Inprise Reports Second Quarter 1998 Results
SCOTTS VALLEY, Calif., July 21 /PRNewswire/ -- Inprise Corporation (Nasdaq: INPR - news) today announced earnings for its second quarter ended June 30, 1998, reporting a 58 percent increase over the prior year in sales of VisiBroker(TM) middleware aimed at the corporate enterprise computing market.
All figures reported reflect pooling of interests with Visigenic Software, Inc., acquired in February, 1998. In June, the company received shareholder approval to change its name from Borland International to Inprise Corporation to reflect its mission of ''integrating the enterprise.''
Net revenues for the second quarter were $46.5 million, compared with $48.2 million for the quarter ended June 30, 1997. Year-to-date revenues were $93.0 million, compared with $91.6 million for the six months ended June 30, 1997.
Net income for the quarter ended June 30, 1998 was $1.9 million, compared with a net loss of $2.5 million in the quarter ended June 30, 1997. Net loss for the six months ended June 30, 1998 was $11.6 million, which included $19.3 million in restructuring and acquisition costs from the purchase of Visigenic and a tax benefit of $3.8 million. The company had a net loss of $47.1 million for the six-month period ended June 30, 1997, which included a $23.1 million charge for restructuring and other non-recurring costs aimed at returning the company to profitability.
Diluted earnings per share were $0.03 for the quarter just ended, compared with a loss per share of $0.05 for the same quarter a year ago. Loss per share for the six months ended June 30, 1998 was $0.23 and loss per share for the six months ended June 30, 1997 was $0.99. Common shares and dilutive securities outstanding were 57.6 million for the quarter ended June 30, 1998.
Cash, cash equivalents, and short-term investments as of June 30, 1998 were approximately $82 million, compared with approximately $94.4 million a year ago.
''We are pleased that sales to corporations of our enterprise-level products continued to increase in the second quarter,'' said Del Yocam, Inprise's chairman and chief executive officer. ''Sales of VisiBroker, the CORBA-based middleware we acquired with Visigenic, increased 58 percent over the same period last year. Sales of our client/server, Internet/intranet and enterprise-level products and related services continued to rise, constituting 73 percent of total revenues in the second quarter compared with 54 percent a year ago. For the first time, revenues from the client/server versions of our development tools are larger than the desktop versions of our development tools. Revenues from our desktop products were 27 percent of total revenues for the second quarter, compared with 46 percent in the June 1997 quarter.''
License revenues made up 88 percent of total revenues in the quarter ended June 30, 1998, compared with 91 percent in the same quarter a year ago. Professional services, consulting and technical support constituted 12 percent of revenues in the quarter ended June 30, 1998, compared with 9 percent in the June 1997 quarter.
''Revenues overall were down approximately 3 percent compared with the same quarter last year due to the financial crisis in Asia, lower revenues from desktop products, and delays in closing several corporate deals,'' said Yocam. ''Our sales in Japan, which make up the majority of our revenue from Asia and are primarily channel sales, decreased approximately 40 percent from a year ago. Our revenues from that region are being affected by exchange rate movements and a decline in desktop software tools sales.''
In breaking out revenues geographically, the company reported that:
Sales in Europe increased to 32 percent of total revenues, compared with 29 percent of total revenues the June 1997 quarter; Sales in the United States, excluding exports, accounted for 47 percent of total revenues, compared with 42 percent in the same quarter a year ago; Sales from Japan accounted 9 percent of total revenues, compared with 15 percent a year ago; And sales from all other regions accounted for 12 and 14 percent of revenues in the June 1998 and June 1997 quarters, respectively.
Quarterly Highlights
Highlights of the second quarter included:
Shipment of JBuilder 2, a revision of the company's popular Java-based language tool. Announcement and initial shipment of Delphi 4, the company's latest version of its Windows rapid application development tool. Selection of JBuilder and Delphi as two of the top 100 software products of the year by Windows Magazine. Release of C++Builder Enterprise, the first C++ compiler and middleware development solution that fully integrates the Windows platform into the platform-neutral enterprise with CORBA, COM (Component Object Model) and Inprise's Entera RPC-based technologies. Creation of a new professional services organization that integrates a broad range of consulting, training and technical support into one worldwide organization. Consolidation and integration of the former Visigenic and Borland partner programs into a new Inprise Business Solutions Program aimed at giving partners greater access to the support they require to deliver Inprise-based solutions to their customers. Naming of John Racioppi to the newly created position of vice president and general manager of U.S. sales. Increasing the direct sales force in the U.S. was the company's focus in the first half of 1998. During the second half of the year, the company will focus on building its direct sales force in Europe and will focus on Asia Pacific in the first half of 1999. Continuation of strong business relationships with enterprise information technology suppliers such as IBM, Sun Microsystems, SAP, Oracle, Hitachi, Netscape, Novell, and Microsoft. Centralization of European operations into one regional headquarters in Amsterdam so that the European operation is better able to focus on enterprise-level products and services.
About Inprise Corporation
Inprise Corporation is a leading provider of software and services that simplify the complexity of enterprise application development, deployment, and management. The company is distinguished for its award-winning Borland family of rapid application development products and for proven scalable middleware. Inprise integrates these offerings with application management products to provide customers with an end-to-end solution. Inprise customers include information technology departments and independent software developers around the world. Founded in 1983, Inprise is headquartered in Scotts Valley, California and has operations around the world. Inprise has more than 900 employees worldwide. For more information on Inprise, customers can visit the company's Web site at inprise.com .
NOTE: Forward-looking statements in this release, including but not limited to, those concerning Inprise's future financial performance, product availability dates, and the potential features of or benefits to be derived from the Company's products, involve a number of uncertainties and risks, and actual events or results may differ materially. Factors that could cause actual events or results to differ materially include, among others, the following: difficulties in integrating the operations and technology of Visigenic Software or other companies or technologies which the Company may acquire, possible disruptive effects of organizational or personnel changes, shifts in customer demand, market acceptance of the Company's new or enhanced products, delays in scheduled product availability dates, actions or announcements by competitors, software errors, general business conditions and market growth rates in the client/server and Internet software markets, and other factors described in the Company's S.E.C. reports on forms 10-K, 10-Q, 8-K.
Inprise Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data, unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
Revenues
Licenses and other $41,172 $43,953 $82,215 $82,176
Services 5,351 4,227 10,794 9,424
Total revenues 46,523 48,180 93,009 91,600
Cost of revenues 7,733 9,183 14,117 16,865
Gross profit 38,790 38,997 78,892 74,735
Operating expenses
Research and development 12,226 13,417 23,397 29,540
Selling, general and
administrative 25,655 28,169 52,957 69,615
Total continuing expenses 37,881 41,586 76,354 99,155
Provision for restructuring
and acquisition charges -- -- 19,281 5,976
Other non-recurring charges -- -- -- 17,100
Total restructuring, acquisition
and non-recurring charges -- -- 19,281 23,076
Total operating expenses 37,881 41,586 95,635 122,231
Operating income (loss) 909 (2,589) (16,743) (47,496)
Interest income, net and other 1,125 405 1,723 1,144
Income (loss) before taxes 2,034 (2,184) (15,020) (46,352)
Provision (benefit) for income
taxes 150 342 (3,462) 709
Net income (loss) 1,884 (2,526) (11,558) (47,061)
Income (loss) per share
- Basic (A) 0.04 (0.05) (0.23) (0.99)
Income (loss) per share
- Diluted (A) 0.03 (0.05) (0.23) (0.99)
Shares used in the calculation of
basic income (loss) per share 51,166 48,702 50,984 47,334
Shares used in the calculation
of diluted income (loss) per
share 57,572 48,702 50,984 47,334
(A) The calculation of loss per share for the three months ended March 31,
1998 includes an accretion to the Mandatorily Redeemable Convertible
Preferred Stock of $142,000.
Inprise Corporation
Condensed Consolidated Balance Sheet
(in thousands, unaudited)
June 30, December 31,
1998 1997
ASSETS
Current assets $136,353 $144,463
Property and equipment, net 104,305 104,944
Other non-current assets 6,270 6,417
Total assets $246,928 $255,824
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 78,969 $ 79,883
Long-term debt and other 22,241 22,025
Mandatorily redeemable convertible preferred stock 27,500 27,358
Stockholders' equity 118,218 126,558
Total liabilities and stockholders' equity $246,928 $255,824
SOURCE: Inprise Corporation
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