Networks North Releases Results for Third Quarter
PR Newswire - July 15, 1999 14:40
Operating results affected by investment in new strategic direction
NASDAQ:NETN
(There will be a conference call today at 4:00 PM Eastern time to discuss the results for the first 9 months of the fiscal year. To join the call, dial 1-877-793-3795 and refer to Conference No. C211771 or to Networks North)
TORONTO, July 15 /CNW-PRN/ - Networks North Inc. (NASDAQ: NETN) announced its results for the nine months ended May 31, 1999. Revenue of $10,588,401 for the first nine months of the current fiscal declined 5% versus reported revenue of $11,143,311 in the first nine months of the previous year. This decline in revenue occurred primarily in the company's subsidiary, Interlynx Multimedia Inc. As previously announced, this subsidiary has changed direction from being a web site developer and prior to that from a producer of children's CD-ROM's to a developer of web based training software called ''PROFIS''. This newly developed Internet product has a longer sales cycle and this is intended to be a global marketing initiative.
Income before taxes and minority interest for the first nine months of the current fiscal year was $215,633, which is substantially below the $923,684 that was reported for the first nine months of the previous year. The main factor contributing to this decrease is a loss that was incurred in Interlynx Multimedia Inc. in the current year compared to income earned in the previous year. Other factors contributing to the decrease include a higher loss in the Company's 50% joint venture, Viewer Services, and a non recurring foreign exchange gain booked in the previous year. As a result of these factors, net income for the first nine months was $30,432 compared with $493,798 for the first nine months of the previous year.
The company incurred a loss before taxes and minority interest for the three months ended May, 31 1999 of $280,305 and a loss after taxes and minority interest of $202,744. Once again, the main factor contributing to the loss in the third quarter was the results of Interlynx Multimedia Inc. In addition, reduced revenues in NTN Interactive Network Inc.'s advertising and repairs and maintenance departments contributed to the loss.
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NETWORKS NORTH INC. FINANCIAL SUMMARY (IN CANADIAN DOLLARS) -----------------------------------------------------------
FOR THE 9 MONTHS ENDED MAY 31, 1999 MAY 31, 1998
Total Revenue $10,588,401 $11,143,311
Income before Income Taxes and
Minority Interest 215,633 923,684
Net Income 30,432 493,798
Earnings per Share 0.01 0.19
FOR THE QUARTER ENDED MAY 31, 1999 MAY 31, 1998
Total Revenue $3,425,197 $3,651,725
Income before Income Taxes and
Minority Interest (280,305) 236,295
Net Income (202,744) 144,807
Earnings per Share (0.08) 0.05
AS AT MAY 31, 1999 AUGUST 31, 1998
Total Current Assets $6,541,873 $6,597,149
Total Assets 15,556,819 16,047,907
Total Current Liabilities 2,045,278 2,559,368
Shareholders' Equity 11,063,610 11,033,178
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At the end of the second quarter, the company announced that it had completed a strategic planning process and that it had reorganized and is now conducting its business in three strategic business divisions; Entertainment, Education and E-business. This plan reinforces the company's shift into the area of developing and marketing e-business applications. During the third quarter, the company has made progress in the area of developing and marketing its primary e-business application, PROFIS, a web based education application designed to assist large corporations become more efficient in training their employees.
''With PROFIS we have developed a product that is now operational in a major bank in Canada'' commented Peter Rona, President and CEO ''and we have now started the process of developing and implementing the marketing and sales structure required for a world wide market. We have identified three vertical markets that we will initially focus our attention: financial, information technology, and transportation.''
Consistent with the strategic direction, the Company has completed the acquisition of the outstanding 49% equity in Interlynx Multimedia Inc. that it did not previously own. The Company now owns 100% of Interlynx Multimedia Inc. and all future benefits of the sales and marketing efforts will accrue to the Company.
Significant progress has been made recently in the Company's digital consulting and encoding operation with some International clients for encoding services.
Networks North Inc.'s operating units include wholly owned NTN Interactive Network Inc. (NTNIN), Magic Lantern Communications Ltd. and Interlynx Multimedia Inc. NTNIN is the exclusive Canadian Licensee of NTN Communications, Inc. (AMEX: NTN), a leading producer and programmer of interactive television, on-line and Internet entertainment. The NTN Entertainment Network distributes programming to more than 15 million participants per month at restaurants, sports bars, and other group viewing locations throughout North America, including 525 in Canada with over 2.5 million participants. Magic Lantern is Canada's premier distributor of educational media resources, with exclusive rights to over 14,000 titles in English and French. Magic's subsidiaries provide MPEG encoding, video duplication distribution, and fulfillment services for broadcasters. Interlynx Multimedia Inc. is a developer of web-based interactive software in the areas of training, knowledge management, and e-business.
Financial Statements in this press release other than historical facts are ''forward-looking'' statements within the meaning of section 27A of the Securities Act of 1933, section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The Company intends that such statements are subject to the safe harbors created thereby. Since these statements (future operational results and sales) involve risks and uncertainties and are subject to change at any time, the Company's actual results could differ materially from expected results.
SOURCE Networks North Inc.
/CONTACT: Peter Rona, President, Networks North Inc., Tel: 416-675-6666,
Email: prona(at)ntnc.com/
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