Premenos Technology Corp. anticipates lower earnings, announces stock
repurchase program and highlights refined strategy
CONCORD, Calif.--(BUSINESS WIRE)--March 26, 1997-- Premenos Technology Corp today announced that it anticipates losses in
the current and subsequent quarter.
The company also announced a program to repurchase shares of its common stock. The anticipated loss reflects a review of the
company's operations and sales and marketing strategy undertaken by new president and CEO Timothy Dreisbach, who joined the
company in January.
"The company's core business is solid, and we are very confident about our expanded product suite and emerging market demand," said
Dreisbach. "However, management's plan for positive operating margins on an annual basis will not be achieved in the early quarters of
this fiscal year. Observing that market expectations have been for modest earnings per share in this quarter, we feel it wise to notify our
stakeholders that a moderate loss in the $.04 to $.07 per share range is likely. Since I arrived two months ago, the company has begun to
refine its market strategy, with an increased emphasis on multi-product synergies, corresponding realignments of our marketing and sales
channels and recasting of the executive management team. We are also absorbing significant headcount growth that occurred in the
fourth quarter of 1996."
"Our strategy is straightforward," said Dreisbach, "to maintain our leadership position in our traditional EDI market and target new
Electronic Commerce segments where we will also be a leader." The company will continue to invest in a number of key areas:
1. To sustain its current installed base of mid-sized companies operating on AS/400 and UNIX platforms by continuing high quality
support and enhancement of its EDI products.
2. To expand the sales of its EDI products, through direct and partner sales initiatives, to unpenetrated portions of its traditional market
(especially international). The company is also exploring complementary product and service offerings for sale to its existing base of
satisfied customers.
3. To move up to larger corporations who are off-loading EDI applications from mainframes to client/server platforms, where Premenos'
already proven NT and UNIX offerings scale up and are open to any choice of communications strategy (VAN/Internet/Extranet).
Further, the company's PowerDox and WebDox products offer these larger corporations forms-based EC solutions for their smaller
trading partners with great cost savings benefit for both. This initiative now gives large corporations a viable competitive alternative.
4. To move out to new information-rich vertical markets (banking, financial services, healthcare and insurance) where the security,
management and auditability of information exchange among communities of large trading partners is critical to their businesses. The
company will leverage its Templar product, which provides these capabilities, in conjunction with its other products. Templar remains
unique in terms of market availability, with its capacity to facilitate peer-to-peer Electronic Commerce transactions on the public Internet
or privately-managed Intranets and Extranets.
"This market strategy is not dependent upon new product development, but rather will leverage the broad suite of existing products," said
Dreisbach. "It does require the already begun expansion of Premenos' salesforce to multi-product solutions selling. These initiatives give
us great optimism and, combined with our very strong cash position and current stock price, make it an attractive time to purchase our
own stock."
The company's board of directors approved the purchase of up to one million shares of common stock from time to time in the open
market. The number of shares purchased and the timing of purchases will be based on a number of considerations, including the market
price of the stock, market conditions and other factors as the company's management deems appropriate. Shares purchased under this
program will be held in the corporate treasury for future use including funding employee benefit programs and other general corporate
purposes. The company had 11,679,314 shares of common stock outstanding as of March 3, 1997.
The company is not providing more specific guidance on revenues or earnings for the quarter or year-end, but noted that losses in the
first and second quarters were likely. Dreisbach also noted that the executive management team was not yet complete and that more
specific operating details would be announced in the coming months.
Forward-Looking Statements
This press release includes forward-looking statements that involve risks and uncertainties including, but not limited to, quarterly
fluctuations in results, the management of growth, market acceptance of certain products, the impact of competitive products and general
economic conditions and other risks. For further information about these factors, please see the company's Securities and Exchange
Commission filings, including the report on Form 10-K for the most recent fiscal year as well as the most recently filed Form 10-Q.
Actual results may differ materially from management expectations.
Premenos: Business Beyond Barriers
Premenos Technology Corp is a leading provider of electronic commerce solutions for established and emerging trading communities. Its
standards-based business applications leverage the strengths of traditional EDI systems, TCP/IP networks and web technologies.
Premenos has a history of market-proved innovation, including the first network-independent technology for secure, auditable data
transmission over public and private Internets.
Through partnerships with leading application and integrated solutions vendors, Premenos empowers businesses to lower costs, shorten
trading cycles and increase competitive advantage. Premenos' renowned Electronic Commerce Resource Guide can be reached at
www.premenos.com . |
