Netscape Announces Fourth Quarter, Full-Year 1997 Results
MOUNTAIN VIEW, Calif., Jan. 27 /PRNewswire/ -- Netscape Communications
Corporation (Nasdaq: NSCP) today reported financial results for the fourth quarter and year ended December 31, 1997. Revenue for the fourth quarter of 1997 increased nine percent to $125.3 million, compared to revenue of $115.2 million for the same period in 1996. The company reported a net loss for the fourth quarter of 1997 of $88.3 million, or a net loss of $0.92 per share, including non-recurring charges of $56.3 million in purchased in-process research and
development and merger-related charges and $23.0 million of restructuring costs. Excluding non-recurring charges, the net loss for the fourth quarter of 1997 was $20.8 million, or a net loss of $0.22 per share, compared to net income of $8.2 million, or $0.09 per share, in the fourth quarter of 1996.
Revenue for the year ended December 31, 1997, grew by 54 percent to $533.9 million compared to $346.3 million in 1996. The company also reported a net loss of $115.5 million for 1997, or a net loss of $1.23 per share, including $108.9 million of purchased in-process research and development and merger-related charges and $23.0 million of restructuring costs. Excluding non-recurring charges, net income for 1997 was $4.7 million, or $0.05 per share, compared to $24.4
million, or $0.27 per share, for 1996.
As the company reported in a preliminary fourth quarter results announcement on January 5, 1998, the slower than expected overall revenue growth in fourth quarter 1997 compared with the year-earlier period was due in part to competitive pressures that caused stand-alone client revenues to decline. The decline in stand-alone client revenue particularly impacted the company's European, Asian
and retail businesses. In addition, Netscape's enterprise software and services revenue fell below expectations due to competitive pricing pressure and longer sales cycles associated with new, more sophisticated enterprise software products.
"No one factor contributed to the revenue shortfall we experienced in the fourth quarter of 1997. Instead, a decline in stand-alone client revenue and slower than expected growth in our enterprise sales and support revenue left us short of our goal," said Jim Barksdale, Netscape's president and chief executive officer. "We have taken immediate action to address these issues by streamlining our business to focus on key enterprise market opportunities and eliminating unrelated expenses. This restructuring, combined with fourth quarter acquisitions (Actra Business Systems, L.L.C. and Kiva Software Corporation) and the continued build-out of our enterprise sales and support infrastructure, position us for industry leadership in
1998 in the growing electronic commerce, messaging, custom Internet solutions and service provider applications markets."
Since announcing its preliminary fourth quarter results earlier this month, Netscape has completed a restructuring of its business to sharpen its focus on enterprise software. As a result, the company has taken a restructuring charge of $23.0 million in the fourth quarter of 1997 in connection with a reduction in workforce, the closing of certain facilities and other write-offs. "By moving quickly to adjust
resources to more aggressively pursue enterprise revenue opportunities, we believe we are well positioned to return to profitability in 1998," Barksdale added.
Last week the company announced plans to make the source code for the next generation of its highly popular Netscape Communicator client software available for free licensing on the Internet. The company plans to post the source code beginning with the first Netscape Communicator 5.0 developer release, expected by the end of the first quarter of 1998. This aggressive move is expected to enable
Netscape to harness the creative power of thousands of programmers on the Internet by incorporating their best enhancements into future versions of Netscape's software. The strategy is designed to accelerate development and free distribution by Netscape of future high-quality versions of Netscape Communicator to business
customers and individuals, further seeding the market for Netscape's enterprise solutions and Netcenter businesses. Netscape also announced last week that it would make its currently available Netscape Navigator and Communicator Standard Edition 4.0 software products immediately free for all users.
The information in this release contains forward-looking statements. Actual results could differ materially. For a detailed discussion of factors that affect the company's operating results, interested parties should review the company's SEC reports, including Netscape's Annual Report on Form 10-K for the year ended December 31, 1996, and Quarterly Reports on Form 10-Q for the quarters ended March 31,
June 30 and September 30 of 1997.
Netscape Communications Corporation is a premier provider of open software for linking people and information over enterprise networks and the Internet. The company offers a full line of Netscape Navigator clients, servers, development tools and commercial applications to create a complete platform for next-generation, live online applications. Traded on Nasdaq under the symbol "NSCP," Netscape Communications Corporation is based in Mountain View,
California.
Additional information on Netscape Communications Corporation is available on the Internet at home.netscape.com, by sending email to info@netscape.com or by calling 650-937-2555 (corporate customers) or 650-937-3777 (individuals).
NOTE: Netscape is a trademark of Netscape Communications Corporation, which is registered in the United States and other jurisdictions. Netscape Communications, the Netscape Communications logo, Netscape Navigator, Netscape SuiteSpot, Netscape Composer, Netscape Messenger and Netscape Communicator are trademarks of Netscape Communications Corporation. |
