Optio Software Announces First Quarter Results for Fiscal 2008

Business Wire,  June 13, 2007  

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ALPHARETTA, Ga. -- Optio Software, Inc. (OTCBB:OPTO), a leading provider of Business Process Improvement (BPI) solutions dedicated to helping companies automate, control and improve the entire lifecycle of document-intensive processes, today reported financial results for the first quarter ended April 30, 2007.

First Quarter Revenue and Cost of Revenue

Total revenue for the first quarter of fiscal 2008 was lower than the first quarter of fiscal 2007 at $6.3 million as compared to $6.9 million. Software license revenues decreased 32% to $1.3 million in the three months ended April 30, 2007, compared to $1.9 million in the three months ended April 30, 2006. Optio's subscription licensing contracts contributed $610,000 to first-quarter revenues, compared to $555,000 in the prior year's same quarter.

Services and maintenance revenue were flat at $4.4 million in the three-months ended April 30, 2007, the same as the three-months ended April 30, 2006.

For the first quarter of fiscal 2008, total cost of revenue remained consistent with the first quarter results of fiscal 2007 at $1.8 million. Days' sales outstanding increased slightly to 48 from 44 in the prior fiscal quarter.

Operating Expenses

Total operating expenses were $5.7 million for the three months ended April 30, 2007 - up from $5.2 million in the prior fiscal-year quarter.

Net Loss

The net loss for the first quarter of fiscal 2008 was $1,170,000 and diluted earnings per share (EPS) were $(0.05), a shortfall compared to the loss of $54,000 and diluted EPS of $0.00 in the prior-year's quarter.

"This quarter's shortfall can be accredited to several contributing factors," said Wayne Cape, chairman, president and chief executive officer of Optio Software. "First, the growing maturity of the document output management market in North America coupled with competitive factors impacted license sales in this area. Secondly, our Intelligent Document Capture solutions require a longer sales-cycle than originally anticipated, as we are still in the process of attempting to close several new opportunities that originated early last year," said Cape.

"We are taking several actions to reverse these issues," said Cape. "Our sales force is working vigorously to complete those deals that extended beyond the end of the first quarter. On the development front, we have decided to roll out our ProCentra(TM) solution in a series of discrete modules in order to better meet the needs of our customers and add value to their transactional document processes," added Cape. "As always, Optio's objective is to increase customer satisfaction, grow revenues and build on the success we've achieved over the past 25 years."

First Quarter Highlights and Business Metrics

On February 2, 2007, Optio announced the availability of its new document automation solution suite, Design Center(TM) and Document Server(TM).

Optio Design Center enables customers to quickly and easily create and customize documents, forms and document workflow processes for execution and multi-channel distribution by Optio's Document Server solution. Optio Design Center accelerates document-intensive processes by enabling collaborative workflow development with innovative, reusable process elements and user-friendly design optimization tools.

Optio Document Server captures, transforms, customizes and automatically distributes critical outbound business documents according to customer preferences. Based on service-oriented architecture (SOA), Optio's Design Center and Document Server (DC and DS) solutions seamlessly integrate with leading ERP systems and all other Optio output applications. Optio's DC and DS solutions help customers meet all standard enterprise business and compliance requirements, as well as the requirements of suppliers, trading partners and customers.

Share Repurchase Program

During the quarter ended April 30, 2007, Optio purchased a total of 92,500 shares at an average purchase price of $1.48 per share, or approximately $139,000 in the aggregate, including broker fees. The repurchased shares were held and not cancelled. As of April 30, 2007, the dollar value of shares that remained available for repurchase under this program was approximately $1,803,000.

Notable sales contracts during the quarter include, but are not limited to:

* Trinity Health Services Corporation signed a subscription-based contract for Optio's MedEx([R]) forms automation suite, as well as Optio's complete set of QuickRecord([R]) solutions, including Deficiency Management(TM);

* Douglas Stewart Company, a leading distributor and marketer of computer products, consumer electronics and school supplies serving the education market, purchased Optio's Imaging Solutions(TM), as well as Optio's secure, online document repository and storage solution - e.ComPresent(TM);

* Jamba GmbH, one of the world's leading providers of digital entertainment services purchased Optio's document output management solution, e.ComIntegrate.(TM); and