CM...if you go to VETX's site at www.vertexindustries.com I think you will find additional information on the company's products and applications for the Internet and E-commerce. I will excerpt part of the most recent 10-q filing below as well as some recent press releases. A perusal of the company's 10-k would also be helpful in this regard. And yesterday's release ref Netscape/VETX drives home the point a bit further.
This from 3rd qtr 10-q dated April 30:
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Three months ended April 30, 1998 compared with three months
ended April 30, 1997.
Overview
The Company experienced a 40% increase in operating revenues
and recorded a net loss of $5,579 for the quarter ended April 30,
1998, compared to a net loss of $100,985 for the same period in
1997. The increase in operating revenues is primarily due to
operating revenues of $288,000 from the NetWeave licensing
agreement and an increase in demand for the software product line
of approximately $80,000 for the quarter ended April 30,1998 as
compared to the same period in 1997. As previously announced the
Company has been awarded a $4.1 million contract. This contract
will significantly impact fiscal 1999. The Company continues to
focus on its middleware and e-commerce technologies and expects
increased revenues in these areas in the future.
Net Loss
The Company recorded a net loss of $5,579 for the quarter
ended April 30, 1998 as compared to a net loss of $100,985 for
the same period in 1997. The decrease in the net loss is due to
an increase in operating revenues of 40% in 1998 compared to
1997.
Operating Revenues
Operating revenues increased $272,119 or 40% to $953,741 for
the quarter ended April 30, 1998, compared to $681,622 for the
same period in 1997. The increase in operating revenues is
primarily attributed to the NetWeave licensing agreement which
generated approximately $288,000 in operating revenues for the
quarter ended April 30, 1998 as compared to $50,000 for the same
period in 1997. The Company expects operating revenue to increase
in future quarters due to its recently announced $4.1 million
contract in addition to its middleware and e-commerce
technologies.
Cost of Sales
Cost of Sales decreased to 50% of revenues in the third
quarter of 1998 compared to 54% for the same period in 1997. The
decrease is primarily due to a change in the sales mix in which
sales of the higher margin products (software and NetWeave
products) increased whereas sales of lower margin products
decreased.
10
Operating Expenses
Operating expenses decreased $1,583 to $489,056 for the
quarter ended April 30, 1998, as compared to $490,639 for the
same period in 1997. The decrease is primarily due to the
closing of the Company's Philadelphia, Pennsylvania office in
December, 1997. In addition to a decrease in Research and
Development expenses. As Operating Revenue increases the Company
anticipates that operating expenses will also increase.
Net Other Income
Net other income decreased $3,334 to $4,833 for the quarter
ended April 30, 1998 compared to $8,167 for the same period in
1997. The decrease is due to decrease in interest income of
$7,281 coupled with a decrease in interest expense of $3,947 for
1998 as compared to 1997. The decrease in interest income is due
to a decrease in the amount of funds available for the Company's
money market account.
11
Nine months ended April 30, 1998 compared with nine months ended
April 30, 1996.
Overview
The Company's operating revenues decreased approximately 5%
and the Company recorded a net loss of $296,966 for the nine
months ended April 30, 1998 as compared to net income of $9,634
for the same period in 1997. The decrease in operating revenues
is primarily due to a decrease in demand for all of the Company's
product lines except for the Netweave product line. The NetWeave
licensing agreement had operating revenues of approximately
$804,000 for the nine months ended April 30, 1998 as compared to
$50,214 for the same period in 1997. In 1998 the Company had
nine months of operating revenue from the Netweave licensing
agreement as compared to two months in 1997.
Net Income (Loss)
The Company had a net loss of $296,966 for the nine months
ended April 30, 1998 compared to net income of $9,634 for the
same period in 1997. The net loss is attributed to a decrease in
operating revenues of approximately $132,000 an increase in
operating expenses of approximately $127,000 and a decrease in
gross margin of approximately $180,000 for the nine months ended
April 30, 1998 as compared to the same period in 1997.
Operating Revenues
Operating revenues decreased 5% to $2,491,946 for the nine
months ended April 30, 1998 compared to $2,623,665 for the same
period last year. The decrease is due to a decrease in demand
for all of the Company's products except for the Netweave
product. The NetWeave licensing agreement generated operating
revenues of approximately $804,000 for the nine months ended
April 30, 1998 as compared to $50,000 for the same period last
year.
Cost of Sales
Cost of Sales increased to 53% of revenues for the nine
months ended April 30, 1998, compared to 48% for the same period
in 1997. The increase is due to a shift in the sales mix from
the higher margin products to the lower margin products. In
addition to costs associated with the Netweave licensing
Agreement. Cost of Sales for the Netweave licensing agreement
should continue to decrease due to the closing of the Company's
Philadelphia, Pennsylvania office in December 1997.
12
Operating Expenses
Operating expenses increased 9% or $127,099 to $1,487,057
for the nine months ended April 30, 1998 compared to $1,359,958
for the same period in 1997. The increase is comprised of an
increase of $139,877 or 14% in selling and administrative
expenses which is due to additional sales personnel and expenses
from the NetWeave Licensing Agreement of approximately $19,000.
Research and development expenses decreased $12,778 or 4% for the
nine months ended April 30, 1998 as compared to the same period
in 1997.
Net Other Income
Net other income decreased $5,539 to $16,676 for the nine
months ended April 30, 1998, compared to net other income of
$22,215 for the same period in 1997. The decrease is primarily
due to a decrease in the interest income of $8,425 in 1998 as
compared to 1997.
Liquidity and Capital Resources
At April 30, 1998 the Company had $559,063 in cash compared
to $608,553 at July 31, 1997. Working Capital and the current
ratio were $1,653,450 and 3.56 to 1 at April 30, 1998 versus
$1,184,762 and 3.03 to 1 at July 31, 1997. Net cash provided by
operating activities was $15,969 for the first nine months of
1998.
Capital expenditures were approximately $36,826 and $17,756
for the nine month periods ended April 30, 1998 and 1997,
respectively.
The Company requires additional financing to meet the short
and long term needs of the Company and is currently seeking a
working capital line of credit and has approached several lenders
and expects to have a line of credit in place within the near
future.
The following two releases concentrate on additional rev streams for the company:
Vertex Expects Return to Profitability in 4th Quarter With Strong
Growth in Revenues and Earnings in Fiscal 1999
CLIFTON, N.J.--(BUSINESS WIRE)--July 6, 1998--Vertex Industries (OTCBB: VETX - news), a leading systems
integration and middleware solutions provider, announced today that it expects to return to profitability in the fourth quarter of
Fiscal Year 1998, ending July 31, 1998, and projects strong profitability for Fiscal Year 1999.
For the last quarter of Fiscal Year 1998, Vertex anticipates positive net earnings from continuing operations on revenues in
excess of $900,000 as compared to a net loss of $482,694 on revenues of $604,933 for the same period in Fiscal Year 1997.
For the first half of Fiscal Year 1999, Vertex expects net earnings in excess of $1,100,000 or $.20 per share, versus a net loss
of $291,387 or $.05 per share for the same period in Fiscal Year 1998.
Ron Byer, President and CEO of Vertex, stated, ''The outlook and anticipated growth of the Company are very exciting and
reflect the new products, and sales and marketing initiatives we have taken over the past eight months. The real benefits of our
recently announced $4.1 million contract with a major telecommunications company and new Warehouse Management System
sales will appear in the first half of our next Fiscal Year. In addition, our previously announced merger of Vertex's inactive
subsidiary has already provided an increase of 42% in Shareholder's Equity as reported in the Company's latest 10Q filing.''
''We are committed to ensuring continued profit growth from this point onward,'' continued Byer.
Certain information and statements included or implied are forward looking and involve certain risks and uncertainties that
could cause actual results to differ materially from those expressed or implied by these statements. These forward-looking
statements are identified by their use of terms and phrases such as ''expects,'' ''projects,'' ''anticipates,'' and ''anticipated.''
Vertex Industries, Inc. is a systems integration and middleware solutions provider that offers turn-key automated bar code
solutions and middleware support for the seamless connection of distributed applications. Vertex customers include AT&T,
Bell Atlantic, MCI, Credit Lyonnais, Dell Computers, Tenneco Packaging, and the New Zealand Stock Exchange.
Vertex Awarded $4.1 Million Contract
Systems Integration Specialists Strikes Deal With Major Telco
CLIFTON, N.J.--(BUSINESS WIRE)--June 4, 1998-- Vertex Industries Inc. (OTCBB:VETX - news), a leading systems
integration and middleware solutions provider, announced today that it has been awarded a $4.1 million contract by a major
northeastern telecommunications provider.
Vertex will provide the soon to be named company with it's proprietary ''BridgeNet Data Collection Software'' and has
formed an alliance with Husky Computers, an operating company of WPI Group, Inc. (NASDAQ:WPIC - news) to supply
1000 of their Model FS3 Hand Held computers, ruggerdized terminals designed for field operations in the utility marketplace,
to upgrade provider's automated field operations.
''This contract is proof-positive of the enormous potential BridgeNet has to become a standard in automated bar code solution
and is a testament to the hard work of our sales and technical staff,'' said Ron Byer, President and CEO of Vertex.
''Additionally, this dramatic increase in revenue will help the company to expedite its middleware and e-commerce technology
expansion.''
Vertex Industries Inc. is a systems integration and middleware solutions provider that offers turnkey automated data collection
solutions and middleware support for the seamless connection of distributed applications. Vertex customers include AT&T,
Bell Atlantic, MCI, Credit Lyonnais, Dell Computers, Tenneco Packaging, and the New Zealand Stock Exchange.
And here is yesterday's release ref the company's affiliation w/Netscape:
Vertex Selected as a Netscape Independent Software Vendor
Will Develop Higher-Value Applications Using Netscape Application Server
CLIFTON, N.J.--(BUSINESS WIRE)--July 13, 1998-- Vertex Industries, Inc. (OTCBB: VETX - news) today announced
its selection by Netscape Communications Corp. (NASDAQ: NSCP - news) to be a Netscape Independent Software Vendor
(ISV), dedicated to building business-critical applications based on the Netscape Application Server. Vertex will be developing
a range of add-on solutions, using Netscape Extension Builder, that provide high-performance, scalable and reliable integration
of existing enterprise applications with new Internet legacy connectivity solutions.
Vertex will also work closely with Netscape to design middleware extensions that connect legacy systems to web-based
systems so that business customers can easily access integration solutions.
''We are excited to be partnered with Netscape to provide high quality web-based solutions to suit Vertex's customers' needs.
Netscape Application Server provides us with the best platform from which we can build business-critical Internet
applications,'' said Ron Byer, President and CEO of Vertex. ''By using Netscape Application Server, we are able to create
higher-value applications for our customers and help them integrate legacy enterprise systems with Internet technology''.
By developing a Netscape extension interface for its supported middleware technologies, Vertex will be creating bridges into
the legacy world from emerging Web and e-commerce implementations. For instance, a new on-line store developed using
Netscape's Application Server will be able to query and update a Tandem-based order management system as part of the
natural storefront processing. Using Vertex's middleware expertise, this type of integration will be available on a wide variety of
platforms including IBM/MVS, Digital OpenVMS, Unisys A-series, Stratus, Tandem, NT and all flavors of UNIX.
Vertex Industries, Inc. is a systems integration and solution provider that offers turnkey automated bar code solutions and
middleware support for seamless connection of distributed applications. Vertex customers include AT&T, Bell Atlantic, MCI,
Credit Lyonnais, Dell Computers, Tenneco Packaging, and the New Zealand Stock Exchange.
gary
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