Forecross Corporation Announces Record Revenues in Fiscal 1998
Year End Results
Business Wire - January 13, 1999 21:09
SAN FRANCISCO--(BUSINESS WIRE)--Jan. 13, 1999--Forecross(R) Corp. (OTCBB:FRXX) announced
today results for the year ended Sept. 30, 1998.
Revenues increased to $7,168,752, up 24% from $5,775,038 reported in 1997. However, the company's net
loss amounted to $2,328,652 (or $.20 per share) in 1998, versus the loss of $1,045,511 (or $.09 per share) it
incurred for the year ended Sept. 30, 1997.
Operating results for the periods ended Sept. 30, include:
Three Months Three Months Year Ended Year Ended
Ended Sept 30, Ended Sept 30, Sept 30, Sept 30,
1998 1997 1998 1997
Revenues $1,512,658 $1,368,442 $7,168,752 $5,775,038
Cost of Revenues 1,077,198 1,292,646 4,419,347 3,366,608
Operating Expenses 1,017,708 981,631 4,772,147 3,384,286
Loss from Operations (582,248) (905,835) (2,022,742) (975,856)
Other (Expense) (87,241) (6,006) (305,910) (69,655)
Net Loss (669,489) (911,841) (2,328,652) (1,045,511)
Net Loss per share (0.06) (0.08) (0.20) (0.09)
Weighted Average
Number of Shares
Outstanding 11,763,612 11,750,862 11,761,920 11,681,035
The increase in revenues for the period reflected several factors: first, revenue of $4,364,000 from year
2000 assessment and renovation contracts and the amortization of Assess/2000 software licenses in 1998,
as compared to $1,788,000 in 1997; second, the decrease in revenue from the amortization of exclusive
distributorship agreements of $110,000 in 1998, compared to $660,000 in 1997; and, third, the decrease in
migration services revenue to $2,695,000 in 1998, as compared to $3,326,000 in 1997.
Revenues for the three months ended Sept. 30, 1998, were $1,512,658 as compared to $1,368,442 for the
same period in 1997, and $2,270,675 for the three months ended June 30, 1998.
"Although our revenues continue to demonstrate strong growth compared to the prior year, our loss is a
direct result of the year 2000 business not developing to the level anticipated by the company and the
industry in general," commented Kim O. Jones, President.
"The company had added significant resources, in terms of both personnel and facilities, to address the
anticipated requirements to support the year 2000 business, and these costs adversely impacted our
operating results for 1998. While we continue to expect to benefit from the enhanced infrastructure and
products that are in place as the year 2000 market materializes during this 1999 fiscal year, we have taken
some steps to reduce our expenses in 1999."
The backlog at Sept. 30, 1998, which was $531,000, was significantly below our historical levels for several
reasons. First, the company substantially completed one major migration/renovation project during fiscal
1998. Second, year 2000 projects are typically of much shorter duration than migration projects and may
even be completed within the same quarter as they are booked, thus not appearing in the quarter end
backlog.
Third, the year 2000 problem has had the effect of temporarily diverting customer resources away from
migration projects to year 2000 efforts, as well as the efforts of some prospective customers to either
attempt to perform the year 2000 renovation internally or to evaluate other alternatives to renovation.
While both of these developments appear to be temporary, they have had the effect of slowing the rate at
which the Company has been able to obtain contracts for such work, especially during the second half of
the company's fiscal year.
During the first quarter of fiscal 1999, the company's working capital was reduced to levels that were
lower than customary. This was due to the slowdown in the company's application migration business
and the slower than anticipated level of new year 2000 contracts. As discussed above, the company has
taken steps to reduce its expenses.
In addition, the company anticipates completing in January 1999, a private placement of securities from
which it expects to receive net proceeds of $250,000 to $330,000. Beyond these actions already taken to
address liquidity concerns, the company expects additional revenue during January and February from
some of the year 2000 contracts currently under negotiation.
Founded in 1982 as a high-technology software development laboratory, Forecross Corp. is dedicated to
the design and development of innovative conversion software. Clients have included such leading
corporations as Aetna Life Insurance Company, Brown Brothers Harriman & Company, Charles Schwab
& Co., BDM Technologies, Inc., IBM Corp. and Bank of America NTSA for its migration software
services.
Teaming partners of Forecross Corp. for its Complete/2000(R) offerings include AASKI Technologies,
Ltd., TRW, Inc. (BDM International), CIBER, Inc., Information Sciences Group, Inc., NCR Corp., Quality
Systems Inc. (formerly known as Tracor, Inc., now a subsidiary of Marconi North America, a subsidiary
of General Electric Company, p.l.c.), SCB Computer Technology, Inc., and Sapiens Americas (a subsidiary
of Sapiens International).
On Behalf of the Board of Directors, Kim O. Jones President & CEO FORECROSS CORP.
Except for historical information contained herein, the matters set forth in this release are forward-looking
statements that are dependent on certain risks and uncertainties, including such factors, among others,
as market acceptance, market demand, pricing, changing regulatory environment, changing economic
conditions, risks in new product and service development, the effect of the company's accounting
policies and other risk factors detailed in the Company's SEC and BCSC filings.
The U.S. Securities and Exchange Commission and the Vancouver Stock Exchange have not reviewed and
do not accept responsibility for the adequacy or accuracy of this News Release, which has been prepared
by the company.
Note to Editors: Forecross is a registered trademark of the Forecross Corp. Complete/2000 is a registered
service mark of Forecross Corp.
CONTACT: Forecross Corp.
Patricia A. Jones, 415/543-1515
Patricia_Jones@forecross.com |
