Press Release
GREENWICH, Conn. – October 6, 2005 – HALO Technology Holdings (OTCBB: HALO) a holding company for established enterprise software companies, announced results for the year ended June 30, 2005.
During fiscal 2005, the Company executed a complete reorganization plan which included the replacement of the entire board of directors with three world-class executives, and the reduction of staff in legacy operations. The Company also implemented a new strategic plan which calls for the acquisition and operation of profitable enterprise software companies. The first step in this strategy was completed in January with the acquisition of Gupta Technologies. In July, the Company completed its second acquisition, Kenosia Corporation, and in so doing became a true technology holding company.
Both of these acquired companies produce a significant amount of high-margin recurring revenue and are leaders in their respective markets. In September, the Company announced an agreement to acquire five more companies: Tesseract, David Corporation, Process Software, ProfitKey, and Foresight Software. In total, the Company has acquired, or agreed to acquire, seven companies for an aggregate acquisition price of $48.8 million. These seven companies generated combined revenue of over $44 million and EBITDA of over $14 million for the trailing twelve-month period.
“We are pleased with our accomplishments during fiscal 2005. We have worked tirelessly to transform what was a money-losing, struggling software company into a true technology holding company that is firmly on the path to creating significant shareholder value,” said Ron Bienvenu, Chief Executive Officer of HALO.
“As we enter the second quarter of fiscal 2006, we have now acquired, or agreed to acquire, a total of seven companies, each of which have generated between 40% and 90% of their revenue from recurring maintenance contracts, for a combined purchase price of less than 3.5x trailing twelve month EBITDA. We continue to seek new opportunities to add great companies to the HALO family, but our shareholders should know that we will do so in a disciplined manner, pursuing acquisitions we expect to be accretive. We also secured a $50 million debt facility to refinance existing debt and which will be used to help fund future acquisitions, thereby reducing dilution for shareholders. We remain completely focused on returning long-term value for our shareholders by generating strong increases in operating cash flow and earnings per share.”
For the twelve months ended June 30, 2005, the company reported revenue of $5.1 million and a net loss attributable to common stockholders of $22.9 million.
EBITDA means earnings before interest, taxes, depreciation and amortization, and before any management fees or distributions to their parent company. The trailing twelve month period for Gupta ended December 31, 2004, and for the other six companies ended June 30, 2005. Amounts are based on unaudited financial statements provided to the Company by the respective sellers. These financial results remain subject to audit, have not been adjusted for the effects of purchase accounting, and are not necessarily indicative of future performance.
HALO Technology Holdings, Inc. is a global provider of a diversified range of standards-based enterprise software applications and on-demand solutions. HALO's strategy is to acquire and operate enterprise software companies with a commitment to sustainable growth. HALO portfolio companies focus on customer service, product quality and profitability to build long term customer relationships and ensure customer satisfaction today and into the future. Everyday, thousands of corporations and institutions from across the globe rely on our portfolio companies to deliver high quality, enterprise class software and services. For more information, please see our website at www.haloholdings.com.
Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those relating to future opportunities, the outlook of customers, the reception of new products and technologies, and the success of new initiatives. In particular, statements contained in this press release that concern future operating results or other statements using words such as “anticipate,” “believe,” “could,” “estimate,” “intend,” “may,” “plan,” “project,” “should” “will,” or “set our sights on” constitute forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.In addition, such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Such factors include: (i) demand for the Company's products; (ii) the actions of current and potential new competitors; (iii) changes in technology; (iv) the nature and amount of the Company's revenues and expenses; and (v) overall economic conditions and other risks detailed from time to time in the Company's periodic earnings releases and reports filed with the Securities and Exchange Commission (the "Commission"), as well as the risks and uncertainties discussed in the Company's Annual Report on Form 10-KSB filed with the Commission on September 28, 2005 (the "Form 10-KSB") and the Company's Quarterly Reports on Form 10-QSB filed with the Commission on November 14, 2005 and on February 15, 2006.