NEON(R) Systems, Inc. (Nasdaq: NESY) announced today record results for both
the third quarter of its fiscal year 2000 and for the nine months ended
December 31, 1999. The record third quarter results were driven by a 59%
increase in license revenue over the comparable fiscal 1999 quarter. Total
revenues for the current nine-month period have increased 52% over the
comparable fiscal 1999 nine-month period.
Total revenues for the third quarter of fiscal 2000 increased 52% to a
record $8.9 million, compared with revenues of $5.8 million in the third
quarter of fiscal 1999. NEON Systems also achieved record-setting
profitability in the quarter with net income and diluted earnings per share of
$1.5 million and $0.14, a 50% increase, compared to net income and diluted
earnings per share of $968,000 and $0.14 for the same period in fiscal 1999.
The diluted earnings per share calculation for the quarter ended
December 31, 1998 does not include the 3,041,000 new common shares issued by
NEON Systems in its March 1999 IPO.
Total revenues for the nine months ended December 31, 1999 were
$21.1 million, a $7.3 million, or 52% increase over revenues of $13.8 million
for the first nine months of the prior year. For the nine months ended
December 31, 1999, net income and diluted earnings per share were $3.4 million
and $0.32, respectively, a 146% increase, compared to net income and diluted
earnings per share of $1.4 million and $0.20, respectively, for the nine
months ended December 31, 1998. The diluted earnings per share calculation
for the nine months ended December 31, 1998 does not include the new shares
issued by NEON Systems in its March 1999 IPO.
"The end of the calendar year quarter continues to be a strong growth
quarter for our business," said President and CEO of NEON Systems, Joe Backer.
"We are particularly pleased with the strong license revenue growth
performance due to continuing customer and prospect enthusiasm for high
performance, scaleable, and secure software solutions for their e-business
initiatives. We are optimistic as we enter a new market period in which our
customers will not be distracted by Y2K issues and are free to focus on new
business applications and e-commerce initiatives which will benefit from our
unique solutions."
NEON SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
FISCAL YEAR 2000 vs 1999
3 Months ended December 31, % Increase
1999 1998 Decrease
Revenues:
License $7,224 $4,544 59%
Maintenance 1,695 1,306 30%
Total revenues 8,919 5,850 52%
Cost of revenues:
Cost of licenses 694 134 416%
Cost of maintenance 539 265 104%
Total cost of revenues 1,233 399 209%
Gross Profit 7,686 5,451 41%
Operating expenses:
Sales and marketing 3,140 2,072 52%
Research and development 1,383 1,046 32%
General and administrative 889 665 34%
Non-cash compensation
& amortization 575 136 321%
Total operating expenses 5,987 3,919 53%
Operating income 1,699 1,532 6%
Interest and other income, net 555 29 1825%
Income before provision for
income taxes 2,254 1,561 44%
Provision for income taxes 803 593 36%
Net income $1,451 $ 968 50%
Earnings per share:
Basic $ 0.16 $ 0.36
Diluted $ 0.14 $ 0.14
Diluted excluding non-cash
compensation and amortization $ 0.17 $ 0.15
Shares used in computing
earnings per share:
Basic 8,949,989 2,611,078
Diluted 10,403,910 7,052,250
9 Months ended December 31, % Increase
1999 1998 Decrease
Revenues:
License $16,025 $10,541 52%
Maintenance 5,039 3,294 53%
Total revenues 21,064 13,835 52%
Cost of revenues:
Cost of licenses 1,104 662 67%
Cost of maintenance 1,163 672 73%
Total cost of revenues 2,267 1,334 70%
Gross Profit 18,797 12,501 50%
Operating expenses:
Sales and marketing 7,951 5,318 50%
Research and development 3,767 2,706 39%
General and administrative 2,564 1,701 51%
Non-cash compensation
& amortization 847 631 34%
Total operating expenses 15,129 10,356 46%
Operating income 3,668 2,145 68%
Interest and other income, net 1,668 44 3698%
Income before provision for
income taxes 5,336 2,189 144%
Provision for income taxes 1,974 825 139%
Net income $ 3,362 $ 1,364 146%
Earnings per share:
Basic $ 0.38 $ 0.49
Diluted $ 0.32 $ 0.20
Diluted excluding non-cash
compensation and amortization $ 0.37 $ 0.25
Shares used in computing
earnings per share:
Basic 8,890,762 2,607,587
Diluted 10,481,666 6,933,985
NEON SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, 1999 March 31, 1999
(Unaudited)
ASSETS
Current assets:
Cash & cash equivalents $33,223 $45,400
Short-term investments 5,163 ---
Accounts receivable-trade 8,657 5,438
Accounts receivable-related party 120 279
Deferred income taxes 704 572
Other current assets 646 411
Total current assets 48,513 52,100
Furniture & equipment 1,285 896
Purchased software 504 79
Less: accumulated depreciation
and amortization (678) (488)
Property & equipment, net 1,111 487
Marketable securities 3,006 ---
Goodwill, net 2,268 ---
Other assets, net 3,533 48
TOTAL ASSETS $58,431 $52,635
LIABILITIES & EQUITY
Current liabilities:
Accrued expenses $ 922 $ 1,222
Accounts payable 1,721 1,475
Taxes payable 1,116 372
Deferred income taxes --- 28
Deferred maintenance revenue 5,208 3,708
Total current liabilities 8,967 6,805
Stockholders' equity:
Preferred stock --- ---
Common stock 90 88
Additional paid-in capital 45,938 46,174
Accumulated other comprehensive income 4 58
Unearned portion of deferred compensation (1,008) (1,710)
Retained earnings 4,581 1,220
Less treasury shares, at cost (141) --- |
