Quarterly statement.....from their website.....
Interface Systems Reports Second Quarter Results
ANN ARBOR, MI. (20-5-98) Interface Systems, Inc. (NASDAQ:INTF) today reported second quarter results which included the sale of the Interface Systems International Ltd. ("ISIL") distribution business, as previously reported. The operating results of ISIL have been segregated from the continuing operations of the core business and are reported herein as results from discontinued operations. The Company has restated its prior financial results to present the operating results of ISIL as a discontinued operation.
Revenues for the second quarter ended March 31, 1998 were $5.1 million, an increase of 4.2% from revenues of $4.9 million reported for the same quarter last year, due primarily to increased sales of the Company's Oasis Document Server software and related consulting and integration services.
The Company reported a net loss for the quarter of $(2.3) million, or $(0.52) per share, compared with a net loss of $(1.5) million, or $(0.34) per share for the same period last year. Income from continuing operations was $21,000, or $0.01 per share, compared with a loss from continuing operations of $(1.8) million, or $(0.34) per share for the same period last year. Results of continuing operations for the quarter included $353,000 of expense from amortization of capitalized software development costs. Going forward, this expense is expected to be less than $50,000 per quarter. The second quarter of 1997 included non-recurring expenses of $1,765,000 resulting from adjustments to inventory and capitalized software.
The loss from discontinued operations for the quarter was $(534,000) compared with income from discontinued operations of $316,000 for the same period last year. In addition, the Company recorded a loss of $1.8 million in the quarter on the disposition of the discontinued operations of ISIL.
Revenues for the six months ended March 31, 1998 were $10.7 million, up 18.4% from the $9.0 million reported for the same period of fiscal 1997. The increase was primarily due to increased sales of Enterprise Network products as well as increased sales of Oasis products offset by decreased sales of printer products.
For the six months ended March 31, 1998, the Company reported a net loss of $(2.4) million, or $(0.53) per share, compared with a net loss of $(2.2) million, or $(0.50) per share for the same period last year. Income from continuing operations was $173,000, or $0.04 per share, compared with a loss from continuing operations of $(2.6) million, or $(0.58) per share for the same period last year. The loss from discontinued operations for the first half of fiscal 1998 was $(748,000) compared with income from discontinued operations of $372,000 for the same period last year.
"The six month results from continuing operations underscore why we are excited by the restructuring. Although Cleo EN sales were a bit softer than we had anticipated, Oasis-related revenues continued to show growth," said Bob Nero, president and CEO of Interface. "A substantial portion of this revenue is consulting services sold in conjunction with the Oasis software. By offering Oasis as a turnkey solution, we've expanded the value and marketability of the product."
Nero added that increased alliance and partnership activity during the first half of the year has enhanced the Company's long-term growth prospects. "Over the past six months, we have added to our potential for future success by developing new channels for marketing our existing products. We expanded our participation in MSFDC's Electronic Bill Presentment and Payment system (a joint venture between Microsoft [NASDAQ: MSFT] and First Data Corp.[NYSE: FDC]); announced a very exciting agreement with SCO (NASDAQ:SCO) to provide host connectivity to their Tarantella software and UnixWare operating system; and signed a very important agreement with Simware Inc.(NASDAQ:SIMWF), to distribute their Salvo web application development tool. While we do not expect these agreements to impact revenue until later in the year, we do view them as strong sources of potential future revenue, and an important component of our software-based strategy."
Interface provides software-based tools and solutions for mainframe document distribution and host connectivity. With more than 30 years of experience, Interface works closely with companies to help them extend the life, the reach, and the value delivery of their legacy applications. Interface Systems is headquartered in Ann Arbor, Michigan, and markets its products worldwide.
Uncertainties Relating to Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Securities Exchange Act of 1934, as amended, based on current management expectations. Actual results could differ materially from those in the forward-looking statements due to a number of uncertainties, including, but not limited to: general economic conditions particularly related to demand for the Company's products and services, changes in Company strategy, product life cycles, competitive factors (including the introduction or enhancement of competitive products), pricing pressures, the results of the audit of the ISIL net assets sold, component price increases, delays in introduction of planned hardware and software products, software defects and latent technological deficiencies in new products, changes in operating expenses, inability to attract or retain sales and/or engineering talent, changes in customer requirements and evolving industry standards.
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Company contact: Bob Nero, President and CEO, Interface Systems, Inc. 5855 Interface Drive, Ann Arbor, MI, 48103. 734-769-5900 Ext. 1740
For a copy of the financial statements, please contact Matt Cardwell at mcar@intface.com or call 734-769-5900.
All Company, brand and product names are or may be trademarks of their respective holders.
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