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Company Press Release
I/NET Reports Solid Third Quarter Earnings
KALAMAZOO, Mich.--(BUSINESS WIRE)--Oct. 19, 1998--I/NET, Inc. (OTC:INNI
- news) today announced the results of its third quarter and nine-month
period ended September 30, 1998, marked by solid gains in sales and net
income.
The developer and marketer of Internet- and Intranet-based software
applications for mid-range computers recorded net revenues of $455,724
in the third quarter of fiscal 1998, as compared to net revenues of
$419,189 in the same period last year. I/NET attributed the nine percent
increase to its web site consulting services and to agreements with IBM
and Netscape for its Internet products, which are also provided to
companies worldwide.
I/NET reported net earnings of $112,997 in the third quarter of fiscal
1998, compared with net earnings of $43,696 in the same period last
year. The 159 percent increase in net earnings enabled the Company to
post its seventh consecutive quarter of profitability.
''We had another quarter of solid financial performance, a result of our
ongoing efforts to bring the full functionality of Netscape's Internet
Server to IBM's AS/400,'' said Stephen J. Markee, president and CEO of
I/NET. ''Our agreements with IBM and Netscape have continued to
contribute to our financial results, enabling us to post top- and
bottom-line growth for the third quarter and for the first nine months
of the year.''
I/NET reported its gross margin (gross profit as a percentage of sales)
increased to 63 percent for the third quarter of 1998, compared with 58
percent in the third quarter of 1997. The Company attributed the
increase to its ability to maintain costs relative to its higher
revenues.
Selling, General and Administrative (SG&A) expense as a percentage of
sales decreased to 34 percent in the third quarter 1998 from 41 percent
in the comparable period last year. The decline reflects continued cost
containment efforts, including the reduction of certain administrative
support positions. Operating income for the third quarter ended
September 30, 1998 increased to $130,635, compared with $69,425 in the
third quarter of the same period a year ago, a result of I/NET's higher
revenues.
I/NET is finalizing its development efforts to bring Netscape's products
to the mid-range computer marketplace. During the third quarter, I/NET
introduced the beta version of its Netscape Server running on the
AS/400, which has initially been well received. The Company has
scheduled the release of this Internet product at the end of 1998.
''We are excited about our long-term growth opportunities with the
planned fourth quarter introduction of our Netscape product for the
AS/400,'' said Markee. ''The feedback received from our beta tests have
been positive, confirming that our development efforts are paying off.
We anticipate these new products will contribute to our financial
results starting in the first quarter of fiscal 1999.''
''I/NET has developed an exciting product, which will make Netscape's
well-known software available on IBM's system,'' said Dave Brown,
technical services manager for International Marketing Strategies Europe
Limited, who participated in the beta test. ''The beta version operated
smoothly and appeared to work reliably. I believe the Company's Internet
products should be well received in the marketplace, especially since
Netscape's Suite Spot Server has a big following on other platforms.''
I/NET has a marketing and distribution alliance with International
Marketing Strategies.
For the nine-month period ended September 30, 1998, I/NET reported net
earnings of $235,623 on net revenues of $1.3 million, compared with net
earnings of $168,531 on net revenues of $1.1 million in the same period
last year. I/NET attributed its 22 percent increase in net revenues for
the first nine months of fiscal 1998 to its expanded agreements with IBM
and Netscape, initiated in September 1997. The 1997 results included an
extraordinary one-time gain of $97,946 from the elimination of a
previously recorded debt.
I/NET's gross margin for the nine-month period ended September 30, 1998
decreased to 51 percent, as compared with 56 percent for the same period
a year ago. Costs associated with continued development efforts and
other expenses related to its IBM and Netscape agreements contributed to
the decline in gross margin for the first nine months ended September
30, 1998.
Operating income advanced to $294,319 for the first nine months of
fiscal 1998, compared with $149,711 in the same period a year ago. I/NET
attributed the solid operating profitability for the first nine months
of 1998 to the significant increase in net revenues and a continued
reduction in selling, general and administrative (SG&A) expense.
I/NET's AS/400 server software products allow AS/400 mid-range computers
to function as Internet servers, provide encryption for secure financial
transactions to occur over the Internet, and perform other Internet- or
Intranet-related functions. The AS/400, recognized for its reliability
and security, is the standard for back-office operating systems or
servers. An estimated 500,000 AS/400s are in use today worldwide,
including installations at 98% of Fortune 100 companies.
I/NET (http://www.inetmi.com) develops Internet computer systems and
software in 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
financial transactions over the Internet for international banking
centers. The Company, established in Kalamazoo, Michigan in 1982, also
provides web site consulting and security services |
