Spyglass Reports Record Fourth Quarter Revenue of $9.2 Million And Earnings of
$.02 Per Share
Quarterly Revenues Up 49 Percent vs. Prior Year as Execution of Information
Appliance Strategy Drives Growth
NAPERVILLE, Ill., Oct. 20 /PRNewswire/ -- Internet solutions provider
Spyglass(R) Inc. (Nasdaq: SPYG) today announced a 49 percent growth in revenue
for the fiscal fourth quarter ended September 30, 1999 over the same period of
a year ago. Revenue for the fiscal 1999 fourth quarter was $9.2 million
compared to $6.2 million in the prior year quarter. The strong increase in
revenues was driven by a 68 percent improvement in technology licensing
revenue combined with a 32 percent increase in revenue from professional
services. The company also reported that revenues for the full fiscal year
increased by 40 percent over prior year results to $29.6 million.
(Photo: newscom.com )
Spyglass reported earnings per share of 2 cents for the fourth quarter,
which was a 7 cent earnings per share improvement from the loss reported for
the same period of a year ago. For the full fiscal 1999 year, Spyglass
reported a 12 cent loss per share, significantly less than the 69 cent loss
per share recorded for fiscal 1998.
In commenting on the Company's results, Spyglass Chief Executive Officer
Douglas Colbeth stated, "Our fourth quarter revenue growth of 49 percent and
positive earnings performance capped a year in which Spyglass began to
capitalize on the emergence of the information appliance market by driving a
significant increase in our revenues. Our strong top-line growth also fueled
substantial improvement in Spyglass' bottom line performance and enabled the
company to achieve profitability in two of the previous four quarters."
Colbeth added, "Spyglass is now beginning to realize the benefits of the
solutions-based business model that the company created to best serve the
needs of the rapidly expanding information appliance market. With our broad
range of expertise, software and services offerings in the interactive TV and
mobile data services markets, Spyglass is well positioned to capitalize on the
market opportunities ahead." According to International Data Corporation
(IDC), a Framingham, Mass. based research firm, over 150 million information
appliances will be in use by 2002 with an annual shipment value of
$15 billion. IDC also forecasts that by 2004, non-PC information appliances
will dominate the market for net-connected devices.
During the quarter, Spyglass announced important relationships including:
-- An exclusive worldwide partnership with Nokia Wireless Software
Solutions intended to accelerate the acceptance and implementation of
the Wireless Application Protocol (WAP) standard. The agreement
empowers Spyglass to license the Nokia WAP Microbrowser to
manufacturers of mobile phones, personal digital assistants (PDA), and
other devices that rely on wireless communications. Spyglass will also
provide engineering services to manufacturers for the customization and
integration of the Nokia WAP Microbrowser with the manufacturer's
platform.
-- Licensing Spyglass' Prism Internet Content Delivery Platform to Seiko
Epson for use with a new wireless device that is now shipping. The
handheld product was specifically designed to target the Japanese
market and includes several built-in features that set it apart from
traditional mobile phones and handheld computers. Each unit serves as
a cellular phone, and includes additions such as a Web browser,
information directory, driving direction services, and other personal
applications.
-- A partnership with Toshiba America Electronic Components, Inc. in which
Spyglass developed the telephony card and Windows CE-based software for
Toshiba's new reference platform for Microsoft Windows(R) CE-based
Web-enabled telephone applications. The reference platform includes
everything developers need to build next-generation Windows CE-based
Web-enabled telephones.
Additionally, the company announced two strategic actions during the
quarter:
-- The company signed a definitive agreement to divest the SurfWatch
content filtering business to JSB Software Technologies PLC
(AIM: JSB) for $29 million. The redeployment of capital from this
non-strategic asset will allow Spyglass to focus 100 percent of the
company's resources on building a leadership position in the
information appliance market.
-- Spyglass strengthened its senior management team in the quarter by
naming Martin Leamy as president and chief operating officer. Leamy,
formerly senior vice president, Systems Management Solutions for
PLATINUM Technology Inc., brings over 20 years of software industry
experience and is focusing his efforts on Spyglass' day-to-day
operations while working closely with Colbeth to ensure that Spyglass
continues to grow as a leading player in the information appliance
market.
Commenting on the addition of Leamy to Spyglass, Colbeth stated, "Marty
not only brings to Spyglass tremendous operational skills, but also possesses
a strong strategic background. We believe the market for information
appliances is going to grow rapidly over the next few years, and Marty will
play an important role in helping Spyglass capitalize on this market
opportunity."
About Spyglass
Spyglass is a leading provider of strategic Internet consulting, software,
and professional services that enable content providers, service operators and
device manufacturers to capitalize on the potential of the Internet. Market-
leading companies using Spyglass solutions include GTE, General Instrument,
Microsoft, Motorola, NEC, Nokia, Sony, Thomson Consumer Electronics, and
Xerox. Spyglass is headquartered in Naperville, Ill. and has regional offices
in Lexington, Mass., Silicon Valley, Calif., London and Tokyo. Visit
spyglass.com for more information.
Spyglass and the Spyglass logo are trademarks or registered trademarks of
Spyglass, Inc., in the United States and other countries. Mosaic is a
trademark of the University of Illinois. SurfWatch is a registered trademark
of SurfWatch Software, a division of Spyglass, Inc. (Other technologies and
brand names are trademarks or registered trademarks of their respective
companies.) This release contains information about management's future
expectations, plans and prospects that constitute forward-looking statements
for purposes of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from
those indicated by these forward-looking statements as a result of various
important factors including consummation of binding agreements with
prospective business partners, competition, development of the marketplace,
the timing of the execution and recognition of revenues under new agreements,
the ability to close and execute large multi-year contracts, product
development, technological change and other factors that are discussed in the
company's annual report on Form 10-K for the year ended September 30, 1998 and
other documents periodically filed with the SEC.
SPYGLASS, INC.
Consolidated Statements of Operations
Three Months Ended Years Ended
September 30, September 30,
(In thousands, except
per share amounts) 1999 1998 1999 1998
(unaudited)
Net revenues:
Internet technology $4,943 $2,949 $13,493 $11,661
Service 4,244 3,209 16,117 9,508
Total net revenues 9,187 6,158 29,610 21,169
Cost of revenues:
Internet technology 50 394 1,220 1,843
Service 2,762 1,555 8,909 3,716
Total cost of revenues 2,812 1,949 10,129 5,559
Gross profit 6,375 4,209 19,481 15,610
Operating expenses and other:
Sales and marketing 1,979 2,171 8,218 9,101
Research and development,
net of funding received
of $856 and $1,606
in 1998, respectively 2,265 1,543 7,970 10,670
General and administrative 2,154 1,469 6,313 6,626
One-time acquisition costs -- -- 259 496
Total operating
expenses and other 6,398 5,183 22,760 26,893
Loss from operations (23) (974) (3,279) (11,283)
Other income, net 358 302 1,382 1,251
Income (loss) before
income taxes 335 (672) (1,897) (10,032)
Income tax provision (benefit) -- -- -- --
Net Income (loss) $335 $(672) $(1,897) $(10,032)
Net income (loss) per
common share-basic $0.02 $(0.05) $(0.12) $(0.69)
Net income (loss) per
common share-diluted $0.02 $(0.05) $(0.12) $(0.69)
Weighted average
number of common
shares outstanding-basic 16,310 14,878 16,029 14,543
Weighted average number
of common shares
outstanding-diluted 17,694 14,878 16,029 14,543
SPYGLASS, INC.
Consolidated Balance Sheets
September 30,
(In thousands) 1999 1998
ASSETS
Current assets:
Cash and cash equivalents $18,613 $22,706
Short-term investments 10,735 --
Accounts receivable, net of allowance for
doubtful accounts of $494
and $429, respectively 8,731 4,704
Unbilled accounts receivable 899 902
Prepaid expenses and other current assets 2,420 2,489
Total current assets 41,398 30,801
Properties and equipment, net 3,897 3,888
Other assets 478 291
Total Assets $45,773 $34,980
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,396 $1,678
Royalties payable 397 541
Deferred revenues 1,477 861
Accrued compensation and related benefits 1,680 1,624
Accrued expenses and other liabilities 249 419
Total current liabilities 6,199 5,123
Long-term deferred revenues 326 50
Total liabilities 6,525 5,173
Stockholders' equity:
Preferred stock, $.01 par value,
2,000,000 shares authorized, none issued -- --
Common stock, $.01 par value,
50,000,000 shares authorized,
16,581,731 and 15,083,239 shares issued
and 16,504,517 and 15,073,525
shares outstanding, respectively 165 150
Additional paid-in capital 62,221 50,546
Accumulated deficit (22,194) (20,297)
Treasury stock at cost, 77,214 and
9,714 shares, respectively (56) (55)
Unamortized value of restricted stock issued (888) (537)
Total stockholders' equity 39,248 29,807
Total Liabilities and
Stockholders' Equity $45,773 $34,980
SOURCE Spyglass Inc.
-0- 10/20/1999
/CONTACT: Press, Amanda Ingalls, 630-245-6512, aingalls@spyglass.com, or
Investors-Analysts, Bruce Beerbower, 630-245-6656, bbeerbower@spyglass.com,
both of Spyglass/
/Photo: newscom.com or
PR Newswire Photo Desk, 888-776-6555 or 201-369-3467/
/Web site: spyglass.com /
(SPYG) |
