EX-99.1 2 aw5966ex991.txt EXHIBIT 99.1 Exhibit 99.1 ACCESS WORLDWIDE REPORTS FIRST QUARTER FINANCIAL RESULTS BOCA RATON, Fla., May 22 /PRNewswire-FirstCall/ -- Access Worldwide Communications, Inc. (OTC Bulletin Board: AWWC), a leading marketing services company, today reported financial results for the three months ended March 31, 2006. Our revenues decreased $0.4 million, or 3.8%, to $10.0 million for the three months ended March 31, 2006, compared to $10.4 million for the three months ended March 31, 2005. Revenues for the Pharmaceutical Segment decreased $1.9 million, or 27.9%, to $4.9 million for the three months ended March 31, 2006, compared to $6.8 million for the three months ended March 31, 2005. The decrease was primarily attributed to a reduction of revenue of $1.1 million in our medical education business. This reduction was caused primarily by a decrease in work being performed for three significant customers at our medical education division, which accounted for a loss in revenue of approximately $978,000 when compared quarter over quarter. The further reduction was caused by a decrease in revenue of $0.8 million in our pharmaceutical communication business, which was primarily the result of a change in programs for two significant customers. One of these customers replaced an inbound program, which was in place in the first quarter of 2005 and ended in August of 2005, with another similar program that has not had as successful an enrollment as the program that it replaced, thus causing a decrease in revenue. The other customer has two large programs, which previously had teleservice representatives dedicated to their programs only, but now utilize our shared pool of representatives that serve more than one client at a time. This change was requested by the customer due to budget cut-backs and has decreased the amount per billable hour that we charge the customer for these programs. Revenues for the Business Segment, which includes our multilingual communications business, increased $1.5 million, or 41.7%, to $5.1 million for the three months ended March 31, 2006, compared to $3.6 million for the three months ended March 31, 2005. The increase in revenues was primarily attributed to the revenue generated in our Philippines communication center of $0.8 million that had not yet begun operations as of the first quarter of 2005. Additionally, we experienced a 20% increase in revenues domestically due to the acquisition of a significant new customer and from increased programs with two existing customers. We reported a net loss and basic and diluted loss per share of $1.2 million and $0.07, respectively, for the quarter ended March 31, 2006, compared to $0.6 million and $0.05, respectively, for the first quarter of 2005. The decline, although offset by the increased profit in our Business Services Segment, was the result of the decrease in revenues from our Pharmaceutical Services Segment along with the increase in interest expense on our borrowings. Total weighted average common shares outstanding for the quarters ended March 31, 2006 and March 31, 2005 were 16,889,039 and 11,177,052, respectively. Founded in 1983, Access Worldwide provides a variety of sales, marketing and medical education services. Among other things, we reach physicians, pharmacists and patients on behalf of pharmaceutical clients, educating them on new drugs, prescribing indications, medical procedures and disease management programs. Services include product stocking, medical education, database management, clinical trial recruitment and teleservices. For clients in the telecommunications, financial services, insurance and consumer products industries, we reach the established mainstream and growing multicultural markets with multilingual teleservices. Access Worldwide is headquartered in Boca Raton, Florida and has about 800 employees in offices throughout the United States and Asia. More information is available at http://www.accessww.com. This press release contains forward-looking statements including statements regarding financial results. Such statements involve known or unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those expressed or implied by such forward- looking statements. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, include, but are not limited to, the following: our ability to continue as a going concern if we are unable to generate cash flow and income from continuing operations; our ability to continue to comply with the financial covenants contained under our debt agreement; competition from other third- party providers and those clients and prospects who may decide to do work in- house that we currently do for them; our ability to successfully operate at capacity our new communication center in Manila, Philippines; consolidation in the pharmaceutical, medical, telecommunications and consumer products industries which reduces the number of clients and prospects that are able to be served; potential consumer saturation reducing the need for services; our ability and clients' ability to comply with state, federal and industry regulations; our reliance on a limited number of major clients and the reduction in services performed for or the loss of one or more major clients; our ability to develop or fund the operations of new products or service offerings; our reliance on technology; our reliance on key personnel and labor force and the ability to recruit additional personnel; and the volatility of our stock price. For a more detailed discussion of these risks and others that could affect results, see our filings with the Securities and Exchange Commission, including the risk factors section of Access Worldwide's Annual Report on Form 10-K for the year ended December 31, 2005 filed with the Securities and Exchange Commission. The Company assumes no duty to update any forward-looking statements. - Tables Follow - Access Worldwide Communications, Inc. Condensed Consolidated Balance Sheets March 31, December 31, 2006 2005 ------------- ------------- ASSETS (Unaudited) Current Assets Cash and cash equivalents $ 831,394 $ 1,755,926 Restricted cash 1,522,000 314,000 Accounts receivable, net 7,933,607 7,297,583 Unbilled receivables 163,623 228,083 Other assets, net 1,026,672 785,257 Total current assets 11,477,296 10,380,849 Property and equipment, net 4,784,437 5,025,158 Restricted cash 466,000 466,000 Other assets, net 303,284 390,822 Total assets $ 17,031,017 $ 16,262,829 LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK AND COMMON STOCKHOLDERS' DEFICIT Current Liabilities Current portion of indebtedness $ 5,388,865 $ 4,876,381 Current portion of indebtedness - related parties 352,334 352,334 Accounts payable 2,042,763 1,878,856 Accrued expense 1,677,423 2,204,267 Grants payable 50,000 80,000 Accrued salaries, wages and related benefits 1,150,342 736,797 Customer deposits 1,172,703 1,084,378 Convertible notes, net 1,871,836 1,768,584 Deferred Revenues 1,050,619 1,435,619 Accrued interest and other related party expenses 56,714 59,512 Total current liabilities 14,813,599 14,476,728 Long-term portion of indebtedness 578,706 669,441 Other long-term liabilities 780,817 796,418 Convertible notes, net 2,963,477 1,380,564 Mandatorily redeemable preferred stock, $0.01 par value: 1,000,000 shares authorized, 40,000 shares issued and outstanding 4,000,000 4,000,000 Total liabilities 23,136,599 21,323,151 Commitments and contingencies Common stockholders' deficit Common stock, $0.01 par value: voting 40,000,000 shares authorized; 17,183,039 and 16,616,219 shares issued and outstanding, respectively 171,830 166,162 Additional paid-in capital 70,496,565 70,389,446 Accumulated deficit (76,773,977) (75,602,730) Deferred compensation - (13,200) Total common stockholders' deficit (6,105,582) (5,060,322) Total liabilities, mandatorily redeemable preferred stock and common stockholders' deficit $ 17,031,017 $ 16,262,829 Access Worldwide Communications, Inc. Condensed Consolidated Statements of Operations Unaudited For the Three Months Ending March 31, ------------------------------ 2006 2005 ------------- ------------- Revenues $ 9,989,395 $ 10,350,794 Cost of revenues 5,769,699 5,509,473 Gross profit 4,219,696 4,841,321 Selling, general & administrative expenses 4,923,284 5,022,344 Loss from operations (703,588) (181,023) Interest expense, net (467,659) (388,858) Net loss $ (1,171,247) $ (569,881) Basic and diluted loss per share of common stock $ (0.07) $ (0.05) Weighted average common shares outstanding 16,889,039 11,177,052 SOURCE Access Worldwide Communications, Inc. -0- 05/22/2006 /CONTACT: Mark Wright, Investor Relations, +1-571-438-6140, mwright@accessww.com, or Richard Lyew, EVP & Chief Financial Officer, +1-571-438-6140, rlyew@accessww.com, both of Access Worldwide Communications, Inc./ /Web site: http://www.accessww.com / (AWWC)