Quarterdeck Announces Third-Quarter Results
MARINA DEL REY, Calif.--(BUSINESS WIRE)--July 31, 1998-- Quarterdeck Corp. (Nasdaq:QDEK - news) Friday announced its operating results for the third quarter of fiscal 1998 ended June 30, 1998.
The company had previously announced that results for the quarter ended June 30, 1998 would include a significant restructuring charge and a substantial operating loss. Gross revenues and net revenues for the quarter were $13.8 million and $8.0 million respectively, compared with $24.8 million and $21.1 million reported for the same period in 1997.
Quarterdeck reported a net loss of $14.7 million, or $0.27 per share, vs. net income of $1.1 million, or $0.02 per share for the same quarter last year. The 1998 third quarter end cash balance was approximately $15.2 million.
For the nine months ended June 30, 1998, the company reported net revenues of $42.0 million, compared with $68.5 million for the nine-month period ending June 30, 1997. The net loss for the nine-month period was $21.4 million or $0.45 per share compared with net income of $241,000 or $0.01 per share, reported for the nine months ended June 30, 1997.
The company attributed the significant decline in gross and net revenues during the third quarter to several factors, including, among others, the industrywide slowdown in software sales related to the market's anticipation of the Windows 98 launch and recent weakness in personal computer retail sales.
Quarterdeck recorded a provision of approximately $5.8 million or 42% of gross quarterly revenue to account for possible sales returns and allowances, vs. a typical 15% provision.
This increased provision was taken to reserve for the previously noted slowdown in software sales and for new products and product bundles that assist users upgrading to Windows 98 for which high sell-through rates to end-users have not yet been established. Gross and net revenues from Europe were also depressed for similar reasons.
In addition, the third quarter 1998 results included $2.7 million in restructuring and other charges and $2 million in acquisition related goodwill deemed impaired by the company.
''In spite of market conditions -- decreased store traffic leading up to the launch of Windows 98 and normal summer sales slowdown -- retail software sales started to pick up in June. We continue to expand our electronic distribution channels and are rapidly moving toward our strategy to re-focus on the less volatile corporate segment with an emphasis on small to medium-sized businesses,'' said King R. Lee, interim president of Quarterdeck.
''We have taken steps to significantly lower the company's break-even point by scaling down to the core business, replacing five vice presidents and lowering head count by over 25%. With these expense reductions and the re-focus of the business, we expect Quarterdeck to become profitable within two quarters. We are pleased that CleanSweep, our flagship product, was first in corporate sales in every month of the quarter in the uninstaller category.''
QUARTERLY HIGHLIGHTS
-- Quarterdeck announced two new corporate solutions products in
the third quarter: DiskClone Corporate, a fast, easy method for
deploying new operating systems over a network, ideal for
businesses and organizations migrating from Windows 3.x or 95 to
Windows 98, Windows NT 4.0 or 5.0; and CleanSweep for
Administrators, a powerful administration tool for creating
customized versions of the company's award-winning uninstaller
solution, CleanSweep, to be distributed throughout an enterprise.
-- Quarterdeck's CleanSweep product line led the PC uninstaller
category in the corporate market for the entire June quarter
according to sales figures from PC Data, the computer industry's
comprehensive source for software and hardware sales information.
CleanSweep outsold the leading competitors, CyberMedia's
Uninstaller and Symantec's Norton Uninstaller, by as much as six
to one and three to one, respectively.
-- The PC Data June business category retail report shows that
Quarterdeck increased its dollar market share for June by 37% over
May, and increased its unit market share by 61% over May.
-- Quarterdeck launched its Enterprise Partner Program (QEPP), a
new initiative to bring helpware solutions to small and
medium-sized enterprises through channel partners. The QEPP
program provides value-added resellers (VARs), corporate
resellers, consultants, integrators and support providers with the
sales, marketing and technical support needed to design, sell and
support the company's enterprise helpware and communication
solutions that help manage the cost of ownership for desktop PCs.
The number of VARs currently signed up for QEPP exceeds, by more
than double, the company's target.
-- Quarterdeck expanded its distribution of PC helpware solutions
through a comprehensive electronic sales distribution network via
the Internet that includes the company's online store
(http://store.quarterdeck.com), and other electronic sales
distributor partners such as Digital River, CNET Buy Direct,
eWarehouse, TestDrive, TechWave and NetSales. Customers can save a
trip to the store and shipping and handling charges by downloading
Quarterdeck's helpware solutions directly to their PCs.
-- Internationally, Quarterdeck announced a strategic alliance with
TECO Business Software to distribute the company's REALHELP Extra
Strength software throughout Australia. Under the agreement, TECO
Business Software, a subsidiary of Taiwan-based TECO Information
Systems Co., Ltd., will distribute Quarterdeck's REALHELP Extra
Strength exclusively on an OEM basis to end users via its network
of Australian computer retail outlets. In addition, the following
products were launched: a Dutch version of CleanSweep; a Japanese
version of Zip-It; and French and German versions of ViruSweep,
Partition-It and Disk Clone.
-- Quarterdeck's products received several awards in the third
quarter: CleanSweep Deluxe received Windows Magazine's prestigious
Win 100 award and the FreshSite Network's Fresh Award. REALHELP
Extra Strength won the C/NET Editor's Choice award for best crash
protection; and Remove-It 98 also won C/NET Editor's Choice award
in the uninstaller category.
ABOUT QUARTERDECK
Quarterdeck is a global leader in the development and marketing of PC helpware -- software designed to prevent and solve PC performance problems, especially those encountered in networked -- Internet and Intranet environments.
The company's goal is to make personal computing trouble-free for users and network administrators alike, while reducing the need for live technical support. Quarterdeck's current product line, which addresses storage management, system conflict resolution, virus protection, system updating, and enhanced access to networked information and communications resources, is marketed to both end-users and businesses via retail distribution, corporate resellers and OEM's, direct marketing channels, and the Internet.
Quarterdeck's products are available in more than 14,000 outlets throughout the United States and Canada, as well as in more than 29 countries worldwide. Incorporated in 1982 and traded on Nasdaq under the symbol QDEK, Quarterdeck's worldwide headquarters are in Marina del Rey, with its European operations based in Dublin, Ireland.
Further information may be obtained by calling 800/683-6696 toll-free, or 573/443-3282, by accessing Quarterdeck's Web site at quarterdeck.com, or by sending e-mail requests to info@quarterdeck.com.
NOTE TO EDITORS: For more information on Quarterdeck Corp. and its products, view the Quarterdeck Press Center at (http://www.quarterdeck.com/qdeck/press).
Quarterdeck, CleanSweep and Remove-It are registered trademarks of Quarterdeck Corp. or its subsidiaries. DiskClone, Partition-It, REALHELP, ViruSweep and Zip-It are trademarks of Quarterdeck Corp. or its subsidiaries. All other brand and product names are trademarks or registered trademarks of their respective holders.
This news release contains forward-looking statements that are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, successful integration of acquisitions and divestitures of non-core assets, the ability to secure additional sources of financing, the ability to reduce operating expenses and other factors described in the company's filings with the Securities and Exchange Commission. The actual results that the company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. The company undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.
QUARTERDECK CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per-share data)
(Unaudited)
Three months ended Nine months ended
June 30, June 30,
1998 1997 1998 1997
Gross revenues $ 13,841 $ 24,796 $ 57,817 $ 79,402
Returns allowances 5,806 3,740 15,808 10,864
Net revenues 8,035 21,056 42,009 68,538
Cost of revenues 3,560 5,153 12,344 17,505
Gross profit 4,475 15,903 29,665 51,033
Operating expenses:
Research and
development 5,785 3,760 14,805 11,480
Sales and marketing 8,109 7,169 26,177 23,015
General and
administrative 2,441 3,689 7,959 13,403
Acquisition,
restructuring and
other charges 2,726 - 2,583 -
Total operating
expenses 19,061 14,618 51,524 47,898
Operating income (loss) (14,586) 1,285 (21,859) 3,135
Interest expense, net (219) (498) (655) (1,491)
Other income (expense), net 59 266 1,116 (1,400)
Income (loss) before
income taxes (14,746) 1,053 (21,398) 244
Provision for income taxes - - 16 3
Net income (loss) $(14,746) $1,053 $(21,414) $ 241
Net income (loss) per share:
Basic $(0.27) $0.02 $(0.45) $ 0.01
Diluted $(0.27) $0.02 $(0.45) $ 0.01
Shares used to compute
net income (loss)
per share:
Basic 55,609 47,130 47,490 47,644
Diluted 55,609 47,130 47,490 47,644
-0-
QUARTERDECK CORP.
COMPARATIVE BALANCE SHEET
(Amounts in thousands)
June 30, Sept. 30,
1998 1997
(Unaudited)
ASSETS
Current assets:
Cash & cash equivalents $ 15,197 $ 23,651
Trade accounts receivable 1,429 7,028
Inventories 895 1,177
Other current assets 2,850 4,655
Total current assets 20,371 36,511
Equipment and leasehold improvements, net 4,739 14,153
Capitalized software costs, net 803 1,790
Other assets 919 3,427
$ 26,832 $ 55,881
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 2,586 3,792
Accrued liabilities 8,339 14,196
Accrued acquisition,
restructuring and
other charges 4,574 5,385
Income tax payable 308 627
Notes payable to bank 1,500 5,579
Current portion of
long-term obligations 14 15
Total current liabilities 17,321 29,594
Convertible notes 25,000 25,000
Other long-term obligations,
less current portion 57 114
Total liabilities 42,378 54,708
Stockholders' equity:
Series C Preferred stock 6,992 24,594
Common stock 60 43
Additional paid-in capital 97,562 75,630
Accumulated deficit (119,578) (98,164)
Foreign currency translation
adjustment (29) (281)
Notes receivable from directors
for sale of stock (18) (18)
Net unrealized gain (loss) on
marketable securities 24 (72)
Treasury stock (559) (559)
Total stockholders' equity (15,546) 1,173
$ 26,832 $ 55,881
--------------------------------------------------------------------------------
Contact:
Quarterdeck Corp., Marina del Rey
Frank Greico, 310/309-4232
fgreico@quarterdeck.com
Ana Thorne, 310/309-3767
athorne@quarterdeck.com |
