to: Bill and others,
5/01/96 - CARNEGIE GROUP ANNOUNCES FIRST QUARTER 1996 FINANCIAL RESULTS
PITTSBURGH, May 1 -- Carnegie Group (Nasdaq:CGIX ) today announced its financial results for the first
quarter of calendar year 1996, ended March 31, 1996.
Revenue for the first quarter 1996 was $8,323,000 compared to $6,052,000 recorded for the same quarter last year, an
increase of 38%. Income from operations rose to $944,000, up 65% from $572,000 recorded in the first quarter last year.
Net income for the first quarter 1996 was $683,000, or $.10 per share compared to $479,000, or $.09 per share for the
first quarter 1995.
Net income for the first quarter of 1996 included a 37.5% effective tax rate compared to a 17.6% effective tax rate used for
the first quarter of 1995, due principally to changes in estimates of the realization of deferred tax assets related to the
Company"s net operating loss carryforwards in accordance with Accounting Standard No. 109. The higher current period
effective tax rate reflects the increased tax benefit that was anticipated in estimating the deferred tax asset at December 31,
1995. The tax provision amounted to $.06 per share for the first quarter of 1996 compared to $.02 per share for the first
quarter of 1995.
Carnegie Group"s President and Chief Executive Officer, Dennis Yablonsky, said, "We are very pleased by our financial
performance for our second quarter as a public company. The increase in operating margins reflects our growth and
continued leverage of our corporate infrastructure."
The Company"s backlog was $14.1 million at March 31, 1996 compared to $9.6 million at March 31, 1995, an increase of
$4.5 million, or 46%. Backlog at March 31, 1996 decreased from backlog of $18.7 million at December 31, 1995,
reflecting the renegotiation of a large fixed-price contract with a major customer, which partially offset new bookings for the
quarter. The Company includes in backlog signed contracts that either have milestones yet to be attained or for which the
Company can make a reasonable estimate of work yet to be performed. As most of the contracts in backlog are terminable
by the Company or the client upon short or no notice, there can be no assurance that contracts reflected in backlog are a
reliable measure of future revenue.
As of March 31, 1996, the Company had a total staff of 234 employees and independent contractors, compared to 219 at
December 31, 1995 and 179 at March 31, 1995.
Carnegie Group, Inc. provides client/server software development services that integrate advanced software technologies
with clients" existing computing infrastructures to automate and enhance complex business processes. The Company
performs software development, systems integration, and technical consulting services to improve its clients" productivity and
market position in three business areas: customer service; customer contact; and logistics, planning, and scheduling. Within
these areas, Carnegie Group targets its services to clients in the telecommunications, financial services, manufacturing,
defense and healthcare industries. CARNEGIE GROUP, INC. AND SUBSIDIARIES Condensed Consolidated
Statements of Operations (in thousands except share and per share data) Three months ended March 31, (unaudited)
(unaudited) 1996 1995 Revenue: Software services $8,193 $ 5,959 Software licenses 130 93 Total revenue 8,323 6,052
Costs and expenses: Cost of revenue 5,065 3,776 Research and development 179 154 Selling, general and administrative
2,135 1,550 Total costs and expenses 7,379 5,480 Income from operations 944 572 Other income 148 9 Income before
income taxes 1,092 581 Income tax provision (409) (102) Net income $ 683 $ 479 Earnings per share of common stock $
.10 $ .09 Weighted average number of common shares outstanding 7,176 5,594 CARNEGIE GROUP, INC. AND
SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands except share and per share data) (unaudited)
March 31, December 31, 1996 1995 Assets Current assets: Cash and cash equivalents $ 12,240 $ 12,395 Accounts
receivable 8,772 7,344 Deferred income taxes 1,076 1,222 Other current assets 383 398 Total current assets 22,471
21,359 Property and equipment, net 1,957 1,813 Deferred income taxes 1,568 1,780 Other assets 34 37 Total assets $
26,030 $ 24,989 Liabilities and Stockholders" Equity Current liabilities: Accounts payable and accrued liabilities $ 4,605 $
4,451 Advance billings and deferred revenue 872 537 Other current liabilities 49 232 Total current liabilities 5,526 5,220
Obligations under capital leases-Noncurrent portion 26 40 Total liabilities 5,552 5,260 Stockholders" equity: Common
stock. $.01 par value; 20,000,000 shares authorized, 6,436,300 and 6,380,200 issued 65 64 Capital in excess of par value
30,901 30,836 Accumulated deficit (10,013) (10,696) Treasury stock, 190,000 shares, at cost (475) (475) Total
stockholders" equity 20,478 19,729 Total liabilities and stockholders" equity $ 26,030 $ 24,989 -0- 5/1/96 /CONTACT:
John W. Manzetti, Executive Vice President and Chief Financial Officer of Carnegie Group, 412-642-6900/
(CGIX) CO: Carnegie Group, Inc. |
