Spyglass Third Quarter Revenue Increases 145 Percent Over Prior Year Company's Internet Device Strategy Propelling Much Improved Financial Results
PR Newswire - July 22, 1998 07:38
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NAPERVILLE, Ill., July 22 /PRNewswire/ -- Internet pioneer Spyglass Inc.(R) (Nasdaq: SPYG) today announced significantly improved operating results for the three months ended June 30, 1998. Revenues for the fiscal 1998 third quarter reached $5.4 million, a 145 percent increase over the comparable period last year. Net losses for the quarter of 9 cents per share represented an 80 percent improvement from the 45 cents per share loss reported for the same period last year.
"Besides our continually improving financial performance, what excites us is the fact that the Internet device market is absolutely real and we have a business model in place to capitalize on it," said Doug Colbeth, president and CEO of Spyglass. "Leading market research firms, IDC and Forrester Research project that more non-PC devices will be connected to the Internet by 2002 than PCs and that the market for Internet appliances will grow to more than $16 billion in 2002, respectively. We believe that Spyglass will play a leadership role in making that happen.
"Today Spyglass develops both client-side and server-side enabling technologies that are being licensed by leading device manufacturers and services providers," Colbeth added. "But more importantly, Spyglass is leading the industry by combining Internet technologies with a world-class, device centric professional services organization, with expertise in a number of leading embedded and real-time operating systems, including Microsoft's Windows CE, Sun's Personal and Embedded Java, Wind River's VxWorks, ISI's pSOS and Microware's OS-9. Furthermore, we have demonstrated our expertise through a number of major consulting engagements in key vertical market segments, including television, telecommunications, office equipment, and industrial controls."
In commenting on the Company's results, chief financial officer Gary Vilchick stated, "For the fourth consecutive quarter, Spyglass has exceeded Wall Street earnings expectations, increased revenue and significantly reduced operating losses. To put our progress in perspective, quarterly revenues of $5.4 million have more than doubled from the $2.2 million recorded during the same period last year. At the same time, Spyglass substantially reduced its operating loss per share to 9 cents as compared to 45 cents for the corresponding period last year, an 80 percent improvement in bottom line performance. All of our financial trends reflect the significant opportunities in the device market, the benefit of having a balanced and diversified business model, and our ability as a company to efficiently manage the business."
Spyglass announced a number of noteworthy customer transactions during the quarter:
* GTE -- Spyglass announced that GTE (NYSE: GTE) licensed Spyglass
Remote Mosaic, Spyglass Prism and SurfWatch for inclusion in
its interactive cable television service, mainStreet.
* Philips -- Spyglass announced that Philips (NYSE: PHG) licensed Spyglass
Mobile Forms Database software technology for the Velo 500
handheld PC running on Microsoft's Windows CE operating
system.
* NEC -- Spyglass announced that NEC (Nasdaq: NIPNY) licensed Spyglass
Device Mosaic for use in a new line of industrial network
computers which will be used to streamline factory floor
activities.
* Lucent -- Spyglass announced that Lucent (NYSE: LU) is marketing
Spyglass Prism in its newly established Cooperative
Innovations Program aimed at developing wireless
applications.
Spyglass also entered into a major licensing contract for Spyglass Device Mosaic and Spyglass MicroServer with a major electronics and communications company for a next generation digital set-top box project. Also, Spyglass announced that the former Chairman and CEO of Tribune Company (NYSE: TRB), Charles Brumback, joined its Board of Directors.
With recently signed deals, Spyglass has solidified its industry leading position in delivering Internet-enabling solutions to the advanced television marketplace. In fact, Spyglass has now delivered solutions to a number of leading companies involved in the interactive television market, including PowerTV, Nokia (NYSE: NOKA), Microsoft's (Nasdaq: MSFT) WebTV, Source Media's (Nasdaq: SRCM) Interactive Channel, WorldGate, Thomson/RCA, and GTE.
"From a shareholder perspective, the recent quarter was extremely positive," said Colbeth. "Spyglass continued to improve its financial performance, continued to sell multiple technologies and services to some of the world's leading device makers and continued to demonstrate the effectiveness of our strategic focus and business model. Furthermore, the recent progress of Spyglass has strengthened our leadership position within the market and put us in an excellent position to capitalize on the tremendous growth opportunities associated with the entire Internet device marketplace."
About Spyglass Inc.
Spyglass (Nasdaq: SPYG) provides Internet expertise, software and services for making devices work with the Web. Particularly active in the cable and satellite television, wireless telecommunications, consumer electronics and office equipment markets, Spyglass solutions are used by market-leading companies including GTE, Sun Microsystems (Nasdaq: SUNW) Java Software Division, NEC, Nokia, Thomson Consumer Electronics (RCA) and Xerox. Spyglass headquarters are located at 1240 East Diehl Rd., Naperville, Ill., 60563; phone: 630-245-6512; fax: 630-245-6693; press email inquiries: astokes@spyglass.com; Web site: spyglass.com.
Spyglass and the Spyglass logo are trademarks or registered trademarks of Spyglass, Inc., in the United States and other countries. Other technologies and brand names are trademarks or registered trademarks of their respective companies. This release contains information about management's future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors that are discussed in the company's annual report on Form 10-K for the year ended September 30, 1997, which is on file with the SEC.
SPYGLASS, INC.
Consolidated Statements of Operations
(Unaudited)
Three Months Nine Months
Ended June 30, Ended June 30,
(In thousands, except
per share amounts) 1998 1997 1998 1997
Net revenues:
Internet technology
revenues $3,241 $1,179 $8,712 $15,154
Service revenues 2,135 1,037 5,924 2,962
Total net revenues 5,376 2,216 14,636 18,116
Cost of revenues:
Cost of internet
technology revenues 651 200 1,449 1,326
Cost of service revenues 784 477 1,973 1,017
Total cost of revenues 1,435 677 3,422 2,343
Gross profit 3,941 1,539 11,214 15,773
Operating expenses:
Sales and marketing 2,371 1,813 6,930 5,843
Research and development 1,676 3,714 7,630 10,074
General and administrative 1,428 2,162 4,508 5,282
Restructuring charge -- -- -- 900
One-time acquisition costs -- -- 496 --
Total operating expenses 5,475 7,689 19,564 22,099
Loss from operations (1,534) (6,150) (8,350) (6,326)
Other income, net 284 307 923 1,299
Loss before income taxes (1,250) (5,843) (7,427) (5,027)
Income tax benefit -- (310) -- --
Net loss $(1,250) $(5,533) $(7,427) $(5,027)
Loss per common share-basic
and diluted $(0.09) $(0.45) $(0.56) $(0.42)
Weighted average number of
common shares
outstanding-basic
and diluted 13,602 12,188 13,283 12,013
SPYGLASS, INC.
Consolidated Balance Sheets
(Unaudited)
June 30, September 30,
(In thousands) 1998 1997
ASSETS
Current assets:
Cash and cash equivalents $22,518 $22,841
Short-term investments -- 4,929
Accounts receivable, net
of allowance for doubtful
accounts of $416 and $350, respectively 5,032 3,792
Prepaid expenses and other current assets 2,606 2,195
Total current assets 30,156 33,757
Properties and equipment, net 3,990 5,037
Long-term accounts
receivable 150 250
Other assets 428 1,536
Total Assets $34,724 $40,580
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,898 $2,162
Deferred revenues 791 1,256
Accrued compensation
and related benefits 1,458 1,322
Accrued expenses and other liabilities 304 173
Total current liabilities 4,451 4,913
Long-term deferred revenues 100 100
Total liabilities 4,551 5,013
Stockholders' equity:
Preferred stock, $.01 par value,
2,000,000 shares authorized,
none issued -- --
Common stock, $.01 par value,
50,000,000 shares authorized, 13,851,141
and 12,362,823 shares issued and outstanding,
respectively 138 124
Additional paid-in capital 43,481 40,746
Accumulated deficit (12,768) (5,303)
Treasury common stock at cost, 9,714 shares
held in 1998 (55) --
Unamortized value of restricted stock issued (623) -
Total stockholders' equity 30,173 35,567
Total Liabilities and Stockholders' Equity $34,724 $40,580
SOURCE Spyglass Inc.
/CONTACT: Media, Amanda Stokes, 630-245-6512, or e-mail,
astokes@spyglass.com, or Investor-Analysts, Gary Vilchick, 630-245-6610 or
e-mail, gvilchick@spyglass.com, both of Spyglass/
/Web site: spyglass.com
(SPYG) |
