Earnings report: Friday August 6, 7:44 pm Eastern Time
Company Press Release
Touchstone Software Reports Second Quarter Results
NORTH ANDOVER, Mass.--(BUSINESS WIRE)--Aug. 6, 1999--TouchStone Software
Corporation (OTC BB:TSSW - news) today announced its second quarter 1999 financial
results.
The company's second-quarter net income before the effect of amortization of Goodwill and other intangibles was $274,239
or, .03 cents per share. Including the effects of amortization of goodwill and other intangibles, the loss for the second quarter
was $(912,951) or (.11) cents per share, compared with a net loss of $(1,960,433) or (.25) cents per share in the second
quarter of 1998 which included $778,140 in other charges.
For the six months ended June 30, 1999, sales were $3,184,231 vs. $2,642,268 in the same period last year. This years first
half-net income before amortization of goodwill, other intangibles and acquisition related costs was $332,964 or .04 cents per
share. The net loss for the six month period which includes amortization of goodwill, other intangibles and acquisition related
costs was $(2,356,850) or (.30) cents per share compared with a net loss of $(1,901,479) or (.24) cents per share in the first
six months last year.
Pierre A. Narath, TouchStone's Chairman & CEO, said, ``We are pleased that TouchStone was able to achieve profitability
on an operating basis (excluding amortization and acquisition charges) so quickly. This trend reflects the company's successful
implementation of our near-term plan to maintain and increase current revenue streams as well as to effectively manage our
operating costs.
``The second quarter reflects the first quarter of full consolidation of Unicore Software's operation. The performance of
Unicore has increasingly contributed to Touchstone's top and bottom lines while also enabling TouchStone to access nearly 10
years of aggressive sales experience in the direct and OEM channels. In short, the combined company is well positioned to
become an aggressive leader in diagnostic innovations, system management software, and internet-based solutions,' added Mr.
Narath.
About TouchStone Software
TouchStone Software Corporation is a leading developer of innovative software designed to help people use complex
technologies. The company's products, which include CheckIt 98 diagnostics, CheckIt 98 Diagnostic Suite bundle, CheckIt
NetOptimizer Internet utility and FastMove! File transfer program, are distributed worldwide through the retail, VAR,
distributor, direct and OEM sales channels. TouchStone's corporate headquarters are located at 1538 Turnpike Street, North
Andover, MA, 01845. European headquarters are located at Sonnnenstrasse 26b 85622 Feldkirchen, Germany
011-49-89-900479-16 (Phone), 011-49-89-900479-11 (Fax). Additional information about TouchStone Software is
available at www.touchstonesoftware.com Information about Unicore Software is available at www.unicore.com
(Note: This release contains certain forward-looking statements regarding product development schedules, sales of
products in the future, return to profitability, financial position and growth plans. Such statements are subject to risks and
uncertainties. Actual results could vary materially from these statements or current trends. Investors should refer to
TouchStone's 1998 10-KSB and first quarter 1999 10-QSB, for a fuller description of risk factors.)
(Financial Tables Follow)
TouchStone Corporation
Consolidated Balance Sheet (Unaudited)
June 30, 1999
ASSETS
Current assets:
Cash and cash equivalents $ 1,029,794
Investments 1,021,509
Restricted cash 3,120,000
Accounts receivable, net 1,879,666
Inventories, net 112,093
Prepaid expenses and other current assets 461,066
Total current assets 7,624,128
Investments 568,524
Property, net 191,340
Other assets 57,799
Goodwill, net of accumulated amortization 3,520,937
Total assets 11,962,728
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current Maturities of Long-Term Debt $ 44,651
Accounts payable 247,230
Accrued payroll and related expenses 295,223
Accrued cooperative advertising expense 425,887
Accrued Merger and Acquisition Costs 1,338,422
Deferred revenue 1,610,412
Deferred Acquisition Costs 2,077,000
Other accrued liabilities 308,912
Total current liabilities 6,347,737
Long-Term Debt, Net of Current Maturities 528,266
Other liabilities
Commitments and contingencies 189,893
Shareholders' equity:
Preferred stock, $.001 par value, 3,000,000 shares
authorized; no shares issued or outstanding
Common stock, $0.001 par value, 20,000,000 shares
authorized; shares issued and outstanding,
7,990,060 (1999)
7,963,060 (1998) 8,063
Additional paid-in capital 19,109,233
Accumulated deficit (14,220,464)
Total shareholders' equity 4,896,832
Total liabilities and
shareholders' equity 11,962,728
TouchStone Software Corporation
Consolidated Statement of Income (Unaudited)
Three Months ended Six Months ended
June30, June30,
1999 1998 1999 1998
Net revenues $1,849,033 $656,409 $3,184,231 $2,642,268
Cost of revenues 229,656 198,359 483,765 642,358
Gross profit 1,619,377 458,050 2,700,466 1,999,910
Operating expenses:
Sales and marketing 453,798 924,420 562,335 1,791,390
General and
administrative 684,458 296,453 1,422,512 590,672
Research and
development 242,205 577,448 480,987 1,065,297
Amortization of
acquired
Intangibles 1,187,190 -- 1,187,325 --
Restructure -- 778,140 1,502,624 778,140
Total operating
expenses 2,567,651 2,576,461 5,155,783 4,225,499
Income (loss) from
operations (948,274) (2,118,411) (2,455,317) (2,225,589)
Interest and other
income, net 35,323 158,778 99,267 324,910
Income before
income taxes (912,951) (1,959,633) (2,356,050) (1,900,679)
Provision for
income taxes -- 800 800 800
Net income (loss) $(912,951) $(1,960,433) $(2,356,850) $(1,901,479)
Basic net income
per share $ (0.11) $ (0.25) $ (0.30) $ (0.24)
Weighted average
common shares 7,990,060 7,922,000 7,990,060 7,906,000
Supplemental (A)
Historical net
income (loss) $(912,951) $(1,960,433) $(2,356,850) $(1,901,479)
Add back certain
non-cash and merger
costs:
Amortization of
goodwill and
acquired
intangibles(B) 1,187,190 -- 1,187,190 --
Restructuring Charges -- 778,140 -- 778,140
Merger related
costs -- -- 1,502,624 --
Total add back 1,187,190 778,140 2,689,814 778,140
Supplemental net
income per share: 274,239 (1,182,293) 332,964 (1,123,339)
Basic $ .03 $ (.15) $ .04 $ (.14)
(A) The accompanying supplemental financial information is presented
for informational purposes only and should not be considered as a
substitute for the historical financial information presented in
accordance with generally accepted accounting principles.
(B) Expenses associated with the amortization of acquisition related
charges are included within operating expenses under the heading
"amortization of goodwill and acquired intangibles." |
