PHOENIX, AZ — (Marketwired) — 11/12/13 — Crexendo, Inc. (NYSE MKT: EXE), a hosted services company that provides hosted telecommunications services, hosted website services, website development software and broadband internet services for businesses and entrepreneurs, today reported financial results for its third quarter of 2013.
Consolidated revenue for the third quarter of 2013 decreased 11% or $0.3 million to $2.4 million compared to $2.7 million for the second quarter of 2013 and decreased 37% or $1.5 million compared to $3.9 million for the third quarter of prior year.
Net loss for the third quarter of 2013 was $(1.6) million or $(0.15) per diluted common share, compared to net loss of $(806,000) or $(0.08) per diluted common share for the third quarter of prior year.
Cash used for operations for the third quarter of 2013 was $(1.5) million compared to cash used for operations of $(585,000) in second quarter of 2013 and cash used for operations of $(493,000) for the third quarter of prior year.
The Company has three operating segments, which consist of Crexendo Network Services, Crexendo Web Services and StoresOnline. 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.
Crexendo Network Services
Revenue for the third quarter of 2013 increased 196% to $696,000 compared to $235,000 in the prior year quarter. Network Services backlog, which is anticipated to be recognized within the next thirty-six to sixty months, increased to $5.2 million as of September 30, 2013 compared to $2.2 million as of September 30, 2012.
Total Network Services operating expenses for the third quarter of 2013 increased 34% to $2.1 million compared to $1.5 million for the prior year quarter.
Total segment loss before income taxes for the third quarter of 2013 increased 5% to $(1.4) million compared to $(1.3) million for the prior year quarter.
Crexendo Web Services
Revenue for the third quarter of 2013 decreased 7% to $533,000 from $575,000 in the prior year quarter. We anticipate that our revenue from our web service segment will continue to decline due to our strategic decision to limit our provision of web services to our enterprise sized customers. As a result of this shift in focus, our backlog has decreased $0.4 million to $0.8 million as of September 30, 2013 compared to $1.2 million as of June 30, 2013. This shift in focus will allow us to focus on our rapidly growing network services segment.
Total segment operating expenses for the third quarter of 2013 decreased 22% to $1.3 million compared to $1.6 million for the prior year quarter.
Total segment loss before income taxes for the third quarter of 2013 decreased 31% to $(721,000) compared to $(1.0) million for the prior year quarter.
StoresOnline
Revenue for the third quarter of 2013 decreased 61% to $1.2 million compared to $3.1 million for the prior year quarter.
Total segment operating expenses decreased 57% to $831,000 compared to $1.9 million for the prior year quarter.
Segment other income, primarily related to interest on the collection of accounts receivable for the third quarter of 2013 decreased 79% to $86,000 compared to $409,000 for the prior year quarter.
Total segment income before income taxes for the third quarter of 2013 decreased 71% to $454,000 compared to $1.5 million for the prior year quarter.
Steven G. Mihaylo, Chief Executive Officer, commented, “I am very pleased with the progress of the business; our results continue to be in line with our internal expectations and our plan for growing the business. I am also encouraged by the improving rate of decline in the cash balance we saw this quarter. I believe this shows that our cost reductions are having a positive impact on the business. While I am not certain this will continue since our EPTA-s continue to decline and will no longer add to our cash balance, what we saw this quarter is a good metric. We continue to see improvements in our sales force results and the growth from sales and partners in our dealer channel. These are also very positive trends. We are holding our first Business Partners- Conference (BPC) this week in Phoenix, which demonstrates the growth, excitement, and support for this channel.”
Mihaylo continued, “We continue to consolidate our focus and resources. We have determined that we will no longer be providing SEO services to customers other than enterprise and national accounts. This allows us to both reduce our work force and to fully concentrate on our -sweet spot,- our business cloud based telephony as well as our soon to be released new web builder software platform. We also continue to look at our liquidity and I am discussing with the Board various debt and equity options. We expect to have clarity on that by year-s end. We continue to monitor costs, sales and operations carefully. I continue to believe we are in the right space with the right products and people. I am very confident in our future.”
The Company is hosting a conference call today, November 12, 2013 at 5:00 PM EST. The conference call will be broadcast live over the Internet at . If you do not have Internet access, the telephone dial-in number is 800-723-6498 for domestic participants and 785-830-7989 for international participants. The conference ID to join the call is 3216093. Please dial in five to ten minutes prior to the beginning of the call at 5:00 PM EST.
Crexendo is a hosted services company that provides hosted telecommunications services, hosted website services, website development software and broadband internet services for businesses and entrepreneurs. Our services are designed to make enterprise-class hosting services available to small, medium-sized and enterprise-sized businesses at affordable monthly rates.
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) being very pleased with the progress of the business; (ii) results continue to be in line with internal expectations and plan; (iii) being encouraged by the improving rate of decline in the cash balance this quarter which has a positive impact on the business and is a good metric; (iv) continuing to see improvements in sales force results and the growth from sales and partners in the dealer channel; (v) seeing growth, excitement and support for dealer channel; (vi) continuing to consolidate focus and resources; (vii) discontinuing non-enterprise SEO allows reduction to the work force and allows the Company to concentrate on cloud based telephony as well as the soon to be released new web builder software platform; (viii) continuing to look at its liquidity and discussing with the Board various debt and equity options and (ix) continuing to believe the Company is in the right space with the right products and people with management being very confident in the Company-s 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-s for the periods ending June 30 and September 30, 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.
Contact
Crexendo, Inc.
Steven G. Mihaylo
CEO
602-345-7777
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