Netscape Reports 18 Percent Growth on Revenues of $150.2 Million for Quarter Ending July 31,
1998; Announces New Board Member
PR Newswire - August 18, 1998 16:40
MOUNTAIN VIEW, Calif., Aug. 18 /PRNewswire/ -- Netscape Communications Corporation (Nasdaq: NSCP) today reported revenues of $150.2 million for
the three months ending July 31, 1998, an 18 percent increase over the $127.2 million in revenues posted during the quarter ended April 30, 1998. Revenues from
Netscape's Enterprise software and services business grew 16 percent during the quarter to $111.6 million, compared to $96.1 million in the previous quarter.
Revenue from Netscape Netcenter increased 24 percent to $38.7 million for the quarter ending July 31, 1998, as compared to $31.1 million for the quarter ended
April 30, 1998.
Netscape's operating margin improved by 6.5 points for an operating loss of $2.1 million for the quarter as compared to an operating loss of $10.1 million for the
preceding quarter ended April 30, 1998. Net income for the quarter totaled $0.1 million, or $0.00 per share, compared with net income of $0.0 million or $0.00
earnings per share in the preceding quarter.
"Overall, we are pleased with the results we posted for the quarter," said Jim Barksdale, president and chief executive officer. "We're seeing strong momentum in
both the Enterprise software and Netcenter businesses as demonstrated by the number of significant customer wins announced during the quarter including Ford,
Visteon, Digital Equipment Corporation, Bay Networks, Fujitsu, Citibank, America Online, Excite, Looksmart, Lycos, Infoseek, and Altavista."
In addition to presenting Consolidated Statements of Operations for the company, Netscape for the first time is presenting separate Statements of Operations for its
Enterprise software and Netcenter segments. "We believe it's important to provide the investor and analyst communities with an enhanced level of detail to evaluate
the performance of both sides of our business," explained Peter Currie, executive vice president and chief administrative officer.
Netscape also announced today that Bill V. Campbell, chairman of the board of directors at Intuit, will join Netscape's board of directors. Mr. Campbell is credited
with helping Intuit become the largest, most successful publisher of financial software in the world. Additionally, Mr. Campbell serves on the board of directors of
Apple Computer, Inc. He replaces John E. Warnock, chairman and chief executive officer of Adobe Systems, Inc. "John has been an outstanding contributor during
his four years of service on Netscape's board and we'll miss him greatly," said Jim Barksdale. "Meanwhile, we look forward to the valuable contributions Bill will
make as our newest board member."
Enterprise Overview
During the quarter, Netscape made several significant announcements related to its enterprise software business. Ford Motor Company is using the Netscape
Directory Server software as the foundation for the Ford Supplier Network, an Extranet that lets Ford deliver information and applications to Ford's suppliers
around the world. Additionally, Visteon, a $20 billion parts supplier and Ford spin-off, licensed the entire Netscape CommerceXpert line and Netscape Application
Server software.
Netscape Singapore announced plans to work with NETS (Network for Electronic Transfers Singapore) to establish Asia's first Internet-based online payment
system for business-to-business electronic commerce. The companies will provide the infrastructure for the new online payment system in partnership with Asia
Manufacturing Online (AMO), a subsidiary of Silkroute Ventures, using electronic commerce software developed by Netscape Communications and Java
technology from Sun Microsystems.
Netscape also shipped BuyerXpert 1.0, delivering the industry's first solution to automate both the internal and external steps of the procurement process, from
placing orders to managing internal approvals and exchanging orders. The insurance and financial services giant John Hancock selected BuyerXpert to automate its
corporate procurement processes and reduce the costs associated with purchasing $300 million in supplies and services for its 7,000 employees nationwide.
On the reseller front, SCO announced plans to be the first to deliver an integrated, enterprise-class Messaging Server for the Intel platform by bundling the Netscape
Messaging, Directory and FastTrack servers on SCO UnixWare 7. Digital expanded its existing license agreement with Netscape to include its Netscape
Application Server line. In addition, Fujitsu announced plans to ship a Japanese localized version of Netscape Application Server. The Fujitsu announcement was
made in conjunction with its partners CTC, FJB, NEC and Hitachi, essentially making Netscape Application Server the definitive industry standard for application
servers in Japan. Also in the quarter, Bay Networks licensed Netscape's Directory Server software and plans to bundle it with each member of its Contivity Extranet
Switch product family.
Netcenter Overview
As a follow-on to the sweeping enterprise software agreement Netscape and Citibank announced in May, the two companies announced a second strategic
worldwide agreement that will make Citibank the anchor tenant of the upcoming Personal Finance Channel on Netscape Netcenter. This multi-year agreement not
only is one of the largest in the industry for finance channels, but also represents the first major Internet portal relationship for Citibank.
Additionally during the quarter, Netscape and America Online signed a strategic agreement to make AOL's Digital City the exclusive local content provider for
Netcenter. Netscape launched the Netscape Silver Screen Sweepstakes with entertainment and consumer products company co-sponsors including Warner Bros.
Online, Paramount Digital Entertainment, Hollywood Online and Sony in a creative promotion to drive membership growth.
The company's two-month "Project 60" campaign to build Netscape Netcenter into a major Internet portal culminated in June 1998 with the launch of Netscape
Netcenter 2.0, a revamped Web site with a new look and feel, a new search service featuring six premier content providers (including Netscape branded search),
and a complete set of content channels and consumer-based Internet services ranging from Web-based email to improved search engine technology.
In July, Netscape announced the beta release of Netscape Communicator 4.5, the first browser designed to link the Netscape Netcenter portal site's content and
services with ease-of-use advances in the browser to make it simpler for people to find information on the Internet. Technology advances introduced in the release
include Smart Browsing, a new set of features that make Web searches more sophisticated and intelligent, Smart Update, a button in the browser that shortens the
process of downloading software, and Smart Addressing, an easier way to find and communicate with other people on the Internet. Additionally, Netscape launched
My Netscape, a new Netcenter service that allows people to fully personalize their Web experience-complete with search functionality, news, weather, stock
quotes, bookmarks and links to applications such as Webmail and Instant Messenger.
Netscape Communications Corporation is a leading provider of software and services for businesses that want to transform the way they create and keep customers
in the emerging Net Economy. The company offers a full line of enterprise software solutions, professional services, and a leading Internet portal to help companies
build, buy or outsource Internet applications that drive revenue growth, build customer loyalty, and create new levels of business efficiency. Traded on Nasdaq under
the symbol "NSCP," Netscape Communications Corporation is based in Mountain View, California.
Additional information on Netscape Communications Corporation is available on the Internet at home.netscape.com, by sending email to info@netscape.com
or by calling 650-937-2555 (corporate customers) or 650-937-3777 (individuals).
NOTE: Netscape, Netscape Navigator, Netscape Certificate Server, Netscape ONE, Netscape SuiteSpot and the Netscape N and Ship's Wheel logos are
registered trademarks of Netscape Communications Corporation in the United States and other countries. Other Netscape logos, product names and service names
are also trademarks of Netscape Communications Corporation, which may be registered in other countries. Other product and brand names are trademarks of their
respective owners.
NETSCAPE COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, July 31, June 30, July 31,
1997* 1998 1997* 1998
Revenues:
Product revenues $99,490 $92,293 $189,427 $168,589
Service revenues 36,480 57,941 67,076 108,875
Total revenues 135,970 150,234 256,503 277,464
Cost of revenues:
Cost of product revenues 7,591 10,499 14,156 17,629
Cost of service revenues 17,328 25,438 32,828 49,350
Total cost of revenues 24,919 35,937 46,984 66,979
Gross profit 111,051 114,297 209,519 210,485
Operating expenses:
Research and development 33,167 37,794 63,377 73,259
Sales and marketing 55,162 64,433 103,185 121,774
General and administrative 11,097 12,612 21,020 24,548
Purchased in-process research
and development and merger
related charges 52,587 - 52,587 -
Goodwill amortization - 1,526 - 3,052
Total operating expenses 152,013 116,365 240,169 222,633
Operating income (loss) (40,962) (2,068) (30,650) (12,148)
Interest income, net 2,445 2,140 4,856 3,903
Other income, net - 16 - 8,341
Equity in net losses of
joint ventures (1,938) - (3,439) -
Income (loss) before
income taxes (40,455) 88 (29,233) 96
Provision for income taxes 4,242 - 8,156 -
Net income (loss) $(44,697) $88 $(37,389) $96
Basic income (loss)
per share $(0.53) $0.00 $(0.45) $0.00
Diluted income (loss)
per share $(0.53) $0.00 $(0.45) $0.00
Shares used in computing
basic income (loss) per share 83,884 96,417 82,824 95,590
Shares used in computing
diluted income (loss)
per share 83,884 104,644 82,824 103,240
* Certain prior period amounts have been reclassified to conform with the
current period presentation.
NETSCAPE COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATMENTS OF OPERATIONS BY SEGMENT
(in thousands)
(Unaudited)
Three Months Ended April 30, 1998*
Enterprise Netcenter Other Combined
Revenues:
Product revenues $76,296 $- $- $76,296
Service revenues 19,825 31,109 - 50,934
Total revenues 96,121 31,109 - 127,230
Cost of revenues :
Cost of product revenues 7,130 - - 7,130
Cost of service revenues 17,358 6,554 - 23,912
Total cost of revenues 24,488 6,554 - 31,042
Gross profit 71,633 24,555 - 96,188
Operating expenses:
Research and development 25,064 10,401 - 35,465
Sales and marketing 44,662 12,679 - 57,341
General and administrative 8,750 3,186 - 11,936
Goodwill amortization - - 1,526 1,526
Total operating expenses 78,476 26,266 1,526 106,268
Operating income (loss) (6,843) (1,711) (1,526) (10,080)
Interest income, net - - 1,763 1,763
Other income, net - - 8,325 8,325
Income (loss) before income taxes (6,843) (1,711) 8,562 8
Provision for income taxes - - - -
Net income (loss) $(6,843) $(1,711) $8,562 $8
NETSCAPE COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT
(In thousands)
(Unaudited)
Three Months Ended July 31, 1998
Enterprise Netcenter Other Combined
Revenues :
Product revenues $92,293 $- $- $92,293
Service revenues 19,291 38,650 - 57,941
Total revenues 111,584 38,650 - 150,234
Cost of revenues :
Cost of product revenues 10,499 - - 10,499
Cost of service revenues 19,316 6,122 - 25,438
Total cost of revenues 29,815 6,122 - 35,937
Gross profit 81,769 32,528 - 114,297
Operating expenses:
Research and development 25,046 12,748 - 37,794
Sales and marketing 48,270 16,163 - 64,433
General and administrative 8,796 3,816 - 12,612
Goodwill amortization - - 1,526 1,526
Total operating expenses 82,112 32,727 1,526 116,365
Operating income (loss) (343) (199) (1,526) (2,068)
Interest income, net - - 2,140 2,140
Other income, net - - 16 16
Income (loss) before income taxes (343) (199) 630 88
Provision for income taxes - - - -
Net income (loss) $(343) $(199) $630 $ 88
* Certain prior period amounts have been reclassified to conform with the
current period presentation.
NETSCAPE COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, 1997 July 31, 1998
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $55,172 $103,998
Short-term investments 129,426 101,773
Accounts receivable, net 153,191 144,686
Deferred tax assets 37,336 37,580
Other current assets 19,961 16,643
Total current assets 395,086 404,680
Property and equipment, net 131,093 143,162
Long-term investments 76,698 77,814
Other assets 29,943 28,595
$632,820 $654,251
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $40,081 $39,063
Accrued compensation and related liabilities 23,193 20,360
Other accrued liabilities 31,397 33,347
Income taxes payable 2,709 2,570
Deferred revenues 106,170 164,541
Total current liabilities 203,550 259,881
Long-term obligations 215 620
Stockholders' equity:
Common stock and additional paid-in capital 549,196 570,014
Deferred compensation (3,671) (2,239)
Accumulated deficit
(119,201) (173,290)
Accumulated other comprehensive income (loss) 2,731 (735)
Total stockholders' equity 429,055 393,750
$632,820 $654,251 |
