ANN ARBOR, Mich., Nov 12, 1999 /PRNewswire via COMTEX/ -- Interface
Systems, Inc. (Nasdaq: INTF) today announced a sharp increase in
revenue from its L2i(TM) (Legacy-to-Internet) suite of products and
services for the Company's fourth quarter and fiscal year ended
September 30, 1999.
Robert A. Nero, president and CEO, said revenue from L2i software
solutions increased five-fold in the fourth quarter versus the same
quarter last year, and grew nearly 300% for the full year, reflecting
strong market reception of the Company's proprietary software products
that facilitate the presentation of bills and statements over the Internet.
"Consistent with our stated strategy, we transformed our revenue mix in
fiscal 1999, de-emphasizing non-strategic business units in favor of
focusing on our high-growth Internet software business," Nero said. "As
anticipated, overall revenue declined due to the divestiture of our
printer service business and to the return of Cleo EN revenue in fiscal
1999 to historical average levels from its fiscal 1998 peak. At the
same time, revenue from our higher-margin L2i software products,
although just one component of our total, grew substantially as a
result of several new customer orders in the rapidly- emerging Internet
bill and statement delivery business."
For the fourth quarter Interface reported a net loss of $182,000, or
$.04 per share, on revenue of $4.9 million versus net income of
$312,000, or $.07 per share, on revenue of $6.1 million in the same
quarter a year ago. The fourth quarter also included strategic
increases in marketing and R&D investments designed to enhance and
accelerate the pursuit of the substantial L2i business opportunity.
For the year ending September 30, 1999 Interface reported a net loss of
$265,000, or $.06 per share, on revenue of $20.2 million versus a net
loss of $2.1 million, or $.48 per share, on revenue of $21.6 million a
year ago. The negative net income of a year ago included a loss of $2.9
million, or $.65 per share from discontinued operations and from the
disposal of discontinued operations.
Nero noted that market acceptance of the Company's L2i products (eBill
Bridge(TM), MyCopy(TM), and Document Server) grew at accelerated rates
throughout the year, and that incremental marketing and sales efforts
were enhanced by strengthened partnerships with IBM and Transpoint.
Also, the Company recently announced that ADP Brokerage Services Group,
a division of Automatic Data Processing (NYSE: AUD), has adopted L2i
technology to help its brokerage firm clients transmit trade
confirmations to their customers via the Internet.
Interface has initially targeted its L2i solutions to brokerage firms
and major billing organizations, although its L2i products are ideally
suited to all large organizations -- banks, retailers, credit card
companies -- that seek to bridge the gap between their traditional
legacy systems and their e-commerce initiatives. "Our business plan is
on track and on schedule," Nero said. "We have a disciplined focus on
high-growth business opportunities where our enabling Internet software
products offer competitive advantages and substantial customer benefits."
Nero said Interface strengthened its balance sheet during the year,
eliminating bank borrowings, which stood at $1.4 million a year ago,
and reducing inventory by 58% to $916,000 from $2.2 million.
He also explained that two key trends begun in fiscal 1999 will be
accelerated in fiscal 2000. First, the Company will continue to phase
out its hardware businesses to further reduce its reliance on
non-strategic, lower- margin revenue streams. And, second, Interface
will accelerate investments in R&D, sales and marketing to pursue
additional market share gains and further establish Interface as a
leading provider of Legacy-to-Internet solutions in its target markets.
Uncertainties Relating to Forward-Looking Statements This press release
contains "forward-looking statements" within the meaning of the
Securities Exchange Act of 1934, as amended, based on current
management expectations. Actual results could differ materially from
those in the forward-looking statements due to a number of
uncertainties, including, but not limited to: general economic
conditions particularly related to demand for the Company's products
and services, changes in Company strategy, product life cycles,
competitive factors (including the introduction or enhancement of
competitive products), pricing pressures, the results of the audit of
the ISIL net assets sold, component price increases, delays in
introduction of planned hardware and software products, software
defects and latent technological deficiencies in new products, changes
in operating expenses, inability to attract or retain sales and/or
engineering talent, changes in customer requirements and evolving
industry standards.
All Company, brand and product names are or may be trademarks of their
respective holders.
INTERFACE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30,
1999 1998
ASSETS
Cash and cash equivalents $1,575 $301
Accounts receivable, net 3,690 4,162
Refundable income taxes 6 1,508
Inventories 916 2,219
Property and equipment, net 3,188 3,443
Intangible and other assets 1,148 1,544
$10,523 $13,177
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ -- $1,350
Accounts payable and accrued
expenses 2,533 3,794
Other non-current liabilities 71 121
Stockholders' equity 7,919 7,912
$10,523 $13,177
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Quarter ended September 30, Year ended September 30,
1999 1998 1999 1998
Net revenues $4,894 $6,095 $20,169 $21,611
Cost of revenues (1) 1,735 2,724 7,899 9,472
Gross profit 3,159 3,371 12,270 12,139
Product development
costs 1,022 934 3,854 3,735
Selling, general and
administrative expenses 2,306 2,009 8,683 8,004
Interest and other
income (expense) 17 (57) 43 (45)
Income (loss) from
continuing operations
before income taxes (186) 371 (224) 355
Income tax 4 (290) 41 (412)
Income (loss) from
continuing operations (182) 661 (265) 767
Income (loss) from
discontinued operations -- -- -- (748)
Loss on disposal of
discontinued operations -- (349) -- (2,140)
Net income (loss) $(182) $312 $(265) $(2,121)
Income (loss) per share:
From continuing
operations $(0.04) $0.15 $(0.06) $0.17
From discontinued
operations -- (0.08) -- (0.65)
Net income (loss)
per share $(0.04) $0.07 $(0.06) $(0.48)
Weighted average shares
outstanding 4,520 4,452 4,481 4,434
(1) Cost of revenues includes expense from amortization and write-off
of capitalized software development costs of $23,000 and $29,000 for
the quarters, and $91,000 and $784,000 for the year ended September 30,
1999 and 1998, respectively. SOURCE Interface Systems, Inc.
(C) 1999 PR Newswire. All rights reserved.
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