Semotus Announces First Quarter 2007 Results


LOS GATOS, Calif., Aug. 11, 2006 (PRIMEZONE) -- Semotus Solutions, Inc. (AMEX:DLK), an innovative leader of software solutions for enterprise mobility, today announced its first fiscal quarter financial results for the three months ended June 30, 2006.

Financial Highlights for the Three Months Ended June 30, 2006 Compared to the Three Months Ended June 30, 2005:



 -- Revenues totaled $436,689, representing an 8.5% decline from 
    revenues of $477,345.
 -- Gross profit margin on sales increased to 78.4%, up from 70.6%.
 -- Operating expenses rose 14.2% to $937,886, compared to $821,020 
 -- Net loss increased 24% to $586,693, or $0.02 loss per basic and 
    diluted share, from a net loss of $472,469, or $0.02 loss per 
    basic and diluted share.
 -- As of June 30, 2006, cash and cash equivalents totaled $853,680; 
    trade receivables were $398,077; available working capital was 
    $569,727; and total stockholders' equity was $3,986,546.

Commenting on the Company's operations, Anthony LaPine, Chairman and CEO of Semotus, noted, "Our investment in product development in the first quarter increased 100% over 2005 to $285,000 reflecting our strong commitment to future growth. These new and enhanced products should spearhead meaningful sales opportunities in the coming months. With the need to continue strong R&D but at a reduced expense level, Semotus has begun moving its engineering operations to Southern Asia. Upon completion, which is expected to occur in the third fiscal quarter of this year, we anticipate that the ultimate impact of this offshore initiative will generate substantial cost savings making a notable contribution to our drive for long term financial stability. Moreover, further headcount reductions are planned in the second fiscal quarter as we complete the consolidation of our acquisitions. We believe these actions will result in even greater cost savings in coming quarters helping to further improve Semotus' P&L performance."

Continuing, LaPine said, "Although revenue for the quarter was lower than expected, current sales activity remains high and a number of significant sales opportunities are in the pipeline and are being vigorously pursued. In addition, Semotus' recently implemented strategy to rapidly build and enhance the VAR channel is gaining momentum and we anticipate meaningful progress in this regard in the current quarter."

"Although we intend to persist in our efforts to achieve notable market penetration for our existing enterprise mobility suite of products and services, we have begun to explore a wide range of creative business strategies, including acquisitions, mergers and reverse mergers that offer potential to improve and enhance our Company's long term value proposition. It's important to note that we remain committed to defining and executing strategies that provide the greatest value-driven growth opportunities for Semotus and its shareholders, and will continue to move forward with this objective firmly in focus," concluded LaPine.

Semotus intends to submit a plan to regain compliance with AMEX listing requirements on August 21st, 2006. The Company is also in discussion with the OTC Bulletin Board and is taking steps to trade on that exchange should AMEX compliance not be forthcoming.

About Semotus Solutions

Founded in 1993, Semotus Solutions is the premier provider of software for the mobile enterprise, connecting employees to critical business systems, information and processes. Semotus has a Fortune 1000-installed customer base and more than 600 corporate clients including Lockheed Martin, Blue Cross Blue Shield, Coca-Cola, Hewlett Packard, Nextel Communications, JP Morgan Chase and The United Nations. Semotus Solutions' software provides mobility, convenience, efficiency and profitability in the areas of workforce automation, finance, health care and m-commerce. For more information on the Company, please visit the following web sites: http://www.semotus.com; http://www.hiplinkwireless.com; http://www.clickmarks.com; http://www.xb.com.

This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "intends," "believes," and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from any forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.



            

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