CADA Cam Commerce Solutions (MM)

Net Income Rises 36% on Record X-Charge Revenues FOUNTAIN VALLEY, Calif., Aug. 8 /PRNewswire-FirstCall/ -- CAM Commerce Solutions, Inc. (NASDAQ:CADA) reported net income increased 36% for the three months ended June 30, 2006 to $686,000, or $0.16 per fully diluted share, compared to $503,000, or $0.13 per fully diluted share, for the same quarter of fiscal 2005. Revenues increased 8% to $6.8 million for the three months ended June 30, 2006, compared to $6.3 million for the third quarter of fiscal 2005, on the strength of a $968,000, or 53%, increase in the Company's X-Charge payment processing revenues from $1.8 million in the 3rd quarter of fiscal 2005 to $2.8 million in the third quarter of fiscal 2006. Pre-tax profit margins were 17% for the quarter versus 13% for the same quarter in 2005. Net income increased 75% for the nine months ended June 30, 2006 to $1.8 million, or $0.44 per fully diluted share, compared to $1.1 million, or $0.26 per fully diluted share, for the same period of fiscal 2005. Revenues for the nine months ended June 30, 2006 increased 10% to $20.2 million, compared to $18.3 million for the nine months ended June 30, 2005. The increase was the result of a $3.1 million, or 68%, increase in X-Charge payment processing revenues for the first nine months of fiscal 2006 to $7.7 million, as compared to $4.6 million for the same period in fiscal 2005. Pre-tax profit margin increased to 15% for the nine months ended June 30, 2006, compared to 10% for the same period of fiscal 2005, which was also a result of the increase in high margin, recurring X-Charge payment processing revenues. The results for the three and nine months ended June 30, 2006 included compensation expense of $46,000 and $126,000, respectively, related to the adoption of Statement of Financial Accounting Standards No. 123R (SFAS123R), for stock options that were previously granted to employees. Prior to SFAS123R adoption, compensation expense related to employee stock options was not recorded in the financial statements but disclosed in the footnotes as required under previous accounting rules. X-Charge Performance During the third quarter, the Company installed a record 1,036 new X-Charge payment processing accounts, an increase of 24% compared to the same period in 2005 when the company installed 838 new accounts. As of June 30, 2006, the company had more than 7,500 payment processing accounts representing approximately $2.2 billion in annual payment processing volume. The Company's X-Charge reseller base grew during the quarter to 256 resellers who had earned residual income from their active X-Charge processing accounts during the quarter, as compared to 239 at the end of the second quarter. X-Charge payment processing revenues increased 53% and 68% for the three and nine months ended June 30, 2006, respectively, compared to the same periods of fiscal 2005. Dividend Declared The Board of Directors has declared a quarterly cash dividend of $0.15 per outstanding share for this quarter, to be paid on October 16, 2006 to shareholders of record on October 5, 2006. This is a 50% increase over the $0.10 per share dividend declared for the third quarter of last fiscal year. Cash, cash equivalents and marketable securities increased by $529,000 during the quarter from $22.3 million on March 31, 2006 to $22.8 million on June 30, 2006. The company remains debt free. "We installed a record number of new X-Charge payment processing accounts during the quarter, and in the month of May we broke all of our monthly records for new applications and installations in a single month," said Geoff Knapp, CEO. "Our X-Charge business continues to be our profit and revenue driver, now representing our largest revenue source this quarter. The recurring portion of our revenues, which is both service and X-Charge payment processing, was 61% of total revenues during the quarter as compared to 50% for the same quarter of fiscal 2005. The result of the increase in high margin, recurring X-Charge payment processing revenues was a 400 basis-point increase in gross profit margin this year over last year for the same quarter. With our X-Charge payment processing revenues continuing to produce record results, the June quarter could have been better had we been able to deliver system sales at the level we expected. The system sales side of our business remains challenging and difficult to predict." Conference Call The company will be holding a conference call to discuss the quarterly results. The conference call will take place at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time), on Tuesday, August 8, 2006. Anyone interested in participating in the conference call should call 800-289-0533, if calling within the United States, or 913-981-5525, if calling internationally. There will be a playback available until August 15, 2006. To listen to the playback, please call 888-203-1112, if calling within the United States, or 719-457-0820, if calling internationally. Please use pin number 4210411 for the replay. The company will also have an updated investor presentation posted on its website at http://www.camcommerece.com/. About CAM Commerce Solutions CAM Commerce Solutions designs, develops, markets and services highly integrated retailing and payment processing solutions for small to medium size traditional and eCommerce businesses based on the company's open architecture software. These integrated solutions include inventory management, point of sale, accounting, credit and debit card processing, Internet sales, gift card and customer loyalty programs, and extensive management reporting. Payment processing services are provided on a transaction based business model. You can visit CAM Commerce Solutions at http://www.camcommerce.com/. Important Information Certain statements made in this release, including those relating to the expectations of profitability and economic climates, are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Words such as "will," "should," "believe," "expect," "anticipate," "outlook," "forecast," "optimistic," "feel," "potential," "continue," "intends," "goal," "plans," "estimates," "may," "seeks," "would," "future," "bright," "projected," and other similar expressions that predict or indicate future events or trends, or that are not statements of historical matters, identify forward-looking statements. Expectations concerning financial results for future quarters are not actual results and are based upon preliminary estimates, as well as certain assumptions management believes to be reasonable at this time. Investors should not rely upon forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from management's expectations, and the company does not undertake any duty to update forward-looking statements which speak only as of the date of this release. The performance of any one month or quarter may not be indicative of future performance, particularly given prevailing market and economic uncertainties. In addition to the factors set forth elsewhere in this release, the economic, competitive, technological, and other factors identified in CAM Commerce Solutions' filings with the Securities and Exchange Commission could affect the forward looking statements contained in this release. CAM COMMERCE SOLUTIONS, INC. CONDENSED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) THREE MONTHS ENDED NINE MONTHS ENDED JUNE 30 JUNE 30 JUNE 30 JUNE 30 2006 2005 2006 2005 REVENUES Net hardware, software and installation revenues $2,651 $3,140 $8,563 $9,715 Net service revenues 1,327 1,307 3,982 4,034 Net payment processing revenues 2,792 1,824 7,694 4,574 Total net revenues 6,770 6,271 20,239 18,323 COSTS AND EXPENSES Cost of hardware, software and installation revenues 1,395 1,581 4,568 4,995 Cost of service revenues 633 583 1,834 1,694 Cost of payment processing revenues 129 81 373 330 Total cost of revenues 2,157 2,245 6,775 7,019 Selling, general and administrative expenses 3,351 2,978 10,010 8,850 Research and development expenses 385 347 1,148 1,064 Interest income (250) (143) (679) (379) Total costs and expenses 5,643 5,427 17,254 16,554 Income before provisions for income taxes 1,127 844 2,985 1,769 Provisions for income taxes 441 341 1,140 714 Net income $686 $503 $1,845 $1,055 Basic net income per share $0.17 $0.13 $0.47 $0.28 Diluted net income per share $0.16 $0.13 $0.44 $0.26 Shares used in computing basic net income per share 3,932 3,830 3,890 3,810 Shares used in computing diluted net income per share 4,180 3,982 4,148 4,020 CAM COMMERCE SOLUTIONS, INC. CONDENSED BALANCE SHEETS (In thousands, except per share data) JUNE 30 SEPTEMBER 30 2006 2005 (Unaudited) ASSETS Current assets: Cash and cash equivalents $16,318 $15,763 Marketable available-for-sale securities 6,476 5,300 Accounts receivable, net 1,941 1,930 Inventories 256 306 Deferred income taxes 1,185 1,188 Other current assets 180 132 Total current assets 26,356 24,619 Deferred income taxes 317 714 Property and equipment, net 505 610 Intangible assets, net 459 467 Other assets 51 51 Total assets $27,688 $26,461 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $242 $445 Accrued compensation and related expenses 1,191 1,154 Deferred service revenue and customer deposits 1,598 1,728 Cash dividends payable 553 385 Other accrued liabilities 125 260 Total current liabilities 3,709 3,972 Stockholders' equity: Common stock, $.001 par value; 12,000 shares authorized, 3,946 shares issued and outstanding at June 30, 2006 and 3,846 at September 30, 2005 4 4 Capital in excess of par value 21,434 20,152 Accumulated other comprehensive loss (12) (18) Retained earnings 2,553 2,351 Total stockholders' equity 23,979 22,489 Total liabilities and stockholders' equity $27,688 $26,461 DATASOURCE: CAM Commerce Solutions, Inc. CONTACT: Mathew Hayden, President of Hayden Communications, Inc., +1-858-704-5065, for CAM Commerce Solutions, Inc. Web site: http://www.camcommerce.com/

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