Conversion Services International Reports 4th Quarter and Full Year 2009 Results

News provided by

Conversion Services International, Inc.

Apr 13, 2010, 08:00 ET

EAST HANOVER, N.J., April 13 /PRNewswire-FirstCall/ -- Conversion Services International, Inc. (CSI, OTC Bulletin Board: CVNS), a premier professional services firm focused on delivering business intelligence and business process optimization solutions to Global 2000 organizations and other businesses, has announced its financial results for the three and twelve months ended December 31, 2009.

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Conversion Services International, Inc. ("CSI") reported its net income for the three months ended December, 2009 of $0.5 million. Net income attributable to common stockholders was $0.3 million, or $0.00 per share. In the fourth quarter of 2008, the Company reported a net loss of $2.1 million and a loss of $2.2 million, or $0.02 per share attributable to common stockholders.

Revenues for the fourth quarter of 2009 were $6.5 million, representing an increase of $1.1 million, or 19.3%, from $5.4 million reported in the same period a year ago. Gross profit for the quarter of $2.2 million, or 33.6% of revenues, increased by $0.6 million as compared to gross profit of $1.6 million, or 29.1% of revenues for the three months ended December 31, 2008.

For the twelve months ended December, 2009, revenues were $24.2 million, which represents a $4.5 million, or 22.5%, increase from $19.7 million in the comparable prior year period. Gross profit for the twelve months year-to-date in 2009 of $6.8 million, or 28.3% of revenues, increased by $1.9 million as compared to gross profit of $4.9 million, or 24.8% of revenues, during the prior year period.

CSI reported net income for the twelve month period ended December 31, 2009 of $31,956 and a loss of $0.5 million, or $0.00 per share attributable to common stockholders. For the twelve month period ended December 31, 2008, the Company reported a net loss of $10.5 million and a loss of $11.1 million, or $0.10 per share attributable to common stockholders.

Lori Cohen, president and chief executive officer of CSI, stated, "We focused our 2009 efforts on generating more profitable business, and reducing or eliminating low margin business, which is illustrated by the 3.5% point increase in our gross profit percentage (from 24.8% in 2008 to 28.3% in 2009) for the year ended December 31, 2009, as compared to the prior year period. Our improved financial results in 2009 have allowed us to strengthen our company by reducing our debt and improving our balance sheet. Although we are pleased with our results this year, we must strive to maintain this positive trend and our efforts to continue to be profitable, further strengthen our balance sheet and, importantly, increase shareholder value."

About Conversion Services International, Inc.

Conversion Services International, Inc. (CSI, OTC Bulletin Board: CVNS) is a leading provider of professional services focusing on strategic consulting, data warehousing, business intelligence and business process reengineering, as well as integration and information technology management solutions. CSI offers an array of products and services to help companies define, develop, and implement the warehousing and strategic use of both enterprise-wide and specific categories of strategic data. CSI's customers include ADP, AmerisourceBergen Specialty Group, Coach, Commerzbank, Goldman Sachs, Liberty Mutual, Merck, Morgan Stanley, New York Independent System Operators, Nikon USA, Northeast Utilities and Pfizer. Information about CSI can be found on the web at http://www.csiwhq.com or by calling its corporate headquarters at 888-CSI-5036.

Note on Forward-Looking Statements

Except for the historical information contained herein, this press release contains, among other things, certain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such statements may include, without limitation, statements with respect to CSI's plans, objectives, expectations and intentions and other statements identified by words such as "may," "could," "would," "should," "believes," "expects," "anticipates," "estimates," "intends," "plans" or similar expressions. These statements are based upon the current beliefs and expectations of CSI's management and are subject to significant risks and uncertainties, the ability to maintain revenue growth, the ability to locate and acquire other businesses and to successfully integrate such acquisitions, the ability to decrease operating expenses, and those detailed in CSI's filings with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond CSI's control). CSI undertakes no obligation to update publicly any forward-looking statements.

Investor Relations:
Conversion Services International, Inc.
973-560-9400
[email protected]

Media Contact:
Tracee Lee Beebe
Marketing & Communications
Conversion Services International, Inc.
973-560-9400
[email protected]

CONVERSION SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31,

			2009	2008
ASSETS
CURRENT ASSETS
	Cash		$ 96,957	$ 338,240
	Accounts receivable, net of allowance for doubtful accounts of $108,001 and $260,205 as of December 31, 2009 and 2008, respectively		3,912,021	3,440,810
	Accounts receivable from related parties, net of allowance for doubtful accounts of $26,407 and $7,024 as of December 31, 2009 and 2008, respectively		236,233	284,028
	Prepaid expenses		124,764	140,493
	TOTAL CURRENT ASSETS		4,369,975	4,203,571

PROPERTY AND EQUIPMENT, at cost, net			36,887	68,536

OTHER ASSETS			110,494	306,778

	Total Assets		$ 4,517,356	$ 4,578,885

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
	Line of credit		$ 2,541,900	$ 2,349,920
	Accounts payable and accrued expenses		1,964,513	1,503,145
	Short term notes payable		-	1,384,811
	Deferred revenue		240,606	159,177
	Related party note payable		92,236	102,796
	TOTAL CURRENT LIABILITIES		4,839,255	5,499,849

Long-term debt, net of current portion			500,000	-
	Total Liabilities		5,339,255	5,499,849

Convertible preferred stock, $0.001 par value, $100 stated value, 20,000,000 shares authorized.

Series A convertible preferred stock, 19,000 shares issued and outstanding at December 31, 2009 and 2008, respectively			1,488,332	1,108,332

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
	Common stock, $0.001 par value, 300,000,000 shares authorized;
		122,295,838 and 119,594,463 issued and outstanding at December 31, 2009 and 2008, respectively	122,296	119,594
	Series B convertible preferred stock, 20,000 shares issued and outstanding at December 31, 2009 and 2008, respectively		1,352,883	1,352,883
	Additional paid in capital		68,260,325	68,575,918
	Treasury stock, at cost, 1,145,382 shares in treasury as of December 31, 2009 and 2008		(423,869)	(423,869)
	Accumulated deficit		(71,621,866)	(71,653,822)
	Total Stockholders' Deficit		(2,310,231)	(2,029,296)

	Total Liabilities and Stockholders' Deficit		$ 4,517,356	$ 4,578,885

CONVERSION SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31,

	2009	2008

REVENUE:
Services	$ 20,720,057	$ 16,409,181
Related party services	2,095,983	2,340,658
Reimbursable expenses	1,184,738	719,956
Other	193,425	273,791
	24,194,203	19,743,586

COST OF REVENUE:
Services	14,232,615	11,832,715
Related party services	1,847,984	2,151,157
Reimbursable expenses	1,270,279	864,250
	17,350,878	14,848,122
GROSS PROFIT	6,843,325	4,895,464

OPERATING EXPENSES
Selling and marketing	3,028,003	3,262,546
General and administrative	2,759,233	3,592,309
Goodwill & intangibles impairment	-	6,857,125
Depreciation and amortization	106,033	264,996
	5,893,269	13,976,976
INCOME (LOSS) FROM OPERATIONS	950,056	(9,081,512)

OTHER INCOME (EXPENSE)
Equity in earnings (losses) from investments	(103,298)	21,045
Loss on extinguishment of debt	-	(664,372)
Interest expense, net	(814,802)	(1,104,927)
	(918,100)	(1,748,254)
INCOME (LOSS) BEFORE INCOME TAXES	31,956	(10,829,766)
INCOME TAX BENEFIT	-	363,400

NET INCOME (LOSS)	31,956	(10,466,366)
Accretion of issuance costs associated with convertible preferred stock	(380,000)	(380,000)
Dividends on convertible preferred stock	(180,000)	(217,081)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (528,044)	$ (11,063,447)

Basic and diluted loss per share attributable to common stockholders	$ (0.00)	$ (0.10)

Weighted average common shares used to compute loss per common share:
Basic and diluted	120,123,905	115,358,271