SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 24, 1999
AVERT, INC.
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(Exact name of registrant as specified in its charter)
Colorado 0-239052 84-1028716
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
301 Remington, Fort Collins, Colorado 80524
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: 970-484-7722
301 Remington Fort Collins, CO 80524
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(Former name of former address, if changed since last report
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Item 5 Other Events
a) Avert, Inc. announced 4th quarter and year-end 1998 results.
Item 7 Financial Statements and Exhibits
c) Exhibits
10 Press release dated February 24, 1999
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AVERT, INC.
March 5, 1999 By: /s/ Dean A. Suposs
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Date Dean A. Suposs
President
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EXHIBIT INDEX
Exhibit No. Exhibit Description Page
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10 Press Release, dated 5
February 24, 1999
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EXHIBIT 10
FOR IMMEDIATE RELEASE:
NEWS
February 24, 1999
Nasdaq National Market/AVRT http://www.avert.com
AVERT, INC. ANNOUNCES FOURTH QUARTER AND YEAR END RESULTS
Board of Directors Declares a $.12 Cent Per Share Dividend
FORT COLLINS, Colorado - Avert, Inc. (Nasdaq National Market/AVRT), an Internet
based information network company providing employment background checks to a
diverse nationwide customer base, today announced financial results for its
fourth quarter and year-ended December 31, 1998.
Net revenues for 1998 reached a record $9,962,000 up 5% from $9,491,000 in 1997.
For the year ending December 31, 1998, the Company reported $7,349,000 million
in working capital and no long-term debt. Net revenues for the fourth quarter
were $2,582,000, a 7% increase from $2,412,000 in the same period in 1997.
Avert, Inc. also announced the payment of a special cash dividend of $.12 per
common share payable on March 24, 1999 to shareholders of record on March 15,
1999. This dividend payment is a 20% increase over the previous dividend
payment.
The Company reported net income for the year of $740,000, or $.22 cents per
share, down from $1,218,000, or $.35 cents per share, a year ago. Fourth quarter
net income was $247,000 or $.07 cents per share versus $341,000, or $0.10 cents
per share, in the comparable period a year ago. Avert's net margins after tax
for the fourth quarter and year-end were 10% and 7% respectively.
The Company also achieved strong new customer growth during 1998, adding 2,336
new customers to its client base in 1998. Fourth quarter new customer growth was
693, up 10% from 630 new customers signed during the fourth quarter of 1997.
Revenue from criminal history reports for 1998 grew to $5,570,000, up 17% from a
year ago; previous employment reports and credit reports declined 3% to
$1,182,000; motor vehicle driving records declined 1% to $988,000; workers'
compensation histories declined 16% to $940,000; and services grew 8% to
$560,000.
Investments in 1998 represented the completion of the ASAP projects. It is
believed that these projects contributed to decreased growth and dampened
financial results, however, significant benefits were attributed to the projects
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toward the end of 1998 and into 1999. It is estimated that 70% of the Company's
revenues resulted from business conducted via Avert's secure network on the
World Wide Web.
"The past year was plagued by several turbulent periods. We began the year with
the first of several key moves with the implementation of an innovative
ORACLE(TM) based technology system. As highlighted by the many success stories
in the high tech arena, we too believe our greatest opportunities lie in
leveraging the Internet as a vehicle for marketing, selling and providing our
services to a diverse client base. I believe it was necessary to re-invent our
company in the likeness of tomorrow's marketplace," commented Dean Suposs,
president and chairman of Avert, Inc. "While this investment had a greater
impact in 1998 than we had hoped, we are enthusiastic about the leverage our
investment can provide in the future," continued Suposs.
Summary of 1998.
First Quarter. Avert completed a technology conversion, development of which
began in 1997. The project accomplished the key business objectives of
increasing productivity per employee, providing enhanced services via the
Internet without sacrificing ease of use for customers, and expanding the Avert
product and service offering. Additional advantages of the Avert system provide
seamless integration for use in partnership and national account relationships.
Second Quarter. Technology enhancements played a pivotal role as Avert, Inc.
announced two partnership arrangements through the AVERTAffinity program. An
agreement with Restrac, Inc. (Nasdaq/RTRK) allows the two companies to pursue
joint marketing activities utilizing Restrac's WebHire Network to offer
pre-employment screening services. In July, ADP Employer Services, (NYSE/AUD)
extended an earlier pilot program to offer pre-employment screening services to
the ADP customer base. At the time of this release, further endeavors are
pending review of the pilot results.
Also during the 2nd quarter, Avert, Inc. announced the payment of a special cash
dividend of $.10 per common share. Dividend payments totaled $350,000. The
Company announced success in obtaining Errors and Omissions Insurance coverage.
The Avert Board of Directors approved an additional $500,000 to repurchase
shares in the open market. This was in addition to $500,000 approved for
repurchase in January of 1996.
Third Quarter. Internal efficiencies related to Avert's technology upgrade were
offset during the third quarter by an above average amount of credits offered to
customers impacted by the Company's second quarter computer conversion. Customer
credits returned to an acceptable level going into the fourth quarter and new
year.
Fourth Quarter. The Company realized intentions to expand its offering of
instant services for use in the hiring process. Instant credit reports were
introduced to customers in early October 1998. Avert's newest product, Instant
Address Link provides employers with an immediate method for identifying
applicants who provide fraudulent or incomplete background information.
"I believe the changes completed in 1998 have allowed us to pursue more
aggressive goals for the coming year. We have already entered negotiations with
prospective national accounts seeking cost-effective methods to meet their
screening requirements. In my opinion, the foundation for our new business
strategies was laid in 1998; we are now focused on building a record value for
our shareholders and employees in 1999," said Suposs.
Currently, feasibility studies are under way for additional services related to
the employment process. New strategies for pursuing national accounts with
multiple sites are expected to allow Avert to showcase its proven methods for
linking multiple sites together via its Internet based information network. In
addition, part of the vision to build a nation wide "extranet" linking Avert to
its suppliers, vendors and partners began in earnest and showed positive early
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results. A recent pilot of the extranet has connected two partners, and our
largest vendor to the AvertNet extranet. Success in this area could lower
production costs coupled with increased efficiency.
Through its headquarters in Fort Collins, Colorado, Avert, inc. is an Internet
based information network company providing employment background checks via
remote access to a diverse nationwide customer base. Visit our headquarters at
www.avert.com.
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<CAPTION>
EARNINGS RECAP Fourth Quarter Ended Year Ended
December 31, December 31,
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1998 1997 1998 1997
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(unaudited) (audited)
<S> <C> <C> <C> <C>
Revenue ...................................... $ 2,582,000 $ 2,412,000 $ 9,962,000 $ 9,491,000
Net Income ................................... $ 247,000 $ 341,000 $ 740,000 $ 1,218,000
Basic Net Income per common share ............ $ .07 $ .10 $ .22 $ .35
Basic Weighted avg. shares outstanding ....... 3,323,000 3,488,000 3,440,000 3,461,000
<CAPTION>
BALANCE SHEET DATA December 31, December 31,
1998 1997
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<S> <C> <C>
Working Capital .............................. $ 7,349,000 $ 7,036,000
Total Assets ................................. $10,908,000 $11,398,000
Total Liabilities ............................ $ 897,000 $ 963,000
Shareholders' Equity ......................... $10,011,000 $10,435,000
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CONTACT: Avert, Inc. Investor Relations - 800.367.5933
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