Hot off the wire:
ANALYTICAL SURVEYS REPORTS REVISED FISCAL 1999 FINANCIAL RESULTS ADJUSTMENT BASED ON
REVISIONS TO COSTS OF COMPLETING SEVERAL CONTRACTS; Year-end Modification Allows for Upward
Adjustment to Anticipated Q1 2000 Results
12/30/99 5:59:53 PM
INDIANAPOLIS, Dec 30, 1999 /PRNewswire via COMTEX/ -- Analytical Surveys, Inc., (ASI) (Nasdaq: ANLT), a
leading provider of customized data conversion and digital mapping services for geographic information systems
(GIS) and related "spatial data" markets, today reported it has adjusted downward its previously announced
fiscal 1999 financial results. The adjustment has led to an upward revision of the Company?s forecasted results
for the first quarter of fiscal 2000.
Based on a routine review of the Company?s cost-of-completion assumptions during the first quarter of fiscal
2000, the Company has revised its fiscal 1999 year-end diluted earnings per share figure to $1.29 from a
previously announced $1.60 per diluted share. Net income for the year was revised to $9.3 million from a
previously announced $11.4 million and year-end revenue was adjusted to $113.5 million from a previously
announced $117.1 million.
During the first quarter of fiscal 2000, several factors converged to adversely affect the implementation of
certain cost reduction initiatives associated with several contracts. First, the Company continued to experience
a decline in timely order flow -- a situation believed to be the result of Y2K concerns and significant
consolidation among key ASI utility customers. Second, the focus of ASI?s transition toward a blended offshore
resource process is fundamentally rooted in providing customers superior quality and service, and that process
-- while now strong -- was still maturing in the first fiscal quarter. Finally, during the transition, continued
assurance of quality service depended on ASI retaining and utilizing the fixed and vital intellectual expertise of
its domestic workforce. As the cost reductions were not realized to the extent originally anticipated, the
estimate of the total production costs for these contracts was increased. Taken together, these factors
resulted in more work than anticipated being retained for domestic production, and at a higher-than-expected
cost of completion.
Since the cost estimates are used to determine the amount of revenue to be recognized, the effect of these
changes in cost estimates was to reduce revenues for fiscal 1999 by $3.5 million from previous estimates. The
reduction in revenue will be recovered over the remaining lives of the affected contracts, which range from
approximately six to 15 months.
This revision will result in a positive impact on the Company?s first quarter results for fiscal 2000. ASI originally
forecasted that first-quarter diluted earnings per share (EPS) would be approximately 80% less than in last
year?s first-quarter. However, EPS are now expected to be between 34% to 47% lower than those reported in
last year?s first quarter. Management said it is still comfortable with its previously issued guidance for the
remainder of fiscal 2000. That guidance called for second quarter EPS to be approximately 20% less than were
reported in the second quarter of fiscal 1999, and third quarter EPS to be approximately 15% greater than were
reported in the comparable period of fiscal 1999. The previously issued guidance for the fourth quarter of fiscal
2000 was provided prior to the adjustment. Accordingly, the anticipated EPS in the fourth quarter of fiscal 2000
are now expected to be approximately 250% greater than EPS in the fourth quarter of fiscal 1999.
Vince Otto, chief financial officer, said, "The decision to adjust our year-end financial results was made only
after careful internal study and concurrence from our outside auditors, KPMG LLP. Accounting guidance under
Statements of Position (SOP) 81-1, titled ?Accounting for Performance of Construction-Type and Certain
Projections-Type Contracts,? states, ?The nature of accounting for contracts is such that refinements of the
estimating process for changing conditions and new developments are continuous and characteristic of the
process. Additional information that enhances and refines the estimating process is often obtained after the
balance sheet date but before the issuance of the financial statements; such information should result in an
adjustment of the un-issued financial statements.? Our financial statements were not considered issued until
earlier today when we filed our Annual Report on Form 10K with the Securities and Exchange Commission."
Otto continued, "We are constantly updating our cost at completion estimates as new information arises.
Although refinements in these calculations are part of our business, this adjustment reflects larger-than-usual
changes, and therefore warrants under SOP 81-1 the revision to our previously announced financial results. I am
personally pleased the Company?s systems for updating these estimates are working as intended."
Analytical Surveys is an industry leader in providing customized data conversion, digital mapping and consulting
services for the spatial data markets. Geospatial data is used for a variety of applications, including the creation
of geographic information systems (GIS). A GIS is a high-resolution, large-scale, richly detailed "intelligent map"
that allows users to input, update, query, analyze and display detailed information about a geographic area.
Geographic information systems are widely used by utilities, state and local governments, federal agencies and
commercial businesses to manage massive infrastructures effectively, to improve operating efficiencies and to
analyze future demand for facilities. The Company?s traditional markets have been utilities and state and local
governments. The Company also is expanding its target markets by offering a broad new range of services.
Certain statements made in this news release are forward-looking statements within the meaning of the Private
Securities Litigation Act of 1995. Results may differ materially from the Company?s expectations. A number of
uncertainties and other factors could cause actual results to differ materially from such forward-looking
statements, including, but not limited to, the possibility that the Company will not be awarded contracts in the
numbers, for the amounts, or at the time that the Company currently expects, and therefore, that overall
contract volume does not increase. The forward-looking statements are also based on assumptions related to
the growth of the Company?s consulting services, as to which there can be no assurance. A more detailed
description of factors that could affect the Company?s financial results are included in the Company?s Annual
Report on Form 10-K and other filings with the Securities and Exchange Commission.
SOURCE Analytical Surveys, Inc. |
