traded or quoted on various markets are forward-looking statements that involve risks and uncertainties. Actual results may differ. Additional factors that could cause or contribute to such differences in results include, but are not limited to, fulfillment of conditions to close any or all of the proposed acquisitions, including without limitation, the availability of financing; changes in market and business conditions and the conditions of the parties to the proposed transactions; and other risks and factors detailed from time to time in the Company's public statements and its periodic reports and other filings with the U.S. Securities and Exchange Commission.
BPO MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
2007 2006
Revenues:
Enterprise content management (a) $1,009,771 $1,069,378
IT outsourcing services 980,305 441,115
Human resource outsourcing services 10,518 111,375
Total revenues 2,000,594 1,621,868
Operating expenses:
Cost of services provided 902,473 419,640
Selling, general and administrative 1,843,587 1,654,642
Research and development 66,011 --
Share-based compensation 53,999 19,976
Total operating expenses 2,866,070 2,094,258
Loss from operations (865,476) (472,390)
Interest (expense) income
Related parties (35,671) --
Other (net) (468,623) 2,125
Other income 12,239 (243)
Total interest and other (expense) income (492,055) 1,882
Net loss $(1,357,531) $(470,508)
Basic and diluted net loss per common share $(0.16) $(0.07)
Basic and diluted weighted average common
shares outstanding 8,619,400 7,131,277
Note (a): Enterprise content management revenue in the quarter ended
March 31, 2006 includes $414,566 in revenue from a contract that
ended February 2006.
BPO MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2007,
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $612,017
Accounts receivable (net of allowance for
doubtful accounts of $110,526) 1,111,299
Inventory (net of reserves of $0) 44,575
Prepaid expenses and other current assets 296,732
Total current assets 2,064,623
Equipment, net 834,380
Goodwill 4,115,041
Intangible assets (net of accumulated
amortization of $139,302) 1,055,557
Other assets 53,251
$8,122,852
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt, net of
discount of $2,891 $307,334
Current portion of capital lease obligations 92,712
Accounts payable 2,061,266
Accrued expenses 538,145
Amount due former Novus shareholders,
current portion 977,473
Deferred revenues 458,429
Related party notes payable, net of
discount of $163,939 1,161,061
Severance obligations payable 490,755
Other current liabilities 9,741
Total current liabilities 6,096,916
Long-term debt, net of current portion and
net of discount of $6,264 36,181
Capital lease obligations, net of current
portion 426,136
Amount due former Novus shareholders 179,579
Other long-term liabilities 33,115
Total liabilities 6,771,927
Commitments and contingencies (Note 9)
Stockholders' equity:
Convertible preferred stock, Series A,
par value $.01; authorized 1,608,612 shares;
1,605,598 shares issued and outstanding 16,056
Convertible preferred stock, Series B,
par value $.01; authorized 1,449,204 shares;
1,449,204 shares issued and outstanding 14,492
Non-convertible preferred stock, Series C,
par value $.01; authorized 21,738,000 shares;
916,667 shares issued and outstanding 9,167
Common stock, par value $.01; authorized
150,000,000 shares; 8,619,400 shares issued
and outstanding 86,194
Additional paid-in capital 6,776,395
Accumulated deficit (5,458,237)
Accumulated other comprehensive loss:
Cumulative foreign currency translation
adjustments (93,142)
Total stockholders' equity 1,350,925
$8,122,852
