Tuesday August 12 7:30 AM EDT
Company Press Release
EduSoft Reports Record Earnings for the Second Quarter and Six Month Periods
Net Income for the Quarter Exceeds $1 Million
TEL AVIV, Israel--(BUSINESS WIRE)--Aug. 12, 1997--EduSoft Ltd. (NASDAQ:EDUSF) today announced record earnings for the second quarter and six months ended June 30, 1997.
Revenues for the second quarter of 1997 were $3,334,000, an increase of 59% from revenues of $2,097,000 in the second quarter of 1996. Company's revenues in the reported quarter were generated from Asia (37%), Europe (26%), North America (20%) and Latin America (15%).
Revenues for the first six months ended June 30, 1997 increased 66% to $6,343,000 from revenues of $3,818,000 in the same 1996 period. The increase in revenues is attributable to sales of approximately $3.4 million of English learning products and $1.7 million of Early Childhood products. Revenues in the first six months of 1997 were mostly generated from Asia (27%), Latin America (27%), Europe (24%) and North America (20%).
Gross profit for the second 1997 quarter increased 93% to a record $2,702,000, 81% of revenues, from a gross profit of $1,399,000, or 67% of revenues, in the same 1996 quarter. Gross profit for the first six months of 1997 increased 106% to a record $5,029,000, 79% of revenues, from $2,441,000, 64% of revenues, in the same 1996 period. Selling, general and administrative expenses increased only 3% to $1,179,000 in the second quarter of 1997 from $1,144,000 although revenues increased 59%. As percentage of revenues, selling, general and administrative expenses were 35% in the 1997 quarter as compared to 55% in the 1996 quarter. Selling, general and administrative expenses increased by only 33% in the first six months of 1997 to $2,641,000, 42% of revenues, from $1,985,000, 52% of revenues, in the same 1996 period although revenues increased 66%. Operating income in the second quarter of 1997 reached $1,196,000, compared with an operating loss of $81,000 in the comparable 1996 quarter. For the first six months of 1997, EduSoft reported operating income of $1,710,000, compared with an operating loss of $180,000 in the first six months of 1996.
For the second quarter of 1997, EduSoft reported record net income of $1,008,000, or 21 cents per share, compared with net income of $12,000 in the comparable 1996 quarter. Net income for the first six months of 1997 reached a record $1,468,000, or 31 cents per share, compared with net income of $64,000, or 1 cent per share, in the first six months of 1996.
Commenting on the financial results, Menachem Hasfari, President and Chief Executive Officer of EduSoft, stated: ``We are very pleased with the significant growth in revenue and net income in both the second quarter and the first six months of 1997. Our net income in the first six months of 1997 has already exceeded by 28% the net income for the full year of 1996. In the last twelve months, our revenues amounted to $12,876,000 and net income to $2,551,000.
``Our efforts in the Latin American and the Asian markets have come to fruition, each representing 27% of EduSoft's revenues in the first six months of 1997. As reported during the quarter, we've made our first product introduction into the Japanese market with a strong partner, Sumitomo Metal Industries, where we expect to increase our activities in the promising consumer segment of the market. We derive special encouragement from the fact that our new line of MultiKid series has taken off successfully, contributing over $1 million to the revenues of the first six months of 1997.
``The delays we've suffered in the Latin American markets during the last two years seem to be over, as local economies are slowly overcoming their difficulties. Our ambitious new development effort of multimedia ESL for young children is underway and we hope to start releasing the first components of the series to the market in mid 1998. As can be seen from our financial results, we've managed to tightly control our expenses and overhead. We believe that these operating efficiencies, coupled with our accelerated marketing efforts in various parts of the world and our investments in development of new products, provide EduSoft with a solid base for continuous growth.
``As reported last week, EduSoft's parent company, Degem Systems Ltd., has announced that it is seeking a strategic partner to whom it will offer a portion of its holdings in EduSoft in order to enable EduSoft to realize its full potential. Negotiations between EduSoft's parent and potential partners have begun.''
Statements contained in this press release, which are not historical facts, are forward-looking statements, as that is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to a number of risks and uncertainties, including competitive and technological developments, as well as availability of human and financial resources, which could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of EduSoft.
EduSoft develops, publishes and markets multimedia educational software, as well as integrated educational systems. EduSoft specializes in four product lines - English learning, Early Childhood, science and technological training. EduSoft's products are used in over 35 countries by schools, governments, corporations and homes.
Obtain more information about EduSoft by visiting our Web site at www.edusf.com in the USA, or at www.edusoft.co.il elsewhere.
Consolidated Statement of Income
(Unaudited)
Three months ended June 30, Six months ended June 30,
1997 1996 1997 1996
(United States Dollars)
Revenues $ 3,334,000 $ 2,097,000 $ 6,343,000 $ 3,818,000
Cost of revenues 632,000 698,000 1,314,000 1,377,000
Gross profit 2,702,000 1,399,000 5,029,000 2,441,000
Research & development
costs:
Total costs 327,000 381,000 678,000 841,000
Capitalization of
development costs -- (45,000) -- (205,000)
Research & development, net 327,000 336,000 678,000 636,000
-------------------------------------------------
2,375,000 1,063,000 4,351,000 1,805,000
Selling expenses 954,000 962,000 2,205,000 1,600,000
General and administrative
expenses 225,000 182,000 436,000 385,000
Operating income 1,196,000 (81,000) 1,710,000 (180,000)
Financial income 12,000 74,000 84,000 232,000
Income before taxes
on income 1,208,000 (7,000) 1,794,000 52,000
Taxes on income 200,000 (15,000) 326,000 --
------------------------------------------------
1,008,000 8,000 1,468,000 52,000
Equity in income (losses)
of subsidiary -- 4,000 -- 12,000
Net income 1,008,000 12,000 1,468,000 64,000
Earnings per share 0.21 0.00 0.31 0.01
Weighted average number of
shares outstanding 4,780,000 4,889,000 4,780,000 4,889,000
-0-
Consolidated Balance Sheets
June 30, 1997 Dec. 31, 1996
(Unaudited) (audited)
United States Dollars
Assets
Current assets
Cash and cash equivalents $ 1,374,000 $ 3,187,000
Marketable securities 1,971,000 2,039,000
Accounts receivable - trade:
Related parties - parent company
and its subsidiaries 4,873,000 3,403,000
Others 3,908,000 3,953,000
Other accounts receivable and
prepaid expenses 426,000 610,000
Inventories 302,000 225,000
Total current assets 12,854,000 13,417,000
Long term trade receivables 1,468,000 1,038,000
Loan to related party - parent company 3,200,000 2,459,000
Property plant and equipment 4,161,000 3,279,000
Software production costs, net 1,656,000 1,988,000
Other assets net 1,036,000 1,104,000
---------------------------------
24,375,000 23,285,000
Liabilities and shareholders' equity
Current liabilities
Short term bank debt 6,000 --
Current portion of long-term payables 78,000 182,000
Trade payables 399,000 667,000
Accrued expenses and other liabilities 1,054,000 1,174,000
Total current liabilities 1,537,000 2,023,000
Long term payables 871,000 840,000
Accrued severance pay 132,000 91,000
Shareholders' equity
Share capital 193,000 193,000
Additional paid-in capital 12,945,000 12,909,000
Retained earnings 8,697,000 7,229,000
Total shareholders' equity 21,835,000 20,331,000
--------------------------------
24,375,000 23,285,000
------------------------------------------------------------------------
Contact:
EduSoft Ltd., DeMonte Associates
Menachem Hasfari, President Cynthia DeMonte
Tel Aviv, Israel New York, NY, USA
Tel - +972-3-648-2131 Tel - (212)-473-3700
Fax - +972-3-647-8095 Fax - (212)-475-1680
E-mail - Tuesday August 12 7:30 AM EDT
Company Press Release
EduSoft Reports Record Earnings for the Second Quarter and Six Month Periods
Net Income for the Quarter Exceeds $1 Million
TEL AVIV, Israel--(BUSINESS WIRE)--Aug. 12, 1997--EduSoft Ltd. (NASDAQ:EDUSF) today announced record earnings for the second quarter and six months ended June 30, 1997.
Revenues for the second quarter of 1997 were $3,334,000, an increase of 59% from revenues of $2,097,000 in the second quarter of 1996. Company's revenues in the reported quarter were generated from Asia (37%), Europe (26%), North America (20%) and Latin America (15%).
Revenues for the first six months ended June 30, 1997 increased 66% to $6,343,000 from revenues of $3,818,000 in the same 1996 period. The increase in revenues is attributable to sales of approximately $3.4 million of English learning products and $1.7 million of Early Childhood products. Revenues in the first six months of 1997 were mostly generated from Asia (27%), Latin America (27%), Europe (24%) and North America (20%).
Gross profit for the second 1997 quarter increased 93% to a record $2,702,000, 81% of revenues, from a gross profit of $1,399,000, or 67% of revenues, in the same 1996 quarter. Gross profit for the first six months of 1997 increased 106% to a record $5,029,000, 79% of revenues, from $2,441,000, 64% of revenues, in the same 1996 period. Selling, general and administrative expenses increased only 3% to $1,179,000 in the second quarter of 1997 from $1,144,000 although revenues increased 59%. As percentage of revenues, selling, general and administrative expenses were 35% in the 1997 quarter as compared to 55% in the 1996 quarter. Selling, general and administrative expenses increased by only 33% in the first six months of 1997 to $2,641,000, 42% of revenues, from $1,985,000, 52% of revenues, in the same 1996 period although revenues increased 66%. Operating income in the second quarter of 1997 reached $1,196,000, compared with an operating loss of $81,000 in the comparable 1996 quarter. For the first six months of 1997, EduSoft reported operating income of $1,710,000, compared with an operating loss of $180,000 in the first six months of 1996.
For the second quarter of 1997, EduSoft reported record net income of $1,008,000, or 21 cents per share, compared with net income of $12,000 in the comparable 1996 quarter. Net income for the first six months of 1997 reached a record $1,468,000, or 31 cents per share, compared with net income of $64,000, or 1 cent per share, in the first six months of 1996.
Commenting on the financial results, Menachem Hasfari, President and Chief Executive Officer of EduSoft, stated: ``We are very pleased with the significant growth in revenue and net income in both the second quarter and the first six months of 1997. Our net income in the first six months of 1997 has already exceeded by 28% the net income for the full year of 1996. In the last twelve months, our revenues amounted to $12,876,000 and net income to $2,551,000.
``Our efforts in the Latin American and the Asian markets have come to fruition, each representing 27% of EduSoft's revenues in the first six months of 1997. As reported during the quarter, we've made our first product introduction into the Japanese market with a strong partner, Sumitomo Metal Industries, where we expect to increase our activities in the promising consumer segment of the market. We derive special encouragement from the fact that our new line of MultiKid series has taken off successfully, contributing over $1 million to the revenues of the first six months of 1997.
``The delays we've suffered in the Latin American markets during the last two years seem to be over, as local economies are slowly overcoming their difficulties. Our ambitious new development effort of multimedia ESL for young children is underway and we hope to start releasing the first components of the series to the market in mid 1998. As can be seen from our financial results, we've managed to tightly control our expenses and overhead. We believe that these operating efficiencies, coupled with our accelerated marketing efforts in various parts of the world and our investments in development of new products, provide EduSoft with a solid base for continuous growth.
``As reported last week, EduSoft's parent company, Degem Systems Ltd., has announced that it is seeking a strategic partner to whom it will offer a portion of its holdings in EduSoft in order to enable EduSoft to realize its full potential. Negotiations between EduSoft's parent and potential partners have begun.''
Statements contained in this press release, which are not historical facts, are forward-looking statements, as that is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to a number of risks and uncertainties, including competitive and technological developments, as well as availability of human and financial resources, which could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of EduSoft.
EduSoft develops, publishes and markets multimedia educational software, as well as integrated educational systems. EduSoft specializes in four product lines - English learning, Early Childhood, science and technological training. EduSoft's products are used in over 35 countries by schools, governments, corporations and homes.
Obtain more information about EduSoft by visiting our Web site at www.edusf.com in the USA, or at www.edusoft.co.il elsewhere.
Consolidated Statement of Income
(Unaudited)
Three months ended June 30, Six months ended June 30,
1997 1996 1997 1996
(United States Dollars)
Revenues $ 3,334,000 $ 2,097,000 $ 6,343,000 $ 3,818,000
Cost of revenues 632,000 698,000 1,314,000 1,377,000
Gross profit 2,702,000 1,399,000 5,029,000 2,441,000
Research & development
costs:
Total costs 327,000 381,000 678,000 841,000
Capitalization of
development costs -- (45,000) -- (205,000)
Research & development, net 327,000 336,000 678,000 636,000
-------------------------------------------------
2,375,000 1,063,000 4,351,000 1,805,000
Selling expenses 954,000 962,000 2,205,000 1,600,000
General and administrative
expenses 225,000 182,000 436,000 385,000
Operating income 1,196,000 (81,000) 1,710,000 (180,000)
Financial income 12,000 74,000 84,000 232,000
Income before taxes
on income 1,208,000 (7,000) 1,794,000 52,000
Taxes on income 200,000 (15,000) 326,000 --
------------------------------------------------
1,008,000 8,000 1,468,000 52,000
Equity in income (losses)
of subsidiary -- 4,000 -- 12,000
Net income 1,008,000 12,000 1,468,000 64,000
Earnings per share 0.21 0.00 0.31 0.01
Weighted average number of
shares outstanding 4,780,000 4,889,000 4,780,000 4,889,000
-0-
Consolidated Balance Sheets
June 30, 1997 Dec. 31, 1996
(Unaudited) (audited)
United States Dollars
Assets
Current assets
Cash and cash equivalents $ 1,374,000 $ 3,187,000
Marketable securities 1,971,000 2,039,000
Accounts receivable - trade:
Related parties - parent company
and its subsidiaries 4,873,000 3,403,000
Others 3,908,000 3,953,000
Other accounts receivable and
prepaid expenses 426,000 610,000
Inventories 302,000 225,000
Total current assets 12,854,000 13,417,000
Long term trade receivables 1,468,000 1,038,000
Loan to related party - parent company 3,200,000 2,459,000
Property plant and equipment 4,161,000 3,279,000
Software production costs, net 1,656,000 1,988,000
Other assets net 1,036,000 1,104,000
---------------------------------
24,375,000 23,285,000
Liabilities and shareholders' equity
Current liabilities
Short term bank debt 6,000 --
Current portion of long-term payables 78,000 182,000
Trade payables 399,000 667,000
Accrued expenses and other liabilities 1,054,000 1,174,000
Total current liabilities 1,537,000 2,023,000
Long term payables 871,000 840,000
Accrued severance pay 132,000 91,000
Shareholders' equity
Share capital 193,000 193,000
Additional paid-in capital 12,945,000 12,909,000
Retained earnings 8,697,000 7,229,000
Total shareholders' equity 21,835,000 20,331,000
--------------------------------
24,375,000 23,285,000
------------------------------------------------------------------------
Contact:
EduSoft Ltd., DeMonte Associates
Menachem Hasfari, President Cynthia DeMonte
Tel Aviv, Israel New York, NY, USA
Tel - +972-3-648-2131 Tel - (212)-473-3700
Fax - +972-3-647-8095 Fax - (212)-475-1680
E-mail - |
