Earnings Part I.......
MetaCreations Announces Third-Quarter Results; Wilczak Moves Up to
Become Chairman, Search for New CEO Begins
Business Wire - October 23, 1997 15:58
CARPINTERIA, Calif.--(BUSINESS WIRE)--Oct. 23, 1997--MetaCreations Corp. (Nasdaq:MCRE) Thursday reported
that net income for the third quarter of 1997 increased 29 percent to $3,605,000, or 15 cents per share, compared with net
income of $2,785,000, or 12 cents per share, for the third quarter of 1996.
MetaCreations also announced that revenues for the third quarter ended Sept. 30, 1997, were $21 million, up 16 percent
from $18.2 million for the third quarter ended Sept. 30, 1996.
The third-quarter earnings report represents the first consolidated results of MetaCreations for a full quarter. MetaCreations
was formed on May 29, 1997, as a result of the merger and pooling of MetaTools Inc. and Fractal Design Corp., and the
earlier acquisitions of Specular International and Real Time Geometry.
MetaCreations reported net revenues of $53 million for the nine months ended Sept. 30, 1997, compared with $47 million in
pooled results for the first nine months of 1996. Net income on a pro forma basis before acquisition charges for the nine
months ended Sept. 30, 1997, would have been $4,859,000, or 20 cents per share, compared with net income of
$4,820,000, or 21 cents per share, for the first nine months of 1996.
MetaCreations reported a net loss of $9,181,000, or 40 cents per share, for the nine months ended Sept. 30, 1997, including
acquisition and merger charges of $16.2 million in the second quarter of 1997.
John Wilczak, MetaCreations' chief executive officer, stated: "The merger and integration of Fractal Design and Specular
International have been completed. We have consolidated the executive team, sales and marketing, manufacturing, operations
and administration of the company, and we are beginning to realize some of these benefits in our third-quarter operating
results."
Wilczak, a founder of MetaCreations, also announced that the company has engaged Ramsey Beirne and Associates to
search for a new chief executive officer to manage the consolidated operations of the company. The company noted that
Wilczak will continue to serve as CEO until a successor can be found, at which time Wilczak will become chairman of the
board. In his new role, he will continue to actively drive the strategic direction of the company.
Wilczak stated, "With a new CEO in place who has experience in managing large organizations, I will be able to focus
intensely on developing strategies for the company's future growth and exploring new business opportunities for
MetaCreations' visual computing technologies."
Howard Morgan, chairman of the board of MetaCreations, stated: "John has a great degree of understanding of the dynamics
fueling growth in the graphics and visual computing markets. The company has successfully positioned itself as a leader in this
industry, with John driving the business vision, and we can look forward to his continued contribution in his new role." Morgan
will continue as a director of the company when Wilczak assumes the chairman's role.
Revenue growth for the third quarter of 1997 was attributed to strong OEM and licensing sales. OEM relationships for the
Fractal Design products Painter 5 and Art Dabbler showed great success during the quarter. In addition, new products
released during the third quarter, including Ray Dream Studio 5, Ray Dream 3D, Art Dabbler and Infini-D for Windows, also
contributed to this growth.
International revenues represented 35 percent of net revenues in the third quarter of 1997, compared with 34 percent in the
third quarter of 1996. The company recorded strong international OEM and licensing revenues in the third quarter of 1997.
Revenues from Windows and cross-platform versions of MetaCreations' products represented 76 percent of net revenues for
the third quarter of 1997, up from 56 percent in the third quarter of 1996. Substantially all of MetaCreations' products operate
on both Windows and Macintosh platforms, with many products sold as cross-platform versions including both Windows and
Macintosh versions on the same CD.
Gross profits represented 86 percent of net revenues in the third quarter of 1997, up from 82 percent in the third quarter of
1996, as a result of higher OEM and licensing revenues and efficiencies in the consolidation of the Fractal Design operations.
OEM and licensing sales were 36 percent of net revenues in the third quarter of 1997, compared with 11 percent in the third
quarter of 1996.
Research and development expenses increased from 12 percent of net revenues in the third quarter of 1996 to 18 percent in
the third quarter of 1997, primarily due to the acquisition of Real Time Geometry in December 1996, and related investments
in technologies focused on 3-D performance.
MetaCreations, the visual computing software company, designs, develops, publishes, markets and supports software tools
and enabling technologies for creating, editing and manipulating computer graphic images, digital art and Web/online content
on the desktop for both professionals and consumers. Working with distributors in North America, Europe and Asia,
MetaCreations' professional and consumer software is available in more than 70 countries.
The company's headquarters is located in Santa Barbara County at 6303 Carpinteria Ave., Carpinteria, Calif. 93013;
telephone 805/566-6200; fax 805/566-6365. The company also has significant operations in Scotts Valley, Calif., and
Princeton, N.J. MetaCreations' International Operations Center is located at Wilson House, Fenian Street, Dublin 2, Ireland.
Telephone: 353-1-662-9333; World Wide Web server metacreations.com . |
