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Technology Stocks : Systemsoft Inc. (SYSF) -- Ignore unavailable to you. Want to Upgrade?

To: Eric Jorgenson who wrote (3139)	3/5/1998 5:25:00 PM
From: Mark D. Earl	Read Replies (1) \| Respond to of 3529

NATTICK, Mass., -- March 5, 1998 -- SystemSoft\056 Corp. (NASDAQ: SYSF) today reported financial results for its 1998 fourth quarter and fiscal year ended January 31, 1998. Revenue for the fourth quarter of fiscal 1998 was $4.0 million, a decrease of 67 percent from $12.0 million in the same period last year. In the fourth quarter, SystemSoft recorded a charge totaling $12.9 million. This charge was primarily related to the impaired realizability of certain prepaid financial obligations and costs related to the write-down of previously acquired and developed technology. The charge was required due to the significant fourth quarter revenue shortfall and reduced expectations for certain products. After accounting for the charge, SystemSoft posted a net loss for the fourth quarter of $23.4 million or ($0.88) per basic share, compared to a net loss of $42.1 million or ($1.78) per basic share after accounting for acquired in-process R&D and other charges primarily in connection with the acquisition of Radish Communications for the fourth quarter of fiscal 1997. Before the charge in the fourth quarter of fiscal 1998, SystemSoft posted a loss for the quarter of $10.5 million or ($0.40) per basic share, compared to income of $2.0 million or $0.08 per basic share a year ago. For the fiscal year 1998, total revenue was $42.6 million, an increase of 7.4 percent over the $39.7 million recorded in the previous fiscal year. After accounting for the charge, SystemSoft reported a net loss of $19.7 million or ($0.76) per basic share for the year, compared to a net loss of $37.6 million or ($1.70) per basic share for the previous fiscal year after accounting for acquisition costs and other charges. Prior to the charges, SystemSoft reported a net loss of $6.8 million or ($0.26) per basic share for fiscal 1998, compared to net income of $6.4 million or $.26 per basic share in the previous fiscal year. At January 31, 1998, SystemSoft had cash of $10.8 million and working capital of $14.5 million. SystemSoft also announced that it, among others, has been named as a defendant in a securities class action lawsuit filed in the United States District Court for the District of Massachusetts. The complaint alleges, among other things, that the defendants made misstatements to the investing public. SystemSoft believes the allegations in the complaint are without merit and intends to vigorously contest them. Several factors contributed to the fourth quarter revenue shortfall. The principal factors were: reduced purchasing commitments by Asia-Pacific (APAC) OEMs fueled by recent regional economic issues that also appear to be slowing industry growth more broadly, significant turnover in the company's US sales force, and the continued long implementation cycles for the SystemWizard product family. In addition, SystemSoft said that upon a further review of its previously announced preliminary results, certain anticipated tax benefits were not recorded and previously recorded deferred tax assets were reduced, resulting in a larger net loss for the quarter. "While the fiscal fourth quarter results were obviously disappointing, we did have several bright spots," said Robert F. Angelo, chairman and CEO of SystemSoft. "Deb Besemer, formerly of Lotus, joined us on December 1 as our new president and Chief Operating Officer. We also gained additional market validation for our SystemWizard technology including a second user survey that revealed high marks for usability, and recognition in February 1998 as a Call Center Magazine "Product of the Year." "We are focused on rebuilding the company to profitability and healthy revenue growth over the next several quarters," said Besemer. "There are no quick fixes. The key components of our efforts are to continue rebuilding our US sales force, ensure the success of our existing customers with the implementation of our products and investigate new markets and routes to those markets. We have a strategic and financial plan against which we will measure our progress and a tactical plan designed to get us there from where we are today."