MARKHAM, ONTARIO--BCB Voice Systems Inc. (BIV- Alberta Stock Exchange) today
announced that sales revenue for the six months ended March 31, 1999, i.e. the first two quarters
of its 1999 fiscal year, was $1,208,772 compared to $1,074,617 for the same period a year ago.
As per the enclosed financial statements, gross profit continues to be in the 45 percent range and is
projected to increase throughout the balance of the fiscal year as the Company's product mix
becomes more software intensive. Through the past six months R&D spending totaled $376,627,
representing 31 percent of sales.
According to Ken Murton, Chairman of BCB, ''Although the loss from operations increased over
last year, this was expected as the Company continues to build an infrastructure capable of
generating and supporting the significant growth we see ahead of us. We have also taken a
one-time charge of $400,639 resulting from the Company's sale of third party shares (related to
last year's share exchange with Lernout & Hauspie Speech Products N.V.) at a lower price than
the value of the shares at the time of exchange.''
As part of its plan to deal with expected growth, the Company announced a restructuring that
includes the formation of the Office of the Chief Executive. The office includes: Ken Murton, who
continues as Chairman with primary responsibility for corporate finance and governance; Peter
Vanderlee, who continues as President with primary responsibility for strategic direction; and Bob
Armstrong, who in addition to being Executive Vice President takes on the role of Chief Operating
Officer. ''With the many opportunities we have just ahead of us, we believe this is a structure that
appropriately recognizes and combines management strengths and begins to prepare for
management succession,'' says Murton.
As an example of the sales breakthrough the Company is making, Murton points to orders
received this current quarter totaling more than $750,000 for BCB's PC DART(r) VoiceFLOW
systems from six separate hospitals in Kansas, Nebraska, Missouri, Colorado and British
Columbia.
''BCB, in partnership with Unisys Canada Inc.,'' says Murton, ''is also on the short list of
candidates being considered to provide services including BCB's digital recording technology to a
major court project in North America. Award of this contract has yet to be announced.''
In addition, Murton says the recent release of several new products is expected to help
immediately increase sales. These new products include: QuickCALL, a software utility that
provides a simple telephony interface for remote dictation; VFPlayer, a software application that
provides professional audio playback control functions for transcriptionists logged on to BCB's
VoiceFLOW system; and PC DART Version 3.9 upgrade software, that makes older BCB
systems Y2K compliant and also enables conversion of these systems from the ADPCM
compression algorithm to TrueSpeech(r). Murton also says, ''BCB's sales team has identified and
bid on more than $2.5 million in current and well qualified purchase-order opportunities, not
counting the major court project in partnership with Unisys. A significant number of these
opportunities are expected to be harvested through the next quarter.''
In business since 1992, BCB Voice Systems Inc. has developed, and is now marketing, a new
generation of Internet-ready voice recording and management systems. This is enabling the
Company to win a growing share of a more than US$1 billion market. The Company is now
supplying solutions to end-users ranging from individual medical and legal practices to large
hospitals, legislative assemblies, courthouses and general business. BCB has formed a number of
key alliances and is currently integrating its technology with leading voice recognition, case
management, document management and medical workflow software.
BCB Voice Systems Inc.
Consolidated Statement of Operations (Unaudited)
Six Months Ending March 31, 1999
1999 1998
Sales $1,208,772 $1,074,617
Cost of Sales 670,711 526,551
--------- ---------
Gross Profit 538,061 548,066
--------- ---------
Percentage 44.51 percent 51.00 percent
Development, Selling and
Administrative Expenses 1,953,042 1,120,493
Depreciation and Amortization 186,000 301,102
--------- ---------
Loss From Operations (1,600,981) (873,529)
--------- ---------
Interest Expense 101,111 42,169
--------- ---------
Net Loss for The Period before
Investment Adjustment ($1,702,092) ($915,698)
--------- ---------
Investment Adjustment 400,639
--------- ---------
Net Loss for the Period ($2,102,731) ($915,698)
--------- ---------
--------- ---------
Net Loss Per Common Share (0.377) (0.029)
--------- ---------
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BCB Voice Systems Inc.
Statement of Changes in Financial Position (Unaudited)
Cash Provided (Used)
Six Months Ending March 31 1999
1999 1998
Cash Derived From (Applied To)
Operating
Net Loss ($2,102,731) ($915,698)
Depreciation and
Amortization 186,000 301,102
Investment Write Down 400,639 0
--------- ---------
(1,516,092) (614,596)
--------- ---------
Change in non-cash working
capital (1,207,333) (315,400)
--------- ---------
(2,723,425) (929,996)
--------- ---------
Financing
Net Equipment Loans 0 (21,960)
Accrued Interest on
Convertible Debentures 17,290 18,302
Net Proceeds - Notes/Warrants
Offering 2,280,850 0
Net Proceeds - Sale of
Investment 1,239,361 0
Net Proceeds - Rights Offering 0 1,136,980
Conversion of Note to
Equity 20,000
--------- ---------
3,557,501 1,133,322
--------- ---------
Investing
Fixed Assets (206,990) 20,317
Deferred Development (150,391) (311,688)
--------- ---------
(357,381) (291,371)
--------- ---------
Net Increase (Decrease) in
cash 476,695 (88,045)
Opening Cash (Loans) (690,824) (26,115)
--------- ---------
Closing Cash (Loans) ($214,129) ($114,160)
--------- ---------
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