TXP Records Q2 Operating Profit
Published: 09 August 2006
by Staff
Operating income was $21,000, compared to a loss of $43,000 for the second quarter last year. Net loss was $4.1 million, or $0.04 per share, compared to net loss of $88,000 or $0.00 per share, for Q2 2005. Net loss included non-cash charges of $4.3 million related to a change in the fair value of derivative financial instruments, and $465,000 related to gain on early extinguishment of debt.
Michael C. Shores, president and chief executive, said in a press release, "I am extremely pleased to report that we achieved an operating profit for the second quarter of fiscal 2006 -- a major accomplishment, given the early stage of our business. Moreover, our customer base has grown to over 93 customers at the end of the second quarter, from 63 customers at the same time last year." Revenue for the six month period increased 35% to $3.4 million, up from $2.6 million a year ago. Operating loss decreased to $132,000, from $345,000. Net loss was $4.3 million, or $0.05 per share, compared to net loss of $427,000 or $0.00 per share, for the same period in 2005.
TXP also sold assets from its predecessor company, including book-rights and software unrelated to the current business, in return for cancellation of $150,000 in amounts owing to a former officer of the company.
"The first phase of our strategy was to penetrate a core base of Fortune 1000 customers, in order to demonstrate our capabilities on individual project,” Shores noted. “We have now shifted our focus to the second phase of our strategy -- working with existing customers to adopt our model enterprise-wide, and we are currently engaged in a number of these discussions. We have also expanded our borrowing capacity by up to $2 million, providing us additional flexibility to support our growth plans as these new customers begin to adopt our model."
"Given the early stage our business, it is important to note that our revenues may initially be very irregular. The third quarter of last year included a large, one-time project, which accounted for approximately $5.2 million. While we anticipate adding additional contracts of this magnitude, the timing of these projects is difficult to predict. As a result, next quarter we are unlikely to exceed our third quarter 2005 revenues, but we do anticipate our revenue will begin to accelerate as large corporate customers begin to adopt our model."
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