Thursday April 23, 5:10 pm Eastern Time
Company Press Release
SOURCE: Insignia Solutions
Insignia Solutions Announces First Quarter 1998 Financial Results
FREMONT, Calif., April 23 /PRNewswire/ -- Insignia Solutions(R) (Nasdaq: INSGY - news) today reported revenues of $5.0 million for the first quarter ended March 31, 1998, a decrease of 46% compared to $9.2 million in the March 1997 quarter. During the quarter, the Company sold its NTRIGUE product line for $17.7 million (net $14.7 million). The Company incurred an operating loss of $3.4 million, which combined with the net proceeds on the disposal of the NTRIGUE product line of $14.7 million and other income of $0.2 million, resulted in diluted earnings per share of $0.62 on 12.4 million shares, compared to a net loss of $0.41 on 11.5 million shares in the March 1997 quarter.
Condensed Consolidated Statement of Operations
(in thousands, except per share data)
(unaudited)
Quarter Ended March 31,
1998 1997
Total revenues $4,982 $9,221
Gross profit 2,063 4,815
Total operating expenses 5,420 9,430
Income (loss) before income taxes 11,585 (4,545)
Net income (loss) 7,632 (4,689)
Earnings (loss) per share - Diluted $0.62 $(0.41)
Diluted weighted average common shares
used in per share calculations 12,404 11,529
Sales of Unix-based products decreased by 37% compared to sales in the first quarter of 1997, but increased 46% compared to the fourth quarter of 1997. Contributing to this increase was Insignia's distribution agreement with Sun Microsystems to provide PC and Windows 95 compatibility for Sun's Ultra workstations, including the newly unveiled Ultra 5, Ultra 10 and Ultra 60 workstations. Through this arrangement, entered into late December, SoftWindows 95 is offered by Sun as an option for Ultra workstation customers. Sun customers can now purchase a state-of-the-art PC compatibility solution with their Ultra workstations, providing the inherent benefits of the Sun workstation as well as the ability to run off-the-shelf Windows 95 applications.
Sales of Macintosh-based products decreased by 29% compared to sales in the first quarter of 1997, but increased 2% compared to the fourth quarter of 1997. During the quarter the Company shipped version 5.0 of its flagship product, SoftWindows (R) 95 for Power Macintosh (R). Version 5.0 boasts a 25% increase in performance over version 4.0 to better handle state-of-the-art business packages, such as Microsoft (R) Office 97. SoftWindows 95 5.0 also features a robust Internet access package, enabling Macintosh users to easily access PC content on the Internet and on corporate intranets.
Service revenue declined 55% compared to the first quarter of 1997 primarily as a result of the Company's sale of its NTRIGUE business.
International sales accounted for 9 percent of sales for the first quarter, compared to 34% in the first quarter of 1997.
The Company has commenced, and continues to implement, a program of financial controls to ensure that its expenses are in-line with the Company's revenues. As a result of these measures, operating expenses declined 43% compared to the first quarter of 1997 and 23% compared to the fourth quarter of 1997.
In the first quarter, the Company announced plans to launch a new product line in late 1998 that leverages the Company's 12 years of experience in developing emulation environments. The new product line is expected to deliver an Embedded Virtual Machine (TM) (EVM(TM)) for the emerging Java-based embedded systems marketplace.
Insignia Solutions
Insignia Solutions is a leading provider of virtual machine/emulation technology that enables embedded and standalone applications and operating systems to be deployed efficiently and reliably on non-native platforms. The Company's SoftWindows product delivers Windows(R) and MS-DOS(R) applications to Macintosh and UNIX(R) desktops and its RealPC product provides Macintosh users with access to DOS-based games. Insignia's Embedded Virtual Machine is expected to allow developers to create reliable, efficient and predictable embedded systems for any platform or device.
The publicly held company's U.S. headquarters are in Fremont, California, and its main R&D facilities are in High Wycombe, England. Sales and Marketing departments are located in Fremont and High Wycombe. For additional information on Insignia and its products, call 800-848-7677 or visit the Company's Web site at insignia.com.
Forward-Looking Statements
The statements in this press release relating to matters that are not historical are forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated. There can be no assurance that the Company will be able to define, develop, design, market and support an EVM product or that such product will be accepted by customers. The Company's business is subject to a variety of other risks and uncertainties that include, but are not limited to, rapid technological changes in the industry, increased competition, and timely introduction and customer acceptance of the Company's products. These and other risks and uncertainties are further described in the Company's Form 10-K for the year ended December 31, 1997 and will be described from time to time in the company's other filings with the Securities and Exchange Commission.
NOTE: Insignia Solutions and Insignia are registered trademarks and Embedded Virtual Machine, EVM and RealPC are trademarks of Insignia Solutions, Inc. SoftWindows is a trademark used under license. Microsoft, MS-DOS, Windows and Windows NT are registered trademarks of Microsoft Corporation. Macintosh is a registered trademark of Apple Computer, Inc. UNIX is a registered trademark licensed exclusively through X/Open Company, Ltd. All other brand names mentioned are trademarks or registered trademarks of their respective holders and are respectfully acknowledged.
INSIGNIA SOLUTIONS PLC
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(amounts in thousands, except per share amounts)
(unaudited)
Three months ended
March 31,
1998 1997
Revenues:
License revenue $4,760 $8,731
Service revenue 222 490
Total revenues 4,982 9,221
Cost of revenues:
Cost of license revenue 2,478 3,844
Cost of service revenue 441 562
Total cost of revenues 2,919 4,406
Gross profit 2,063 4,815
Operating Expenses:
Sales and marketing 2,563 4,713
Research and development 1,496 2,528
General and administrative 1,361 1,332
Restructuring -- 857
Total operating expenses 5,420 9,430
Operating loss (3,357) (4,615)
Interest income, net 151 202
Other income (expense), net 14,791 (132)
Income (loss) before income taxes 11,585 (4,545)
Provision for income taxes 3,953 144
Net income (loss) $7,632 $(4,689)
Basic net income (loss) per share $0.63 $(0.41)
Diluted net income (loss) per share $0.62 $(0.41)
Basic weighted average common shares 12,077 11,529
Diluted weighted average common shares 12,404 11,529
INSIGNIA SOLUTIONS PLC
CONDENSED CONSOLIDATED BALANCE SHEET
(amounts in thousands, unaudited)
March 31, December 31,
1998 1997
ASSETS
Current assets:
Cash and cash equivalents $11,685 $10,641
Short-term investments 6,057 3,820
Cash and cash equivalents held in escrow 2,500 --
Accounts receivable, net of allowances and
reserves of $2,191 and $2,818, respectively 6,055 6,754
Inventories 208 185
Prepaid expenses 1,240 608
Prepaid income taxes -- 864
Total current assets 27,745 22,872
Property and equipment, net 1,092 2,175
Cash and cash equivalents held in escrow 6,250 --
Other noncurrent assets 328 410
Total assets $35,415 $25,457
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,825 $1,683
Accrued liabilities 3,351 2,685
Customer deposits 435 617
Accrued royalties 7,383 8,874
Deferred revenue 508 843
Current obligations under capital leases 109 104
Income taxes payable 3,316 --
Total current liabilities 16,927 14,806
Noncurrent liabilities 145 128
Total liabilities 17,072 14,934
Shareholders' equity:
Preferred shares -- --
Ordinary shares 4,002 3,954
Additional paid-in capital 34,602 34,462
Accumulated deficit (19,800) (27,432)
Cumulative currency translation adjustment (461) (461)
Total shareholders' equity 18,343 10,523
Total liabilities and shareholders' equity $35,415 $25,457
SOURCE: Insignia Solutions |
