Astea International Inc. has a market cap of $12.2 million; its shares were traded at around $3.42 with and P/S ratio of 0.6. ATEA is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Software license fee revenues increased 91% to $974,000 in the first quarter of 2010 from $510,000 in the first quarter of 2009. Astea Alliance license revenues increased $768,000 or 413%, to $954,000 in the first quarter of 2010 from $186,000 in the first quarter of 2009. The increase results from sales in Japan and Europe. The Company sold $20,000 of software licenses from its FieldCentrix subsidiary, a decrease of 94% from the same quarter of 2009. The decrease is attributable to no new license deals in the first quarter of 2010.
Services and maintenance revenues decreased to $3,716,000 from $4,274,000 in the first quarter of 2010, a decrease of 13%. Astea Alliance service and maintenance revenues decreased by $396,000 or 13% compared to the first quarter of 2009. The decrease resulted from reduced demand from customers. Service and maintenance revenues generated by FieldCentrix, decreased by $159,000 or 13% from $1,212,000 to $1,053,000 during the same period in 2009. In addition, DISPATCH-1 service and maintenance revenues decreased $3,000 to $63,000 from $66,000 in the prior year. The decline in service and maintenance revenue for DISPATCH-1 is expected as the Company discontinued development of DISPATCH-1 at the end of 1999.
Product development expense increased 44% to $891,000 in the first quarter of 2010 from $618,000 in the first quarter of 2009. The large increase resulted from a reduction in capitalized product development costs in the first quarter of 2010 compared to the same period in 2009. The Company released version 10 of its Astea Alliance product in January 2010, at which time capitalization of development costs ceased. Fluctuations in product development expense from period to period can vary due to the amount of development expense which is capitalized. Development costs of $274,000 were capitalized in the first quarter of 2010 compared to $468,000 during the same period in 2009. Gross product development expense was $1,165,000 in the quarter ended March 31, 2010 which is 7% more than the same quarter in 2009. Product development expense as a percentage of revenues increased to 19% in the first quarter of 2010 compared with 13% in the first quarter of 2009. The increase in costs relative to revenues is due to the increase in product development expense as well as slight decrease in revenue.
Net loss for the three months ended March 31, 2010 was $1,093,000 compared to net loss of $728,000 for the three months ended March 31, 2009. The net loss was due to an increase in operating expenses of $306,000, primarily development expense and general and administrative expenses, as well as a reduction in service and maintenance revenues of $558,000. Partially offsetting these losses was an increase in license revenue of $464,000 in 2010 compared to 2009 and a decrease in the tax provision of $37,000 for the three months ended March 31, 2010 compared to the same period in 2009.
Net cash generated by operating activities increased by $1,300,000 to $1,058,000 for the three months ended March 31, 2010 compared to cash used of $242,000 for the three months ended March 31, 2009. The increase was attributable to a net increase in deferred revenues of $1,013,000, a decrease in accounts receivable of $867,000 and a decrease in prepaid expenses of $14,000. The significant increase in deferred revenues occurred primarily due to a sale that occurred in the first quarter of 2010, but due to the terms of the agreement, license and professional services revenue must be deferred under software revenue recognition rules, until the completion of substantial customizations. Partially offsetting the increases in cash flow were a decrease in noncash expenses of $159,000, a decrease in other assets of $68,000 and an increase in net loss of $365,000.
The Company used $222,000 for investing activities in the first three months of 2010 compared to generating $65,000 in the first three months of 2009. The increase in cash used for investing activities is attributable to the purchase of $206,000 of short term investments, an increase of $26,000 in the purchases of property and equipment, less sales of short term investments of $201,000 compared to the first three months of 2009 and the release of $48,000 from restricted cash offset by decrease in capitalized software development costs of $194,000.
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