Check out IAIC... Y2K EARNINGS SURPISE! See release below. (directly relevant to CA)
Monday April 20, 4:00 pm Eastern Time
Company Press Release
SOURCE: Information Analysis Incorporated
Information Analysis Inc. Reports a Profit for FY1998 First
Quarter
Quarterly highlights: * Revenues of $4.2 million, up 167% vs. 1Q97 * Net
income of $60,000, or $0.01 per share, vs. year-earlier loss * Quarterly
bookings of $5.8 million * 17 Year 2000 remediation contracts currently in
house
FAIRFAX, Va., April 20 /PRNewswire/ -- Information Analysis Inc. (Nasdaq: IAIC
- news) today
reported results for the first quarter of fiscal 1998 ended March 31, 1998. Revenues
were
$4,169,000, up 167% from the $1,562,000 reported in 1997's first quarter. IAI
reported net income
of $60,000, or $0.01 per share, compared to a loss of $371,000, or $0.07 per share
in 1997's first
quarter.
On a sequential basis, revenues improved 43% from the fourth quarter of 1997's
$2,914,000, and the
company reversed a loss of $424,000, or $0.07 per share, reported in the prior
quarter.
''We're very pleased by these results, and especially pleased that we achieved
profitability in the
quarter,'' said Sandor Rosenberg, IAI's Chairman and Chief Executive Officer. ''We
began the
quarter with six Year 2000 contracts in house; we closed the quarter with 17. We are
assembling a
blue- chip roster of customers for our UNICAST/2000 software tool, including
Canada Life
Assurance (UK), Arbitron, Gulfstream International, and the Bureau of National
Affairs. Moreover,
our partnership with Computer Associates International, Inc. (CA) brought us a
significant number of
new orders in the quarter that just ended, plus leads which we believe we will convert
to orders as this
quarter progresses.''
The company reported total Year 2000 bookings in the quarter of $5.8 million,
including product and
factory services that will be performed at the company's Year 2000 International
Solutions Factory in
Fairfax, Virginia. This compares to product and service bookings of $1.6 million in the
fourth quarter
of FY1997. In addition to its own solutions factory, the company now has five
solutions partners that
use UNICAST/2000 for remediation of certain CA languages. These partners include
CACI
International, ManTech, and Software International Corporation.
Next several quarters will be crucial
''We believe we're successfully positioning ourselves as a provider of Year 2000
software and
services,'' Mr. Rosenberg said. ''However, the next few quarters will be crucial to
sustaining the
momentum we've established. To maintain our order flow, we are dependent upon the
continuing
efforts of CA, and their continued emphasis on finding Year 2000 solutions for their
customers. To
that end, our highest priority must be to support and train CA's sales force.''
Mr. Rosenberg said IAI's revenues over the next year would be driven by growth in
both professional
services and in sales of UNICAST/2000 software. ''We are aware a general
perception that Year
2000 issues may somehow be overblown, and that the market will be much smaller
than previously
anticipated,'' Mr. Rosenberg said. ''After meeting with dozens of prospective
customers, we do not
share this pessimism. Rather, we find that organizations are coming to terms with the
absolute need for
Year 2000 compliance, but are doing so methodically and with costs and resources
uppermost in their
minds. The ability to both provide a remediation tool and serve as an external resource
to carry out
that remediation is a decided plus for IAI.''
Finally, Mr. Rosenberg outlined the company's plan for achieving sustained revenue
growth and
profitability. ''During the first quarter, UNICAST/2000 for CA-ADS went from
factory availability to
general availability, UNICAST/2000 for CA-IDMS COBOL became factory
available, and
UNICAST/2000-PC for UNISYS COBOL entered beta testing. Our goal is to
quickly follow with
remediation tools for other CA and non-CA languages, and to enhance existing
software tools. On the
professional services side of our business, we will staff our Fairfax International
Solutions Factory to
provide quick, thorough, and accurate remediation services to our customers. We are
currently
moving toward a goal of having the capacity to remediate 400 million lines of code per
year.''
About Information Analysis Incorporated
Information Analysis Incorporated (www.infoa.com), headquartered in Fairfax,
Virginia, is a
world-class provider of products and services for automated transition engineering of
computer
systems. IAI provides highly automated software and platform conversion,
modernization and
migration. Through its UNICAST/2000 product family, IAI provides clients the ability
to achieve
Year 2000 compliance in-house or off-site at IAI's or other certified solution factories.
Additional information for investors
This release may contain forward-looking statements regarding the Company's
business, customer
prospects, or other factors that may affect future earnings or financial results. Such
statements involve
risks and uncertainties which could cause actual results to vary materially from those
expressed in the
forward-looking statements. Investors should read and understand the risk factors
detailed in the
Company's 10-KSB for the fiscal year ended December 31, 1997 and in other filings
with the
Securities and Exchange Commission.
All product names referenced herein are the trademarks of their respective companies.
Information Analysis Incorporated
Condensed Consolidated Income Statements
Three months ended March 31,
(in thousands, except per share
data; unaudited) 1998 1997
Net revenue:
Professional services $2,037 $1,498
Software sales 2,132 64
Total revenue 4,169 1,562
Cost of goods sold and services
provided:
Cost of professional services 1,593 1,200
Cost of software sales 575 51
Total cost of goods sold
and services provided 2,168 1,251
Gross margin 2,001 311
Operating expenses:
Sales, general and
administrative 1,686 579
Research and development 287 24
Total operating expenses 1,973 603
Operating income (loss) 28 (292)
Other income (expense) 32 (5)
Income (loss) before income
taxes 60 (297)
Provision (benefit) for
income taxes -- 74
Net income (loss) $60 $(371)
Net income (loss) per share:
Basic $0.01 $(0.07)
Diluted $0.01 $(0.07)
Shares used in calculating
earnings per share:
Basic 6,497,215 5,007,349
Diluted 8,205,965 5,007,349
Information Analysis Incorporated
Condensed Consolidated Balance Sheets
March 31, December 31,
(in thousands; unaudited) 1998 1997
Assets
Current Assets
Cash and cash equivalents $3,356 $364
Accounts receivable, net 5,089 3,128
Refundable income taxes 33 33
Other 308 156
Total current assets 8,786 3,681
Fixed assets, net 864 780
Capital leases, net 43 50
Capitalized software, net 5,207 4,431
Goodwill and other 61 75
Total assets $14,961 $9,017
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable 1,331 1,122
Payroll and other accrued
liabilities 1,443 1,178
Revolving line of credit -- 600
Current portion of long-
term debt 103 104
Other 20 23
Total current liabilities 2,897 3,027
Long term debt -- --
Other non-current liabilities 12 12
Total liabilities 2,909 3,039
Common stock, par value $0.01,
15,000,000 shares authorized;
8,116,655 and 7,498,430 issued;
6,612,044 and 5,993,819
outstanding at March 31, 1998 and
December 31, 1997 respectively 81 75
Additional paid-in capital 12,527 6,518
Retained earnings 298 239
Less treasury stock;
1,504,611 shares at cost (854) (854)
Total shareholders' equity 12,052 5,978
Total liabilities and
shareholders' equity $14,961 $9,017
SOURCE: Information Analysis Incorporated
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