This looks like they could also go down the tubes.... I've seen this scenerio many times..
ACCENT REPORTS 1997 FINANCIAL RESULTS
COLORADO SPRINGS, Co., March 17 /PRNewswire/ -- Accent Software International,
Ltd., (Nasdaq: ACNTF and ACNUF) announced today that it reduced its 1997 operating
loss by 52% from its 1996 level, incurring an operating loss of $10,096,000 on revenue of
$3,125,000 as compared with an operating loss of $20,879,000 on revenue of $4,953,000
during 1996. Costs related to the Company's recent financing transactions contributed to a
total net loss of $13,474,000 or $1.09 per share for 1997, a 36% improvement from 1996
when the net loss was $21,034,000 or $2.12 per share. The reduction in the operating loss
is the result of significant cost reduction efforts, particularly in the general, administrative,
sales and marketing areas.
The operating loss during the fourth quarter of $3,169,000 represented a 39% improvement
over the fourth quarter of 1996 when the operating loss was $5,201,000. Revenue in the
most recent quarter was $572,000 compared with revenue of $222,000 during the same
period of 1996. Financing-related costs of $2,526,000 contributed to a net loss during the
fourth quarter of $5,787,000 or $0.41 per share compared to $5,285, 000 or $0.50 per share
during the year earlier quarter.
"The Company's products, particularly the Global Development Kit (GDK) and WordPoint,
are receiving a favorable reception in the marketplace but revenue, both in the fourth quarter
and currently, has fallen short of management expectations due to significant concerns
from potential customers as to the Company's ability to continue to support and expand its
product offerings," reported Todd Oseth, Accent President and CEO. "The Company is
continuing to work on significant new sales opportunities which we had expected to
complete during the fourth quarter and is also continuing to place significant emphasis on
the development of new and enhanced products which will be introduced early during the
first half of 1998."
As previously announced, Accent completed a multi-phased financing transaction during
1997's fourth quarter which raised $5.5 million after expenses. The transaction involved the
sale of convertible securities and has resulted to date in significant dilution to existing
shareholders. All of the convertible securities have now been converted into the Company's
ordinary shares and the total number of shares outstanding is currently approximately 27
million. Conversion of the securities and sales of a substantial number of the shares
received on conversion by the entities providing the financing placed considerable downward
pressure on the Company's share price. This, in turn, has apparently led to speculation
from both potential customers and investors about the Company's continuing viability,
further pressuring the share price downward.
The financing transactions completed during the fourth quarter increased the Company's
equity at the end of the year and placed the Company in compliance with the requirements
for continued listing on the Nasdaq SmallCap market. The listing requirements changed
effective February 23, 1998, however, and management believes, based upon the recent
trading prices of its ordinary shares and anticipated first quarter losses, that the Company
will not be in compliance with the new requirements unless either new equity is obtained in
the near term or the Company's market value continues to increase. For reasons unknown
to the Company, the Company's share price increased dramatically in the last few days
and is currently trading above $1.00 per share which is the minimum share price required
by Nasdaq for continued listing on the SmallCap market.
Accent's Board of Directors has been pursuing a variety of alternatives to stabilize and, if
possible, enhance, the Company's financial position and continuing viability. Among these
alternatives, in February the Company retained Software Equity Group, LLC, a mergers,
acquisitions and strategic planning firm specializing in the software industry, to seek a
potential buyer for the Company's majority-owned subsidiary, AgentSoft. Divestiture of
AgentSoft could provide working capital for Accent's continuing operations. Software Equity
Group will also be utilized by Accent to pursue other strategic initiatives.
Todd Oseth also stated, "In the next several days, additional cost reduction efforts which
are necessary to further reduce our working capital needs will be implemented. These
actions include significant personnel reductions, the consolidation of facilities and a freeze
on capital spending. We are also in negotiations with our major lender and other creditors
to restructure our long term debt and other liabilities, possibly by issuing equity, obtaining
discounts, deferring or stretching payment terms, or some combination of these
alternatives. Absent significant new revenue, financing or the sale of AgentSoft, the
Company will continue to experience significant cash flow difficulties." There can be no
assurance that the Company will be successful in its efforts to reduce its working capital
requirements and generate additional cash flow and any failure to do so will have a material
adverse impact on the Company.
This press release contains historical information and forward-looking statements.
Statements looking forward in time are included pursuant to the "safe harbor" provision of
the Private Securities Litigation Reform Act of 1995. Such statements involve known and
unknown risks and the Company's actual results in future periods may be materially
different from any future performance suggested herein.
ACCENT SOFTWARE INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. Dollars and Shares in Thousands, Except Per Share Data)
For The For The
Three Months Ended Twelve Months Ended
December 31, December 31,
1997 1996 1997 1996
Net Sales $572 $222 $3,125 $4,953
Operating Costs and Expenses
Cost of Sales 975 1,922 3,062 6,767
Product Development Costs 1,238 938 4,813 3,386
Marketing Expenses 275 1,133 2,177 9,242
General and Administrative
Costs 1,253 1,430 3,169 6,437
Total Operating Costs
and Expenses 3,741 5,423 13,221 25,832
Operating Loss $(3,169) $(5,201) $(10,096) $(20,879)
Other Expenses,
principally financing costs 2,618 84 3,378 155
Net Loss $(5,787) $(5,285) $(13,474) $(21,034)
Net Loss per Share $(0.41) $(0.50) $(1.09) $(2.12)
Weighted Average Number
of Shares 14,115 10,612 12,343 9,926
About Accent Software International Ltd.
Accent Software International, Ltd. is a provider of language
solutions for software products in over 30 languages. AgentSoft, Ltd.,
develops Internet automation products. Products and services of both
Accent and AgentSoft are provided through direct, OEM and retail
channels in most regions of the world. Accent Software was founded in
1988. AgentSoft was established in 1996.
SOURCE Accent Software International, Ltd. |
