Information Analysis Inc. Reports Second Quarter Results
Quarterly highlights: * Record revenue and income for any quarter in the
company's history * Revenues of $5.8 million, up 225% vs. 2Q97 * Net income
of $391,000, or $0.05 per share (basic), vs. year-earlier loss * Quarterly
bookings of 20 million lines of code * 13 new Year 2000 compliance contracts
signed during quarter
FAIRFAX, Va., July 27 /PRNewswire/ -- Information Analysis Inc. (Nasdaq: IAIC - news) today reported results
for the second quarter of fiscal 1998 ended June 30, 1998. Revenues were $5,816,000, up 225% from the
$1,788,000 reported in 1997's second quarter. The Year 2000 software and services company reported net income
of $330,000, or $0.05 per share basic, $0.04 diluted, compared to a loss of $109,000, or $0.02 per share in
1997's second quarter.
On a sequential basis, revenues improved 40% from the first quarter of 1998, and net income grew fivefold. IAI
reported net income of $60,000, or $0.01 per share in the prior quarter.
For the six months ended June 30, 1998, IAI had revenue of $9,986,000, exceeding full-year 1997 revenue of
$8,080,000 and first half revenue of $3,350,000. Net income for the first six months of fiscal 1998 was
$390,000, or $0.06 per share basic, $0.05 diluted, versus a loss of $480,000 or $0.09 in the comparable 1997
period.
Customer count now at 30
IAI added 13 new Year 2000 compliance customers during the quarter, bringing the company's total customer
count to 30. These new customers include the financial services arm of one of the world's largest corporations,
one of Europe's principal auto manufacturers, a major telecommunications company, a pension fund, and three
U.S. Government agencies, among others. These new customers represent approximately 20 million lines of code
to be remediated in the current and future quarters, and bring the company's total code backlog to 30 million lines.
''It was a positive quarter; one of substantial progress,'' said Sandor Rosenberg, IAI's Chairman and Chief
Executive Officer. ''Moreover, behind the immediate code remediation requirements of our customers are
substantial follow-on opportunities for both Year 2000 and post-Year-2000 work. We are seeing an increasing
interest in full-service opportunities, including testing. The proposal-to-acceptance time frame is narrowing, and
the number of proposals outstanding is at an all-time high.
''We have progressed from six Year 2000 customers at the end of December to 17 at the end of March. Today, we
have 30, representing a blue-chip roster of customers. Moreover, our partnership with Computer Associates
International, Inc. (CA) brought us a significant number of new orders in the quarter that just ended, plus leads
which we believe we will convert to orders as this quarter progresses.''
Mr. Rosenberg said IAI's goal was to build on the successes of the first two quarters. ''We are a remarkably well
positioned company with enormous opportunity,'' Mr. Rosenberg said. ''It is now our obligation to our
shareholders to convert all of that potential into revenue and income.''
About Information Analysis Incorporated
Information Analysis Incorporated (www.infoa.com), headquartered in Fairfax, Virginia, is a world-class
provider of products and services for automated transition engineering of computer systems. IAI provides highly
automated software and platform conversion, modernization and migration. Through its UNICAST/2000 product
family, IAI provides clients the ability to achieve Year 2000 compliance in-house or off-site at IAI's or other
certified solution factories.
Additional information for investors
This release may contain forward-looking statements regarding the Company's business, customer prospects, or
other factors that may affect future earnings or financial results. Such statements involve risks and uncertainties
which could cause actual results to vary materially from those expressed in the forward-looking statements.
Investors should read and understand the risk factors detailed in the Company's 10-KSB for the fiscal year ended
December 31, 1997 and in other filings with the Securities and Exchange Commission.
All product names referenced herein are the trademarks of their respective companies.
Information Analysis Incorporated
Condensed Consolidated Income Statements
Three months ended June 30,
(in thousands, except per share data; unaudited) 1998 1997
Net revenue:
Professional services $3,343 $1,659
Software sales 2,474 128
Total revenue 5,817 1,787
Cost of goods sold and services provided:
Cost of professional services 2,377 1,219
Cost of software sales 1,038 121
Total cost of goods sold and services provided 3,415 1,340
Gross margin 2,402 448
Operating expenses:
Sales, general and administrative 1,731 573
Research and development 391 24
Total operating expenses 2,122 597
Operating income (loss) 280 (149)
Other income (expense) 50 40
Income (loss) before income taxes 330 (109)
Provision for income taxes -- --
Net income (loss) $330 $(109)
Net income (loss) per share:
Basic $0.05 $(0.02)
Diluted $0.04 $(0.02)
Shares used in calculating earnings per share:
Basic 6,654,685 5,728,431
Diluted 8,076,235 5,728,431
Six months ended June 30,
(in thousands, except per share data; unaudited) 1998 1997
Net revenue:
Professional services $5,380 $3,157
Software sales 4,606 193
Total revenue 9,986 3,350
Cost of goods sold and services provided:
Cost of professional services 3,970 2,419
Cost of software sales 1,613 172
Total cost of goods sold and services provided 5,582 2,591
Gross margin 4,404 759
Operating expenses:
Sales, general and administrative 3,417 1,152
Research and development 679 48
Total operating expenses 4,096 1,200
Operating income (loss) 308 (441)
Other income (expense) 82 (35)
Income (loss) before income taxes 390 (407)
Provision (benefit) for income taxes -- 74
Net income (loss) $390 $(480)
Net income (loss) per share:
Basic $0.06 $(0.09)
Diluted $0.05 $(0.09)
Shares used in calculating earnings per share:
Basic 6,586,862 5,362,861
Diluted 8,008,412 5,362,861
SOURCE: Information Analysis Inc. |
