you still in TEKC?
PALO ALTO, Calif., Oct. 23 /PRNewswire/ -- Teknowledge
(OTC Bulletin Board: TEKC) reports revenue of $3,070,219 and earnings of
$273,469, or $.01 diluted earnings per share for the third quarter of 1998,
compared to revenue of $3,367,044 and earnings of $371,352, or $.01 diluted
earnings per share, for the comparable quarter in 1997. Both revenue and
income were up slightly over Q-2 1998 results. Net income for the nine months
ending September 30, 1998 was $678,857, or $.02 diluted earnings per share, on
revenues of $9,221,003, compared to income of $1,651,332, or $.06 diluted
earnings per share, on revenues of $7,654,173 for the comparable period.
Included in 1997's net income is a one-time settlement of a patent matter with
Trilogy Development Group Inc. for $1.1M. Teknowledge Corporation has reported
profitable results for eighteen consecutive quarters. Multi-year backlog,
representing ongoing and future service contract commitments, stands at $22M
and includes a new award from NIST (National Institute of Standards and
Technology) for $2M that was announced on October 7, 1998.
On October 20, 1998, the Company entered into a cash settlement agreement
with Dan Robusto, a former executive of the Company, in the amount of $80,000.
The settlement resolves all severance claims made by the former executive
relating to a 1994 lawsuit. As a result of this settlement, the Company was
able to recover $46,000 in income from its legal reserves.
The Company has learned that the government intends to discontinue the
DARPA Distributed Multi-user Information Fusion (DMIF) project as a separate
program, and combine any continuing related work with a different DARPA
program called the Dynamic Data Base (DDB). Based on the likelihood that
DMIF-specific revenue will not materialize, the Company removed $3.2M from its
multi-year backlog. The multi-year service backlog of $22M includes this
adjustment. The change in program priorities is not expected to have a
material effect on Teknowledge's 1998 results, due to the Company's relatively
high backlog and its ability to cover technical staff on alternate projects.
Frederick Hayes-Roth, Chairman and CEO, commented, "Over the last four
months, there has been considerable turnover in management at DARPA, which is
our biggest government customer. Whenever this happens, DARPA management
identifies new opportunities and reshapes existing programs to make more money
available for its strategic directions. We are actively pursuing these new
opportunities, while continuing to strengthen our performance on other
projects that have been identified as central to the long-term directions of
the government. Our leadership on the High Performance Knowledge Base program
and the Quorum program for Quality of Service on distributed, real-time,
Internet-based systems should position us for significant new business in both
government and commercial markets. As our customers redefine their priorities,
we attempt to work with them to provide the highest value technology and
services they demand. Teknowledge has demonstrated repeatedly that it knows
how to adapt to the changing environment and cultivate several lines of
business that can provide multiple paths to economic success."
Neil Jacobstein, President and COO said, "Teknowledge's new NIST
Courseware Conversion contract provides an example of our strategy of multiple
paths to success. In addition to developing the software for licensing to our
commercial partners, we plan to incorporate the technology into Teknowledge's
Sales Associate(TM) product. The technology we develop will enable rapid
conversion of product catalogs into E-Commerce web sites. Corporations that
need quick conversion of their classroom training materials for Intranet to
Internet distribution, will also be able to utilize the software that we are
developing."
Teknowledge is a 17 year-old distributed knowledge management Company. It
provides architecture, design, and software systems development services for
government and commercial Internet applications. Teknowledge's E-Commerce
Systems business sells commercial software and services for selling products
on the Internet. Teknowledge stock is traded on the bulletin board under the
symbol TEKC.
TEKNOWLEDGE CORPORATION
Consolidated Balance Sheets
(In thousands)
(Unaudited) (Audited)
September 30, December 31,
1998 1997
Assets
Cash and cash equivalents $2,572 $2,172
Receivables and unbilled charges 2,203 2,387
Deferred tax asset, short-term 400 400
Capitalized software, net 226 27
Equipment and improvements, net 562 599
Deferred tax asset, long-term 500 500
Total assets $6,463 $6,085
Liabilities and stockholders' equity
Accounts payable $540 $703
Accrued payroll & related liabilities 659 745
Other accrued liabilities 302 477
Stockholders' equity 4,962 4,160
Total liabilities and stockholders' equity $6,463 $6,085
TEKNOWLEDGE CORPORATION
Consolidated Income Statements
(In thousands, except per share data)
(Unaudited)
Three Months Nine Months
Ended Sep 30, Ended Sep 30,
1998 1997 1998 1997
Revenues $3,070 $3,367 $9,221 $7,654
Costs and expenses 2,817 3,045 8,614 7,192
Operating income 254 322 607 462
Nonoperating income 27 56 72 1,205
Income before tax 281 378 679 1,667
Provision for income tax 7 7 0 16
Net income 273 371 679 1,651
Diluted net income per share $0.01 $0.01 $0.02 $0.06
Shares used in computing
net income per share 28,853 28,079 28,713 29,165
SOURCE Teknowledge Corporation
-0- 10/23/98
/CONTACT: Dennis Bugbee of Director of Finance of Teknowledge,
650-424-0500/
(TEKC)
CO: Teknowledge Corporation
ST: California
IN: CPR
SU: ERN
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