NCD meets expectations :-(
Regards,
Dave Hsu
NCD Earned 6 Cents Per Share in 4thQuarter; 1997 EPS Was 15 Cents Versus Loss of 32
Cents in 1996
January 28, 1998 05:05 PM
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Jan. 28, 1998--Network Computing
Devices, Inc. NCDI today reported its results for 1997's fourth quarter and full year, and said
that they reflected the company's return to annual profitability and its role as a significant
participant in the emerging market for thin-client computing. For the fourth quarter ended
December 31, 1997, NCD reported net income of $1,081,000 and diluted earnings per share of 6
cents, compared with net income of $1,055,000, or 6 cents, a year ago. Basic fourth-quarter
earnings per share were 7 cents this year and 6 cents for 1996. Revenues for the period were
$33,328,000 in 1997, up slightly from revenues of $32,890,000 during 1996's final three months.
The company said that lower operating profit in 1997's fourth quarter was essentially offset by
a smaller tax provision. Full-year 1997 net income was $2,681,000, or 15 cents in diluted
earnings per share (16 cents basic), compared with 1996's net loss of $5,232,000, or 32 cents,
both diluted and basic. Total net revenues for 1997 were $133,400,000, up 11% from 1996's
$120,608,000. Robert G. Gilbertson, president and chief executive officer, said: "Most of the
industry's major players and many pioneering customers are embracing our thin-client
systems, reinforcing our decision to invest fully during this early-adopter phase when large
orders continue to be slow in coming. However, we remain confident that NCD's strategy is
positioning us well to capitalize on our 10 years of development and real-world experience with
the technology that is driving the thin-client revolution." "During the past year, we have seen
significant levels of interest and have booked important pilot orders for NCD's branded Explora
line and our OEM systems," Gilbertson said. "Accordingly, we remain patient about the timing
of commitments for major installations, which we do not expect to materialize until Microsoft
Corporation is ready with its multi-user technology later on this year. "NCD continues to be
gratified by the commitment of International Business Machines Corporation," he said. "This is
clearly in evidence in its marketing push and the recent two-year extension of our long-term
agreement with IBM." NCD co-developed and is manufacturing IBM's entire Network Station
product line. Noting that last year both Microsoft and Intel Corporation moved aggressively into
network computing, he said, "At the Comdex exposition, for example, we demonstrated NCD's
technology in Microsoft's Partners Pavilion, showing the industry's first Window-based
terminal. This thin client enables seamless multi-user access to Windows NT using 'CE'
technology. Also last fall, Intel announced its own 'lean client' initiative and invited NCD to
comment on their program." Gilbertson concluded: "Cooperative efforts with leading companies
-- and the growing interest we see through our own sales channels -- are most encouraging.
We are preparing for the anticipated growth in the thin-client field, which virtually all industry
experts believe to be inevitable. More then ever, we believe that NCD is in one of the best
positions in our industry to capitalize on this next wave of computing." About NCD: Founded in
1988, Network Computing Devices Inc. provides thin-client hardware and software that
delivers simultaneous, high-performance, easy-to-manage access to any application from
thin-client, UNIX and PC desktops. NCD's products include the Explora family of thin clients,
WinCenter multi-user Windows NT server software and PC-Xware software that delivers PC
access to UNIX and multi-user Windows NT. Over 500,000 NCD thin clients are installed with
over 2 billion hours of operation. NCD's technology is incorporated into products sold by
companies such as IBM, Sun and Novell. The company can be reached on the Internet at
www.ncd.com. This press release includes forward-looking statements that involve risk and
uncertainty. Although the company believes its expectations reflected in such forward-looking
statements are based on reasonable assumptions, no assurance can be given that such
expectations will prove correct. Actual results and developments may differ materially.
Keyword: thin-client computing
NETWORK COMPUTING DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Year
Ended Ended
December 31, December 31,
1997 1996 1997 1996
(unaudited)
Total net revenues $ 33,328 $ 32,890 $133,400 $120,608
Total cost of revenues 20,354 18,928 81,075 80,484
Gross profit margin 12,974 13,962 52,325 40,124
Operating expenses:
Research and development 3,505 3,584 14,179 14,930
Marketing and selling 7,706 6,977 30,455 32,117
General and
administrative 1,038 2,015 6,102 10,270
Charge for business
restructuring -- (1,052) -- (1,052)
Litigation settlement -- 1,100 (147) 1,100
Total operating expenses 12,249 12,624 50,589 57,365
Operating income (loss) 725 1,338 1,736 (17,241)
Interest income, net 443 421 1,895 1,588
Other income, net -- -- 200 --
Gain on sale of product line -- -- -- 6,932
Income (loss) before
income taxes 1,168 1,759 3,831 (8,721)
Provision for income taxes
(income tax benefit) 87 704 1,150 (3,489)
Net income (loss) $ 1,081 $ 1,055 $ 2,681 $(5,232)
Net income (loss) per share
Basic $ 0.07 $ 0.06 $ 0.16 $ (0.32)
Diluted $ 0.06 $ 0.06 $ 0.15 $ (0.32)
Shares used in per share computations
Basic 16,345 16,933 16,725 16,579
Diluted 17,625 18,404 18,313 16,579
NETWORK COMPUTING DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Dec. 31, Dec. 31,
1997 1996
ASSETS
Current assets:
Cash and equivalents and short-term
investments $ 31,480 $ 35,671
Accounts receivable, net 25,148 21,549
Inventories 15,412 9,776
Prepaid expenses and other 7,605 11,939
Total current assets 79,645 78,935
Property and equipment, net 4,424 4,895
Other assets 2,444 1,863
Total assets $ 86,513 $ 85,693
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,211 $ 4,383
Accrued expenses 9,551 9,337
Current portion of capital lease obligations 154 748
Deferred revenue 4,918 3,486
Total current liabilities 25,834 17,954
Long-term portion of capital lease obligations 160 314
Shareholders' equity:
Common stock 58,630 68,217
Retained earnings (accumulated deficit) 1,889 (792)
Total shareholders' equity 60,519 67,425
Total liabilities and shareholders' equity $ 86,513 $ 85,693 |
