"Xybernaut(R)...Sets Solid Foundation for 'Future Revenues'"
Anyone out there interested in translating today's PR from Newmanspeak to English?
I, for one, don't understand why they stated, "we no longer believe we will achieve $40 million in revenues for this fiscal year." when, based on this PR's headline and on past PR stylings, they should more logically have stated, "we believe we are on-track to achieve $40 million in 'future revenues' for this fiscal year.
Digesting with difficulty,
Shoe.
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PR Newswire - August 04, 1999 08:47
Xybernaut(R) Pre-Releases Q2 Revenues Continued Penetration of Key Industries Sets Solid Foundation for Future Revenues
FAIRFAX, Va., Aug. 4 /PRNewswire/ -- Xybernaut Corporation (Nasdaq: XYBR), the leader in wearable computing, today announced that revenues for the second quarter ended June 30, 1999 will be approximately the same as the $654,000 of revenues reported for the first quarter ended March 31, 1999, largely as the result of a delayed start in sales through distribution channels of the Mobile Assistant(R) IV (MA IV(TM)) wearable PC. The report on Form 10QSB for the quarter ended June 30, 1999 will be filed with the SEC on or before August 16, 1999.
Edward G. Newman, President and C.E.O. of Xybernaut stated, "These sales results are more than 250% higher than for the second quarter last year and reflect the continued solution sales into large vertical markets such as telecommunications, aerospace, automobiles and utilities. While we are very happy with the strategic market penetration of our products into Fortune 500 companies, we are not satisfied with the level of revenues and we are refocusing our direct sales efforts and those of our distribution channels to improve revenues in future quarters.
"We have long recognized that Xybernaut would face considerable challenges in creating and 'kick starting' the market for wearable PCs alone. Therefore, we established a channel program that encompasses distributors, systems integrators, independent software vendors, independent hardware vendors and value added resellers -- many of which have been publicly announced. Xybernaut's prior revenue estimates have always been based on a more rapid activation of our channel partner's sales forces than has occurred. We have not met those revenue estimates simply because we underestimated the amount of time and effort it would take to energize corporations as large as we have partnered with and to resolve channel conflicts. In addition, customers that are using the MA IV in their core processes often are changing those processes to take full advantage of the productivity improvements available from the MA IV, and those changes slow down their initial ordering cycle.
"While our total revenues have been slower than expected, we maintain our belief that this multi-channel strategy is the best way for Xybernaut to quickly generate revenues. Our channel partners are now on track, our patent position keeps getting stronger, and we are in an excellent position to gain additional future revenues from software, services and licensing.
"The industrial and technology worlds are increasingly recognizing the marketplace for wearable PCs. This recognition is evidenced by many factors, including the recent study by International Data Corporation (IDC) that identified wearable PCs as a high-growth marketplace, with an expected base-case market in the U.S. of over $600 million annually in the next few years, with significant upside potential. We expect that the market outside the U.S. will be even larger and we intend to capture a large part of the worldwide market for wearable PCs either directly or through licensing," concluded Mr. Newman.
John F. Moynahan, Senior Vice President and C.F.O., added "While we expect growth in revenues to accelerate rapidly in coming quarters, this delayed start in channel sales means that we no longer believe we will achieve $40 million in revenues for this fiscal year. The model used to formulate this estimate was in large measure based on initial sales forecasts provided to Xybernaut by our distributors and other channel partners. These forecasts have recently been revised and also adjusted for the change in accounting approach for certain distributors from a 'sell-to' model to the more conservative and complex 'sell-through' model. This change generally results in lower revenue realization during the early phase of revenue growth.
"We believe that Xybernaut is protected by strong barriers to entry in the form of our patents, know-how and strong strategic relationships around the world. Our customers can directly measure the benefits of our products in both time and money saved. As our sales start to ramp up and awareness of the bottom-line benefits of wearable PCs builds, we expect that our stock price will more directly reflect these advantages and our long-term growth potential," concluded Mr. Moynahan.
About Xybernaut Corporation:
Xybernaut Corporation is the leader in providing hardware, software and service solutions to the wearable computing industry. Xybernaut's current customers include leading Fortune 500 companies and government organizations for many mobile knowledge delivery system applications, including telecommunications, power utilities, law enforcement, installation, maintenance and repair, diagnosis, inspection, inventory control, manufacturing and data collection. The Company's patented wearable computers allow users hands-free and fully-mobile access to information in the computer's internal storage, in local area networks and on the Internet on an as-needed, where-needed basis. Xybernaut's software is designed to provide users with the right information needed for the task at hand using consistent navigation techniques and screen presentations. Headquartered in Fairfax, Virginia, Xybernaut has subsidiaries in Europe (Germany) and Asia (Japan). Visit Xybernaut's web site at xybernaut.com.
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "plan," "confident that," "believe," "expect," or "intend to," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward- looking statements. Such risks and uncertainties include, but are not limited to, market conditions, the availability of components and production of the Mobile Assistant, general acceptance of the Company's products and technologies, competitive factors, the ability to successfully complete additional financings and other risks described in the Company's SEC reports and filings.
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