Tuesday June 15, 8:10 am Eastern Time
Company Press Release
Sand Technology Systems International Reports Third Quarter Profits
MONTREAL, QUEBEC--SAND TECHNOLOGY SYSTEMS INTERNATIONAL INC. (NASDAQ: SNDCF - news) today announced net earnings for its fiscal quarter ended April 30, 1999 of $55,380 or $0.01 per share on sales of $868,855 as compared to a net earnings of $63,633 or $0.01 per share on sales of $1,354,921 for the third quarter ended April 30, 1998. Losses from operations were $(172,941) for the third quarter of fiscal 1999 as compared to $(25,500) for the third quarter of fiscal 1998.
Arthur Ritchie, President and Chief Executive Officer of Sand, observed that ''the return to profitability reflects the combination of substantial progress on the Nucleus front combined with good results for the hardware and attendant peripherals business of its affiliate Hitachi Data Systems (Canada).''
Commenting further on the results for the third quarter, Mr. Ritchie stated that the Company had also made several key positive announcements with respect to its Nucleus Product Suite including an expansion of its business relationship with IBM. He added that ''several sales cycles associated with the purchase of Nucleus products in the third fiscal quarter have taken longer than anticipated due to a number of factors over which the Company has little or no control. These include customers' budgeting constraints, internal review procedures for new products, and procurement dollars being re-directed towards corporate Year 2000 projects. Moreover, many buyers have ''frozen'' major implementations of new production applications until they are past Y2K issues. As well, results from the Company's indirect sales channels are just beginning to show promise, a process that has taken longer to implement than had been planned. He went on to emphasize that the Company continues to apply very conservative accounting approaches, both in allocating the revenue recognition of prepaid royalty commitments, as well as the full expensing of development expenses.''
Mr. Ritchie also observed that ''during the past months Sand had placed an intense focus on marketing efforts associated with creating lead generation and Nucleus product demand while directing all sales efforts towards corporate cycles for closure. Both efforts have produced a robust pipeline of prospects for the Nucleus Product Suite. Sand is proceeding with its plans to sell smaller initial proof-of-concept installations of Nucleus at large enterprises during the coming months until these customers have successfully managed the Y2K transition, after which full Nucleus production implementations are anticipated.''
Commenting on the results of Hitachi Data Systems (Canada), Mr. Ritchie stated that Sand is re-evaluating its on-going relationship with Hitachi Data Systems with respect to its hardware and maintenance business in Canada in light of the recent announcement that Hewlett-Packard Company [NYSE:HWP - news] and Hitachi, Ltd., were entering into joint technology and original equipment manufacturer (OEM) agreements for entreprise-storage subsystems directed at the burgeoning entreprise-storage and storage area network (SAN) markets. The implementation of these agreements could have a major impact on the future hardware and maintenance sales results of Hitachi Data Systems (Canada).
SAND TECHNOLOGY SYSTEMS INTERNATIONAL INC. provides high performance, scaleable software solutions for data mining, data marts, data warehouses and on-line analytical processing (OLAP). Sand's product suite, the Nucleus Series, brings patented technology to the business user allowing for more timely and accurate decision processing within the disconnected client, desktop, workgroup, departmental and enterprise computing environments. More information on Nucleus is provided at the Sand website at http:/www.sandtechnology.com.
Nucleus, Nucleus Server and N-Vector are registered trademarks and Nucleus Exploration Mart, Nucleus Exploration Warehouse, Nucleus Virtual Database (VDB), Nucleus Powered! and Nucleus E! are trademarks of Sand Technology Systems International Inc. Other trademarks are the property of their respective owners.
Many of the matters including the earnings projections contained in this release are forward looking statements based on reasonable assumptions. However, some assumptions may not materialize and unanticipated events may occur which could cause actual results to differ materially from those forecasted. Competitive pressures, availability and cost competitiveness of supplies or competing products, timing of significant orders, market acceptance of the Sand Nucleus series of products and other risks and uncertainties described in Sand's reports to Securities and Exchange Commission are important factors which could cause actual results to differ materially from those projected.
SAND TECHNOLOGY SYSTEMS INTERNATIONAL INC. Consolidated Statement of Operations (Unaudited)
IN CANADIAN DOLLARS
3 Mths 9 Mths 3 Mths 9 Mths
Ended Ended Ended Ended
April 30 April 30 April 30 April 30
1999 1999 1998 1998
Net Sales $868,855 $1,924,711 $1,354,921 $2,300,040
(Loss)
Earnings
from
operations $(172,941) $(3,817,031) $(25,500) $(1,143,320)
(Loss)
Earnings
from
Affiliate $341,758 $929,878 $157,689 $960,459
(Loss)
Net Earnings $55,380 $(3,049,097) $63,633 $ (77,444)
(Loss)
Earnings
per Share $0.01 $(0.36) $0.01 $(0.01)
Weighted
average
number of
shares
outstanding 8,528,206 8,528,206 8,912,864 8,912,864
\032
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Contact:
Sand Technology Systems International Inc.
Vice President
Finance and Administration
(514) 939-3477
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