Splash Technology Reports 1998 Fourth Quarter/Year End
Results
Business Wire - January 26, 1999 16:19
SUNNYVALE, Calif.--(BUSINESS WIRE)--Jan. 26, 1999--Splash Technology Holdings, Inc. ("Splash"
or the "Company")(Nasdaq:SPLH), a leading international supplier of color servers designed to transform
color copiers into high-quality printers, scanners, and prepress proofing systems, today reported operating
results for the fourth quarter and year ended December 31, 1998.
Net income for the 1998 fourth quarter was $1.9 million, or $0.14 per share, on net revenue of $15.7 million
compared to a loss of $22.8 million (including a $26.9 million charge relating to acquisitions), or ($1.65) per
share, on net revenue of $22.2 million in the same period last year.
For the year ended December 31, 1998, net income was $13.3 million, or $0.94 per share, on net revenue
of $84.8 million compared to a net loss of $21.2 million (including a $37.9 million charge relating to
acquisitions), or ($1.67) per share, on net revenue of $83.2 million in the similar period a year ago.
"Despite yearlong uncertainties in the Pacific Rim, including Japan's weakness in particular, we are pleased to
close 1998 with another profitable quarter,"stated Kevin Macgillivray, Splash chief executive officer.
"During the past year, we announced a broadened and enhanced line of new products, reflecting our focus
on addressing the specific needs found in several segments of the highly competitive color arena. 1998 also
saw the release of our seventh generation Mac-based PCI and DC Series servers aimed at the graphic arts
market, a new Intel-based M Series line for the corporate market, and our first-ever wide format printing
solution.
"Our overall unit sales increases in 1998 were largely offset by the ongoing transition to lower achieved
prices, and we expect these sales trends to continue in the near term. Nonetheless, we plan to make
additional investments to broaden our sales channels and expand our product line to position us for 2000."
Adoption of Stockholder Rights Plan: The Splash Board of Directors announced that it has declared a
dividend distribution of one Preferred Share Purchase Right ("Right") on each outstanding share of the
Company's Common Stock. Each right will entitle stockholders to buy one-one thousandth of a share of the
Company's Series A Participating Preferred Stock at an exercise price of $55. The Rights will become
exercisable following the tenth day after a person or group announces acquisition of 15% or more of the
Company's Common Stock or announces commencement of a tender or exchange offer the consummation
of which would result in ownership by the person or group of 15% or more of the Common Stock. The
Company will be entitled to redeem the Rights at $0.01 per Right at any time on or before the tenth day
following acquisition by a person or group of 15% or more of the Company's Common Stock. The dividend
distribution is expected to be made on February 16, 1999, payable to stockholders of record on February
16, 1999. The Rights will expire on February 16, 2009. Further details of the Rights will be contained in a
letter that will be mailed to all Splash stockholders.
Splash Technology, Inc. produces software-based color servers that transform printing engines into powerful
networked printers. Splash's innovative technology is easy to use and enables high-quality, accurate, and
consistent color printing from virtually any desktop computer and application. Advanced product features
include color correction, color calibration, separations support, variable data printing, and wide format
support. Splash ships color servers on both Intel and PowerPC platforms. For more information, visit
Splash's website at www.splashtech.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements in this
press release relating to Splash's sales trends, the broadening of Splash's sales channels and Splash's product
investments and product introductions constitute forward-looking statements that involve risks and
uncertainties, including, without limitation, risks relating to the Company's dependence on the color copier
industry and the growth rates in the Company's markets, the Company's dependence on relatively few
customers for a significant portion of its revenues, the Company's reliance on sales to OEMs, the ability of
the Company to continue to successfully develop and market new products and product enhancements for its
targeted markets, the highly competitive nature and rapid technological change that characterize the industries
in which the Company competes, uncertain domestic and international business conditions, particularly sales
to customers located in the Pacific Rim, and other risks and uncertainties described in the Company's reports
and registration statements filed with the Securities and Exchange Commission. As a result, there can be no
assurance that Splash will experience the indicated sales trends, that Splash will successfully broaden its sales
channels, that Splash will successfully make the anticipated investments in broadening sales channels and
product lines, or that Splash's recently introduced products will receive market acceptance.
Splash Technology Holdings, Inc.
Consolidated Statements of Operations
(in thousands, except for per share data; audited)
Three Months Ended Year Ended
December 31, December 31,
1998 1997 1998 1997
Unaudited Unaudited
Revenues:
Net revenue $ 15,720 $ 22,237 $ 84,778 $ 83,192
Cost of net revenue 7,088 10,477 38,943 40,195
Gross profit 8,632 11,760 45,835 42,997
Operating Expenses:
Research and development 3,347 2,638 13,602 7,560
Selling, general and
administrative 3,556 3,256 14,830 10,304
Amortization and write-off
of technology -- 26,900 -- 37,939
Total operating expenses 6,903 32,794 28,432 55,803
Income from operations 1,729 (21,034) 17,403 (12,806)
Interest income, net 529 590 1,979 1,162
Income before income taxes 2,258 (20,444) 19,382 (11,644)
Provision for income taxes 328 2,330 6,079 9,580
Net income $ 1,930 $(22,774) $ 13,303 $(21,224)
Diluted net income
per common share $ 0.14 $ (1.65) $ 0.94 $ (1.67)
Shares used in diluted net
income per share calculation 14,151 13,821 14,170 12,700
Splash Technology Holdings, Inc.
Consolidated Balance Sheets
(in thousands)
Dec 31, Dec 31,
1998 1997
ASSETS
Current assets:
Cash, cash equivalents
and marketable securities $59,185 $53,710
Accounts receivable, net 9,316 4,399
Inventories 2,830 3,541
Other current assets 4,877 4,621
Total current assets 76,208 66,271
Long term investments 1,642 --
Property and equipment, net 2,256 1,385
Deferred income taxes 10,514 11,198
Other assets 3,112 3,639
Total assets $93,732 $82,493
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 2,056 $ 2,283
Accrued and other liabilities 16,286 18,711
Deferred revenue 1,355 1,700
Total current liabilities 19,697 22,694
Other long-term liabilities 742 932
Total liabilities 20,439 23,626
Stockholders' equity 73,293 58,867
Total liabilities and stockholders' equity $93,732 $82,493
CONTACT: Splash Technology, Inc.
Joan P. Platt, 408/328-6351
or
Kehoe, White, Savage & Company,
Van Negris/Philip J. Denning, 212/396-0606
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