Earnings report:
Thursday August 13, 8:04 am Eastern Time
Company Press Release
EduSoft Reports Record Second Quarter and Six Months Financial
Results
Sales Increase 54% for the Quarter Ended June 30, 1998 and 42% for the Six Months
Ended June 30, 1998
ROSH HA'AYIN, Israel--(BUSINESS WIRE)--Aug. 13, 1998--EduSoft Ltd. (Nasdaq/NMS: EDUSF - news) today reported record sales and net earnings for
both the second quarter and six months ended June 30, 1998.
Sales for the second quarter of 1998 increased 54% to a record $5,118,000 from $3,334,000 for the comparable 1997 quarter. The increase is due mainly to
strong sales in Latin America and Europe, accounting for 55% and 32% respectively, of all revenues in the 1998 quarter. Sales for the first six months of
1998 reached a record $9,013,000, an increase of 42% from sales of $6,343,000 in the comparable period in 1997. The Company's best selling English
Discoveries and English+ multimedia English-learning series lead the sales increase in both the second quarter and first six months of 1998.
Gross profit for the 1998 second quarter increased 57% to $4,286,000 (84% of revenues) from $2,702,000 (81% of revenues) in the second quarter of 1997,
while gross profit for the first six months of 1998 amounted to $7,461,000 (83% of revenues), an increase of 48% from $5,029,000 (79% of revenues) in the
comparable 1997 period.
Net research and development expenses in the second quarter of 1998 increased 63% to $534,000 from $327,000 in the 1997 quarter. Research and
development expenses in the first six months of 1998 increased 49% to $1,009,000 from $678,000 in the first half of 1997. The increase in research and
development expenses in both the three and six month periods is due mainly to the Company's accelerated efforts since the end of 1997 for the
development of My First English(C), its new multimedia ESL series for children. The Secret of the Golden Jewel(C), the first title in the My First
English(C) series, was released to the European market last week.
Selling expenses for the second quarter of 1998 reached $2,077,000 (41% of revenues), up 117% from $954,000 (29% of revenues) in the 1997 second
quarter. The increase is attributable to increased commissioned and royalty-bearing sales in Latin America. Selling expenses in the first six months of
1998 increased 58% to $3,492,000 (39% of revenues) from $2,205,000 (35% of revenues) in the comparable 1997 period.
General and administrative expenses for the 1998 second quarter increased 36% to $307,000 (6% of revenues) from $225,000 (7% of revenues) in the
comparable 1997 quarter. General and administrative expenses for the first six months of 1998 reached $780,000 (9% of revenues), an increase of 79% from
$436,000 (7% of revenues) in the comparable 1997 period.
Operating income in the 1998 second quarter amounted to $1,368,000, up 14% from operating income of $1,196,000 in the second quarter of 1997.
Operating income for the first six months of 1998 increased 27% to $2,180,000 from $1,710,000 in the same 1997 period.
Net income in the 1998 second quarter rose 10% to a record $1,105,000 ($0.23 per share) from $1,008,000 ($0.21 per share) in the same quarter of 1997. Net
income in the first six months of 1998 reached a record $1,847,000 ($0.39 per share), an increase of 26% from $1,468,000 ($0.31 per share) in the comparable
1997 period.
Commenting on the Company's results of operations, Menachem Hasfari, EduSoft's President and C.E.O. said: ''We are proud to report record financial
results for both the second quarter and the first six months of 1998. I'm especially pleased that the first title of our My First English(C) series has been
released to the market, with many more to follow. The My First English(C) series is strategically designed to further EduSoft's leadership position in the
ESL global market by attracting younger audiences. The Company is expecting that the new series will account for a significant part of the Company's
future growth, hoping to repeat the international success experienced with our ESL multimedia series for adults.''
Except for historical data, matters discussed in this release are forward-looking statements, as it is defined in the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are subject to a number of known and unknown risks and uncertainties including, but not limited to product
and technology development, product demand, impact of competitive products and pricing, market acceptance, lengthy and unstable sales cycle,
changing political and economic conditions, as well as availability of human and financial resources; which may cause actual results to differ materially
from those expressed in any forward-looking statements made by or on behalf of EduSoft.
EduSoft develops, publishes and markets multimedia educational titles in three product lines - English learning, Early Childhood and science. Homes,
schools, governments and corporations use EduSoft's products in more than 40 countries worldwide.
Consolidated Statements of Income
(Unaudited)
Three months Six months
ended June 30, ended June 30,
1998 1997 1998 1997
United States Dollars
Revenues 5,118,000 3,334,000 9,013,000 6,343,000
Cost of revenues 832,000 632,000 1,552,000 1,314,000
Gross profit 4,286,000 2,702,000 7,461,000 5,029,000
Research & development,
net 534,000 327,000 1,009,000 678,000
----------------------------------------------------------------------
3,752,000 2,375,000 6,452,000 4,351,000
Selling expenses 2,077,000 954,000 3,492,000 2,205,000
General and administrative
expenses 307,000 225,000 780,000 436,000
Operating income 1,368,000 1,196,000 2,180,000 1,710,000
Financial income 26,000 12,000 41,000 84,000
Other income (expense),
net (34,000) -- (34,000) --
Income (loss) before
taxes on income 1,360,000 1,208,000 2,187,000 1,794,000
Taxes on income 255,000 200,000 340,000 326,000
Net income 1,105,000 1,008,000 1,847,000 1,468,000
Basic earnings
per share 0.23 0.21 0.39 0.31
Weighted average number
of shares outstanding 4,777,000 4,719,000 4,777,000 4,719,000
Diluted earnings per share 0.23 0.21 0.38 0.31
Weighted average number
of shares outstanding 4,798,000 4,731,000 4,800,500 4,731,000
Consolidated Balance Sheets
June 30, Dec. 31,
1998 1997
(Unaudited) (Audited)
United States Dollars
Assets Current assets Cash and cash equivalents $ 697,000 $ 2,623,000 Marketable securities 7,000 1,111,000 Accounts receivable - trade: Related parties
- parent company and its subsidiaries 6,301,000 4,115,000 Others 5,956,000 6,645,000 Loan to related party - parent company -- 2,977,000 Other accounts
receivable and prepaid expenses 506,000 395,000 Inventories 295,000 254,000 Total current assets 13,762,000 18,120,000 Long term trade receivables
1,390,000 1,025,000 Loan to related party - parent company 2,948,000 -- Property plant and equipment 6,344,000 5,323,000 Software production costs, net
976,000 1,357,000
Other assets, net 936,000 1,012,000
26,356,000 26,837,000
Liabilities and shareholders' equity Current liabilities Current portion of longterm payables 292,000 450,000 Trade payables 362,000 1,231,000 Accrued
expenses and other liabilities 2,065,000 1,006,000
Total current liabilities 2,719,000 2,687,000 Long term payables 459,000 415,000 Accrued severance pay, net 55,000 --
Shareholders' equity Share capital 195,000 195,000 Additional paid-in capital 13,339,000 13,296,000 Retained earnings 9,589,000 10,244,000 Total
shareholders' equity 23,123,000 23,735,000 ----------------------------------------------------------------------
26,356,000 26,837,000
Obtain more information about EduSoft by visiting our Web site at
edusf.com in the USA, or at edusoft.co.il
elsewhere.
Contact:
Menachem Hasfari, President
EduSoft Ltd., Tel Aviv, Israel
+972-3-900-2410, +972-3-900-2401 Fax
hasfari@edusoft.co.il
or
Cynthia DeMonte
DeMonte Associates
New York, NY,
212/473-3700, 212/707-8668
cdemonte@aol.com |
