Infowave Releases First Quarter Fiscal 2002 Results
VANCOUVER, BRITISH COLUMBIA--Infowave Software (TSE:IW), a global
provider of software that connects enterprise applications to
wireless devices, today released financial results for the first
quarter ended March 31, 2002. (All financial information is
expressed in U.S. dollars and Canadian GAAP).
Infowave reported revenue for the quarter of $325,261 - a decrease
of 39% from $534,867 in the fourth quarter of 2001 and a decrease
of 62% from $857,764 in the first quarter of 2001. Infowave posted
gross margins of 89% for the quarter. Total expenses for the
quarter were $3,691,964, a decline of 13% from $4,265,695 in the
previous quarter and a decrease of 35% from $5,696,029 in the
first quarter of 2001. Net loss for the first quarter was
$3,376,025 or $0.09 per share, compared to $4,825,370 or $0.21 per
share in the previous quarter and $4,820,124 or $0.22 per share in
the first quarter of 2001. Cash, cash equivalents and short-term
investments were approximately $7.2 million at the end of the
quarter.
"The economic environment continues to plague IT decision making
processes, and several deals from Q1 slipped into Q2. While our
sales efforts over the past several months have resulted
successfully in getting Infowave short-listed in larger deals, we
have also noted a mandate for Fortune 500 companies to engage in
paid pilot projects before making final decisions to roll out
wireless initiatives company-wide. This means our deal composition
and sales pipeline is encouraging, but the sales cycle remains
long, and initial orders are small compared to their potential,"
said Infowave Chairman of the Board Thomas Koll. "In order to
preserve capital and continue to be well-positioned to serve our
customers and partners, we have made a number of changes to our
organization, including further reduction of operating expenses,
and have focused our operations on key strategic areas that we
believe will have positive impact on our revenue going forward."
Highlights from the first quarter 2002 included signing of a
strategic alliance and sales agreement between Infowave and Compaq
which encompasses both broad and specific initiatives. Compaq
also provided Infowave with a $2 million credit facility which
deepened the relationship between the two companies. Over the
coming months, Compaq has agreed to roll out additional product
bundles containing Infowave software, and the Infowave Wireless
Business Engine has become a key component of Compaq's Wireless
Enterprise Framework, which is a well-funded, highly visible
initiative to make a wireless solution bundle (hardware, software
and professional services) available to Compaq's customer base
through its global sales organization.
Also in the first quarter Infowave introduced a new desktop
product, Infowave Symmetry Pro, which gives individuals and
business development prospects an opportunity to try wireless
before they buy. It also provides a unique value-added service
that can be bundled and resold by device manufacturers, carriers
and other third parties. Symmetry Pro launch activities were
supported by such industry leaders as Compaq, Handspring, Novatel
and Sierra Wireless. This trial concept has already resulted in
incoming interest by third parties to purchase licenses to re-sell
Infowave Symmetry Pro and has proven to be an important catalyst
for these discussions. It has received positive reviews in the
press and by industry analysts. The company believes the sale of
the Symmetry Pro gateway to network operators, Symmetry Pro
subscriptions and general availability of new Infowave products in
the same family will fuel Infowave's growth in enterprise sales.
The Company has commenced an expense reduction program, which,
when fully implemented will reduce monthly cash expenditures by
over 30% from the current quarter. A number of measures were
implemented to reach this objective, including headcount
reductions. The Company anticipates taking a charge against second
quarter earnings relating to this initiative.
"Our short-term focus is on accelerating revenue growth by working
closely with partners such as Compaq, converting trial customers
into full-scale deployments, intensifying our new carrier sales
efforts of the Infowave Symmetry Pro gateway and prudently
managing our capital resources," Infowave Chief Financial Officer
George Reznik said. "We are focusing our development efforts on
the products our partners and customers want today, and this
quarter alone we will open up new sales opportunities by shipping
platform support for Pocket PC 2002, Windows XP, Office XP and
Lotus Domino. We have scaled back all expenditures that do not
directly impact our ability to generate revenue for the Company
and maintain our investment in product development. We believe the
result is an operationally sound, well-focused organization."
Forward Looking Statements
Statements made herein and in today's conference call may contain
forward-looking information about management's expectations, new
strategic objectives, business prospects, revenue growth
opportunities, anticipated financial performance and other similar
matters. A variety of factors, many of which are beyond the
Company's control, affect the operations, performance and business
strategy and results of the Company and could cause actual results
and experiences to differ materially from the expectations and
objectives expressed in these statements. These factors include,
but are not limited to, the sufficiency of the Company's
restructuring activities and strategic initiatives, including the
potential for higher actual costs incurred in restructuring
actions and strategic initiatives compared to the estimated costs
of such actions or initiatives; the ability to retain and recruit
qualified employees; the ability to manage business in light of
recent management changes and personnel reductions; the impact and
acceptance of Symmetry Pro; and the success of the Company's
alliance and strategic initiatives with Compaq. Other potential
risk factors are described in the Company's 2001 annual report on
Form 10-K, in addition to reports on Form 8-K and Form 10-Q, which
are available at the SEC's Web site at www.sec.gov.
Forward-looking statements are based on management's beliefs,
opinions and projections on the date the statements are made. The
Company undertakes no obligation to update forward-looking
statements if circumstances or management's beliefs, opinions or
projections should change.
Conference Call
Infowave will hold a conference call to discuss these results at
5:00 P.M. Eastern today. Infowave expects that it will be
providing financial guidance during the conference call and more
information on customer metrics. Thomas Koll, Infowave's Chairman
and George Reznik, Chief Financial Officer, will participate in
the call. Analysts, media and investors are invited to join the
conference call by dialing 800.240.6709.
The conference call will also be webcast live. A link to the
webcast will be available from the Infowave website at
www.infowave.com/ir. The conference call will be available for
replay until May 9, 2002 by dialing either 877-289-8525 or
416-640-1917 (local Toronto) and entering reservation 186055#.
/T/
Financial Statements
INFOWAVE SOFTWARE, INC.
Consolidated Statements of Operations and Deficit
(expressed in U.S. dollars)
Three months ended
March 31, March 31,
2002 2001
Unaudited) (Unaudited)
----------------------------------------------------------------------
Revenues:
Sales $325,261 $857,764
Cost of Goods Sold 37,167 114,659
----------------------------------------------------------------------
288,094 743,105
Expenses:
Research and Development 901,979 1,568,937
Sales and Marketing 1,624,224 2,673,080
General and Administrative 683,357 1,143,089
Depreciation and Amortization 482,404 310,923
----------------------------------------------------------------------
3,691,964 5,696,029
----------------------------------------------------------------------
Operating loss from continuing
operations 3,403,870 4,952,924
Interest and other income 27,845 132,800
----------------------------------------------------------------------
Net loss for the period 3,376,025 4,820,124
Deficit, beginning of quarter 44,626,077 23,765,641
----------------------------------------------------------------------
Deficit, end of quarter $48,002,102 $28,585,765
----------------------------------------------------------------------
Net loss per share $0.09 $0.22
Weighted average number of shares
outstanding 36,035,432 22,038,141
----------------------------------------------------------------------
INFOWAVE SOFTWARE, INC.
Consolidated Balance Sheets
(expressed in U.S. dollars)
----------------------------------------------------------------------
March 31, December 31,
2002 2001
(Unaudited)
----------------------------------------------------------------------
Assets
Current Assets:
Cash and cash equivalents $6,837,344 $9,087,730
Short term investments 347,132 352,670
Accounts receivable 809,907 1,454,681
Finished goods inventory 50,291 49,710
Prepaid expenses 162,723 181,740
----------------------------------------------------------------------
8,207,397 11,126,531
Capital assets 2,122,975 2,531,144
----------------------------------------------------------------------
$10,330,372 $13,657,675
----------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $1,628,100 $1,568,303
Deferred revenue 229,996 281,420
----------------------------------------------------------------------
1,858,096 1,849,723
Shareholders' equity
Share capital
Authorized: 200,000,000 voting
common shares
Issued: 57,676,808
(2001: 23,440,203) 55,521,401 42,447,141
Special warrants, net of issue
costs of $1,882,912 - 13,004,340
Other equity instruments 1,613,096 1,613,096
Deficit (48,002,102) (44,626,077)
Cumulative translation account (660,119) (630,548)
----------------------------------------------------------------------
8,472,276 11,807,952
----------------------------------------------------------------------
$10,330,372 $13,657,675
----------------------------------------------------------------------
/T/ |
