TouchStone Software Corp. Reports Q2 Revenue of $1,034,207 and Earnings of
NORTH ANDOVER, MASSACHUSETTS—July 24, 2007— TouchStone Software Corporation (OTCBB:TSSW) today announced that for the quarter ending June 30, 2007, net revenue was $1,034,207, an increase of 40.5% over the same period in 2006. On a GAAP basis, TouchStone Software's second quarter net earnings were $259,575, or $0.02 per share diluted. As a percentage of sales, gross profit margin for the second quarter improved to 98% as compared to 93% for the same period in 2006.
Financial Highlights
- TouchStone Software’s Q2 2007 revenue increased 40.5% versus Q2 2006 and compared favorably to Q1's 2007 revenue increase of 39.7% over Q1 2006
- TouchStone Software posted its 7th consecutive quarter of profitability
- TouchStone Software's Q2 2007 net income increased 43% versus Q2 2006
- TouchStone Software ended the quarter with cash and cash equivalents, restricted cash, and investments of $1,436,656, an increase of $962,127 from the same period in 2006 and the highest level in over 6 plus years
- Driver Agent’s total active subscribers grew 97% in Q2 of 2007 from Q1 in 2007
Financial Outlook
- TouchStone Software expects continued strong revenue and earnings results for the rest of 2007 as new online services are rolled out and website traffic continues to grow resulting in significant growth in subscribers to TouchStone’s overall online services business
- Touchstone Software anticipates releasing an OEM version of DriverAgent in the 4th quarter of 2007
"TouchStone's Driver Agent has once again turned in a strong performance as expected and continues to receive wide acceptance among the PC community and the press " said Jason K. Raza, President and Chief Executive Officer of TouchStone Software Corporation. "TouchStone's strategy of aggregating Internet traffic through its network of web properties along with the expected launch of TouchStone's new Windows based Registry Cleaner in September as well as an OEM version of Driver Agent named Driver AgentPRO is expected to provide strong momentum to TouchStone's growth over the next several quarters".
Business Highlights:
- TouchStone Software welcomed several new Internet partners in the 2nd quarter including:
www.ViaArena.com
www.Laptops2go.com
www.Tweaksrus.com
www.Driverstock.com
www.Driverfiles.net
- TouchStone Software’s web traffic continued to achieve record new highs during the 2nd quarter of 2007 with over 12 million unique visitors in the three months
- Total page views across the entire TouchStone Software network of websites exceeded 68 million for the three month period ending June 30, 2007 and averaged over 22 million per month
- Touchstone Software successfully closed the acquisition of 62nds and relocated the lead developer of DriverAgent to the United States
- TouchStone Software's Driver Agent receives top mention in the August issue of Smart Computing's "Find Device Drivers For Windows Vista" article
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The prior discussion and analysis of TouchStone Software Corporations financial condition and results of operations should be read in conjunction with the Companys Consolidated Financial Statements and other financial information included herein. The Managements Discussion and Analysis or Plan of Operation and other sections of this report contain forward-looking statements that are based on the current beliefs and expectations of the Companys management, as well as assumptions made by, and information currently available to, the Companys management. Future events and results could differ materially from those set forth in or underlying the forward looking statements.
The Annual Report on Form 10-KSB contains forward looking statements. Statements containing expressions such as may, will, project, or might, expect, believe, anticipate, intend, could, would, estimated, potential, continue, or pursue, or the negative or other variations thereof or comparable terminology used in the Companys press releases and in its reports filed with the Securities and Exchange Commission are intended to identify forward-looking statements. These forward-looking statements, which are included in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Companys actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this report. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations. From time to time, these risks, uncertainties and other factors are discussed in the Companys filings with the Securities and Exchange Commission. Such factors include, but are not limited to, the following:
· that we will continue to enter reseller and original equipment manufacturer relationships;
· that current relationships with BIOS manufacturers will remain unchanged and they will continue to be supportive with resources such as links to our website from theirs;
· that we anticipate our gross margins may increase;
· that our available cash resources will be sufficient to meet our anticipated needs for working capital and capital expenditures for at least the next year;
· our ability to secure additional sources of financing;
· our ability to control operating expenses;
· a decline in the general economy; and
· unauthorized resellers of Phoenix and Award BIOS that may engage in business.
We caution investors that there are a number of important factors, in addition to those above, that could cause our results to differ materially from those indicated by such forward-looking statements, including those set forth below in the Factors that May Affect Future Results and Market Price of Stock and elsewhere throughout this report.
FACTORS THAT MAY AFFECT FUTURE RESULTS AND MARKET PRICE OF STOCK
Our quarterly operating results are subject to significant fluctuations, and you should not rely on them as an indication of our future results.
Our revenue and operating results may vary significantly from quarter to quarter due to a number of factors, not all of which are in our control. Future revenue is difficult to forecast and for the foreseeable future will be influenced by the timing and amount of sales to new customers.
Although we have reduced operating expenditures through various methods, many of our continuing expenses are relatively fixed and are incurred in part based on expectations of future revenue. We may be unable to adjust spending quickly enough to offset any unexpected revenue shortfall. Accordingly, any shortfall in revenue may cause significant variation in operating results in any quarter.
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Because of these factors, you should not rely on quarter-to-quarter comparisons or our results of operations as an indication of our future performance. It is possible that, in future periods, our results of operations may be below the expectations of public market analysts and investors. This could cause the trading price of our common stock to decline.
Competition could reduce our market share and harm our business.
Competitors may be able to develop products and services that are more attractive to businesses than our products and services.
If we cannot deliver satisfactory support and maintenance services to our customers, our revenues may be harmed.
Our business will not grow if we do not keep pace with the rapidly changing technologies.
We may need additional financing which could be difficult to obtain.
Our business may suffer if we cannot protect our intellectual property.
Our stock price is likely to be highly volatile.
The price at which our common stock will trade has been and is likely to continue to be highly volatile and may fluctuate substantially due to a number of factors, many of which are beyond our control, including:
· actual or anticipated fluctuations in our results of operations
· our ability to raise additional capital if needed
· technological innovations by us or our competitors
· increased competition
· additions or departures or key personnel
· conditions and trends in our industry
· general market conditions
· our common stock is currently traded on the Over The Counter Bulletin Board, where share price volatility is more prevalent.
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