Workstream Finds Some Good News – Sort Of

Jul 25, 2008
This article is part of a series called News & Trends.

For the first time in many quarters Workstream (profile; site) was in the money – sort of – eking out a half-million dollar finish to its 2008 fiscal year. The talent management software company reported Thursday evening that it had an EBITDA of $516,000 for the fourth quarter that ended May 31. That compares to an EBITDA of ($4.5 million) for the previous quarter and ($1.3 million) for the fourth quarter last year.

Still, the company reported losing $14.9 million in the last quarter and $39.4 million for the year.

Only sketchy and incomplete numbers were released by the publicly traded company, so it isn’t possible to detail the company’s income and expenses other than to say the fourth quarter revenues were $7 million, up from the $6.2 million of the third quarter.

The company attributed the incomplete financial statement to an “on-going goodwill analysis.” “This item does not have an impact on EBITDA, revenues or cash,” the company noted in the announcement of its financial results. However, goodwill is a business asset that has to be adjusted if its fair value is different from the value carried on the books. Workstream valued its goodwill at $45.3 million in an April filing with the Securities and Exchange Commission. But in the financials it released Thursday appears to be anticipating a reduction of $13.6 million.

Regardless of the eventual accounting decisions, Workstream is a troubled company. Its operating expenses have exceeded its revenues every year since the company went public in 1999 and for two years before that as well. It is very likely to be delisted by NASDAQ, where it trades under the ticker symbol WSTM. To remain on the active exchange Workstream would have to lift its stock price to at least $1. It closed today at 16.27 cents. A planned merger with payroll processor Empagio fell apart in June.

Still, Chief Executive Officer Steve Purello says in the press release announcing the financial, “Workstream had a solid finish to its fiscal year.”

Purello could not be reached for additional details.

This article is part of a series called News & Trends.