HR Technology Vendor News by HRchitect

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Workstream Inc., a leading provider of on-demand compensation, performance and talent management software that helps companies manage the entire employee lifecycle, recently announced financial results for the third quarter ended February 28, 2010.

Remarks on the Third Quarter Include: 

  –  Workstream has satisfied all applicable covenants required to be satisfied under the Senior Secured Note agreements with respect to the Third Quarter Fiscal 2010 operating results; and,

  –  Closing of exchange and restructuring of senior secured notes in December 2009 leading to a non-cash loss on extinguishment of debt of ($13,071,000);

  –  Revenues to $4,000,000 during the third quarter of fiscal 2010 in comparison to $5,030,000 during the second quarter of fiscal 2010;

  –  Impairment of goodwill of ($6,348,000) associated with the Career Networks operating segment (6FigureJobs.com and Allen And Associates);

“The Company’s Third Quarter results were reflective of corporate customers hesitating to spend on new capital project while Healthcare and Financial reform continue to point to a jobless recovery, tight credit availability, coupled with our own challenges with our own Note Exchange,” said President and Chief Executive Officer, Michael Mullarkey. “While our own Note Restructuring has placed new hurdles for the company to manage through, Management will not allow the Company to be deterred in its overall focus and plans.”

As mentioned previously, the Company has implemented a new, more targeted approach during the third quarter of fiscal 2010 to grow revenues. Our initiatives have centered on:

  –   further development of our technology to meet customer needs;

  –   focus on existing customer relationships to ensure renewals and identification of potential ‘up sell’ opportunities; and,

  –   targeting Fortune 2000 companies that are currently, or in the near future, implementing a talent management software initiative.

Over the past couple of months, we have seen increased pipeline activity, which we are confident will result in improved financial performance. Furthermore, we will continue to focus on the alignment of our financial position with our operational requirements through the management of our financial resources and seeking funding alternatives to improve our capital structure.”

Workstream delivered the following results for the three and nine months ended February 28, 2010:

Total revenues were $3,962,000 and $13,204,000 for the three and nine months ended February 28, 2010, respectively, compared to $5,638,000 and $16,335,000 for the three and nine months ended February 28, 2009, respectively.

Total operating expenses increased to $9,400,000 and $15,749,000 for the three and nine months ended February 28, 2010, respectively, from $3,232,000 and $13,815,000 for the three and nine months ended February 28, 2009, respectively.

The three and nine months ended February 28, 2010 included a non-cash impairment of goodwill of ($6,348,000) associated with the Career Networks operating segment resulting from an analysis of the current economic conditions, the Company’s performance to budget and the lower estimated future cash flows of the operating segment.

Operating income / (loss) were ($7,335,000) and ($7,464,000) for the three and nine months ended February 28, 2010, respectively, compared to $926,000 and ($2,141,000) for the three and nine months ended February 28, 2009, respectively. The three and nine months ended February 28, 2010 included non-cash impairment of goodwill of ($6,348,000) associated with the Career Networks operating segment.

Net income / (loss) was ($20,625,000) and ($21,326,000) for the three and nine months ended February 28, 2010, respectively, compared to $574,000 and ($2,827,000) for the three and nine months ended February 28, 2009, respectively. The three and nine months ended February 28, 2010 included a non-cash impairment of goodwill of ($6,348,000) associated with the Career Networks operating segment and a non-cash loss on extinguishment of debt of ($13,071,000) relating to the exchange and restructuring of senior secured notes in December 2009.

Net income / (loss) per share (basic and diluted) were ($0.36) and ($0.37) for the three and nine months ended February 28, 2010, respectively, compared to $0.01 and ($0.05) for the three and nine months ended February 28, 2009, respectively.

EBITDA, as adjusted, was ($767,000) and ($243,000) for the three and nine months ended February 28, 2010, respectively, compared to $1,271,000 and ($736,000) for the three and nine months ended February 28, 2009, respectively.

Total assets increased to $14,565,000 at February 28, 2010 from $23,076,000 at May 31, 2009.

Working capital, which represents current assets less current liabilities, was ($4.7) million at February 28, 2010 compared to ($24.2) million at May 31, 2009.

Cash flows provided by operating activities increased to $185,000 for the nine months ended February 28, 2010 compared to cash used in operating activities of ($2,044,000) for the nine months ended February 28, 2009. Further, the overall net decrease in cash and cash equivalents was reduced to ($392,000) for the nine months ended February 28, 2010 compared to ($1,951,000) for the nine months ended February 28, 2009.

For more information on Workstream, please visit www.workstreaminc.com
Matt Lafata, HRchitect