PHOENIX, AZ — (Marketwired) — 05/15/13 — Crexendo, Inc. (NYSE MKT: EXE), a hosted services company that provides web hosting, hosted telecommunications services, search engine optimization management, link building, e-commerce software, website development and broadband internet services for businesses and entrepreneurs, today reported financial results for its first quarter of 2013.
Consolidated revenue for the first quarter of 2013 decreased 42% to $3.0 million compared to $5.3 million for the first quarter of prior year.
Net loss for the first quarter of 2013 was $(398,000) or $(0.04) per diluted common share, compared to net income of $197,000 or $0.02 per diluted common share for the first quarter of prior year.
Cash used for operations for the first quarter of 2013 was $(1.8) million compared to cash provided by operations of $652,000 for the first quarter of prior year.
The Company has three operating segments, which consist of StoresOnline, Crexendo Web Services and Crexendo Network Services. Effective October 1, 2012, the Company changed its reporting segments to reflect the allocation of previously unallocated corporate expenses to each of the three operating segments. The Company revised its segment reporting to reflect changes in how the Chief Operating Decision Maker (CODM) internally measures performance and allocates resources. Segment operating results for the prior year has been revised to conform to current year segment operating results presentation.
StoresOnline
Revenue for the first quarter of 2013 decreased 52% to $2.1 million compared to $4.4 million for the prior year quarter. Following our decision to suspend our direct mail seminar sales in July 2011, revenue from our StoresOnline segment has been generated primarily through principal amounts collected on historical sales of StoresOnline products and services sold through EPTAs. Fees for our StoresOnline products and services sold under EPTAs are recognized as revenue as cash payments are received from the customer and not at the time of sale.
Total segment operating expenses decreased 61% to $1.1 million compared to $2.7 million for the prior year quarter.
Segment other income, primarily related to interest on the collection of accounts receivable for the first quarter of 2013 decreased 73% to $206,000 compared to $762,000 in the prior year quarter.
Total segment income before income taxes for the first quarter of 2013 decreased 50% to $1.2 million compared to $2.4 million in the prior year quarter.
Crexendo Web Services
Revenue for the first quarter of 2013 decreased 31% to $533,000, from $770,000 in the prior year quarter. Web Services backlog, which is anticipated to be recognized within the next twelve months, was $1.3 million at March 31, 2013 compared to a backlog of $1.2 million at March 31, 2012.
Total segment operating expenses for the first quarter of 2013 decreased 45% to $1.2 million compared to $2.2 million in the prior year quarter.
Crexendo Network Services
Revenue for the first quarter of 2013 increased 413% to $385,000 compared to $75,000 in the prior year quarter. Network Services backlog, which is anticipated to be recognized within the next thirty-six months, was $3.4 million at March 31, 2013 compared to a backlog of $965,000 at March 31, 2012.
Total Network Services operating expenses for the first quarter of 2013 increased 60% to $1.6 million compared to $1.0 million in the prior year quarter.
Steven G. Mihaylo, Chief Executive Officer, commented “I have confidence that this quarter-s results show we are on a path toward profitability. This is the second quarter in a row that sales results are fully in line with our plan. Our backlog is at healthy levels, and I am very pleased with our marketing and sales initiatives. We continue to add resellers to our dealer program and sales are beginning to increase. I have high expectations for continued growth from that program. We are able to provide world class service to customers of all sizes, and every day our products and services improve. We continue to put our legacy issues firmly in the past; we were able to resolve the dispute with the landlord in Orem, Utah on terms that were reasonable and fair. Every day we continue to move further away from the issues that burdened this company. While our results are in line with our plan and my expectations, every day I work with our management team to streamline operations, keep costs at acceptable levels, improve sales and increase our product reach. We continue to monitor productivity of our sales force improving the efficiencies of our sales team. We continue to look at ways to increase our organic sales while carefully reviewing strategic accretive acquisitions.”
Mihaylo continued, “I understand that our shareholders will not be satisfied until we are profitable and the results are fully in line with our expectations. I will not be satisfied until this Company-s results demonstrate it is the world class company that I know it to be. I am dedicated to working with this management team to realize that goal. I do however look at the progress we have accomplished over the last two years and realized we have done incredible work, we have resolved mountains of issues that would have destroyed most companies, completely retooled our business and have built a strong company with amazing people and products. I am very proud of this team and confident and excited about our future.”
The Company is hosting a conference call today, May 15, 2013 at 5:00 PM EDT. The conference call will be broadcast live over the Internet at . If you do not have Internet access, the telephone dial-in number is 888-428-9480 for domestic participants and 719-325-2323 for international participants. The conference ID to join the call is 5131127. Please dial in five to ten minutes prior to the beginning of the call at 5:00 PM EDT.
Crexendo is a hosted services company that provides web hosting, hosted telecommunications services, search engine optimization management, link building, e-commerce software, website development and broadband internet services for businesses and entrepreneurs. Our services are designed to make enterprise-class hosting services available to small and medium-sized businesses at affordable monthly rates.
Safe Harbor Statement
This press release contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for such forward-looking statements. The words “believe,” “expect,” “anticipate,” “estimate,” “will” and other similar statements of expectation identify forward-looking statements. Specific forward-looking statements in this press release include information about Crexendo (i) backlogs being at healthy levels; (ii) being pleased with its marketing and sales initiatives; adding resellers to our dealer program and having high expectations for continued growth from that program; (iii) providing world class service to customers of all sizes with products and services improving; (iv) resolving the Orem lawsuit on a fair basis while putting legacy issues firmly in the past and continuing to move further away from the issues that burdened the company; (v) working to streamline operations, keep costs at acceptable levels, improve sales and increase product reach; (vi) continuing to look at ways to increase organic sales while carefully reviewing strategic accretive acquisitions; (vii) being profitable and results are fully in line with company expectations; (vii) being a world class company and (ix) being proud of this team and confident and excited about its future.
For a more detailed discussion of risk factors that may affect Crexendo-s operations and results, please refer to the company-s Form 10-K for the year ended December 31, 2012, and Form 10Q for the period ending March 31, 2013. These forward-looking statements speak only as of the date on which such statements are made, and the company undertakes no obligation to update such forward-looking statements, except as required by law.
Crexendo, Inc.
Steven G. Mihaylo
CEO
602-345-7777
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