Infowave reports second quarter 2000 results
BURNABY, BC, Aug. 14 /CNW/ - Infowave Software, Inc. (TSE: IW) today
reported financial results for the second quarter ended June 30, 2000. Unless
otherwise stated, all currency is expressed in U.S. dollars and all results
are attributable to the operations of the Wireless business. Infowave is
reporting the results of its Imaging business as discontinued operations.
Infowave posted a loss for the quarter of $2,971,205, or $0.15 per share,
on revenue of $132,730 versus a loss of $864,263, or $0.06 per share, on
revenue of $32,898 in the second quarter of 1999. The majority of revenue in
the quarter was derived from direct sales to enterprise customers, including
the first sale in excess of 100 seats. The balance of revenue was derived from
a one-time sale of third-party hardware, which had a negative impact on gross
margins for the quarter. Management expects traditional high margins to resume
in the next quarter. Infowave reported increased expenditures on sales and
marketing and research and development initiatives as it continued to
aggressively build infrastructure. Total headcount grew to 124 from 96 in the
previous quarter and 42 in the second quarter of 1999.
"Infowave is building sustainable technology leadership and effective
product distribution channels so that our market positioning is synchronized
precisely with the widespread adoption of wireless business solutions by
Corporate America," said Bijan Sanii, Chief Operating Officer and acting CEO.
"Compaq and Intel are the latest industry heavyweights to choose Infowave's
wireless business engine and, in doing so, they have further expanded
Infowave's paths to the business market. In addition, Infowave continues to
attract talented senior sales and marketing personnel to drive enterprise
sales and monetize strategic relationships. As previously indicated,
management expects these activities to translate into revenue traction
beginning in the third quarter.
Morgan Sturdy, Infowave's Chairman, added, "In addition to the
significant wireless business accomplishments at Infowave, we expect the
disposition of the Imaging business to be completed by the end of August. I am
also pleased to report that Infowave has engaged Heidrick & Struggles - an
exclusive high-tech executive recruiting firm in the U.S. - to assist with the
expansion of the executive team. Before year-end, we expect to add additional
executive talent to the first-rate management team already in place."
Sales & Marketing Update
- Three key revenue drivers continued to trend upward during the second
quarter - new enterprise accounts, new enterprise seats, and average
seats per enterprise account.
- Following the series of second quarter announcements, Infowave and
Compaq are now actively collaborating to offer best-of-class integrated
wireless business solutions to large enterprise accounts. Infowave
provides the wireless business engine and Compaq serves as both
hardware provider and systems integrator. Infowave has appointed a
senior marketing manager devoted exclusively to managing this key
strategic relationship. Recent activities have included a three-day
strategic market planning summit involving a number of key Compaq
officials from across the company; involvement in over 14 training
events in 9 states regarding Exchange 2000; and four major Compaq
exhibit events in U.S. and Europe. Compaq is scheduled to launch
bundled Infowave Software solutions on the Compaq Direct Plus web site
in August, which will provide the enterprise customer direct purchase
opportunities.
- Infowave has appointed two senior marketing managers to focus on the
development of the reseller channel. Seven new regional resellers were
recently added, two resellers were trained and Infowave participated in
three reseller special events. Infowave intends to add more regional
and national resellers in the third quarter.
- Infowave and Intel Corporation signed a five-year software license and
development agreement. Infowave will be compensated through a
combination of engineering fees, royalties and license fees expected to
begin in the third quarter. Development and design work is in progress.
- Critical staffing milestones were achieved in the sales and marketing
organization. Key positions that have been recently filled include VP
Business Development, Director of Strategic Marketing, Director of
Enterprise Sales, and Manager of Inside Sales. In addition, three
Regional Sales Managers were appointed giving Infowave complete
geographic sales coverage across North America. Total sales and
marketing headcount was 49 at the end of the quarter, with 28 located
at Infowave's U.S. headquarters.
- During the quarter, Infowave participated in 19 industry and customer
events with partners such as Sierra Wireless, Compaq, AT&T, Verizon and
Microsoft. The marketing activity generated record analyst and media
coverage and customer leads were up 479% over the previous quarter.
Product and Technology Update
- Infowave continued to expand the research and development team with
headcount increasing to 53 in the second quarter from 43 in the
previous quarter and 24 in the second quarter of 1999.
- A "Technology Architecture Team" was established for quick project
incubation and cross-product architecture. Infowave appointed a ten-
year IBM veteran to lead the unit.
- The research and development team made significant progress on key
projects including the incorporation of feature enhancements and
increased network support for Infowave's enterprise and carrier
software products as well as several OEM projects. Infowave expects to
ship a major product upgrade in the third quarter.
Finance and Operations Update
- The Company's final prospectus for its Cdn.$30.0 million offering was
receipted in British Columbia, Ontario and New Brunswick.
- Infowave qualified as a Prompt Offering Prospectus (POP) filer in
Canada and has also become eligible to use the Multi-Jurisdictional
Disclosure System (MJDS) in the U.S.
- Infowave executive management presented at four institutional
conferences in Toronto, New York, San Francisco and Vancouver. The
Company is scheduled to present at additional U.S. conferences in the
third quarter.
- Infowave incorporated "Infowave USA Inc." as a 100%-owned subsidiary.
<<
INFOWAVE SOFTWARE, INC.
Balance Sheets
(expressed in U.S. dollars)
------------------------------------------------------------------------
------------------------------------------------------------------------
June 30, 2000 December 31,
(Unaudited) 1999
------------------------------------------------------------------------
Assets
Current Assets:
Cash and cash equivalents $11,903,508 $4,359,090
Short term investments 6,661,801 -
Trade receivables 1,282,483 1,916,961
Share subscription receivable 537,666 -
Inventory 517,322 588,981
Prepaid expenses and deposits 145,169 170,662
------------------------------------------------------------------------
21,047,949 7,035,694
Capital assets 2,457,655 984,698
Deferred charges 17,700 34,100
------------------------------------------------------------------------
$23,523,304 $8,054,492
------------------------------------------------------------------------
------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and
accrued liabilities $1,566,453 $1,014,673
Deferred revenue 3,020 -
------------------------------------------------------------------------
1,569,473 1,014,673
Shareholders' equity
Share capital
Authorized: 100,000,000 voting
common shares
Issued: 20,728,717
(1999-18,297,470) 34,576,792 12,526,949
Deficit (12,762,483) (5,776,773)
Cumulative translation account 139,522 289,643
------------------------------------------------------------------------
21,953,831 7,039,819
------------------------------------------------------------------------
$23,523,304 $8,054,492
------------------------------------------------------------------------
------------------------------------------------------------------------
INFOWAVE SOFTWARE, INC.
Statements of Operations and Deficit
(expressed in U.S. dollars)
------------------------------------------------------------------------
------------------------------------------------------------------------
Three months ended
June 30, 2000 June 30, 1999
(Unaudited) (Unaudited)
------------------------------------------------------------------------
Revenues:
Sales $132,730 $32,898
Cost of goods sold 115,265 2,947
------------------------------------------------------------------------
17,465 29,951
Expenses:
Research and development 852,228 300,994
Sales and marketing 1,568,178 290,499
General and administrative 646,019 212,831
Depreciation and amortization 169,533 36,018
------------------------------------------------------------------------
3,235,958 840,342
------------------------------------------------------------------------
Operating loss from continuing
operations 3,218,493 810,391
Other income (expenses):
Interest and other income 231,436 15,451
Foreign exchange 15,852 (69,323)
------------------------------------------------------------------------
247,288 (53,872)
------------------------------------------------------------------------
Loss from continuing operations 2,971,205 864,263
Discontinued operations:
Loss (earnings) from operations 744,761 (114,198)
Estimated loss on disposal 112,166 -
------------------------------------------------------------------------
856,927 (114,198)
------------------------------------------------------------------------
Net loss for the period 3,828,132 750,065
Deficit, beginning of period 8,934,351 2,905,952
------------------------------------------------------------------------
Deficit, end of period $12,762,483 $3,656,017
------------------------------------------------------------------------
------------------------------------------------------------------------
Loss (earnings) per share
Continuing operations $0.15 $0.06
Discontinued operations $0.05 ($0.01)
------------------------------------------------------------------------
Net loss $0.20 $0.05
------------------------------------------------------------------------
------------------------------------------------------------------------
Weighted average number of shares
outstanding 19,237,005 15,362,764
------------------------------------------------------------------------
------------------------------------------------------------------------
INFOWAVE SOFTWARE, INC.
Statements of Operations and Deficit
(expressed in U.S. dollars)
------------------------------------------------------------------------
------------------------------------------------------------------------
Six months ended
June 30, 2000 June 30, 1999
(Unaudited) (Unaudited)
------------------------------------------------------------------------
Revenues:
Sales $235,164 $150,538
Cost of goods sold 115,634 21,822
------------------------------------------------------------------------
119,530 128,716
Expenses:
Research and development 1,462,565 525,019
Sales and marketing 2,604,583 557,746
General and administrative 1,070,099 391,206
Depreciation and amortization 257,117 73,451
------------------------------------------------------------------------
5,394,364 1,547,422
------------------------------------------------------------------------
Operating loss from continuing
operations 5,274,834 1,418,706
Other income (expenses):
Interest and other income 278,287 26,792
Foreign exchange 29,634 (64,503)
------------------------------------------------------------------------
307,921 (37,711)
------------------------------------------------------------------------
Loss from continuing operations 4,966,913 1,456,417
Discontinued operations:
Loss (earnings) from operations 1,231,631 (288,922)
Estimated loss on disposal 787,166 -
------------------------------------------------------------------------
2,018,797 (288,922)
------------------------------------------------------------------------
Net loss for the period 6,985,710 1,167,495
Deficit, beginning of period 5,776,773 2,488,522
------------------------------------------------------------------------
Deficit, end of period $12,762,483 $3,656,017
------------------------------------------------------------------------
------------------------------------------------------------------------
Loss (earnings) per share
Continuing operations $0.26 $0.10
Discontinued operations $0.11 $(0.02)
------------------------------------------------------------------------
Net Loss $0.37 $0.08
------------------------------------------------------------------------
------------------------------------------------------------------------
Weighted Average number of shares
outstanding 19,036,659 15,334,907
------------------------------------------------------------------------
------------------------------------------------------------------------
INFOWAVE SOFTWARE, INC.
Condensed Statements of Cash Flows
(expressed in U.S. dollars)
------------------------------------------------------------------------
------------------------------------------------------------------------
Six months ended
June 30, 2000 June 30, 1999
(Unaudited) (Unaudited)
------------------------------------------------------------------------
Net cash provided by (used in)
continuing operations ($3,875,760) ($589,516)
Net cash provided by (used in)
discontinued operations (1,485,182) 391,369
------------------------------------------------------------------------
Total cash flows provided by
(used in) operations (5,360,942) (198,147)
Cash flows from investing activities:
Purchase of short term investments (6,661,801) -
Purchase of capital assets (1,852,014) (223,720)
------------------------------------------------------------------------
(8,513,815) (223,720)
Cash flows from financing activities:
Issuance of shares for cash,
net of issue costs 2,487,848 248,599
Issuance of warrants for cash,
net of issue costs 19,027,038 2,875,870
------------------------------------------------------------------------
21,514,886 3,124,469
Foreign exchange gain (loss) on cash
and cash equivalents held in a
foreign currency (95,711) 117,748
------------------------------------------------------------------------
Increase in cash and cash equivalents 7,544,418 2,820,350
Cash and cash equivalents, beginning
of period 4,359,090 1,047,319
------------------------------------------------------------------------
Cash and cash equivalents, end
of period $11,903,508 $3,867,669
------------------------------------------------------------------------
------------------------------------------------------------------------
Supplemental information:
Shares issued for share
subscription receivable $537,666 $-
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