TSQD sold some DRIV shares...
Here is the earnings release. They sold DRIV shares but not all. Revenues flat.
Tech Squared Reports Third-Quarter Results
PR Newswire - November 16, 1998 17:12
MINNEAPOLIS, Nov. 16 /PRNewswire/ -- Tech Squared Inc. (OTC Bulletin Board: TSQD) today reported net sales of
$9,721,000 for the third quarter ended June 30, 1998, an 8-percent increase from $8,973,000 in the third quarter last year.
The company reported a net loss of $982,000, or 9 cents per share, for the quarter, compared with a net loss of $210,000, or
2 cents per share, in the third quarter last year. These results include a portion of the losses of Digital River, Inc., through Aug.
11, 1998, when Digital River's initial public offering reduced Tech Squared's effective ownership to approximately 19 percent
from 23 percent. Tech Squared holds an option to acquire 3,200,000 shares of Digital River, a leading provider of electronic
outsourcing solutions to software publishers and online retailer clients. The option is exercisable through Dec. 31, 2000, for a
total exercise price of $1.
Excluding the company's portion of Digital River's losses, Tech Squared's net loss in the most recent quarter was $612,000,
compared with net income of $107,000 in the third quarter of 1997. This year's third-quarter net loss included an investment
loss of $271,000 from a write off of an investment in Cam Designs Inc. stock.
Sales to DTP Direct catalog customers increased 15 percent in the third quarter from the same period in 1997, primarily as a
result of stronger computer system sales, said Richard Apple, chief executive. The increase in DTP Direct sales more than
offset a 22-percent decline in sales through the company's distribution business. That decline was primarily a result of the
elimination of Macintosh clone system sales at the end of this year's second quarter..
Apple said another factor in Tech Squared's third-quarter sales increase was the contribution of the company's new Net Direct
catalog, which is aimed at developers of Internet/intranet sites.
"Net Direct generated more than a half-million dollars in sales during the quarter -- an encouraging start," Apple said. "But, as
expected, its start-up costs also contributed substantially to a 68-percent increase in third-quarter selling and marketing
expenses. While we believe that its target market is larger than the market for DTP direct, we don't expect Net Direct to
contribute to net income before the end of 1998."
For the nine months ended Sept. 30, 1998, net sales were $27,816,000, compared with $27,421,000 in the same period of
1997. The company's net loss was $2,529,000, or 23 cents per share, compared with a net loss of $711,000, or 7 cents per
share, last year.
For the nine months, Tech Squared recorded gain on issuance of stock by Digital River of approximately $4,374,000, net of
deferred income taxes, which has been recorded as an adjustment to stockholders' equity. Issuance of additional Digital River
shares reduced Tech Squared's effective ownership in Digital River to less than 20 percent. As a result, beginning Aug. 12,
1998, Tech Squared is accounting for its investment in Digital River as available-for-sale securities, which are valued at $8.75
per share, the closing market price on Sept. 30, 1998.
The investment in Digital River is shown on the balance sheet as $27,966,000 at Sept. 30, 1998, vs. $839,000 at Dec. 31,
1997.
Tech Squared, based in Minneapolis, is a national marketer and distributor of mid- to high-end microcomputer hardware,
software and peripherals primarily to businesses in the desktop publishing, graphic arts and pre-press industries, as well as an
emerging customer base of Internet and intranet site developers.
Except for historical financial information, the information contained in this release is forward-looking and subject to certain
risks as described in the company's filings with the Securities and Exchange Commission, including the company's annual report
on Form 10-K for the year ended Dec. 31, 1997. Actual results may differ significantly based on such risks. |
