EX-99.1 2 e19564ex99_1.txt PRESS RELEASE Exhibit 99.1 Document Sciences Announces Third Quarter Financial Results CARLSBAD, Calif., Nov. 1 /PRNewswire-FirstCall/ -- Document Sciences Corporation (Nasdaq: DOCX) today reported net income for the quarter ended September 30, 2004, of $205,461 compared with a net loss of $341,180 for the quarter ended September 30, 2003. Net income per share for the quarter ended September 30, 2004, was $0.04, based on 5,044,337 diluted shares outstanding, compared with a net loss per share of $0.09, based on 3,900,727 shares outstanding for the same quarter in 2003. Revenues for the quarter ended September 30, 2004, were $6.0 million, an increase of $1.5 million from the revenues for the quarter ended September 30, 2003. For the nine months ended September 30, 2004, the company reported net income of $482,843, or $0.10 per share based on 4,635,532 diluted shares outstanding, compared with a net loss of $2.1 million, or $0.54 per share based on 3,845,297 shares outstanding, for the nine months ended September 30, 2003. Revenues for the nine months ending September 30, 2004, were $16.8 million, compared with revenues of $14.3 million for the nine months ending September 30, 2003. Jack McGannon, Document Sciences' President and CEO, stated that "our financial results this year represent a large improvement over those of last year. Additionally, we have consistently improved during the year, with sequential quarterly growth in both revenue and net income." McGannon further stated that "all three of the company's reported revenue components grew over the levels of the third quarter of 2003 as well as over the second quarter of this year. Initial license revenue during the quarter, which benefited from significant sales to two existing customers migrating from our Autograph to xPression product suites, was up by $0.9 million from the same quarter last year. Annual license revenue is up by 11% from the same quarter of last year and on a year-to-date basis. Services revenue grew by $265,000 over the same quarter last year, with much of the growth comprised of revenue from clients obtained through our Objectiva acquisition which closed during July." McGannon added "we plan to release xPression 2.0, the next version of our award-winning content processing product suite, in November. This version, which includes a new composition engine as well as enhanced charting and double byte capabilities among other benefits, evidences Document Sciences' consistent commitment to providing leading-edge technology to its customers and prospects." Document Sciences will be demonstrating xPression 2.0 at the IsoTech Connect conference at the New Orleans Marriott on November 14-16. This press release may contain "forward-looking" statements about possible or assumed future results of our financial condition, operations, plans, objectives and performance. You can identify these statements by the fact they use words such as "believe," "expect," "anticipate," "estimate," "project," "intend," "plan" or similar expressions. Many possible events or factors could affect our future financial results and performance. This could cause our results or performance to differ materially from those expressed in these forward-looking statements. Some of these events or factors include the following: (i) national, international, regional and local economic, competitive and regulatory conditions and developments; (ii) the market for document automation software (including the emerging content processing market); (iii) market acceptance of enhancements to our existing products and introduction of new products; (iv) continued profitability of our professional services; (v) maintaining our relationships with Xerox Corporation and our other distribution partners and/or other risks detailed from time-to-time in our SEC reports, including the report on Form 10-K for the fiscal year ended December 31, 2003. We do not undertake, and specifically disclaim, any obligation to update forward-looking statements. DOCUMENT SCIENCES CORPORATION CONSOLIDATED BALANCE SHEETS September 30, December 31, 2004 2003 (Unaudited) ASSETS Current assets: Cash and cash equivalents $2,835,039 $1,916,595 Short-term investments 1,941,087 3,979,864 Accounts receivable, net 7,696,335 6,959,940 Other current assets 966,781 655,392 Total current assets 13,439,242 13,511,791 Property and equipment, net 625,254 689,575 Software development costs, net 3,496,399 2,494,634 Goodwill, net 4,495,192 724,615 Other assets 51,984 202,944 Total assets $22,108,071 $17,623,559 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $359,283 $205,036 Accrued compensation 1,488,644 1,088,772 Other accrued liabilities 737,223 1,159,686 Deferred revenue 10,763,761 10,356,855 Total current liabilities 13,348,911 12,810,349 Obligations under capital leases 53,548 69,405 STOCKHOLDERS' EQUITY Common stock, $.001 par value 4,136 3,331 Treasury stock (472,231) (556,352) Additional paid-in capital 12,173,375 8,759,120 Accumulated comprehensive loss (108,829) (88,611) Retained deficit (2,890,839) (3,373,683) Total stockholders' equity 8,705,612 4,743,805 Total liabilities and $22,108,071 $17,623,559 stockholders' equity DOCUMENT SCIENCES CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 Revenues: Initial license fees $1,908,337 $1,010,677 $5,109,358 $3,516,170 Annual renewal license and support fees 2,952,828 2,660,336 8,690,972 7,853,812 Services and other 1,174,813 909,558 2,973,905 2,940,443 Total revenues 6,035,978 4,580,571 16,774,235 14,310,425 Cost of revenues: Initial license fees 493,645 286,043 1,027,744 786,524 Annual renewal license and support fees 455,835 444,889 1,473,588 1,264,100 Services and other 941,975 700,474 2,373,340 2,101,459 Total cost of revenues 1,891,455 1,431,406 4,874,672 4,152,083 Gross margin 4,144,523 3,149,165 11,899,563 10,158,342 Operating expenses: Research and development 957,725 873,259 2,789,432 3,549,245 Selling and marketing 2,229,625 1,837,325 6,212,809 6,612,282 General and administrative 765,289 688,127 2,450,393 2,070,853 Total operating expenses 3,952,639 3,398,711 11,452,634 12,232,380 Income (loss) from operations 191,884 (249,546) 446,929 (2,074,038) Interest and other income (loss), net 13,577 (80,627) 55,037 28,140 Income (loss) before income taxes 205,461 (330,173) 501,966 (2,045,898) Provision for income taxes -- 11,007 19,123 37,451 Net income (loss) $205,461 $(341,180) $482,843 $(2,083,349) Net income (loss) per share-basic $0.05 $(0.09) $0.14 $(0.54) Weighted average shares used in basic calculation 3,952,686 3,900,727 3,486,379 3,883,538 Net income (loss) per share-diluted $0.04 $(0.09) $0.10 $(0.54) Weighted average shares used in diluted calculation 5,044,337 3,900,727 4,635,532 3,883,538 SOURCE Document Sciences Corporation -0- 11/01/2004 /CONTACT: Editorial, Jack McGannon, +1-760-602-1597, jmcgannon@docscience.com, or Investors, Scott Samuels, +1-760-602-1528, ssamuels@docscience.com, both of Document Sciences Corporation/ (DOCX) CO: Document Sciences Corporation ST: California IN: CPR SU: ERN