TouchStone Software Corp. Reports Financial Results for Third Quarter 2000
NORTH ANDOVER, Mass., Nov 7, 2000 (BUSINESS WIRE) -- TouchStone Software Corp. (OTCBB: TSSW chart, msgs) Tuesday reported its financial results for the third quarter and nine months ended Sept. 30, 2000.
For the three months ended Sept. 30, 2000, the company reported net sales of $838,492, down from $1,569,204, or a 47 percent decrease from the same period last year. Net loss for the three months ended Sept. 30, 2000, was $232,999, down from $869,737 from the same period last year, representing a 73 percent improvement in net loss.
For the three months ended Sept. 30, 2000, the net loss per basic share decreased to $0.02, compared with a loss of $0.09 per share for the same period last year, representing an 80 percent improvement in net loss.
For the nine months ended Sept. 30, 2000, the company reported net sales of $3,511,856, compared with $4,713,835 for the same period last year, representing a 26 percent decrease in net sales. "The overall decrease in sales is mainly attributable to the fact that we removed ourselves from the competitive retail industry during 2000," said Pierre A. Narath, chairman, president and CEO.
For the nine months ended Sept. 30, 2000, net loss was $1,969,388, or $0.17 per basic share, compared with $2,651,215, or $0.31 per share for the same period last year, representing a 25 percent improvement in net loss.
"For the first time in the history of the company, the third quarter reflected bottom-line improvements in all categories of the business," said Narath.
The company completed the third quarter by effectively completing the sale of the assets and intellectual property relating to the company's CheckIt line of retail software products known as CheckIt, FastMove (including Clean & Zip), WinCheckIt and CheckIt Net Optimizer.
The assets were sold to Smith Micro Software Inc. ("Smith Micro") (Nasdaq: SMSI chart, msgs) of Aliso Viejo, Calif. In the sale, the company received cash in the amount of $25,000 and 108,000 shares of Smith Micro common stock. The Smith Micro shares were issued to the company in a sale exempt from registration under Section 3(a)(10) of the Securities Act of 1933. Accordingly, such shares are not subject to restrictions on resale by the company.
"We continue to realign the overall business model which we began implementing almost one year ago," said Narath. "This sale is a continuation of the company's two-pronged business focus through its eSupport.com subsidiary on (i) direct and OEM sales of software products and services (BIOS upgrades, CardWare and engineering services) and (ii) investments in technology companies."
About TouchStone
TouchStone Software ("TouchStone" or the "company") designs, develops, markets and supports a line of computer problem-solving products that simplify personal computer installation, support and maintenance. TouchStone operates from one location in the United States.
The company markets its products, domestically and internationally through software distributors and directly to original equipment manufacturers and end users, primarily located in the United States and Canada.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in the forward-looking statements as a result of various factors including the ability of the company to successfully commercialize its new technologies, as well as risk factors set forth under "Factors Affecting Future Operating Results" in the company's annual report on Form 10-K and such other risks detailed from time to time in the company's reports filed with the Securities and Exchange Commission. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Investors are cautioned that forward-looking statements are inherently uncertain. These forward-looking statements represent the best judgment of the company as on the date of this news release, and the company cautions readers not to place undue reliance on such statements. Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties including, without limitation, risks associated with fluctuations in the company's operating results, volume and timing of orders received, changes in the mix of products sold, competitive pricing pressure, the company's ability to meet or renegotiate customer demands, the ability to anticipate changes in the market, the company's ability to finance its operations on terms that are acceptable, the company's ability to attract and retain qualified personnel including the company's management, changes in the global economy, changes in regulatory processes, the dependence on certain key customers, the availability and timing of funding for the company's current products and the development of future products. TouchStone assumes no obligation to update the information included in this news release.
TouchStone Software Corp.
Condensed Consolidated Balance Sheet
Sept. 30, 2000
(unaudited)
Assets
Cash and marketable securities $ 1,365,380
Investments, other 1,836,924
Accounts receivable, net 304,600
Property and equipment, net 72,477
Goodwill and other intangibles, net 1,632,818
Other assets 673,590
Total assets $ 5,885,789
Liabilities and Stockholders' Investment
Current liabilities:
Accounts payable 353,883
Accrued expenses 418,611
Deferred revenue 222,925
Other liabilities 589,557
Stockholders' equity 4,300,813
Total liabilities and Stockholders' Equity $ 5,885,789
TouchStone Software Corp.
CONSOLIDATED INCOME STATEMENTS
(unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
Revenues:
Product sales $ 775,770 $ 1,569,204 $ 3,338,877 $ 4,713,835
Royalty income 62,722 - 172,979 -
Net revenues 838,492 1,569,204 3,511,856 4,713,835
Cost of revenues 128,425 213,228 557,223 689,742
Gross profit 710,067 1,355,976 2,954,633 4,024,093
Operating expenses:
Sales, general and
administrative 674,057 1,512,459 2,787,360 3,711,460
Research and
development 278,815 526,141 1,076,328 1,105,288
Amortization of
goodwill and
acquired intangible
assets 433,731 633,732 1,434,523 1,478,698
Merger and
restructuring
charges, net (61,520) - (61,520) 1,174,730
Total operating
expenses 1,325,083 2,672,332 5,236,691 7,470,176
Loss from operations (615,016) (1,316,356) (2,282,058) (3,446,083)
Gain on sale of product
line 319,872 - 319,872 -
Other income, net (9,655) 86,119 173,766 176,868
Loss before provision
for (benefit) from
income taxes (304,799) (1,230,237) (1,788,420) (3,269,215)
Provision for (benefit)
from income taxes (72,100) (360,500) 142,968 (618,000)
Net loss before
minority interest (232,699) (869,737) (1,931,388) (2,651,215)
Minority interest (300) - (38,000) -
Net loss $(232,999) $ (869,737) $(1,969,388)$(2,651,215)
Basic and diluted
loss per share $ (0.02) $ (0.09) $ (0.17)$ (0.31)
Basic weighted average
shares outstanding 11,440,060 9,663,744 11,440,060 8,552,306
Contact:
TouchStone Software Corp., North Andover
Chris Gaudette, 978/686-6468
E-mail: chris_gaudette@unicore.com
or
Market Pathways
Shannon T. Squyres (media & investor relations)
949/955-1860
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