3 cents a share! (33% higher than estimates...)
Tuesday October 14 8:16 AM EDT
Company Press Release
The Network Connection Posts Profit in Third Quarter 1997; Record Revenues and First Profitable Quarter Since Going Public
ALPHARETTA, Ga., Oct. 14 /PRNewswire/ -- The Network Connection, Inc., (Nasdaq:TNCX), an industry leading developer and manufacturer of video and multimedia file-server technology, reported record revenues and positive net earnings for the fiscal third quarter ended September 30, 1997.
The Company reported net income of $108,792, or $0.03 per share, an increase of 92%, on revenues of $3.5 million for the quarter ended September 30, 1997. This compares to a loss of $312,670, or $0.10 per share, on revenues of $1.8 million for the same period of the prior year. The third quarter operating income was primarily the result of increased shipments for the South Korean Government School Program and initial shipments under its Fairlines program.
''Our third quarter results reflect the success realized from the initial implementation of previously announced long-term larger system programs with Fairlines ($10-$13 million over 18 months), the Department of Defense Breast Cancer Awareness ($10 million over 24 months), and increased shipments on the South Korean Government High School Program ($30 million over 24 months),'' commented Wil Riner, Chairman and CEO of The Network Connection, Inc.
For the nine months ended September 30, 1997, net revenues increased 78% to $6.9 million compared with $3.9 million in the same period of 1996. The Company reported a net loss of $1.1 million, or $0.28 per share, compared to a net loss of $1.5 million, or $0.55 per share, for the nine months ended September 30, 1996.
Mr. Riner continued, ''We are very pleased with the success achieved on our larger programs which has greatly enhanced our opportunities with other potential customers. The Fairlines program, with our AirView system, has contributed significantly toward advanced discussions with other airline operators and manufacturers. We are also proud to note that the Cheetah(R) video server is rapidly becoming the de facto standard for educational use in South Korean schools.''
The Network Connection, Inc. designs, manufactures and distributes computer networking products that provide digital video-on-demand, imaging, and multimedia applications in the markets for corporate skills training, education and travel/entertainment. The Company's Cheetah family of video server platforms enables the storage and delivery of up to 700 hours of digital video/audio data to 300 simultaneous users over local area networks.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release that are not descriptions of historical facts may be forward-looking statements that are subject to risks and uncertainties, including economic, competitive, and technological factors affecting the Company's operations, markets, products, services and prices, the failure to execute further definitive orders on favorable terms or at all for the programs identified above, as well as other specific factors discussed in the Company's filings with the Securities and Exchange Commission. These and other factors may cause actual results to differ materially from those anticipated.
THE NETWORK CONNECTION, INC.
Statements of Operations
(Unaudited)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30 September 30 September 30 September 30
1997 1996 1997 1996
Revenues $3,518,632 $1,830,312 $6,881,212 $3,862,108
Cost of revenues 2,342,072 1,255,773 4,498,138 2,681,481
Gross profit 1,176,560 574,539 2,383,074 1,180,627
Selling, general
and administrative 1,008,970 876,304 3,294,208 2,660,970
Research and
development 75,730 -- 162,674 --
Operating income
(loss) 91,860 (301,765) (1,073,808) (1,480,343)
Interest expense (7,422) (48,011) (37,400) (101,331)
Other, net 24,354 37,106 39,085 68,478
Net income (loss) $108,792 $(312,670) $(1,072,123) $(1,513,196)
Net income (loss)
per share $0.03 $(0.10) $(0.28) $(0.55)
Shares used in per
share calculation 4,242,520 2,982,043 3,786,704 2,763,435 |
