Here are some notes on the quarterly earnings:
First, 2Q '97 revenues were $722,000 compared to $727,000 for 1Q '97. Losses increased to $2,725,00 from $2,027,00 or $0.23 from $0.17 per share because everything within operating costs and expenses was higher (the number of shares outstanding remained almost the same). Roughly, product development, marketing and general administration each increased by $200,000 and cost of sales by $50,000.
Unfortunately I didn't have these numbers when the conference call was made. One prime question I should have asked was the breakdown of quaterly revenue by product or service. Todd Oseth, the President and CEO of Accent, spoke authoritatively again and said the company was really a new company from a year ago. Knowing the sources of revenue would either prove or disprove his point.
The conference was hosted by Ray Hutchison who is handling investor relations for Accent. Ray called me personally the day of the conference after I left a message with him. Ray said he represents a group that recently invested in Accent which he claimed was the reason the stock recently rose. Accent badly needs someone to drum up support for the company and increase its awareness in the investing community. Ray comes on a bit strong but I'm not going to complain if he can generate enthusiasm for the stock. Ray can be reached at 904-409-0200. Give him you fax number and I'm sure he send you out company and investor information.
Oseth made the following comments:
1) In 96, Accent moved on the internet hype and chose distribution channels in retail sales of a product that ultimately the layperson didn't need. The company is now taking technologies into a new area where the marketplace will respond to its products.
2) Oseth became involved with Accent while working for Sony, as a personal investment, because there was no automated way to transfer English in Japanese. Later asked to takeover and focus Accent and has done so on new language solutions for software developers, creating an automated process for companies around the world to use software in multiple languages.
3) In 2Q started with old software, bringing on the GDK [the Global Development Kit] and have totally transformed the product line and customer base. Revenues were essentially flat from 1Q but the software is far more profitable, e.g. it has larger gross margins. Accent is a new company because of its direction, products and companies it sells to.
4) For the remainder of the year, there is the potential the company will break even by the end of the year or early next year. Customers are fortune 100 companies and the rate of new companies using the software should increase.
5) The type of companies interested in GDK are large companies that previously had to globalize their software manually and smaller companies that are just beginning to go global. Accent plans on being a one stop service center for smaller companies who need assistance in globalization.
6) Additional Q2 costs were attributed to bringing on the U.S. organization and sales and marketing. Revenues were not higher because the product was only released at the end of Q2.
7) There are no plan for layoffs in the future; Oseth wants the company be more competitive.
8) Cost of sales increased in 2Q because still have older invetory that was sold and the cost of sales is high on that inventory.
9) The market for globalization and localization of software is $1-2 billion, mostly served by cottage software firms. Some additional toolkits and products within the GDK will be sold and brought to the market. AgentSoft will also be providing Webtamer and internet automation tools. Two near term products are Word Point -- point at a word and the definition comes up in another language -- and GDK will continue to grow in new computer languages. Live Agent Pro is in beta form.
10) Of the companies reviewing GDK , no negative feedback has been received. It's priced well $10 to 15,000.
11) The company's cash situation is tight but not a big problem. He's able to find money for the company and getting rid of the last year's baggage each quarter. The company recently had a $2,000,000 private placement which was deliberately kept small so as to not dilute investors' shares.
There were more comments. I'll continue them later. Time to get some sleep! |
