01 Communique more than doubles revenues for 1998 year end
01 Communique Laboratory Inc OONE
Shares issued 19,076,860 Feb 17 close $0.35
Thu 18 Feb 99 News Release
Mr. Andrew Cheung reports
The company's revenue more than doubled over fiscal 1997, increasing to
$4,003,313 in 1998 from $1,765,282 in 1997. There was a loss for the year
of $1,897,545 which is a reduction from the loss of $2,097,667 in 1997.
The increase in revenue is the result of a successful three-year plan to
develop a strong retail presence and then use this presence to attract
large modem manufacturers as OEM partners. Revenue increased in both
channels with retail revenue increasing 19 per cent, from $1,759,000 in
1997 to $2,095,000 in 1998 and OEM revenue increasing from a negligible
amount to $1,908,000 in 1998.
Operating expenses increased 57 per cent, from $3,572,105 in 1997 to
$5,595,925 in 1998. These increases were incurred in two main areas:
Research and development, in order to develop new products and customize
products for international markets. Committed to continuing the product
development required to maintain its technological leadership in
communications software the company plans to continue its current level of
R&D expenditures in 1999. The company takes a conservative approach to its
accounting for research and development, expensing all costs as incurred.
Marketing, where $3,703,000 was spent primarily on national advertising and
channel promotion to create a strong retail presence. The channel that was
developed is an asset which will benefit the company for years to come.
While still committed to growing the retail sector, the company plans to
curtail marketing activities in 1999 to a level commensurate with the
revenue stream.
At the beginning of the year, the company had cash of $1,686,922. Cash
resources of $2,322,812 were used for the year resulting in bank debt of
$635,890 at year end. The cash was used to finance the reported loss of
$1,897,545 and the change in non-cash working capital of $378,304. Moving
into 1999, to deal with the availability of working capital, the company:
has arranged extended payment plans with its suppliers;
is pursuing additional financing to be structured in a way as to minimize
shareholder dilution;
has renegotiated new banking arrangements; and,
has successfully reduced its receivable levels.
SELECTED FINANCIAL INFORMATION
Year ended Year ended
10/31/98 10/31/97
Revenue $ 4,003,313 $ 1,765,282
Gross profit 3,698,380 1,474,438
Operating
expenses 5,595,925 3,572,105
Loss (1,897,545) (2,097,667)
Loss per
share (10 cents) (15 cents) |
