3rd Quarter Results
December 6, 2001 (QHR – CDNX) The Company is pleased to report its third quarter results for the period ending September 30, 2001. The Company’s operations are indicative of a junior software company that is making its transition from software development to product delivery and service operations. Quadrant HR, the Company’s suite of Human Resource (HR) software products is gaining market acceptance and customer adoption.
The Company’s client base is growing steadily and now exceeds 35 customers. Revenues reached $914,302, up 57% from $583,340 for the same period a year ago. This reflects management’s earlier expenditures for marketing and product introduction. Current marketing and sales costs fell to $82,657 for the period from $549,090 for the same period in 2000.
The Company is now working on executed customer contracts that are valued in excess of $500,000. This work will be billed over the next six months. Deposits received on these contracts are recorded as a liability as deferred revenues on the balance sheet until implementation is completed or the services are provided. They are then recognized as revenues when the contracts are completed in accordance with Generally Accepted Accounting Principles (GAAP). Deferred revenues reached $673,355 at quarter end up 94% from $347,799 for the previous year.
The Company receives many questions from shareholders and investors as to why it does not capitalize product development costs as an asset on its balance sheet. Current GAAP requires junior software companies such as the Company whose sole products are under continuing development to write-off all costs in the period they are incurred.
Management continues to view its product development costs as an investment in its future. The Company has invested over $2,500,000 in developing its products. Quadrant HR has found a market where revenue volume is growing and other market opportunities are emerging.
Product development costs reached $1,015,435 compared to $537,296 for the same period in 2000. Quadrant HR payroll modules have been completed and they are used by more than 25 organizations. HR modules are approximately 80% complete and they are used in more than 25 sites.
The Company’s loss was recorded at $1,073,193 ($.09 per share) compared to $1,291,737 ($.11 per share) for the same period in 2000. Amortization was $112,486 and there was no amortization recorded in the prior period.
Management has begun to reduce its operating costs. Salaries were $1,053,034 compared to $1,166,729. Travel expenditures fell to $134,864 from $172,189. Legal fees fell to $23,090 from $63,656 while consulting fees rose to $217,450 from $161,564.
These results are not necessarily indicative of results to be expected in future periods. The Company must improve its financial health through capital financing and increased revenues. It will continue to aggressively market its products to new customers and search out new markets.
The complete Quarterly Report for the nine months ending September 30, 2001 is available at www.sedar.com or www.quadranthr.com.
On behalf of the Board of Directors
Al Hildebrandt President & Chief Executive Officer
