Press Release
GREENWICH, Conn. – May 15, 2006 – HALO Technology Holdings (OTCBB: HALO) (the “Company” or “HALO”) a holding company for established enterprise software companies, announced results for the three and nine months ended March 31, 2006.
For the third quarter of fiscal 2006, the Company reported revenue of $8.2 million, a 53% increase over the $5.4 million reported for the second quarter of fiscal 2006, and a 251% increase over the same period last year. Net loss attributable to common stockholders for the third quarter of fiscal 2006 was $5.4 million, or $0.75 per share. For the nine months ended March 31, 2006, the company reported revenue of $16.8 million and a net loss attributable to common stockholders of $13.8 million, or $2.97 per share. Results for the third quarter of fiscal 2006 reflect the acquisitions of: Gupta Technologies, which was acquired on January 31, 2005; Kenosia Corporation, which was acquired on July 6, 2005; Tesseract, DAVID Corporation, Process Software, ProfitKey International, and Foresight Software, which were acquired on October 26, 2005; Empagio, Inc, which was acquired on January 13, 2006; and Executive Consultants, Inc., which was acquired on March 1, 2006.
The Company expects to complete the acquisitions of InfoNow Corporation (Pink Sheets: INOW) and Unify Corp (OTCBB: UNFY) by the end of July and September, respectively.
HALO CEO Ron Bienvenu stated, “We are well on our way toward completing the first phase of our growth strategy, by acquiring profitable enterprise software companies with significant recurring revenues and sustainable cash flows for an average purchase price of less than 3.5 times trailing twelve month EBITDA. Now that we are generating positive operating cash flow (on a pro forma EBITDA basis), we are embarking on the second phase of our growth strategy\emdash leveraging the client base of our portfolio companies through our unique \lquote lift-and-shift’ strategy, which allows our existing customers to migrate from their existing mainframe-based systems, to more efficient and lower cost hosted software solutions.”
The Company announced it has successfully implemented its first “lift-and-shift” of an enterprise customer by moving the human resources, benefits, and payroll administration for a wholly-owned IT subsidiary of a major US airline from a mainframe-based deployed architecture to a hosted environment.
Mr. Bienvenu continued, “Following the merger of Tesseract and Empagio, we offered Tesseract customers the opportunity to \lquote lift’ their HR platform off their legacy mainframe systems and \lquote shift’ it over to Empagio’s more efficient and lower cost hosted software solution. By gradually shifting customers, on a time frame and budget that makes sense to them, we can save our clients millions of dollars per year on mainframe maintenance costs, while generating recurring monthly subscription fees.”
“Empagio’s hosted environment was originally built upon the Tesseract platform, making the migration of our recently announced airline customer seamless. Alternatively, if they had gone with traditional software, such as SAP or People Soft, it would have presented incredible implementation risks, with high switching costs and requiring ongoing maintenance and upgrades. Following the migration to Empagio, the airline customer couldn’t have been happier with the process, and cited ease of use, customer support, and cost savings as the major benefits. Having successfully completed the \lquote lift-and-shift,’ we are now in discussions to begin a broader implementation across the entire enterprise. Additionally, with the acquisition of InfoNow and Unify, we believe we will have four subsidiaries that can execute our \lquote lift-and-shift’ strategy to produce long-term profitable growth.”
Mr. Bienvenu concluded, “We remain confident in our ability to achieve a pro forma revenue run-rate of approximately $100 million by the end of calendar 2006 through a combination of native growth and acquisitions. We also expect to have positive cash flow across the portfolio companies. At the same time, we intend to streamline our capital structure by converting our Series C preferred shares, as well as strengthening our balance sheet by gradually paying down our debt through increased cash flow from operations.”
HALO’s revenue run-rate target is on a pro forma basis, without the impact of the loss of deferred revenue from the acquired companies due to purchase accounting rules.
The HALO Technology Holdings third quarter conference call will be held at 11:00AM Eastern time on Monday, May 15, 2006. To participate in the call, please dial 800-399-7503 or (706) 643-0996. A live webcast of the call will also be available on the Company's website, http://www.shareholder.com/halo/mediaregister.cfm?MediaID=20436. To listen to the live call online, please visit the site at least 10 minutes early to register, download and install any necessary audio software. The webcast will be archived on HALO’s website, and a telephone replay of the call will be available for seven days beginning at 2:00 p.m. Eastern time, May 15, at 800-642-1687 or 706-645-9291, using conference ID # 8609150.
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. (the “Reform Act”). These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. The safe harbors for forward-looking statements provided by the Reform Act are unavailable to issuers of "penny stock". Our shares may be considered a penny stock and, as a result, the safe harbors may not be available to us. 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, and the Company’s Quarterly Reports on Form 10-QSB filed with the Commission on November 14, 2005, February 15, 2006 and May 15, 2006.