Friday May 15, 10:35 am Eastern Time
Company Press Release
ModaCAD, Inc. Reports 62% Net Sales Increase For Fiscal 1998 First Quarter Results
Company Intensifying Implementation of E-Commerce Business Plan
LOS ANGELES--(BUSINESS WIRE)--May 15, 1998--ModaCAD, Inc. (NASDAQ:MODA - news) today announced operating results for the quarter ended March 31, 1998.
Net sales showed a 62% improvement to $964,253 as compared with $595,890 in last year's comparable period. The Company also reported a net loss for the first quarter of $1,926,103 or $0.32 per share ($0.32 per share fully diluted) on 6,049,085 weighted average common shares outstanding versus a loss of $182,593 or $0.05 per share ($0.05 per share fully diluted) on 3,875,068 weighted average common shares outstanding for the same period last year. The Company continues to report strong balance sheet data which includes a cash position in excess of $11 million, stockholders' equity of more than $19 million and a 8-to-1 current ratio.
The Company incurred $1,486,000 of research and development costs during the first quarter of 1998, of which $271,000 was capitalized as software development costs and $1,215,000 was expensed, compared to $720,000 for the first quarter of 1997, of which $695,000 was capitalized and $25,000 was expensed. The 106% increase in research and development expenditures from the first quarter of 1997 to the first quarter of 1998 was primarily due to the hiring of additional personnel in connection with the further development of the Company's commercial and consumer products. A lower percentage of research and development expenditures was capitalized in the first quarter of 1998 as compared to the first quarter of 1997 due primarily to the Company completing two of its major projects at the beginning of 1998. A significant portion of the research and development expenses incurred prior to the completion of these two major projects was capitalized as software development costs.
The 62% net sales increase was largely driven by the Company's e-commerce business and reflects the recognition of revenues from retailers and manufacturers who have agreed to participate in ModaCAD's virtual reality shopping experience. This first e-commerce content manager is focused on fashion for young women and is being co-developed with Intel Corporation [Nasdaq:INTC - news]. Recent participation announcements include Seventeen Magazine, Jantzen, Steve Madden, Trussardi and EarthLink Network.
Joyce Freedman, chief executive officer of ModaCAD said, ''We are pleased to report our first quarter performance and are gratified to note the positive effect of our e-commerce strategy on the growth of our business. We also want to report that we are moving forward with our fiscal 1998 action plan by pursuing a number of key strategic alliances that have been targeted to further the development and distribution of our e-commerce product offerings. The shift in focus of our sales force has also been effective as evidenced by the number and caliber of new customer relationships in process.''
ModaCAD's core rendering and digital content management technologies enable computers to create photo-realistic, synthetic 3D images and scenes on a computer screen from computer generated data, in real-time. ModaCAD develops, markets, and licenses 3D rendering, modeling and virtual reality software for a broad variety of applications to the e-commerce, consumer, business-to-business and OEM marketplaces. ModaCAD holds two patents on its proprietary rendering technology and distributes its products to over 33 countries worldwide.
ModaCAD, Inc.
Financial Highlights
First Quarter Ended March 31,
1998 1997
Net sales $ 964,253 $ 595,890
Net loss ($ 1,926,103) ($ 182,593)
Basic loss per share ($ 0.32) ($ 0.05)
Diluted loss per share ($ 0.32) ($ 0.05)
Weighted average common
shares outstanding 6,049,085 3,875,068
Balance Sheet Highlights
March 31, 1998 December 31, 1997
Cash $11,296,892 $12,419,992
Total current assets $14,461,389 $15,328,920
Total current liabilities $ 1,840,922 $ 465,001
Total stockholders' equity $19,217,952 $20,939,055
This press release contains forward-looking statements including statements regarding the timing and composition of revenues, future operating results and the timing of product introductions, among others. Except for historical information, the matters discussed in this report are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected. Factors that could cause actual results to differ materially include the following: (i) the timely completion of the development of the Company's software products, including ModaCAD's e-commerce and consumer software and enhanced or updated versions of the Company's electronic merchandising and CAD software products; (ii) unforeseen technical or other obstacles in the development or production of such software; (iii) acceptance of ModaCAD's e-commerce and consumer software by the publisher/distributors of such software and the release and marketing plans of the publisher/distributor; (iv) customer acceptance of ModaCAD's e-commerce and consumer software products and updated or revised versions of the Company's electronic merchandising and CAD software products; (v) the Company and its publisher/distributor's ability to produce its products on a cost-effective and timely basis; and (vi) factors not directly related to the Company, such as competitive pressures on pricing, market conditions in general, competition, technological progression, product obsolescence and the changing needs of potential customers as well as the software, textile, apparel, home furnishings and home design industries in general.
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Contact:
ModaCAD
Alison Barney, 310/751-2100
abarney@modacad.co
or
ModaCAD
Linda Freedman, 310/751-2100
lfreedman@modacad.com
or
Internet: modacad.com
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