INNI.News.STRONG SALES,RECORD FIRST QUARTER EARNINGS.here it is
Monday May 11, 8:55 am Eastern Time
Company Press Release
I/NET Reports Strong Sales, Record First Quarter Earnings
KALAMAZOO, Mich--(BUSINESS WIRE)--May 11, 1998--I/NET, Inc. (OTC:INNI - news) today announced record earnings on a 60 percent increase in net revenues for the first quarter ended March 31, 1998.
The developer and marketer of Internet- and Intranet-based software applications for mid-range computers reported net earnings of $33,565 on net revenues of $432,781 in the first quarter 1998, compared with net earnings of $24,017 on net revenues of $269,748 in the same period last year. The 1997 results included an extraordinary one-time gain of $97,946 from the extinguishment of a previously recorded debt. I/NET attributed its second best ever quarterly revenue results to the further development of its internet and intranet products and web site services.
''We are pleased to see continued improvement reflected in our first quarter results,'' said Stephen J. Markee, president and CEO of I/NET. ''The major thrust of our development efforts have focused on bringing the Netscape servers to the IBM AS/400 computer. We expect the first server to be available in the third quarter of 1998.''
Markee continued: ''Other product launches for I/NET will include a new version of Webulator, our 5250 emulation software, set to hit the market this month, and I/NET's Merchant/400 product for two-party credit card transactions, which has been modified to work with IBM's Net.Commerce product for internet-based merchandising. These two products should bolster sales of I/NET logo products and significantly contribute to revenues in the last half of 1998.''
I/NET reported its gross margin (gross profit as a percentage of sales) decreased to 44 percent for the first quarter of 1998, compared with 51 percent in the first quarter of 1997. I/NET attributed this decrease to its further investment in additional development personnel and other expenses relating to its Netscape and IBM initiatives.
Operating income advanced to $51,066 for the quarter ended March 31, 1998, compared with an operating loss of $47,204 in the prior year first quarter. I/NET attributed the dramatic improvement to increased revenue and a reduction in selling, general and administrative (SG&A) expense. I/NET reduced SG&A expense as a percentage of sales to 32 percent in the first quarter 1998 from 69 percent in the comparable period last year. The decline is due to a reduction in administrative personnel and continued cost containment over operating expenses.
''I/NET is continuing to commit additional resources to product development. In fact, these investments of capital will be significantly increased during the second and third quarters of 1998 and are expected to generate additional revenues for I/NET in the latter part of 1998 and into 1999,'' said Markee.
Established in Kalamazoo, Michigan in 1982 as a contract research and development firm, I/NET (http://www.inetmi.com) has been a pioneer in the areas of digital imaging, voice recognition and multimedia. I/NET currently develops internet computer systems and software for both public and private sectors, and is a leading research firm specializing in systems planning, development and implementation of internet security solutions, including services to provide secure and anonymous financial transactions over the internet for international banking centers. The Company also provides web site consulting and security services.
I/NET, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For The Three Months Ended
March 31,
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1998 1997
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Revenues $432,781 $269,748
Cost of Revenues 242,226 130,900
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Gross Profit 190,555 138,848
Selling, General & Administrative
Expense 139,489 186,052
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Earnings From Operations 51,066 (47,204)
Interest Expense 17,501 26,725
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Earnings Before Extraordinary Item 33,565 (73,929)
Extraordinary Item -- 97,946
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Net Earnings $ 33,565 $ 24,017
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________ ________
Net Earnings Per Share $ 0.00 $ 0.00
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Contact:
I/NET Inc.
Stephen J. Markee, 616/344-3017 ext. 104
smarkee@inetmi.com
or
Seyferth & Associates, Inc.
Jeff Lambert or John Vonder Haar, 800/435-9539
SeyferthPR@aol.com
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