AlphaServ.com Reports First-Quarter Results
May 11, 2000 07:31 AM Eastern Time
SANTA ANA, Calif.--(BUSINESS WIRE)--May 11, 2000--AlphaServ.com(TM) ALMI , a premier provider of Internet software solutions and professional information technology (IT) services, Thursday reported financial results for its first quarter ended March 31, 2000.
The company reported revenue for the first quarter of $4.6 million, compared with revenue of $9.6 million for the comparable quarter ended March 31, 1999. Approximately $4 million of this decline in revenue is due to the sale of the company's managed services and computer hardware manufacturing division, as well as the sale of the company's telephone installation business.
The company reported a net loss for the quarter of $238,000, compared with a net loss of $819,000 during the comparable quarter of the previous year. The diluted net loss attributable to common shareholders declined from $0.10 for the quarter ended March 31, 1999, to $0.08 for the quarter ended March 31, 2000.
The computation of diluted net loss per share includes $753,000 ($0.06 per share) and $382,000 ($0.03 per share) in accretion and dividends related to the company's outstanding preferred stock for the periods ended March 31, 2000 and 1999, respectively.
The current quarter's results also include approximately $300,000 of losses related to the operations of the company's managed services division, which includes its proprietary hardware manufacturing group through Jan. 31, 2000.
Under the terms of the agreement, AlphaServ.com retained a deferred revenue balance and reclassified it to a deferred gain of $2.7 million that the company expected to recognize during fiscal years 2000 and 2001 as the contingent contractual obligations lapsed. Accordingly, in the first quarter of 2000, the company recognized a gain on the sale of business of $884,000.
"We are behind revenue projections in our professional services division, DCi," commented AlphaServ.com chairman, CEO and president, Douglas J. Tullio.
"As a result of predicted Y2K problems, we experienced a revenue shortfall in the fourth quarter with an anticipated ramp-up of revenue in the first quarter as budgets were approved and projects got underway. The pace is just beginning to pick up and revenue is expected to increase slightly in the second quarter and should be back on track in the second half of the year."
"The disposition of non-core businesses has allowed us to stay focused on our strengths and objectives -- growing our Internet technology division and expanding our professional services group," added Tullio.
"The completion of a $14.6 million private placement in March provides the working capital necessary to accelerate the company's sales and marketing expansion, as well as increase our technical development and support group. Our investments in the NQL Solutions division have already provided several important technology introductions during the first quarter."
"As announced earlier this week," continued Tullio, "we have already made significant progress in implementing our marketing campaign by expanding our internal marketing group, and have further augmented this campaign through the engagement of three well-known marketing and consulting agencies to lend their expertise and industry presence.
"As we move forward, we believe the combination of internal and external efforts will become the vehicle that enables us to reach our goal of branding NQL as the standard for the development of intelligent agents."
Throughout the past quarter, the company's NQL Internet division continued to gain recognition within the Internet business community through the introduction of several new developments including the "Virtual VCR" function and support for the Palm VII.
The NQL Solutions division also extended its wireless capabilities beyond the Palm VII through its adoption of Wireless Application Protocol (WAP), which is supported by many Web and wireless companies such as Motorola, Ericsson, Amazon.com and AOL.
About AlphaServ.com
AlphaServ.com, the d.b.a. name for Alpha Microsystems, operates an Internet technologies division, NQL Solutions and the DCi professional services division.
NQL Solutions is a premier provider of Internet software solutions to the global marketplace. This division develops and deploys enabling software technologies based on its Network Query Language to partner systems integrators, Fortune 1000 corporations, Internet communities and marketplaces, software vendors and Internet-based service providers.
For more information, visit www.NQLSolutions.com or call 888/785-3370. The company's professional services division is a premier provider of Internet and Intranet consulting and networking, onsite network support for customers primarily located in the Northeastern United States. For more information, visit the company's Web site at www.alphaserv.com.
Certain statements in this news release, including the statements pertaining to the company's belief that the internal and external efforts will lead to the acceptance of NQL as an industry standard, and that revenue should be back on track in the second half of the year are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties, including (i) the successful implementation of the company's marketing campaign (ii) actual amount of revenue in the second half of the year (iii) undiscovered competition in the area of intelligent agent development (iv) the company's ability to manage personnel and external resources (v) the company's ability to continue developing technology that is competitive according to industry standards along with other factors which may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward- looking statements, which speak only as of the date hereof.
ALPHASERV.COM
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per-share data)
Three Months Ended
March 31, March 31,
2000 1999
Net sales:
IT Services $ 4,357 $ 8,391
Product 262 1,214
Total net sales 4,619 9,605
Cost of sales:
IT Services 3,361 6,356
Product 256 888
Total cost of sales 3,617 7,244
Gross margin 1,002 2,361
Operating expenses:
Selling, general and administrative 1,939 2,861
Engineering, research and development 171 321
Total operating expenses 2,110 3,182
Loss from operations (1,108) (821)
Other expense (income):
Interest income (7) (40)
Interest expense 20 27
Gain on dispositions of businesses (884) --
Other expense (income), net (12) 11
Total other expense (income) (883) (2)
Loss before taxes (225) (819)
Income tax expense (benefit) 13 --
Net loss (238) (819)
Accretion on redeemable preferred stock (116) (44)
Dividends on redeemable preferred stock (637) (338)
Net loss attributable to common shareholders $ (991) $ (1,201)
Basic and diluted net loss per share $(0.08) $ (0.10)
Number of shares used in computing
basic and diluted per-share amounts 11,787 11,549
EZ/np
CONTACT: AlphaServ.com, Santa Ana Robert O. Riiska, 714/641-6220 rriiska@alphaserv.com or Tamara Yanito, 714/641-6216 (investors) tyanito@alphaserv.com
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