Ouch! Price is being punished this morning. Seems a bit of
an over reaction since the revenue shortfall is only do to a
delay in timing of billing. See release below.
The Network Connection Reports 1997 Results
PR Newswire, Monday, March 16, 1998 at 07:46
Fourth Quarter Lower Than Previous Estimates Due to Deferral of Revenue
and Profit Recognition from Certain International Shipments
ALPHARETTA, Ga., March 16 /PRNewswire/ -- The Network Connection, Inc.
(TNCi) (NASDAQ:TNCX), an industry leading developer and manufacturer of video
and multimedia file-server technology, reported record revenues and
substantial improvement in net loss for the fiscal year ended December 31,
1997.
The Company reported a net loss of $953,506, or $0.23 per share based on
4,152,393 shares outstanding, on a 323% increase in revenues to $973,176 for
the quarter ended December 31, 1997. This compares to a loss of $1.7 million,
or $0.56 per share based on 3,031,377 shares outstanding, on revenues of
$229,915 for the same period of the prior year.
For the fiscal year ended December 31, 1997, net revenues increased 92% to
$7.9 million compared with $4.1 million in the same period of 1996. The
Company reported a net loss of $2.0 million, or $0.53 per share based on
3,845,097 weighted average shares, compared to a net loss of $3.3 million, or
$1.14 per share based on 2,846,715 weighted average shares, for the fiscal
year ended December 31, 1996.
"TNCi did not meet previously announced estimated results for its fourth
quarter due to deferral of revenue and profit recognition from fourth quarter
1997 shipments of four AirView(R) systems to Fairlines. Of the ten contracted
AirView(R) systems, eight systems have been delivered. However, due to recent
notification by Fairlines of an unexpected delay in securing the four aircraft
for the four AirView(R) systems shipped in the fourth quarter of 1997, these
four shipments did not meet the requirements for revenue recognition by the
Company. The six remaining aircraft are expected to be secured by Fairlines
and the AirView(R) systems to be delivered and installed in 1998 in accordance
with the terms of the contract," commented Wil Riner, Chairman and CEO of
TNCi.
Mr. Riner further commented, "The winning of larger long-term programs,
with a sales cycle averaging six to twelve months, is important to our future
success. However, our quarter to quarter performance still remains variable
due to dependence on timing issues for large shipments to a limited number of
customers."
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(R) 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 standard 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.
Statement of Operations
Three Months Ended Twelve Months Ended
December 31, December 31,
1997 1996 1997 1996
Revenues $ 973,176 $ 229,915 $7,848,444 $4,092,023
Cost of revenues 552,064 362,483 5,044,258 3,050,596
Gross profit 421,112 (132,568) 2,804,186 1,041,427
Selling, general and
administrative 1,229,640 1,484,964 4,604,588 4,016,351
Loan origination
expense 0 0 0 60,000
Research and
development 114,851 0 277,527 160,276
Operating loss (923,379) (1,617,532) (2,077,929) (3,195,200)
Interest expense (24,337) (80,854) (61,737) (99,026)
Other income
(expense) (5,790) 0 114,038 41,327
Net loss ($ 953,506) ($1,698,386) ($2,025,628) ($3,252,899)
Basic Loss
per Share ($0.23) ($0.56) ($0.53) ($1.14)
Weighted average
basic shares 4,152,393 3,031,377 3,845,097 2,846,715
SOURCE The Network Connection, Inc.
-0- 3/16/98
/CONTACT: Bryan Carr, Chief Financial Officer of The Network Connection,
770-751-0889; or Kevin McGrath, Financial Relations, of Cameron Associates,
212-245-8800, for TNCi/
Companies or Securities discussed in this article:
Symbol
Name
NASDAQ:TNCX
Network Connection Inc |
