February 11, 1999 16:50
Input Software Reports Record Fourth Quarter Results
Record Number of New Customers Select InputAccel for Information Capture
SAN JOSE, Calif., Feb. 11 /PRNewswire/ -- Input Software, Inc. (Nasdaq: INPT), a leading provider of enterprise information capture software, today announced operating results for the fourth quarter 1998.
Fourth Quarter Highlights:
-- Reports record revenues of $5.3 million, up 46% over Q4:97 and up 14%
over Q3:98.
-- Posts record profit of $431,000 (nine cents per share), up from
$296,000 in Q4:97 and $354,000 in Q3:98.
-- Wins record number of new InputAccel(TM) customers.
-- Announces stock repurchase program of an additional $5 million.
Summary financial results from continuing software operations:
(dollars and
shares in Q4:98 Q3:98 Q4:97 1998 1997
thousands)
Revenues $5,263 $4,599 $3,593 $17,409 $12,240
Gross margin 90% 91% 92% 90% 93%
Operating margin 8% 8% 8% 5% (1%)
Net income from
continuing
operations $431 $354 $296 $1,019 $394
Diluted EPS $0.09 $0.07 $0.04 $ 0.18 $ 0.05
Cash and
marketable
securities $14,447 $10,755 $12,284 $14,447 $12,284
Weighted
average
shares 4,998 5,440 6,903 5,731 7,285
Revenues for Q4:98 of $5.3 million were up 46% from Q4:97 and 14% from Q3:98. Gross margin for Q4:98 was 90%, compared to 92% in Q4:97 and 91% in Q3:98.
Operating expenses were $4.3 million in Q4:98, compared to $3 million in Q4:97 and $3.8 million in Q3:98. The increased spending was primarily related to increased sales staffing and increased investment in marketing programs for InputAccel.
Net income from continuing operations was $431,000, or nine cents per share, in Q4:98 compared to $296,000, or four cents per share, in Q4:97 and $354,000, or seven cents per share, in Q3:98. Net income from the discontinued Display Division was $1.3 million, or 26 cents per share. This amount reflects a favorable realization of net assets as compared to estimates reflected in Q1:98.
Year End Results
For the year ending December 31, 1998 revenue from the continuing software operations was $17.4 million, an increase of 42% compared to $12.2 million for 1997. Net income from continuing software operations was $1 million, or 18 cents per share, compared to $394,000, or five cents per share, in 1997. The sale of the Display Division was completed on September 8, 1998. The net loss for 1998 for this discontinued operation was $1.4 million, or 24 cents per share. As a result of the sale, the Company owns a minority interest in Cornerstone Peripherals Technology, Inc., which is reflected as an 'other asset' on the December 31, 1998 balance sheet.
The cash balance at December 31, 1998 was $14.4 million, an increase of $2.1 million from December 31, 1997. During Q4:98, the Company repurchased 305,000 shares of its stock for a total of $2.1 million. Since inception of the repurchase plan in February, 1997, 2.9 million shares have been repurchased for a total of $19.1 million. The Board of Directors have authorized repurchases of an additional $5 million, bringing the total authorized amount for stock repurchases to $25 million. The repurchased stock is expected to be held by the Company as treasury stock to be used to meet obligations under its stock plans and for other corporate purposes. Purchases will be made from time-to-time on the open market or in privately negotiated transactions. The timing and volume of purchases will be dependent upon market conditions and other factors. The Company intends to use cash to fund its purchases.
Customer and Channel Expansion
"We made significant progress in all major segments of our business during the quarter and the year," commented Kimra Hawley, Input Software's President and CEO. "During the quarter, we once again delivered record revenue and profits, our seventh consecutive quarter of profitability. We added a record number of new customers during the quarter, as 24 organizations worldwide chose InputAccel to manage their information capture needs. Among the global enterprises that selected InputAccel are EarthGrains, First Union Bank, Gateway Computers, the National Science Foundation, North Carolina Department of Transportation, Schering Plough, U.K Department of Social Security, U.S. Department of Labor, Volkswagen, West Bend Mutual Insurance, and others.
"Essential to building a strong foundation for growth is the continued strengthening and diversification of our sales channels," continued Hawley. "Throughout the fourth quarter and year, we have been able to achieve significant productivity enhancements across our own sales team and through our resellers and partners. In addition to the 24 new customers that purchased InputAccel through our direct and reseller channels, we also saw strong sell-through by our OEM partner, Documentum, who sold to a significant number of net new customers. Combined with these latest additions, we added over 100 customers during 1998. This level of sales and channel activity illustrates the growing adoption of information capture solutions as an integral component of organizations' overall computing infrastructure and as an effective means of streamlining operations.
"During the fourth quarter, more than half of our InputAccel software license revenue was derived from system expansions," Hawley added. "Many of our customers start with a single departmental application, with an eye toward broadening their use of InputAccel by adding additional applications and users. More customers are realizing increased competitive advantage and productivity gains provided by InputAccel and are extending these benefits deeper into their enterprises.
Growing Market Opportunities
"As we've seen throughout 1998, our customers use InputAccel for two different types of information capture applications," Hawley explained. "One usage is for transaction applications, where documents such as order forms, insurance claims, and loan applications are the basis of a business transaction. Clients have reported significantly improved efficiencies and customer service since adopting InputAccel to convert paper and faxes to digital format, creating paperless transactions.
"The second usage is content loading applications, where external documents are captured and uploaded to web sites, CDs, or application servers for subsequent search and retrieval. As organizations become increasingly reliant on the Internet as an effective way to store and share information, we expect content loading applications to represent a growing share of our business.
"We are very pleased with the results achieved during the quarter and throughout the year," said Hawley. "We believe we have developed the superior information capture platform technology, built a productive sales team, and secured effective sales channels and resellers to broadcast the potential inherent in information capture solutions and to secure Input's position as the leader in this exciting emerging market."
About the Company
Input Software, Inc., (www.inputsw.com) headquartered in San Jose, Calif., develops, markets, and supports software products that automate and manage the process of converting externally generated data -- paper, faxes, microfiche, or electronic files -- into an electronic format compatible with enterprise computing systems and the Internet. The company's flagship product, InputAccel, has become the de facto standard for information capture software, supported by more than 25 vendors who provide compatible products.
Input Software, Inc. is a publicly held company traded on the Nasdaq National Market under the INPT symbol.
This press release contains forward-looking statements that involve risk and uncertainties. The Company's actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in "Risk Factors" in the Company's 1998 Quarterly Report on Form 10-Q for the quarter ending September 30, 1998, as well as the following: the emergence of the document management and image processing and markets, potential fluctuations in quarterly results, competition, new products and technological change, general economic conditions and dependence on capital spending of customers, a lengthy sales cycle and dependence on systems sales, risks related to the Year 2000, inherent risks associated with international sales, reliance on third-party resellers and dependence on key personnel.
INPUT SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Year
Ended Dec. 31, Ended Dec. 31,
1998 1997 1998 1997
Net revenues from continuing
operations $5,263 $3,593 $17,409 $12,240
Cost of Revenues 531 290 1,748 881
Gross Profit 4,732 3,303 15,661 11,359
Research and development 1,111 1,004 4,212 4,016
Sales, general, and
administrative 3,216 2,025 10,618 7,434
Operating income (loss) 405 274 831 (91)
Interest income/other 217 174 676 688
Pretax income 622 448 1,507 597
Provision for income taxes (191) (152) (468) (203)
Net income from continuing
operations $431 $296 $1,039 $394
Discontinued operations:
Net income (loss) from
operations of Discontinued
Display Division -- (146) (361) 687
Est. net income/(loss) on sale
of Display Division 1,294 -- (990) --
Net income (loss) from
discontinued operations $1,294 (146) (1,351) 687
Net income (loss) $1,725 $150 $(312) $1,081
Basic and diluted EPS:
For continuing operations $0.09 $0.04 $0.18 $0.05
For discontinued Display
Division $0.26 $(0.02) $(0.24) $0.10
Net income (loss) $0.34 $0.02 $(0.06) $0.15
Shares used in basic EPS
calculation 4,899 6,888 5,657 7,248
Shares used in diluted EPS
calculation 4,998 6,903 5,731 7,285
INCOME SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
December 31, December 31,
1998 1997
ASSETS
Current Assets:
Cash and cash equivalents $14,447 $12,284
Accounts receivable 4,490 2,946
Deferred income taxes and other
current assets 5,613 5,521
Total current assets 24,550 20,751
Property and equipment, net 1,208 1,056
Other assets 943 424
Net assets related to the
discontinued Display Division 176 15,642
$26,877 $37,693
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $652 $463
Deferred revenue 1,694 654
Accrued liabilities 3,174 2,653
Total current liabilities 5,520 3,770
Stockholders' equity:
Common Stock 48 67
Paid-in capital 12,512 24,747
Retained earnings 8,797 9,109
Stockholders' equity 21,357 33,923
$26,877 $37,693
SOURCE Input Software, Inc.
/NOTE TO EDITORS: For more information on Input Software, Inc. via fax,
dial 800-PRO-INFO, code 045. No cost./
/CONTACT: John Finegan, Vice President & CFO of Input Software, Inc.,
408-325-3800; or Danice Van Deren or Catherine Kawakami of The Financial
Relations Board, 415-986-1591/
/Web site: inputsw.com
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