ClearStory Systems (Formerly INSCI Corp.) Fiscal 2005 Nine-Month
Revenues Increase 36 Percent WESTBOROUGH, Mass., Feb. 11
/PRNewswire-FirstCall/ -- ClearStory Systems, Inc. (OTC:CSYS)
(BULLETIN BOARD: CSYS) , (formerly INSCI Corp.), an established
provider of on-demand enterprise content management (ECM)
solutions, today announced that revenues increased 21 percent to
$2.7 million for the three months ended December 31, 2004, compared
to $2.2 million for the same period last year. For the nine-month
period ended December 31, 2004, revenues increased 36 percent to
$8.3 million, compared to $6.1 million for the nine-month period
ended December 31, 2003. Product revenues for the fiscal 2005 third
quarter ended December 31, 2004 increased 43% to $861,000, compared
to $603,000 for the fiscal 2004 third quarter. Service revenues
increased 13 percent to $1.8 million for the three months ended
December 31, 2004, compared to $1.6 million for the same period
last year. For the nine-month period ended December 31, 2004,
product revenues increased 41% to $3.0 million, compared to $2.2
million for the nine-month period ended December 31, 2003. For the
nine months ended December 31, 2004, service revenues increased 33
percent to $5.2 million, compared to $3.9 million for the same
period last year. Net loss decreased to $421,000 for the three
months ended December 31, 2004, compared to $1,284,000 for the same
period last year. Net loss attributable to common shareholders
decreased to $583,000, or $0.10 per basic and diluted share, for
the three months ended December 31, 2004, compared to $1,367,000,
or $0.23 per basic and diluted share, for the same period last
year. For the nine months ended December 31, 2004, net loss
decreased to $916,000, compared to $2,248,000 for the same period
last year. For the nine months ended December 31, 2004, net loss
attributable to common shareholders decreased to $1,374,000, or
$0.23 per basic and diluted share, compared to $2,415,000, or $0.43
per basic and diluted share for the same period last year. "We
continue to invest in new products, sales, marketing and
infrastructure, which has resulted in operating losses for the
quarter and first nine months of fiscal 2005," stated Henry F.
Nelson, President and CEO of ClearStory Systems. "However, we have
achieved and sustained strong revenue growth for the first nine
months of fiscal 2005." On January 10, 2005, the Company announced
the expansion of its ECM suite of products with the release of
Radiant MailManager(TM), a highly scalable e-mail active archiving
solution that provides complete lifecycle, compliance, and storage
management for the corporate e-mail knowledge base. In addition,
the company continued to expand upon the development of rich media
solutions that leverage the Radiant Enterprise Media Server
(released in November 2004). Customers that selected Radiant EMS as
a media services platform successfully completed the development of
their vertical market applications. Nelson added, "We continue to
innovate with products that benefit enterprises by enabling them to
save time and resources for all of their critical enterprise
content management needs. We are especially pleased with the rapid
deployment of customized vertical applications by our Enterprise
Media Server clients, who selected Radiant EMS as a developer
platform for the management of rich media." On January 28, 2005,
the Company sold a total of 309,342 shares of Series C Convertible
Preferred Stock to SCP Private Equity Investors II, LP ("SCP") and
CSSMK, LLC for $600,000. Additionally SCP, or CIP Capital LP, will
purchase an additional 77,336 of shares of Series C Preferred Stock
for $150,000, on or before April 15, 2005, and, at their sole
discretion, may expand their purchase to a maximum of 128,893
shares of Series C Preferred Stock for $250,000. "I am enthusiastic
about the progress we have made thus far in fiscal 2005," added
Nelson. "The additional funding by our preferred shareholders
supports the execution of our growth strategy and vision." About
ClearStory Systems ClearStory Systems is an established provider of
flexible, on-demand ECM solutions. ClearStory's Radiant Content
Suite provides discrete management and on-demand access for the
full spectrum of content -- from graphics and video to customer
statements and email. The company's standards-based technology
provides a powerful platform for integrating rich media and
business documents into a multitude of business-critical
environments, including marketing and finance departments, call
centers, channel partner portals, compliance initiatives, and
global marketing extranets. For more information, visit
http://www.clearstorysystems.com/. There are statements in this
news release that contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
including for example the expected benefits of ClearStory's
in-house hosting model, the anticipated customer demand for
ClearStory's products and services (including its recently released
ActiveMedia version 5.5 and its Radiant Enterprise Media Server),
and the expected benefits to be derived from ClearStory's products
and services. These forward-looking statements include all
statements that are not statements of historical fact and relate to
the intent, belief, plans or expectations of ClearStory Systems,
their management, and their customers. Words like "plans,"
"intends," "believes," "signifies," "estimates," "anticipate,"
"will," "expect," and words of similar meaning are intended to
identify forward-looking statements. Actual results may vary
significantly from the forward-looking statements. For a detailed
discussion of cautionary statements that may affect ClearStory's
future results of operations and financial results, please refer to
ClearStory's filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-KSB for the year-ended March
31, 2004, and its Quarterly Reports on Form 10-QSB. Actual results,
events and performance may differ materially. Readers are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company undertakes no
obligation to release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events. ClearStory Systems Susan Worthy (508)
870-4225 Ripple Effect Communications Valerie Harding (Media) (617)
536-8887 Ripple Effect Communications Michael Frank (Investors)
(201) 601-9595 ClearStory Systems, Inc. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per
share amounts) Three Months Ended Nine Months Ended December 31,
December 31, 2004 2003 2004 2003 Revenue: Product $861 $603 $3,031
$2,153 Services 1,843 1,626 5,233 3,944 2,704 2,229 8,264 6,097
Cost of revenues: Product 12 34 138 115 Services 841 743 2,604
1,428 853 777 2,742 1,543 Gross profit 1,851 1,452 5,522 4,554
Operating expenses: Sales and marketing 802 873 2,260 2,167 Product
development 659 958 1,862 2,268 General and administrative 717 775
2,168 1,649 Non-recurring items -- -- -- 380 2,178 2,606 6,290
6,464 Operating loss (327) (1,154) (768) (1,910) Interest expense,
net (94) (130) (148) (338) Net loss before income taxes (421)
(1,284) (916) (2,248) Provision for income taxes -- -- -- -- Net
loss (421) (1,284) (916) (2,248) Preferred stock dividends (162)
(83) (458) (167) Net loss attributable to common shareholders
$(583) $(1,367) $(1,374) $(2,415) Net loss per share - basic and
diluted $(0.10) $(0.23) $(0.23) $(0.43) Weighted average common
shares outstanding - basic and diluted 5,992 5,992 5,992 5,583
DATASOURCE: ClearStory Systems CONTACT: Susan Worthy of ClearStory
Systems, +1-508-870-4225, ; or media, Valerie Harding,
+1-617-536-8887, , or investors, Michael Frank, +1-201-601-9595, ,
both of Ripple Effect Communications, for ClearStory Systems Web
site: http://www.clearstorysystems.com/
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