Company Press Release
Source: Quarterdeck Corporation
Quarterdeck Announces Third Quarter Results - Company Continues to Improve Net Income -
MARINA DEL REY, Calif., July 24 /PRNewswire/ -- Quarterdeck Corporation (Nasdaq:QDEK) announced operating results for the third fiscal quarter ended June 30, 1997. The Company reported net revenues of $21.1 million, which is an increase of 7% compared to $19.6 million reported for the third quarter of 1996. Net income for the quarter was $1.1 million, or $0.02 per share, compared to a net loss of $23.3 million, or $0.67 per share, as compared to the third quarter of 1996.
For the nine month period ended June 30, 1997, revenue decreased 40% to $68.5 million compared to $113.4 million reported for the first nine months of fiscal 1996. Net income for the nine month period was $0.2 million, or $0.01 per share, compared to net losses of $20.2 million, or $0.58 per share, reported for the nine months of fiscal 1996.
The Company posted a $0.6 million increase in cash and cash equivalents as compared to the preceding quarter, while also reducing debt by $1.5 million. Working capital increased $2.7 million to $1.8 million. Cash and cash equivalents aggregated $10.9 million as of June 30, 1997. The improvements in the Company's balance sheet reflect solid sell through of Quarterdeck's core products. The cash increase is also indicative of low channel inventory levels reflecting the management of existing products nearing the end of their lifecycle in preparation for upcoming new product releases and upgrades.
Compared to the quarter ended March 31, 1997, net income increased $1.9 million on net revenues that were lower by approximately $2 million. The net income improvement reflected continued gains in operational efficiency and product focus, while the net revenue decline reflected seasonal factors, a decline in StarNine Macintosh revenues, and fewer direct marketing campaigns.
``I am encouraged by Quarterdeck's continuing improvements in profitability and cash flow,'' said Curtis Hessler, president and CEO of Quarterdeck Corporation. ``These improvements, and the quarter's successful launches of Procomm Plus 32 and QEMM 97, show we have in place the operating foundations for an aggressive schedule of new product activity over the remainder of this year and into 1998.''
Growth Strategy
Several new products, to be released over the remainder of calendar 1997, are expected to provide fiscal 1998 revenue growth and deliver on Quarterdeck's product strategy. This strategy is designed to provide a broad, integrated suite of desktop/network utilities that will reduce the total cost of personal computer ownership by enabling users to automatically detect and solve problems in hardware and software configuration. In addition to the new product releases, the Company expects to further focus efforts on this product strategy by substantially completing its restructuring program, including divesting certain non-core assets.
Product Highlights
CleanSweep 3.0 listed as the #5 best-selling business software for Windows, Windows 95, and Windows NT in the PC Data U.S. Retail report (May 1997) CleanSweep 3.0 named best business software in Japan's Nikkei Business Magazine (July 1997) CleanSweep 3.0 listed in Home PC's Top 100 software programs (July 1997) WebCompass 2.0 won NetGuide's Editor's Choice award (May 1997) WebCompass 2.0 named ``Best of LANTimes'' (May 1997)
ABOUT QUARTERDECK
Quarterdeck Corporation develops, markets, and supports software that enhances the performance, user productivity and cost-effectiveness of personal computing in standalone and networked environments. Current products address diagnosis and resolution of software and hardware conflicts, PC based communications and Internet connectivity, storage and hard disk management, system performance, and Internet/intranet information search and content management. The Company provides its software solutions worldwide to individual, business, and government/education users through retail distribution, resellers, direct marketing operations, and Internet downloads.
Founded in 1983 and traded on Nasdaq under the symbol QDEK, Quarterdeck's worldwide headquarters are in Marina del Rey, California, with Dublin, Ireland, serving as its European headquarters and Sydney as the Australian headquarters. Further information may be obtained by calling 800-683-6696 toll-free or 813-523-9700, by accessing Quarterdeck's Web site at quarterdeck.com, or by sending e-mail requests to info@quarterdeck.com.
This press release contains forward-looking statements which are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals and similar expressions such as ``designed to'' and ``expected to,'' reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, successful integration of acquisitions and divestitures of non-core assets, the ability to secure additional sources of financing, the ability to reduce operating expenses and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. The Company undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.
Quarterdeck, CleanSweep, Procomm, Procomm Plus, QEMM and WebCompass are registered trademarks of Quarterdeck Corporation or its subsidiaries. All other brand and product names are trademarks or registered trademarks of their respective holders.
QUARTERDECK CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
June 30, June 30,
1997 1996 1997 1996
Gross revenues $24,796 $27,945 $79,402 $132,922
Provision for returns 3,740 8,338 10,864 19,563
Net revenues 21,056 19,607 68,538 113,359
Cost of revenues 5,153 12,519 17,505 38,331
Gross margin 15,903 7,088 51,033 75,028
Operating expenses:
Research and development3,760 5,410 11,480 15,951
Sales and marketing 7,169 18,993 23,015 52,496
General and
administrative 3,689 10,200 13,403 23,302
Acquisition,
restructuring and other
one-time charges -- 1,660 -- 9,131
Total operating expenses14,618 36,263 47,898 100,880
Operating income 1,285 (29,175) 3,135 (25,852)
Interest income (expense),
net (498) (130) (1,491) 278
Other income (expense) 266 1,435 (1,400) 1,485
Income/(loss) before
income taxes 1,053 (27,870) 244 (24,089)
Provision for income taxes -- (4,553) 3 (3,938)
Net Income/(loss) $1,053 $(23,317) $241 $(20,151)
Net income/(loss) per
share $0.02 $(0.67) $0.01 $(0.58)
Shares used for per share
calculations (a) 47,130 35,047 47,644 34,921
(a) 50,000 shares of Series B Preferred Stock were converted into 1,910,000 shares of common stock during the quarter ended June 30, 1997. In addition to the weighted average shares outstanding, the shares of common stock used for the 1997 per share calculations primarily include the dilutive effect of (i) 150,000 outstanding shares of Series B Preferred Stock which is convertible into 5,513,000 shares of common stock and, (ii) 1,422,000 shares of common stock issuable in August 1997 in conjunction with the acquisition of Limbex Corporation in August 1996.
QUARTERDECK CORPORATION
COMPARATIVE BALANCE SHEET
(Amounts in thousands)
June 30, September 30,
1997 1996
(Unaudited)
Assets:
Cash & cash equivalents $10,883 $25,254
Accounts receivable, net 9,411 9,265
Inventory, net 1,953 2,151
Other current assets 5,191 5,594
Total current assets 27,438 42,564
Property, plant & equipment, net 21,087 21,252
Capitalized software, net 2,543 3,448
Other noncurrent assets 4,940 9,517
Total assets $56,008 $76,781
Liabilities:
Current portion - capital lease obligations $16 $111
Trade accounts payable 4,497 10,685
Loan payable to bank 5,480 8,280
Accrued expenses 13,872 17,232
Accrued acquisition & restructuring expense 1,731 10,940
Total current liabilities 25,596 47,248
Convertible debentures 25,000 25,000
Long term obligations, less current portion 67 108
Total liabilities 50,663 72,356
Stockholders equity:
Preferred stock 15,000 20,000
Common stock 40 38
Treasury stock (559) (559)
Notes receivable on sale of stock (18) (18)
Additional paid in capital 70,620 64,819
Foreign currency translation adjustment (428) (468)
Unrealized gain (loss) on marketable securities 216 379
Accumulated deficit (79,526) (79,766)
Total stockholders equity 5,345 4,425
Total liabilities & stockholders equity $56,008 $76,781
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SOURCE: Quarterdeck Corporation
Contact: Frank Greico, 310-309-4232, or fgreico@quarterdeck.com, or Ana Thorne, 310-309-3767, or athorne@quarterdeck.com, both of Quarterdeck Corporation; or Michaelle Burstin of Financial Relations Board, 310-442-0599, or mab@la.frbd.com |
