CrossKeys resumes revenue growth in first quarter
September 22, 1999
KANATA, ONTARIO--CrossKeys Systems Corporation (Nasdaq: CKEY; TSE: CKY), a leading supplier of software for telecommunication service providers, today announced financial results for the first quarter of its fiscal year 2000.
Revenues for the quarter ended August 29, 1999 grew 47 per cent over the fourth quarter of 1999. In addition, orders for software in the quarter exceeded shipments resulting in a strengthened backlog. First quarter 2000 revenues of $7.6 million compare to $5.2 million in the fourth quarter of fiscal 1999 and $12.1 million for the first quarter of 1999.
CrossKeys reported a net loss of $1.4 million for the first quarter of fiscal 2000, or a fully diluted loss per share of $(0.07) Cdn versus earnings per share of $0.10 Cdn in the first quarter a year ago, and a loss of $(0.37) Cdn per share in the fourth quarter of fiscal 1999. In U.S. dollars, fully diluted loss per share for the first quarter was $(0.05), translated at the average exchange rate for the quarter of $0.6721 as reported by the Federal Reserve Bank of New York.
"The combination of major wins and additional global channel partnerships are creating new momentum for the Company," said Ian McLaren, CrossKeys President and Chief Executive Officer. "The growth in core product revenue and the strong book-to-bill ratio during the first quarter are both very positive signs."
Mr. McLaren added, "Our prime objective right now is growth--growth in the extent and nature of our partnerships, growth in our product set and growth in our top line revenue. In this past quarter, we announced agreements with world class players such as Nortel and Logica as well as significant deals with telcos such as BT, which are all positive endorsements of our strategy and our position in the market place. Closer to home, we are revitalizing our sales and marketing force and adding engineering depth to advance our product lead over our competitors."
Significant highlights of the quarter included:
- Positive book-to-bill ratio, driving increased backlog.
- Increase in revenues from core products of $5 million from last quarter, reflecting CrossKeys strategic decision to focus on license sales.
- Fourth highest quarterly bookings in company's history, 20 per cent of which came from new customers and channels.
- Improvement in Days Sales Outstanding to 48 days as of August 29, 1999 compared to 78 days in the previous quarter.
- Strong sales to over 20 existing customers including Bell Atlantic and Bell Canada.
About CrossKeys
CrossKeys Systems Corporation (www.crosskeys.com) develops software that helps service providers manage the equipment and traffic on their telecom networks so they can operate more efficiently and provide better service to their customers. Through its relationships with leading systems integrators, equipment manufacturers and other vendors, CrossKeys serves over 180 telecommunication service providers worldwide. CrossKeys has been ISO 9001 certified since 1995.
CrossKeys Systems Corporation is a public company whose common shares are listed for trading on Nasdaq (CKEY) in the United States and on The Toronto Stock Exchange (CKY) in Canada.
CrossKeys and the CrossKeys logo are registered trade marks of CrossKeys Systems Corporation. All other trade marks are the property of their respective holders and are acknowledged by CrossKeys Systems Corporation.
This announcement may contain forward-looking statements as defined by the US Private Securities Litigation Reform Act of 1995, such as statements related to the industry motivators, market and partnership opportunities. The Company cautions that these statements are based on current expectations that are subject to risks and uncertainties. Actual results may differ due to factors such as customer demand, product shipping schedules, product mix, competitive products and pricing pressures, and changes in the service, network and element management software applications market specifically. Additional information identifying risks and uncertainties is contained in the Company's filings with the Ontario Securities Commission and the Securities and Exchange Commission.
Summary of financials follows:
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CROSSKEYS SYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Canadian dollars, amounts in thousands, except per share
data, US GAAP)
Fiscal quarters ended
August 29, August 2,
1999 1998
----------- -----------
(unaudited) (unaudited)
Product revenue $ 5,965 $ 9,885
Service revenue 1,590 2,195
----------- -----------
Total revenue 7,555 12,080
----------- -----------
Product costs 1,386 2,428
Service costs 780 1,013
----------- -----------
Total cost of sales 2,166 3,441
----------- -----------
Gross margin 5,389 8,639
----------- -----------
Expenses
Research and development 2,617 1,996
Selling, general and administration 4,709 4,657
----------- -----------
Total expenses 7,326 6,653
----------- -----------
Income (loss) from operations (1,937) 1,986
Interest income 586 647
----------- -----------
Income (loss) before income taxes (1,351) 2,633
Income tax provision - (723)
----------- -----------
Net income (loss) (1,351) 1,910
----------- -----------
----------- -----------
Earnings per share
Basic ($ 0.07) $ 0.10
Diluted ($ 0.07) $ 0.10
Weighted average number of common
shares
Basic 18,541 18,306
Diluted 18,541 19,205
CROSSKEYS SYSTEMS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Canadian dollars, amounts in thousands, except per share
data, US GAAP)
August 29, May 31,
1999 1999
----------- -----------
(unaudited)
ASSETS
Cash and short-term investments $ 53,096 $ 53,426
Accounts receivable 4,060 5,463
Unbilled receivables 3,535 4,438
Fixed assets 5,348 5,693
Other assets 8,576 8,124
----------- -----------
$ 74,615 $ 77,144
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued
liabilities $ 5,313 $ 5,348
Deferred revenue 663 1,320
----------- -----------
5,976 6,668
----------- -----------
Shareholders' equity 68,639 70,476
----------- -----------
$ 74,615 $ 77,144
----------- -----------
----------- -----------
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FOR FURTHER INFORMATION PLEASE CONTACT :
CrossKeys Systems Corporation
John Blackmore, Corporate Communications
Media contact
(613) 599-2300 ext. 8936
E-mail: jblackmore@crosskeys.com
Web Site: www.crosskeys.com
or
CrossKeys Systems Corporation
Shelley Moorhead, Investor Relations Specialist
Financial Analyst contact
(613) 599-2300 ext. 8336
E-mail: moorhead@crosskeys.com
INDUSTRY: CMT
SUBJECT: ERN |
