EXHIBIT 25
FOR IMMEDIATE RELEASE: NEWS
August 7, 2000 Nasdaq National Market/AVRT
http://www.avert.com
AVERT, INC. ANNOUNCES RECORD SECOND QUARTER PERFORMANCE
Company Post Over 45% Increases in Revenue, Net Income and Earnings Per Share
FORT COLLINS, Colorado - Avert, Inc. (Nasdaq National Market/AVRT), an
information services company that provides employment background checks to a
growing nationwide customer base, today announced record financial results for
its second quarter and six-month period ended June 30, 2000.
Net revenues for the second quarter 2000, grew to $4,383,000, up 47% from
$2,977,000 in the comparable quarter a year ago. Service revenue for the quarter
grew to $719,000, up 289% from the same period a year ago. Through six months,
the Company reported net revenues of $8,128,000, up 49% from $5,469,000 in the
same period last year.
Net income for second quarter 2000, rose 45% to $623,000, or $.19 cents per
basic share, compared to $429,000, or $.13 cents per basic share, in the same
quarter last year. Net income for the six-month period of 2000, advanced 74% to
$1,189,000, or $.36 cents per basic share as compared to $684,000 or $.21 cents
per basic share in the comparable period a year ago.
What a great first six months for Avert and our shareholders! stated the Company
s President Dean Suposs. We have grown our top line nearly 50% and our bottom
line 74%, and we have done this during a time that we have devoted resources to
the development of new products and had massive changes to our Driving Record
product line. If we ever needed proof of the abilities of our people, the
flexibility of our system and the efficiency of our technology, this was it. We
now have released our small business Human Resource Portal (HR-Desktop.com).
Combining forces with industry giants such as ADP and Wausau this portal
provides specialized communities of small businesses with products and services
to help them compete with larger industries for employees. We now have the best
of both worlds. The ability to continue our strong growth background checking
business while introducing new products and new user communities all very
systematically and economically makes this a very exciting time for Avert,
concludes Suposs.
During the quarter, Avert was challenged by state legislative changes affecting
access to Motor Vehicle Reports. These events required a redesign of Avert s
internal processes: modifications to the programming language used to process
customer orders, additional labor needed to process requests manually in the
interim, changes in vendor and source costs, and estimated lost orders and
opportunities in this area. It is estimated that these events had an approximate
$230,000 financial impact in the second quarter of 2000. Pricing changes to this
product line have been implemented to protect margins. The impact of this
situation is represented in the second quarter financials and believed to be
isolated primarily to the second quarter.
Second Quarter 2000
During the second quarter of 2000, Avert announced the results of its third
annual Hiring Index. The Hiring Index represents a statistical analysis of the
previous year s completed background checks. This Hiring Index validated the
need to check prospective employees, as it highlighted that approximately 10% of
applicants have some type of criminal record, while almost 29% of applicants
misrepresented their employment or education history. Please visit www.avert.com
for the complete results of the study.
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During the May 31, 2000 Avert, Inc. Annual Meeting of Shareholders, shareholders
re-elected the Board of Directors and ratified the selection of Hein +
Associates LLP, as independent auditors for the Company. Additionally,
shareholders voted to add 50,000 shares to the Directors Stock Option Plan.
About Avert, Inc.
Avert is the leading provider of Internet pre-employment screening solutions
linked through AVERTnet (Y2K Compliant), a secure network of Internet background
checking services. Avert uses Internet technology to create solutions that
streamline the hiring process. More than 10,000 companies nationwide utilize
Avert and the Web-based background checking system which incorporates criminal
court records, driving records, reference checks, workers' compensation
histories, credit histories, education and credential verification and Social
Security Number validations. AVERTnet is customized to meet the unique concerns,
policies and procedures of companies nationwide. Additional information about
Avert background checking solutions and the Company's SEC filings is available
on the Internet at www.avert.com or contact Investor Relations at 970.484.7722.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues:
Search and product fees ................................... $ 4,288,000 $ 2,896,000 $ 7,941,000 $ 5,312,000
Interest and other income ................................ 95,000 81,000 187,000 157,000
----------- ----------- ----------- -----------
4,383,000 2,977,000 $ 8,128,000 $ 5,469,000
Expenses:
Search and product costs .................................. 2,095,000 1,357,000 3,795,000 2,498,000
Marketing ................................................. 488,000 311,000 920,000 660,000
General and administrative ................................ 437,000 345,000 843,000 648,000
Software development ...................................... 156,000 107,000 298,000 238,000
Depreciation and amortization ............................. 170,000 150,000 335,000 298,000
----------- ----------- ----------- -----------
3,346,000 2,270,000 6,191,000 4,342,000
----------- ----------- ----------- -----------
Income before income taxes. .............................. 1,037,000 707,000 1,936,000 1,127,000
Income tax expense ........................................ (414,000) (278,000) (748,000) (443,000)
----------- ----------- ----------- -----------
Net income ................................................ $ 623,000 $ 429,000 $ 1,189,000 $ 684,000
=========== =========== =========== ===========
Basic net income per common
share ..................................................... $ .19 $ .13 $ .36 $ .21
=========== =========== =========== ===========
Weighted average common
shares outstanding (primary) ..................... 3,304,263 3,323,025 3,295,091 3,323,025
<CAPTION>
BALANCE SHEET DATA June 30, December 31,
2000 1999
(unaudited)
<S> <C> <C>
Working Capital ........................................... $ 9,288,000 $ 8,496,000
Total Assets .............................................. $ 13,317,000 $ 12,428,000
Total Liabilities ......................................... $ 1,553,000 $ 1,476,000
Shareholders Equity ...................................... $ 11,764,000 $ 10,952,000
</TABLE>
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This press release may contain forward-looking statements that are made pursuant
to the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995. Factors that may cause the company's actual results to differ
materially from those expressed in the forward-looking statements include, but
are not limited to, the following: risks associated with potential liability for
failure to comply with federal and state regulations; liability to customers
and/or to the subjects of background checks for inaccurate or misuse of
information; loss of key personnel; and intense competition, as well as general
economic business conditions, changes in laws or regulations and other factors,
many of which are beyond the control of the company.
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