J.L. Halsey Reports Fiscal Year Revenue of $24.4 Million
Lyris and EmailLabs Email Marketing Units Continue to Show Strong Growth
WILMINGTON, Del.(Sep 29, 2006)--J.L. Halsey (OTCBB:LYRI.OB) today reported results for the fourth quarter and fiscal year 2006 ended June 30. The results described below reflect the company's acquisition of two leading email marketing companies -- Lyris Technologies, Inc. and EmailLabs -- which occurred on May 12, 2005, and October 11, 2005, respectively.
During the past year, the company has made a significant transformation to an emarketing technology and services business, including the acquisitions of ClickTracks Analytics, Inc., and Hot Banana Software Inc., subsequent to the end of fiscal 2006. Prior to these four transactions, the company had no operating businesses. As a result, the company believes that comparisons to earnings results in the prior year are not meaningful.
For all of fiscal 2006, J.L. Halsey reported revenues of $24.4 million. Net income on a GAAP basis for fiscal 2006 was $2.4 million, or $0.03 per diluted share. For the fourth quarter ended June 30, 2006, the company reported revenues of $7.7 million. J.L. Halsey reported net income on a GAAP basis of $364,000, or $0.00 per diluted share, in the fourth quarter of 2006.
For all of fiscal 2006, net income on a non-GAAP basis was $5.1 million, or $0.06 per diluted share. Net income on a non-GAAP basis for the fourth quarter of 2006 was $1.3 million, or $0.02 per diluted share. Non-GAAP net income excludes $2,627,000 and $758,000 in amortization of intangibles in the full fiscal year and fourth quarter, respectively, resulting from the Lyris and EmailLabs acquisitions. In addition, the non-GAAP measure excludes $343,000 and $95,000 of stock-based compensation expense and gains (losses) from discontinued operations of $407,000 and ($41,000), for the two periods, respectively.
"We are pleased to report full year revenues in excess of $24 million, the result of a nearly 39 percent increase in revenues year over year at EmailLabs and Lyris. These results reflect continued strong demand for email marketing solutions from both Lyris and EmailLabs," stated David Burt, chief executive officer of J.L. Halsey. We continue to be enthusiastic about the future of permission-based email marketing."
"As a significant part of our strategic initiative to provide sophisticated, yet easy-to-use, marketing technologies to small and mid-sized businesses, we acquired ClickTracks and Hot Banana," Burt continued. "Our company is now one of the leaders in helping marketers within small and medium-sized organizations optimize their growing online marketing spends and activities."
ClickTracks is a leading Web analytics provider that enables marketers to understand how visitors behave and interact with Web sites and offers both hosted and installed software solutions. Hot Banana offers Web content management and active marketing solutions that enable clients to create, publish and optimize Web site content.
In conjunction with these transactions, Halsey announced that it closed a $10 million subordinated bridge loan and that its board of directors had approved a $20 million common stock rights offering.
Non-GAAP Net Income
Non-GAAP net income is a financial measure under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. Management believes that it may be useful in measuring the company's operations to exclude amortization of intangibles, stock-based compensation and gains or losses from discontinued operations. Management also believes that non-GAAP net income provides useful supplemental information to management and investors regarding the performance of the company's business operations. Non-GAAP net income is a performance measure only and it does not provide any measure of the company's cash flow or liquidity. Non-GAAP financial measure should not be considered as a substitute for measures of financial performance in accordance with GAAP.
About J.L. Halsey
J.L. Halsey (OTCBB:LYRI.OB) is a leading eMarketing company that provides technology solutions for marketers at mid-size businesses. Its wholly owned subsidiaries -- Lyris Technologies, EmailLabs, ClickTracks and Hot Banana -- provide a suite of best-of-breed tools for managing email marketing campaigns end-to-end, publishing and managing Web site content, creating landing pages, and optimizing sites based on sophisticated, yet easy-to-use, Web analytics. Clients include Nokia, Adobe, PalmSource, Johns Hopkins University and Jupitermedia. For more information, please visit www.lyrisinc.com, www.lyris.com, www.emaillabs.com, www.clicktracks.com, www.hotbanana.com and www.sparklist.com.
Precautionary Statements Regarding Forward-Looking Information
Some of the statements in this press release may include forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995 (PSLRA), that reflect our current views with respect to future events and financial performance. These forward-looking statements, which may apply to us specifically or the email marketing technology and services industry in general, are made pursuant to the safe harbor provisions of the PSLRA and include estimates and assumptions related to economic, competitive, regulatory, judicial, legislative and other developments. Statements that include the words, "expects," "intends," "plan," "believe," "project," "estimate," "may," "should," "anticipate," "will" and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise.
All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. Certain risks and uncertainties that could cause our actual results to differ significantly from management's expectations are described in our Annual Report on Form 10-K under the section entitled, "Business-Risk Factors." This section, along with other sections of our Annual Report, describes some, but not all, of the factors that could actual results to differ significantly from management's expectations and have a material adverse effect on the businesses, financial condition and common stock of the company. This list of factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in our filings with the Securities and Exchange Commission (available at www.sec.gov). Unless otherwise required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
If one or more of these risks or uncertainties materialize, or if our underlying assumptions otherwise prove to be incorrect, our actual results may vary materially from what we project. Any forward-looking statements you read in this news release reflect our views as of the date of this press release with respect to future events, and are subject to these and other risks, uncertainties and assumptions relating to our operations, financial condition, results of operations, growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by this paragraph.
The rights offering will be made only by means of a prospectus that Halsey will file with the Securities and Exchange Commission as part of a registration statement. This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
J. L. Halsey Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except for per share data)
Fiscal Quarter Ended June 2006
----------------------------------------------------
Share Amorti-
Based zation Gain on
Compen- of Discon-
GAAP sation Intan- tinued Non-GAAP
Results Expense gibles Operations Results
----------- -------- ------- ----------- -----------
Software and
services revenue $ 7,656 $ 7,656
Cost of revenues 2,277 (11) (409) 1,857
----------- -------- ------- ----------- -----------
Gross profit 5,379 11 409 5,799
----------- -------- ------- ----------- -----------
Operating
expenses:
General and
administrative
expenses 2,157 (59) 2,098
Sales &
marketing 1,827 (25) 1,802
Amortization of
intangibles 349 (349)
----------- -------- ------- ----------- -----------
Income (loss)
from
operations 1,046 95 349 1,899
Interest income 13 13
Interest expense (350) (350)
----------- -------- ------- ----------- -----------
Income (loss)
from
continuing
operations
before income
taxes 709 95 758 1,562
Income tax
provision 304 304
Net income
(loss) from
continuing
operations 405 95 758 - 1,258
Gain (loss) on
disposal of
discontinued
operations, net
of tax (41) 41 -
----------- -------- ------- ----------- -----------
Net income
(loss) 364 95 758 41 1,258
=========== ========================================
Net income (loss)
per share basic
and diluted $ 0.00 $ 0.02
=========== ===========
Shares used to
compute net
income (loss)
per share:
Basic 83,208,332 83,208,332
Diluted 84,476,533 84,476,533
Use of Non-GAAP Financial Measures
----------------------------------------------------------------------
This press release discloses non-GAAP measures of net income and
earnings per share which are not financial measures prepared in
accordance with United States Generally Accepted Accounting
Principles ("GAAP"). Management believes that these non-GAAP
measures can be useful for investors to evaluate our financial
performance by providing the results of our company's primary
business operations, excluding, as applicable, share based
compensation expense, amortization of intangibles and gains or losses
on discontinued operations. However, these measures should be
considered in addition to, and not as a substitute, or a superior
measure to, net income or earnings per share or other measures of
financial performance prepared in accordance with GAAP. Prior period
non-GAAP amounts have been restated to exclude the effects of share
based compensation.
J. L. Halsey Corporation
Condensed Consolidated Statements of Operations
(in thousands, except for per share data)
Twelve Months Ended June 2006
----------------------------------------------------
Share Amorti-
Based zation Gain on
Compen- of Discon-
GAAP sation Intan- tinued Non-GAAP
Results Expense gibles Operations Results
----------- -------- ------- ----------- -----------
Software and
services revenue $ 24,353 $ 24,353
Cost of revenues 6,756 (71) (1,410) 5,275
----------- -------- ------- ----------- -----------
Gross profit 17,597 71 1,410 19,078
----------- -------- ------- ----------- -----------
Operating
expenses:
General and
administrative
expenses 7,111 (199) 6,912
Sales &
marketing 5,097 (73) 5,024
Amortization of
intangibles 1,217 (1,217)
----------- -------- ------- ----------- -----------
Income (loss)
from
operations 4,172 343 1,217 7,142
Interest income 98 98
Interest expense (1,268) (1,268)
Loss on sale of
assets (16)
----------- -------- ------- ----------- -----------
Income (loss)
from
continuing
operations
before income
taxes 2,986 343 2,627 5,956
Income tax
provision 827 827
Net income
(loss) from
continuing
operations 2,159 343 2,627 - 5,129
Gain (loss) on
disposal of
discontinued
operations, net
of tax 407 (407) -
----------- -------- ------- ----------- -----------
Net income
(loss) 2,566 343 2,627 (407) 5,129
=========== ===========
Net income (loss)
per share basic
and diluted $ 0.03 $ 0.06
=========== ===========
Shares used to
compute net
income (loss)
per share:
Basic 83,126,803 83,126,803
Diluted 84,485,747 84,485,747
Use of Non-GAAP Financial Measures
----------------------------------------------------------------------
This press release discloses non-GAAP measures of net income and
earnings per share which are not financial measures prepared in
accordance with United States Generally Accepted Accounting
Principles ("GAAP"). Management believes that these non-GAAP
measures can be useful for investors to evaluate our financial
performance by providing the results of our company's primary
business operations, excluding, as applicable, share based
compensation expense, amortization of intangibles and gains or losses
on discontinued operations. However, these measures should be
considered in addition to, and not as a substitute, or a superior
measure to, net income or earnings per share or other measures of
financial performance prepared in accordance with GAAP. Prior period
non-GAAP amounts have been restated to exclude the effects of share
based compensation.
Contact:
J.L. Halsey
Richard McDonald, 610-688-3305 (Investor Relations)
or
Kalt Rosen & Co.
Neal Rosen, 415-397-2686
About EmailLabs EmailLabs is a leading provider of high-performance email marketing
solutions to agencies, publishers and marketing departments of middle-market
and Global 2000 companies. The EmailLabs email marketing platform is provided
as an ASP (Web-based) service, and is easily integrated with a company's Web
site, sales force automation and CRM technologies through EmailLabs' application
programming interface (API). For the fourth consecutive year, EmailLabs has
been recognized by ASPnews.com
as one of the Top 50 ASPs worldwide and as a Top 25 Service Provider for the
Software-as-a Service (SaaS) and Business Service Provider category. The company
provides email marketing solutions to more than 550 companies, including Nokia,
Agilent, PalmSource and Jupitermedia. Headquartered in Menlo Park, Calif., EmailLabs
was founded in 1999 and is a subsidiary of Lyris, Inc. (OTCBB:JLHY).
For more information, visit www.EmailLabs.com.
Media Contacts:
Ken Greenberg
Edge Communications, Inc.
818.990.5001
Loren T. McDonald
VP Corporate Communications, EmailLabs
650.388.3542
