Optio Software Reports Third Quarter Results — New Sales Organization Structure and Investment in Sales Training Impact Revenue Growth

Business Wire, Nov 29, 2000

Business Editors

ATLANTA--(BUSINESS WIRE)--Nov. 29, 2000

Optio Software, Inc. (Nasdaq: OPTO) a leading provider of e-business infrastructure software that enables organizations to communicate with 100% of their trading partners and systems, today announced its financial results for the third quarter and nine months ended October 31, 2000. For the third quarter of fiscal 2001, total revenue decreased 3% to $8,351,000 from $8,645,000 for the third quarter of fiscal 2000. The Company had a cash loss for the quarter (loss before amortization of intangible assets, assuming a 40% tax rate) of $1,948,000, or $0.11 per basic and diluted share, compared with cash earnings of $612,000, or $0.05 per diluted share, for the same quarter in fiscal 2000, and a net loss of $5,133,000, or $0.29 per basic and diluted share for the quarter, compared with net income of $537,000, or $0.03 per diluted share for the same quarter in fiscal 2000.

For the first nine months of fiscal 2001, total revenue increased 20% to $27,922,000 from $23,202,000 for the first nine months of fiscal 2000. For the same period, the Company's cash loss was $2,373,000, or $0.14 basic and diluted share, versus cash earnings of $1,542,000, or $0.13 per diluted share. Including goodwill, the net loss for the first nine months of fiscal 2001 was $8,611,000 or $0.49 per basic and diluted share, compared with net income of $1,310,000, or $0.07 per diluted share, for the same period in the prior fiscal year.

Commenting on the announcement, C. Wayne Cape, Chairman and CEO at Optio Software, said, "During the second quarter we took some deliberate and strategic steps to better approach the marketplace with the expanded product set Optio Software attained with the acquisition of Muscato Corporation. We fully expected that the short-term impact of our actions would lead to softer revenues and lower profitability; something that we believe was clearly communicated to our shareholders in our prior earnings report and during our second quarter earnings conference call. Our view is that Optio Software's financial performance during the third quarter was consistent with our internal projections and that it should represent the low-water mark for our current fiscal year. We continue to believe that the investments that we undertook to re-align and strengthen our sales organization and properly train them on solution-based selling, should quickly lead to an acceleration of sales and a return to profitability during the next fiscal year. Strategically, we believe the steps that we took during the second and third quarters were the only appropriate steps that we could take to ensure the future growth and profitability of the company. As we enter our fourth fiscal quarter, we have seen strong evidence that our investments in our revamped sales organization is paying off."

"As we move forward through the remainder of the fourth quarter and into next year, we remain extremely focused on the opportunities that, to us, look very promising. Our reliance on the ERP market will continue to shift in favor of the emerging Business-to-Business integration (B2Bi) and Enterprise Application Integration (EAI) sectors that represent far greater revenue growth opportunities than our heritage Distributed Output Management (DOM) products. Our recently established product marketing team has researched the market segments that require our new technology solution sets. Additionally, our R&D team is continuing to develop what we believe will be innovative offerings for the B2Bi and EAI market," Cape concluded.

Optio Software has continued to innovate new products and enhance its diverse product set during the third quarter as evidenced by the following:

Product                        Enhancement

Optio Reprint 1.0              Provides users with the ability to
                               selectively take actions on submitted
                               print jobs and resubmit all or part of
                               them to the same printer, an identical
                               printer, or compatible printer for
                               reprinting.

DCS/MedForms 6.2               New SORT functionality, additional SATO
                               thermal label printer support, e-mail
                               notification tied to rules-based
                               processing status, Windows 2000 license
                               key and Windows 2000 server platform
                               support, and expanded functionality on
                               GDI Device file support.

DesignStudio 1.1               Enhanced page compression, SQL
                               functionality and duplexing support,
                               CGI input template, PDF output to
                               e.ComPresent and Windows 200 support

DCS/DesignStudio 7.5           Double-byte enabled support for drivers
                               (PCL, PS, PDF, RTF, thermals) to allow
                               multiple language support, including
                               Asian languages. Installed on Windows
                               NT, Windows 95, Windows 98 and Windows
                               2000 clients and all standard server
                               platforms, SQL BLOB and SQL stored
                               procedures support, JD Edwards OneWorld
                               XE compatibility for Windows NT
                               systems

e.ComPresent 1.2               Streamlined administration tools,
                               filter-based security encryption and
                               delivery, "thick client" administration
                               tools, enhanced installation and
                               maintenance protocols.

e.ComPayments 1.0              Proven B2B payments management
                               solution to support electronic and
                               traditional check payments was made
                               generally available.

e.ComEngine 5.0                Common user platform and architecture
                               installed at two new clients