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Enter a symbol:ÿ ÿ Symbol Lookup TAVA Technologies, Inc. Announces Year End Results for 1998 Wednesday, September 23, 1998 08:07 AM
DENVER, Sept. 23 /PRNewswire/ -- TAVA Technologies, Inc., (Nasdaq: TAVA) Denver, Colorado, a leading provider of automation and information technology solutions to industry, announced results for its fiscal year and fourth quarter ending June 30, 1998.
Revenues for the year increased 31% to a record $48,363,000 from $36,843,000 recorded in 1997. Gross profit increased by 51% to $18,953,000 or 39.2% of revenue from $12,521,000 (34.0%) in 1997. Earnings before interest, taxes, depreciation and amortization were $2,778,000 for the year compared with a negative $71,000 in 1997. The company recorded a net loss of applicable to common shareholders of $310,000 ($.02 per share) compare to a loss of $2,750,000 (.31 per share) for 1997.
Revenues for the fourth quarter increased 56% to a record $14,893,000 from $9,556,000 recorded in the fourth quarter of 1997. The company recorded net income for the fourth quarter of $605,000 ($.03 per share) compared to a fourth quarter loss of $ 3,234,000 in 1997. Earnings before taxes, interest, depreciation and amortization were $1,759,000 for the quarter.
John Jenkins, CEO stated "We expect the solid trends of growth and general improvement in our business to continue and accelerate. Revenue growth from our third to fourth quarter; 1998 was 28%; earnings before interest taxes and depreciation were up nearly 82% and earnings per share tripled.
He added, "Our annual revenues included a $14,390,000 contribution from our Y2k products and services, of that total, $4,129,000 was product sales and license fees in the fourth quarter. We expect significant additional growth from this sector in 1999."
Doug Kelsall, CFO added, "The company's balance sheet has improved dramatically from one year ago. Working capital at June 30, 1998 was $17,605,000 as compared to $168,000 in 1997."
Kelsall added, "Gross margin as recorded for the quarter and year includes the effect of modifications in overhead allocation methods that were made to reflect changes in corporate and operating structure. The effect of these changes was to reduce recorded G&A and increase costs of sales. Before including the effect of these changes, Q4 gross margin was computed at 51% of revenue, a 48% increase in gross profit on Q3 1998. These modifications have no effect on EBITDA , net income or EPS."
As a general update to the company's activity, Jenkins, provided the following:
The company's business and performance continues to grow and improve.
Currently active projects across the organization total more than 500
with approximately 240 those Y2k related. The company is currently active
in Y2k work at more than 300 sites around the world.
Headcount at the end of August totaled approximately 520. This is up
from 380 in March.
The company booked $62,000,000 of new orders in its fiscal 1998. This
provides an opening backlog for 1999 of more than $24,000,000. As we have
explained previously, booked order values for Y2k generally include only
estimates of products and services included in the inventory and
assessment stage of a project. As we extend into remediation work with a
client, this is done either as an extension and expansion of the original
contract or a new contract.
As previously announced, our bookings for Y2k business increased
sharply at the very end of our fourth quarter. We expect that bookings
for Q1/99 will track at or above the rate of Q4.
In spite of the late arrival of many of the orders in Q4, we posted a
28% increase in revenue, Q4 over Q3 and believe that we should see an
accelerated revenue increase from Q4 to Q1.
The total number of sites covered by Y2k specific contracts or master
consulting agreements has now climbed to approximately 4000. While the
company does not expect to provide products and services to all these
sites, it does expect to address a substantial number of these, and of
course those from future bookings.
Eleven of the company's clients are now engaged in some remediation
activity, with others very close to that stage. For current clients that
have progressed far enough in assessment for us to make a reasoned
calculation, we estimate the total costs of those remediation projects at
more than $150,000,000. It is clear that all clients will not complete
their remediation projects prior to December 31, 1999. We do not expect
that the company will execute all of the estimated remediation project
activity.
The company continues to experience core business opportunity growth
from its Y2k activity. As an example, at one particular client, TAVA had
previously done work in 10 of their facilities in the U.S. We now
forecast that in the course of the next 14 months, we will work in between
100 and 150 of their U.S. facilities. All of these facilities are
potential purchasers of TAVA's non-Y2k products and services. This
example is repeated many times across the scope of our Y2k business base.
Given the general late start in addressing the embedded system issue,
most of our Y2k clients are confining current spending to Y2k projects
until they better understand the scope. That said, we have already booked
non-Y2k business with some new Y2k clients and have clear indications from
many that they see TAVA clearly as a supplier beyond year 2000.
The content and quality of our database information continues to be a
major competitive advantage for us. In addition, it has positioned us to
address rapidly additional leverage opportunities such as addressed below
very rapidly. We added more than 10,000 items to our database in Q4,
which now stands at approximately 40,000 items. Our research capacity is
now operating at a rate of approximately 1000 new items per week. The
"hit rate" on client inventories continues to climb now that the fourth
quarter surge of orders has been processed.
In Q4, client inventory items processed through our Y2k compliance
database numbered more than 55,000 resulting in approximately 20,000
billable database reports after reduction for unique items. As an
indication of the sharp ramp in demand, we expect to process nearly 80,000
client inventory items and generate more than 35,000 billable database
reports in Q1.
The company issued more than 200 licenses in Q4/99. This figure
includes multiple licenses to a number of clients.
The company's position in the utility market through TAVA/Beck, LLC is
also growing rapidly. While there was no material contribution from the
venture in Q4/99, we expect a solid positive financial contribution in Q1.
This will be in the form of an equity change given the structure of the
deal.
The company's licensee Colorado Med Tech is also having increasing
success in the health care industry. We expect that contribution from
license revenues will begin in our second quarter.
The company's alliance and solution provider partner programs continue
to expand in scope and impact. The company recently signed a solution
provider partner agreement with Unisys. Unisys and TAVA are teamed on a
Y2k engagement with a major domestic airline. The Unisys agreement has
generated significant early positive response, particularly from their
international operations.
The company also recently executed a business partner agreement with
the IBM Greater China Group. IBM will market TAVA's PlantY2kOne products
and services for resale and will be using the product to address the non-
IT portion of its own Y2k business.
Earnings Recap:
Numbers are in ($000's, except per share amounts)
3 Months 3 Months 12 Months 12 Months
Quarter Quarter Year Year
Ending Ending Ending Ending
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
Revenue $14,893 $9,556 $48,363 $36,843
Cost of Sales 8,318 6,592 29,410 24,322
Gross Margins 6,575 2,964 18,953 12,521
SG&A 4,884 5,054 16,360 12,546
Amort of Goodwill & Cap
Sftwr + Depr. 967 773 2,382 1,582
Total Expenses 5,851 5,827 18,742 14,128
Other Income ( Expenses) (119) (361) (461) (1,080)
Net Income (loss) $605 $(3,224) $(250) $(2,735)
Net Income (loss) applicable
to comn shldr. 605 (3,239) (310) (2,750)
Per share-basic 0.03 (0.28) (0.02) (0.31)
Per share- diluted 0.03 (0.28) (0.02) (0.31)
Weighted average shares -
basic 21,471,000 11,532,000 18,356,000 8,882,000
Weighted average shares -
diluted 23,194,000 11,532,000 18,356,000 8,882,000
EBITDA $1,759 $(2,133) $2,778 $(71)
Balance Sheet Info: June 30, 1998
Assets
Cash $ 4,993
Other Current 22,872
Total Current assets 27,865
Other Assets 16,316
Total Assets $44,181
Working Capital $17,605
Liabilites and Equity
Total Current Liabilities $10,260
Long Term Liabilities 5,589
Total Liabilities 15,847
Shareholder's Equity 28,333
Total Liabilites and
Shareholder's Equity $44,181
Statements made in this Press Release that are not historical or current facts are "forward looking statements" made pursuant to the safe harbor provisions of federal securities laws. Forward-looking statements represent management's best judgment as to what may occur in the future, but are subject to certain risks and uncertainties that could cause actual results and events to differ materially from those presently anticipated or projected. Such factors include adverse economic conditions, entry of new and stronger competitors, inadequate capital, unexpected costs, failure to integrate operations of recently acquired subsidiaries and failure to capitalize upon access of new clientele. Specific risks and uncertainties which may affect forward-looking statements about the Company's Plant Y2K One(TM) business and prospects include the possibility that a competitor will develop a more comprehensive or less expensive Y2K solution, and delays in market awareness of TAVA and its product and service solutions. These factors and others are discussed in the "Management's Discussion and Analysis" section of the Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1997, to which reference should be made.
SOURCE TAVA Technologies, Inc.
CONTACT: John Jenkins, CEO, or Doug Kelsall, CFO, of TAVA Technologies, Inc., 303-771-9794; or Media: Margaret Ebeling of Barnhardt/CMI Public Relations, 303-626-7200; or Investor Relations: Scott Liolios of Pacific Consulting Group, 949-574-3860
Quote for referenced ticker symbols: TAVAc 1998, PR Newswire
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