Friday October 24 9:00 AM EDT
Company Press Release
WavePhore Reports Continued 1997 Revenue Growth
PHOENIX, Oct. 24 /PRNewswire/ -- WavePhore, Inc (Nasdaq:WAVO), today reported third quarter 1997 revenues of
$6.5 million compared with $5.2 million for the comparable year earlier period, a 25% increase. ''We are pleased with our
continued revenue growth in both our Networks and Newscast divisions,'' stated Ken Swenson, Chief Financial Officer of
WavePhore. ''In particular, our Newscast division revenue for the third quarter of 1997 increased 135% over the comparable
year earlier period and increased 57% over the second quarter of 1997. There are a total of 158,000 Newscast subscribers at
September 30, 1997, an increase of 58,000 during the last three months.''
The net loss, was $2.9 million, or $0.18 per share, excluding preferred stock dividends, for the third quarter of 1997
compared to a net loss of $1.9 million, or $0.13 per share, excluding preferred stock dividends, for the same period in 1996.
The third quarter of 1997 results are an improvement over the net loss of $3.8 million, or $0.23 per share, excluding preferred
stock dividends, for the second quarter of 1997.
For the nine months ended September 30, 1997, WavePhore reported revenue of $15.7 million compared to $13.8 million for
the same period in 1996. The loss excluding the preferred stock dividends and the 1997 second quarter one-time acquisition
charge of $6 million, or $0.37 per share, was $10.2 million, or $0.62 per share for the nine months ended September 30,
1997 compared to a net loss of $6.9 million, or $0.54 per share, excluding preferred stock dividends, for the same period in
1996.
The Company's operating expenses for the third quarter and first nine months of 1997 include investments made in anticipation
of the launch of the WaveTop(TM) broadcast PC Service to home PC users. These investments increased net loss per share
$1.0 million and $3.7 million for the third quarter and first nine-months of 1997, respectively. The net loss per share excluding
the WaveTop investments, one-time acquisition charge in the second quarter of 1997 and preferred stock dividends, was
$0.12 for the third quarter of 1997 and $0.39 for the First nine months of 1997.
''We are pleased with the strong positive momentum of the Networks and Newscast divisions,'' stated David Deeds,
Chairman, President and CEO of WavePhore. ''Our Networks division continues to add new international clients as well as
respond to many international opportunities. The Newscast division continues to exceed expectations with substantial
subscriber growth.''
''Major milestones for WavePhore were the three agreements recently signed with Microsoft. The first two agreements placed
the WaveTop Gold Channel and the Newscast Premier Business Channel on Microsoft's IE 4.0 Active Desktop. The third
was an agreement to include WaveTop software and service within the Microsoft Windows 98 operating system. This
agreement will allow us to deliver the WaveTop service with its diverse variety of entertainment and information content to the
millions of future users of Windows 98 who have TV tuners installed in their PC's.''
About WavePhore
WavePhore, Inc., the industry leader in data broadcasting, is comprised of three divisions: WavePhore Newscast, WavePhore
Networks and WaveTop(TM). WavePhore Newscast delivers web-based and intranet enterprise solutions for customized
business intelligence to more than 158,000 corporate knowledge workers across the U.S., Canada and Europe providing a
strategic information advantage. WavePhore Networks provides flexible, high speed data delivery for information providers to
more than 60,000 sites worldwide. WaveTop will utilize push technology to deliver information and entertainment to broadcast
ready home PCs over the unused portion of TV signals. Additional information on WavePhore is available via the Internet at
www.wavephore.com, www.newscast.com and www.wavetop.com. Based in Phoenix, Arizona, WavePhore, Inc. is a.
publicly traded company (Nasdaq:WAVO - news).
Certain of the above statements regarding WavePhore constitute forward- looking statements which may involve risks and
uncertainties. Actual results could differ materially from such forward-looking statements as a result of a variety of factors,
including, but not limited to, technology changes, competitive developments, industry and market acceptance of new products
and services, and risk factors listed from time to time in WavePhore's SEC filings.
WavePhore, Inc.
Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
1997 1996 1997 1996
Revenues:
Networks services
and equipment $5,574 $4,788 $13,726 $12,767
Newscast services 955 406 2,011 1,075
Total Revenues 6,529 5,194 15,737 13,842
Cost of Revenues 3,470 3,140 8,607 8,441
Gross margin 3,059 2,054 7,130 5,401
Operating expenses:
Research and development 2,024 990 5,552 2,911
Sales and marketing 2,363 1,385 7,002 4,301
General and
administrative 1,211 1,232 3,527 4,015
Amortization 557 482 1,576 1,449
Charge for purchased
research and
development -- -- 6,000 --
6,155 4,089 23,657 12,676
Loss from operations (3,096) (2,035) (16,527) (7,275)
Other (income) expense:
Interest expense 48 33 140 133
Interest income (226) (165) (489) (535)
Other 3 (3) 16 (6)
(175) (135) (333) (408)
Net loss $(2,921) $(1,900) $(16,194) $(6,867)
Less: Preferred
stock dividends (537) (346) (1,109) (1,398)
Net loss after
preferred stock
dividends $(3,458) $(2,246) $(17,303) $(8,265)
Net loss per
common share $(0.18) $(0.13) $(0.99) $(0.54)
Net loss per common
share after preferred
stock dividends $(0.21) $(0.16) $(1.05) $(0.65)
Number of shares
used in per share
calculation 16,648,873 14,280,995 16,420,288 12,676,758
WavePhore, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
1997 1996
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $21,010 $11,793
Accounts receivable 7,275 3,881
Inventories 3,673 3,343
Other current assets 1,435 1,829
Total Current Assets 33,393 20,846
Property and equipment, net 4,219 2,281
Intangible assets of
businesses acquired, net 18,424 16,570
Other assets 1,418 1,865
$57,454 $41,562
Liabilities and
Stockholders' Equity
Current Liabilities:
Accounts payable $1,720 $2,126
Other accrued expenses 2,946 715
Deferred revenue 1,410 --
Payable related to
business acquisition 6,000 --
Short term debt 1,637 2,258
Total Current Liabilities 13,713 5,099
Long-term liabilities 549 609
Stockholders' equity 43,192 35,854
Total liabilities and
stockholders' equity $57,454 $41,562
SOURCE WavePhore, Inc.
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