Lernout & Hauspie Reports Record Revenues & Record Earnings For Third Quarter 1997
BusinessWire, Wednesday, October 22, 1997 at 16:22
BURLINGTON, Mass.--(BUSINESS WIRE)--Oct. 22, 1997--
Record Revenues of $27.9 Million, Earnings Per Share of $.26,
Strong Increase In Recurring Revenues For Core Technologies and
Dictation Software Revenues
Lernout & Hauspie Speech Products (NASDAQ:LHSPF) today announced
financial results for the third quarter ended September 30, 1997.
For the third quarter of 1997 Lernout & Hauspie's (L&H) total
revenues were $27.9 million, an increase of 285% over revenues of $7.3
million in the third quarter of 1996. Revenue included approximately
$7.6 million from the companys core speech technologies, $8 million
from dictation products, $7.6 million from translation services and
$4.7 million from machine translation.
Net income for the third quarter of 1997 reached $5.8 million, or
$.26 per share, on 20.2 million average fully diluted shares
outstanding, compared with $1.6 million or, $.10 per share, on 17
million shares outstanding for the third quarter of 1996.
Recurring revenues from core technologies for the third quarter
of 1997 increased substantially to $4.6 million (up 70% from previous
quarter), or 61% of the total core technology revenues. The company
has realized significant growth in the sales of dictation software.
The quarter previous to it's acquisition, Kurzweil AI reported
approximately $2.2 million in revenues. In the third quarter of 1997,
the company reported $3.5 million in revenues for it's Kurzweil
related dictation software, representing approximately a 60% percent
increase.
The company continues to demonstrate strong financial momentum.
For the nine months ended September 30, 1997 revenues were $65.5
million, an 271% increase over the same period of the prior year. Net
income before the one time charges for the nine month period was $11.9
million, compared $1.2 million for the same period in 1996. Earnings
per share before one time charges were $.63 for the nine months period
as compared to $.07 for the same period of the prior year.
"We are pleased with the results of Q3. It confirms our belief
that consolidation and focus on execution pay off, not only from a
corporate and financial standpoint, but from a product perspective as
well. The combination of this quarter's accomplishments, including the
Microsoft alliance, the increase in recurring royalties and the
increasing revenues of the Dictation Division were supported by
product introductions in the horizontal market with VoiceCommands, and
in vertical markets with continuous speech products from our
Healthcare Solutions Group. These milestones demonstrate the companies
belief that the market is ready to embrace speech as an established
technology," said Gaston Bastiaens, president and CEO of Lernout &
Hauspie.
L&H Reports Third Quarter 1997
In the third quarter L&H secured a record of 31 contracts for
core speech technologies, such as automatic speech recognition (ASR),
text-to-speech (TTS), digital speech compression and text-to-text
(translation). This represents a 82% percent increase in the number of
contracts from the same quarter in 1996, bringing the total number for
the year to 86, totaling over 232 to date.
HIGHLIGHTS OF THE QUARTER
Public Share Offering Increases US and European Floats L&H
completed a public offering of 2,400,000 shares of Common Stock at a
price of $45 per share. Of that total, 1,664,239 shares were sold by
the company and the balance by selling stockholders. The stock is
being traded on both Easdaq and Nasdaq, and constitutes a new
financing for the company. Funds from the offering are anticipated be
used to repay bank indebtedness as well as for general corporate
purposes, including investments in the development of human and
machine translation services and other speech and language- related
businesses.
Strategic Alliance with Microsoft
L&H announced a broad strategic alliance with Microsoft
(Nasdaq:MSFT) on September 11, with the goal of accelerating
development of the next generation of voice-enabled computing on the
Microsoft Windows platform. Microsoft's $45 million investment will
help accelerate efforts to create next generation speech-enabled
products for the Windows platform.
Kurzweil VoiceCommands Continuous Speech Product Introduction In
September 1997 L&H launched VoiceCommands, a horizontal market
continuous speech command and control editing tool for Microsoft
Word(TM). VoiceCommands is designed to increase user productivity by
recognizing naturally-spoken words to edit and format Word documents.
Significant Strides in Healthcare Solutions Group
In September, L&H announced the first in a series of Kurzweil
Clinical Reporter products now with continuous speech for the
Pathology market. The new versions of Kurzweil Clinical Reporter are
being integrated with L&H's large vocabulary continuous speech
recognition technology, specified knowledge bases for Pathology, an
automatic report writer and complete integration services into
hospital information systems.
Product Introduction to Address Embedded Market
On October 7, L&H introduced a phonetic-based, speech recognition
engine for embedded products. The ASR1600, which is being deployed on
a NEC processor for car navigation systems such as Pioneer, employs
automatic speech recognition (ASR) technology, allowing machines to
recognize and respond to spoken words. Complimenting the company's
existing ASR200 word-based engine, which is designed for noisy
surroundings, the ASR1600 uses phonetic recognition algorithms to
support flexible, speaker-independent vocabularies without
time-consuming data collection or training.
L&H Reports Third Quarter 1997
Strategic Acquisitions Strengthen Footholds in Spain, Brazil and
Portugal L&H announced during the quarter that it had acquired both
C&L Services Linguisticos S.A. of Spain, specialized in lexicography
and terminology, and EMTI, a company specializing in translation and
localization services for Brazil and Portuguese languages. These
acquisitions signify L&H's commitment to building comprehensive global
translation services and dictation and machine translation
applications to meet the worldwide demand for both markets.
About Lernout & Hauspie
Lernout & Hauspie Speech Products (L&H) is an international
leader in the development of advanced speech technology for various
commercial applications and products. The company is divided into four
divisions: core technologies; dictation, a division dedicated to
discrete and continuous speech offerings; translation services and
products; and Internet services. Its four core technologies are
automatic speech recognition (ASR), text-to-speech (TTS), digital
speech compression and text-to-text (translation).
The company has its worldwide headquarters in Ieper, Belgium, its
U.S. headquarters in Burlington, Massachusetts and international sales
offices throughout Asia.
This News Release contains forward-looking information that
involves risks and uncertainties, including statements about the
companys plans, objectives, expectations and intentions. Such
statements include, without limitation, discussions concerning the
companys new product introductions and developments. Investors are
cautioned that such forward-looking statements involve risks and
uncertainties, including, without limitation, the company's reliance
on sales by its customers to generate recurring revenues, the early
stage of the speech technology market, the management of growth, the
successful integration of the company's recent acquisitions, the
ability of the company to develop and successfully market new
products, rapid technological change, competition, and the companys
increased leverage. The forward-looking statements contained herein
speak only as of the date of this News Release. The company expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any such statement to reflect any change in
the companys expectations or any change in events, conditions or
circumstance on which any such statement is based.
Lernout & Hauspie can be found on the World Wide Web at
www.lhs.com. All product names and trademarks mentioned herein are
trademarks of L&H and their respective subsidiaries.
*T
LERNOUT & HAUSPIE SPEECH PRODUCTS N.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30
1997 1996 1997 1996
Net Revenues:
Core Technologies 7,613 5,764 20,498 16,164
Dictation 7,983 0 16,726 0
Machine Translation 4,726 0 7,152 0
Translation Service 7,552 1,488 21,152 1,488
Total net revenues 27,874 7,252 65,528 17,651
Cost of revenues:
Core Technologies 1,488 329 3,452 1,087
Dictation 2,919 0 7,188 0
Machine Translation 1,616 0 2,495 0
Translation Service 4,377 945 12,809 945
Total cost of revenues 10,400 1,274 25,944 2,032
Gross profit 17,474 5,978 39,584 15,619
Operating expenses:
Sales and marketing 3,461 1,156 7,308 3,492
Research and development 1,711 1,373 4,391 5,156
General and
administrative 3,772 1,948 9,417 5,902
Goodwill Amortization 1,708 0 3,215 0
In-process R&D write-off 0 0 55,100 0
Total operating expenses 10,652 4,477 79,431 14,550
Income (loss) from
operations 6,822 1,501 (39,847) 1,069
Other (income) expenses
Financial (income)/expense 516 (142) 1,168 (105)
Share in loss
unconsolidated affiliates 138 0 699 0
Net income (loss) before
taxes 6,168 1,644 (41,714) 1,174
Taxes 355 0 784 0
Net income (loss) 5,813 1,644 (42,498) 1,174
EPS Calculation
Embedded dividend on
Preferred Stock (616) 0 (724) 0
Net Income (loss) Adjusted(a) 5,197 0 (43,222) 0
Net Income (Loss) Per Share(b) .26 .10 (2.70) .07
Average number of fully
diluted shares(c) 20,243 17,062 16,027 16,865
EPS before one time charges
(a) Net Income (loss) before
one time charges 11,878
(b) EPS before one time charges .63
(c) Fully diluted average
shares outstanding 18,854
LERNOUT & HAUSPIE SPEECH PRODUCTS N.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands - Unaudited)
At Sept. 30, 1997 At Dec. 31, 1996
ASSETS
CURRENT ASSETS
Cash and cash equivalents $103,993 $28,650
Accounts receivable 22,113 12,379
Recoverable VAT and Tax 753 0
Prepaid expenses and
other current assets 2,328 2,200
Inventories 1,457 0
TOTAL CURRENT ASSETS 130,644 43,229
Deferred financing costs 1,332 1,428
Investments in affiliate 7,074 2,075
Goodwill 56,254 27,843
Property and equipment, net 6,728 5,299
Intangibles net of amortization 5,973 0
Software development costs, net 1,028 0
TOTAL ASSETS 209,033 79,874
LIABILITIES & SHAREHOLDERS EQUITY
CURRENT LIABILITIES
Notes payable 2,470 7,658
Current portion of long-term debt 2,365 1,299
Accounts payable 8,835 5,691
Accrued expenses 13,247 8,555
Deferred Income 127 570
Net liabilities of
discontinued operations 350 571
TOTAL CURRENT LIABILIITIES 27,394 24,344
Long-term debt, less
current portion 2,892 2,909
Convertible bonds 36,799 36,032
TOTAL LIABILITIES 67,085 63,285
Minority Interest 34 54
Stockholders Equity
Common and Preferred
stock 277,368 106,021
Accumulated deficit (125,909) (82,686)
Cumulative currency
translation adjustments (9,545) (6,800)
TOTAL STOCKHOLDERS EQUITY 141,948 16,535
TOTAL LIABILITIES
& SHAREHOLDERS EQUITY 209,033 79,874
*T
CONTACT: Worldwide PR/IR:
Ellen Spooren,
Lernout & Hauspie
(617) 221-8344
espooren@lhs.com
or
Media Contact US:
Audrey Pobre
Lernout & Hauspie
(617) 221-8341
apobre@lhs.com
lhs.com
or
Investor Contact US:
Alicia Verity,
FitzGerald Comm.
(617) 494-9500
averity@fitzcomm.com
or
Investor Contact Europe:
Annemieke Blondeel
Lommaert & Blondeel Consultants
(44) 181 850 6880,
lommaertblondeel@netmatters.co.uk
KEYWORD: MASSACHUSETTS
INDUSTRY KEYWORD: COMED COMPUTERS/ELECTRONICS EARNINGS
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