Workstream is reporting that it made money last quarter, bucking the recession tide to give the HCM technology and services company its first profit since going public in 1999.
In a statement today, Workstream says it earned $780,000 on revenues of about $5.6 million for the 3rd quarter ending Feb. 28. Its EBITDA of $1.5 million for the quarter is three times what it was for the 4th quarter of 2008. EBITDA, often used to compare the performance of companies in the same industry, is debated as a metric of genuine profitability. But there’s no debating a bottom line operating profit of three-quarters of a million dollars, a stunning reversal considering Workstream’s historic financial performance.
For the same quarter a year ago, Workstream reported losing $5.9 million. For the last quarter ending Nov. 30 (Workstream is on a June 1 to May 31 fiscal year) the company had an operating loss of $1.1 million. Even a quick look at the numbers, however, shows that Workstream has been improving its performance over the last few quarters. (The hit it took for the huge loss reported for the quarter ending May 31 was primarily a writedown of goodwill.)
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Last week, company CEO Steve Purello told us the company has been putting its house order since pretty much hitting bottom last spring. That’s when an acquisition deal fell apart, the company faced a delisting notice from NASDAQ, where it trades, and there was an unbroken string of losses.“We’ve done all the things we said we were going to do,” Purello said, giving us his best guesses as to why Workstream’s stock was on a tear since January. In less than two months it went from a price of 2 cents a share to 20 cents. As we write this, the stock is around 22 cents a share.
Today’s financial release hits only the top line results. Specifics on the company’s financials won’t be released until the middle of April, when it files its detailed report with the SEC. While today’s numbers are subject to revision, if it occurs it shouldn’t significantly change the picture.