Thursday June 1, 4:14 pm Eastern Time
Company Press Release
ION Networks Reports Fiscal Fourth Quarter
Revenue Up 75 Percent
PISCATAWAY, N.J.--(BUSINESS WIRE)--June 1, 2000--ION Networks Inc. (Nasdaq:IONN - news), THE
PROACTIVE NETWORK MANAGEMENT COMPANY(SM), today announced results for the three months and fiscal
year (``FY'') ended March 31, 2000.
Revenues for the fourth quarter of FY 2000 increased 75 percent to $5,651,000 compared with revenues of $3,222,000 in the
fourth quarter of FY 1999. Net loss for the fourth quarter was $2,682,000 or $0.19 loss per share, compared to a net loss of
$6,028,000, or $1.10 loss per share, for the fourth quarter of FY 1999. The net loss in the fourth quarter of 2000 was primarily
due to continued increased investment in sales and marketing personnel and research and development, and non-cash goodwill
and software amortization totaling approximately $550,000 associated with the acquisition of SolCom Systems (SolCom) and
certain assets of LeeMAH DataCom Security Corp completed in the fourth quarter of FY 1999.
The net loss in the fourth quarter of 1999 was primarily due to a non-cash in-process research and development charge of $3.5
million associated with the acquisition of SolCom in the fiscal fourth quarter of 1999, as well as investments in sales and
marketing personnel and research and development. Weighted average common stock outstanding for the fourth quarter of FY
2000 grew to 14,356,000 shares from 5,480,000 shares for the FY 1999 fourth quarter.
Revenues for the fiscal year ended March 31, 2000 increased 79 percent to $22,669,000 compared with revenues of
$12,674,000 in FY 1999. Net loss for FY 2000 was $5,260,000 or $0.44 loss per share, compared to net loss of
$5,997,000, or $1.09 loss per share, for FY 1999. Weighted average common stock outstanding for FY 2000 grew to
12,064,000 shares from 5,500,000 shares for FY 1999.
The Company's fourth quarter of FY 2000 results were impacted because certain shipments made in the fourth quarter were
not recognizable as revenue due to the newly codified revenue recognition standards issued by the Staff of the Securities and
Exchange Commission. As a result, the Company will record revenue of approximately $1.1 million that it expected in the fourth
quarter of FY 2000 in future periods of FY 2001.
``While our quarterly revenues were below expectations due to the implementation of the newly codified SEC standards, our
fourth quarter and audited year end growth rates of 75 and 79 percent, respectively, confirm our growth strategy and underline
the significant opportunity and criticality of networks to companies and the associated demands for cost effective network
infrastructure management of these mission critical business assets,'' stated Stephen B. Gray, president and chief executive
officer of ION Networks. ``Our recently introduced PRIISMS Suite(TM) systems continue to gain market acceptance and
represented approximately 20 percent of sales in the fourth quarter.
``Our customers have begun programs to aggressively improve the efficiencies of these network assets, driving to lower
network operating costs, while at the same time improving the performance, service levels and quality of service of their
increasingly complex voice and data networks,'' added Gray. ``This mega trend continues to help increase sales opportunities
into our existing large enterprise and service provider accounts, as well as providing us with many new large customer
prospects. During FY 2000, new customers included Intel, Pacific Bell Mobile, Hewlett Packard, Crown Castle International,
Reuters, Sycamore Networks, Bomara, FirstWorld Communications, among others.
``Additionally, we are constantly innovating and significantly investing in our Company's infrastructure, sales and sales support
organizations as well as research and development organization, in order to continue meeting these growing market needs as
well as our long term market objectives,'' continued Gray. ``We invested approximately $1.3 million in research and
development during the fourth quarter and have grown our sales force from seven to 19 sales people since last August.
``We remain excited by the opportunities created by the rapid broadband convergence of voice, data, video, the significant
market roll out of optical transmission infrastructure equipment, environmental systems and the mission-critical role that secure
network management and monitoring plays in the future of network infrastructure spending. We believe our strategy of
significant internal growth, growth through acquisition and appropriate investments in corporate infrastructure correctly position
us to meet the needs of our customers and deliver value,'' concluded Gray.
ION Networks is a leading developer and manufacturer of software- and hardware-based solutions for Internet security,
application performance management as well as network management and monitoring for voice, video and data communications
networks. Based in Piscataway, N.J., the Company has installed systems worldwide, with six direct sales offices in the U.S.,
wholly owned subsidiaries in Livingston, Scotland and Antwerp, Belgium, a division in Fremont, California and distribution
networks on four continents. Visit the ION Networks web site at www.ion-networks.com. We keep an EYE ON
NETWORKS(SM).
This press release contains information that may constitute forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be affected by
certain risks and uncertainties described in the Company's filings with the Securities and Exchange Commission. The Company's
actual results could differ materially from such forward-looking statements. Unless otherwise required by applicable securities
laws, the Company assumes no obligation to update any such forward-looking statements, or to update the reasons why actual
results could differ from those projected in the forward-looking statements.
Tables to Follow
ION Networks Inc. and Subsidiaries
Consolidated Statement of Operations
Three Months Ended Twelve Months
March 31 March 31
2000 1999 2000 1999
------ ------ ------ ------
Net Sales $5,650,573 $3,222,313 $22,668,833 $12,673,917
Cost of Sales $2,502,970 $2,028,118 $8,409,068 $5,464,708
---------- ---------- ----------- -----------
Gross Margin $3,147,603 $1,194,195 $14,259,765 $7,209,209
Research and
development
expenses $964,617 $1,033,744 $4,288,396 $2,580,857
Selling,
general and
administrative
expenses $3,754,264 $2,178,653 $11,155,390 $6,114,218
Depreciation &
Amortization $990,750 $320,544 $3,902,331 $731,160
In-Process R&D $0 $3,490,177 $0 $3,490,177
---------- ---------- ----------- ----------
Loss from
operations ($2,562,028) ($5,828,923) ($5,086,352) ($5,707,203)
Interest income $190,602 $37,873 $315,467 $43,012
Interest expense ($46,288) ($44,848) ($224,363) ($100,573)
---------- ---------- ---------- ----------
Loss before
income tax
expense ($2,417,714) ($5,835,898) ($4,995,248) ($5,764,764)
---------- ---------- ---------- ----------
Income tax
expense $264,490 $192,516 $264,490 $232,239
---------- ---------- ---------- ----------
Net loss ($2,682,204) ($6,028,414) ($5,259,738) ($5,997,003)
========== ========== ========== ==========
Earnings per
share data:
Basic ($0.19) ($1.10) ($0.44) ($1.09)
Diluted ($0.19) ($1.10) ($0.44) ($1.09)
Weighted Average
of Common
Shares
Outstanding
Basic 14,356,465 5,480,376 12,063,709 5,499,556
Diluted 14,356,465 5,480,376 12,063,709 5,499,556
ION Networks Inc. and Subsidiaries
Consolidated Balance Sheet
(In Thousands)
Assets 31-Mar 31-Mar
2000 1999
------- --------
Current Assets
Cash & Cash Equivalents $10,382 $166
Accounts Receivable 4,570 3,093
Other Receivables 1,560 --
Inventory 1,925 2,555
Deferred Tax Assets -- 422
Prepaid & Other Current 602 433
------- -------
Total Current Assets $19,039 $6,669
PP&E 2,147 1,010
Capitalized Software 4,186 5,350
Goodwill 1,939 2,905
Security Deposits / Other 79 39
------- -------
Total Assets $27,390 $15,973
======= =======
Liabilities & Stockholders Equity
Current Liabilities
Current Portion Long
Term Debt $164 $488
Accounts Payable &
Accrued Expenses 2,631 3,890
Accrued Payroll & Related
Liabilities 2,140 813
Deferred Income 250 269
Other Current Liabilities 352 1,909
------- -------
Total Current Liabilities $5,537 $7,369
Deferred Tax Liabilities -- 188
Long Term Debt 457 2,013
------- -------
Total Liabilities 5,994 9,570
Stockholders Equity 21,396 6,403
------- -------
Total Liabilities &
Stockholders Equity $27,390 $15,973
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