Monday November 3 4:02 PM EST
Company Press Release
MEMCO Announces Third Quarter 1997 Results
Revenues Increase 92%
Net Income Up 192%
TEL AVIV, Israel--(BUSINESS WIRE)--Nov. 3, 1997--MEMCO Software Ltd.
(Nasdaq:MEMCF), a leading provider of information security software solutions, today announced
unaudited financial results for the third quarter and nine months ended September 30, 1997.
Revenues for the third quarter of 1997 increased by 92% to $8.08 million from $4.20 million for the
same period one year ago. Operating income for the third quarter of 1997 was $1.79 million, an
increase of 129% versus $0.78 million for the third quarter of 1996. Net income reached $2.51
million, or $0.15 per share, an increase of 192% over net income of $0.86 million, or $0.07 per
share, in the third quarter of 1996.
Revenues for the nine-month period ended September 30, 1997 were $18.46 million, a 102%
increase compared with $9.14 million for the same period one year ago. Operating income for the
nine months increased by 199% to $3.77 million from $1.26 million for the first nine months of 1996.
Net income for the nine-month period ended September 30, 1997 increased by 228% to $5.41
million, or $0.33 per share, from $1.65 million, or $0.13 per share, in the same period a year ago.
Commenting on the results, MEMCO's Chairman and CEO Israel Mazin said, ''The adoption rate
for software security products is increasing every quarter. Our customers continue to show that
MEMCO's technology provides the protection they need for their most critical data and
applications. Most corporations, regardless of their size or complexity, understand that
first-generation technology such as firewall and encryption are only the starting point in a truly secure
enterprise. As a case in point, a very large telecommunications company has selected MEMCO's
SeOS (Security for Open Systems) suite as its standard for extending security to its mission-critical
applications and servers. This quarter, they have purchased additional licenses and services totalling
more than $3 million.''
After the close of the quarter, MEMCO announced the appointment of Gadi Maier as CEO of
MEMCO's US subsidiary. In announcing Mr. Maier's appointment, Mr. Mazin said, ''Gadi's
extensive management ability will be well-deployed as MEMCO continues to grow rapidly.'' Mr.
Maier was most recently VP/GM of the Internet Business Unit at Cisco Systems Inc.
Other Highlights
During the third quarter, MEMCO released new products, solidified important industry alliances,
and continued to enhance its management team. Examples include:
Products
Proxima(TM) SSO (single sign-on) product completes its controlled release and is released
for general availability.
SeOS for Windows NT successfully undergoes initial field testing at large sites.
Partners and Distribution
-- MEMCO products are selected for distribution by EDS.
-- Tivoli TME 10 Security Management is released with TACF, which is based on MEMCO's
SeOS patent-pending technology.
Strategic Direction and Investments in Future Technologies
-- MEMCO invests $775,000 in Soliton Ltd., a Tel Aviv-based software company developing
advanced security technology, and secures an OEM agreement. Soliton focuses on emerging
computing platforms, such as Internet browsers.
Company Growth
-- Motti Tal becomes Director of Business Development, responsible
for technology-driven M&A activity.
-- Kathleen Hill becomes Director of Corporate Communications,
responsible for Investor Relations and Public Relations.
About MEMCO Software
MEMCO Software Ltd. (Nasdaq:MEMCF) is a leading provider of information security solutions
for distributed computing environments. MEMCO's flagship software product, SeOS (Security for
Open Systems), provides access control security for Unix and Windows NT servers. MEMCO
addresses the single sign-on market with its Proxima product suite which automates user logins and
centralizes user account management. The company's customers include leaders in finance,
telecommunications and other industries where information security is critical. MEMCO successfully
partners with many of the world's largest software companies, systems integrators and value-added
resellers, including a strategic OEM relationship with Tivoli Systems Incorporated, an IBM
company. MEMCO's headquarters are located in Tel Aviv, Israel and New York City. For more
information, please visit the company's Web site at memco.com.
Statements in this release concerning the Company's future prospects are ''forward-looking
statements'' under the federal securities laws. In conjunction with the Private Securities Litigation
Reform Act of 1995, the Company wishes to avail itself of the ''safe harbor'' provisions and cautions
readers that there can be no assurance that future results will be achieved and actual results could
differ materially from the forecasts and estimates contained herein. Important factors that could cause
actual results to differ materially are included but not limited to those listed in the Company's
registration statement on Form F-1, originally filed on September 20, 1996 with the Securities and
Exchange Commission, and in the Company's annual reports as filed on Forms 20-F and in the
Company's quarterly report as filed on Forms 6-K.
(c) 1997 MEMCO Software Ltd. MEMCO, SeOS for Windows NT, and Proxima SSO are
proprietary trademarks of MEMCO Software Ltd. All other company and product names
mentioned herein are trademarks of their respective owners.
MEMCO SOFTWARE LTD.
CONSOLIDATED STATEMENTS OF OPERATION
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
30-Sept-97 30-Sept- 96 30-Sept-97 30-Sept-96
Revenues $ 8,082 $ 4,201 $ 18,457 $ 9,140
Cost of revenues 816 420 1,983 975
Gross Profits 7,266 3,781 16,474 8,165
Operating expenses
Research &
development, net 1,079 599 2,854 1,469
Marketing and selling 3,644 1,972 7,858 4,545
General and
administrative 755 431 1,994 892
Total operating expenses 5,478 3,002 12,706 6,906
Operating income 1,788 779 3,768 1,259
Financial income, net 1,020 239 2,342 591
Income before taxes on
income 2,808 1,018 6,110 1,850
Income taxes 300 160 705 200
Net income $ 2,508 $ 858 $ 5,405 $ 1,650
Net income per share $ 0.15 $ 0.07 $ 0.33 $ 0.13
Weighted average
number of shares 16,879,275 12,798,316 16,550,513 12,718,707
MEMCO SOFTWARED LTD
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30 December 31
1997 1996
(Unaudited) (Audited)
Assets
CURRENT ASSETS:
Cash and cash equivalents $ 3,920 $ 52,016
Short term investments 52,376 3,662
Trade receivables 7,389 6,164
Other receivables and prepaid expenses 1,339 928
Total current assets 65,024 62,770
PROPERTY AND EQUIPMENT
Cost 2,636 1,521
Less - accumulated depreciation 608 299
2,028 1,222
LONG TERM INVESTMENT 775 --
OTHER ASSETS NET 670 523
Total Assets $ 68,497 $ 64,515
Liabilities and Shareholders' equity
CURRENT LIABILITIES
Current maturities of long term loans $ 34 $ 54
Accounts payable - trade 626 647
Other current liabilities 6,284 6,951
Total current liabilities 6,944 7,652
LONG - TERM LIABILITIES:
Deferred income 1,883 3,295
Loans from banks and others 59 157
Accrued severance pay 641 471
Total long - term liabilities 2,583 3,923
SHAREHOLDERS' EQUITY
Share capital
Ordinary shares of NIS 0.01 par value
Authorized 30,000,000 shares; issued
and outstanding 15,652,343 shares as of
September 30, 1997, 15,476,467 shares as of
December 31, 1996 49 48
Share premium 53,238 52,761
Deferred compensation (151) (298)
Retained earnings 5,834 429
Total shareholders' equity 58,970 52,940
Total liabilities and shareholders'
equity $ 68,497 $ 64,515
Contact:
Dov Gal, CFO
MEMCO Software Ltd.
+972.3.645.0000
dov@memco.co.il
or
Dorin Miller, VP Marketing
MEMCO Software Inc.
800.862.2602/212.891.9622
dorin@memco.com
or
Jody Burfening
Lippert Heilshorn & Associates
212.838.3777
jody@lhai.com |
