I guess #2. OK, I cheated. Here's the release:
Wednesday February 18, 10:55 am Eastern Time
Company Press Release
SOURCE: Network Imaging Corporation
Network Imaging Reports 1997 Results Sales Up 25% in the Fourth
Quarter; Quarterly Net Loss Cut from $2.8 Million to $1.1 Million
HERNDON, Va. Feb. 18 /PRNewswire/ -- Network Imaging Corporation (Nasdaq: IMGX - news) today announced
financial results for the quarter and the year ended December 31, 1997.
According to Jim Leto, chairman and chief executive officer, ''We completed the fourth quarter of 1997 with record sales and
the lowest net loss in history.''
Sales from continuing operations (previously reported as U.S. sales) in the fourth quarter were $7.4 million compared to $5.9
million in the fourth quarter of 1996 -- a 25% increase. The net loss was cut by more than half -- from $2.8 million in the fourth
quarter of 1996 to $1.1 million in this year's fourth quarter.
The net loss per share improved from $0.13 per share in the 1996 fourth quarter to $0.04 per share in the 1997 fourth quarter.
For the year, sales from continuing operations increased 24%, from $19.7 million in 1996 to $24.5 million in 1997. The net loss
was cut from $17.6 million, or $0.85 per share, last year to $13.0 million, or $0.51 per share, this year.
''We enter 1998 a much stronger company, having completed the final steps of a three-year corporate restructuring program,''
continues Leto. ''We divested 11 non-strategic businesses, which culminated in the sale of our French subsidiary Dorotech in
the fourth quarter of 1997. We hired a number of seasoned managers to run the business, reorganized to focus on two key
product lines, and overhauled and invested in the sales and marketing function. We improved our capital structure, most
significantly eliminating the $3.2 million annual cash dividend associated with the Preferred A stock.''
Concludes Leto, ''We expect substantial revenue growth and increased growth margins this year, as we continue to penetrate
the integrated document and COLD marketplace.''
The Company will host a conference call for investors to review the financial and operational highlights for the quarter and 1997.
The call is scheduled for 11 a.m. EST on Thursday, February 19. The conference call phone number is 703-736-7226.
Financial Results
Revenues
--For the quarter ended December 31, 1997, revenues from continuing
operations were $7.4 million compared to $5.9 million for the fourth
quarter of 1996.
-- Product revenues continued to show a healthy rise due to new product
releases during 1997 and a significant sale to the U.S. Army. Product
revenues increased 31%, from $3.6 million in the fourth quarter of 1996 to
$4.7 million in this year's fourth quarter. Service revenues rose from
$2.3 million in the final quarter of 1996 to $2.7 million in the
comparable quarter of this year. This was attributable to continued
management emphasis on the professional services business.
-- For the 12 months ended December 31, 1997, revenues from continuing
operations were $24.5 million versus $19.7 million for 1996.
-- Product revenues for 1997 were 29% higher than in 1996 -- $14.7 million
in 1997 versus $11.4 million last year. Service revenues rose 17%, from
$8.3 million last year to $9.7 million this year.
Operating Loss/Gross Margins
-- The operating loss decreased modestly, from $1,840,000 in the fourth
quarter of last year to $1,691,000 in the same period of 1997. In
addition, the operating loss this quarter was affected by increased
investment in sales and marketing, as well as higher general and
administrative costs due in part to the Company's preparation associated
with satisfying its Nasdaq National Market System requirement.
-- The gross profit margin increased from 49% in the fourth quarter of
last year to 52%. This increase was primarily due to increased service
sales and management's focus on the professional services business. The
product gross margin was 65% compared to 66% in the last quarter of 1996,
and the service gross margin was 28% versus 21% for the same quarter last
year.
-- The operating loss for 1997 was $10.0 million, a drop of 28% from the
prior year's operating loss of $13.9 million. This was attributable
primarily to a reduction in general and administrative expenses, from $6.9
million, or 35% of sales, in 1996 to $5.5 million, or 21% of sales, in
1997.
-- The gross profit margin rose from 40% in 1996 to 44% in 1997,
reflecting increased sales of the Company's products and strengthened cost
controls. The product gross margin was 61% in 1997 compared to 58% in the
previous year, and the service gross margin was 19% versus 16% for 1996.
-- On a consolidated basis (including Dorotech for the first nine months
of 1997, the effect of the sale of Dorotech and other one-time charges,
and Symmetrical Technologies, Inc. for the first six months of 1996), the
Company's net loss for 1997 was $14.3 million, or $0.57 per share,
compared to a net loss of $21.1 million, or $1.02 per share.
Cash
-- On December 31, 1997, the Company had $3.8 million in cash and
equivalents -- the same as the amount reported for September 30, 1997.
Balance Sheet
-- During the fourth quarter, shareholders approved the Company's proposal
to modify the terms and conditions of the Series A Convertible Preferred
Stock. This eliminates the $3.2 million annual cash dividend ($2.00 per
share) previously paid to Preferred A shareholders. The modified
Preferred A stock will pay an annual dividend of $0.84 per share, or a
total of $1.3 million annually. The modified Preferred A dividend will be
payable quarterly, in common stock or in cash at the Company's discretion.
-- The sale of the Dorotech subsidiary in December 1997 eliminated $6.5
million in debt and retired $1.7 million in goodwill. The gain resulting
from the sale was $180,000 versus the $900,000 expected. The significantly
lower-than-expected results for Dorotech during the fourth quarter of 1997
resulted in a reduced sales price, based on the original divestiture
agreement.
Operational Highlights
Pipeline
-- The Company reported a pipeline of identified new business
opportunities of $87 million at the end of 1997, compared to $81 million
at the end of the third quarter and $71 million at the end of the second
quarter of 1997.
Product Sales
-- The Company announced new contracts worth $2.7 million for its 1View
integrated document management and COLD products during the fourth
quarter. These included a $640,000 award to support the Allegheny County
Prothonotary and a major contract with a major financial services
organization worth $520,000. The financial reporting system will support
more than 700 concurrent users throughout one of the organization's nine
data centers.
-- In January, the Company announced a three-year, $1.8 million agreement
with the Department of Defense, representing the largest single award in
the government vertical market in Network Imaging's history.
Alliances
-- The Company signed an OEM agreement with Intergraph Corporation [Nasdaq:INGR - news] to use
the 1View:Ojbect Manager(TM) product as a key component in its Maps Online
digital map repository system. Agreements with major federal government
integrators, such as Intergraph, are a critical component of the Company's
indirect sales channel strategy and its plan to further penetrate the
government vertical market.
Network Imaging Corporation develops and markets multimedia content and storage management, Internet, workflow,
engineering document management and Computer Output to Laser Disk (COLD) software products. Network Imaging's
flagship product suite, 1View, provides businesses with an automated method of electronically storing, accessing and managing
large volumes of multimedia information such as office documents, images, video and audio files, engineering drawings and
computer reports. Network Imaging's mission is to efficiently solve multimedia storage, management and distribution challenges
across enterprise and Internet/intranet environments.
''Safe Harbor'' statement under the Private Securities Litigation Reform Act of 1995: Except for historical information, all of the
statements, expectations and assumptions contained in the foregoing are forward looking statements that involve a number of
risks and uncertainties. Although the Company has used its best efforts to be accurate in making these forward looking
statements, it is possible that the assumptions made by management are not necessarily the most likely and may not materialize.
In addition to those factors, other important factors that could cause actual results to differ materially include the following:
business conditions and the amount of growth in the computer industry and general economy; competitive factors; ability to
attract and retain customers; ability to attract and retain personnel, including key management personnel; and the risk factors set
forth from time to time in the Company's SEC reports, including but not limited to its annual report on Form 10-K.
NETWORK IMAGING CORPORATION
PRO FORMA STATEMENTS OF OPERATIONS
CONTINUING OPERATIONS (EXCLUDING RESULTS OF SYMMETRICAL
TECHNOLOGIES, INC. & DOROTECH, SA. and ONE TIME CHARGES)
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
1997 1996 1997 1996
(Unaudited) (Unaudited)
Revenue $7,409 $5,927 $24,486 $19,706
Cost of sales 3,586 3,028 13,609 11,797
3,823 2,899 10,877 7,909
Gross margin as % of sales 52% 49% 44% 40%
Sales and marketing 3,001 2,792 11,442 11,020
General and administrative1,412 1,139 5,258 6,901
Product development 977 917 3,856 4,152
Other income (expense) (124) 109 (311) 287
Operating loss (1,691) (1,840) (9,990) (13,877)
Preferred stock
preferences
Accrued dividends 1,401 (982) (1,435) (3,730)
Imputed accrued
dividends (762) -- (1,536) --
Net loss applicable to
common shares $(1,052) $(2,822) $(12,961) $(17,607)
Net loss per
common share $(0.04) $(0.13) $(0.51) $(0.85)
Weighted average shares 25,943 22,470 25,206 20,682
NOTE: THESE PRO FORMA STATEMENTS OF OPERATIONS ARE INTENDED TO DISCLOSE THE RESULTS
OF OPERATIONS FOR THE COMPANY'S CONTINUING OPERATIONS AND THEREFORE, EXCLUDE THE
PARTIAL YEAR RESULTS OF THE COMPANY'S FORMER DOROTECH AND SYMMETRICAL SUBSIDIARIES,
THE GAIN RECORDED ON THE SALE OF DOROTECH AND OTHER ONE TIME CHARGES. PLEASE SEE THE
EARNINGS RELEASE WHICH IS PART OF THIS DOCUMENT FOR THE CONSOLIDATED EARNINGS PER
SHARE FOR THE REPORTED PERIODS, AND THE COMPANY'S ANNUAL REPORT ON FORM 10-K WHICH
THE COMPANY EXPECTS TO FILE BEFORE MARCH 20, 1998.
SOURCE: Network Imaging Corporation
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