CHICAGO, Nov. 12 /PRNewswire/ -- PC Quote, Inc. (AMEX:PQT), a leading provider of on-line real-time and delayed securities, futures, and market data and financial analysis software to financial professionals, consumers and redistributors, today announced a significant reduction in its reported loss for the third quarter ended September 30, 1998 versus the prior year. The loss for the third quarter of 1998 was $911,055, or $0.07 per share, versus a loss of $2.3 million, or $0.31 per share, for the same period in 1997. "We are definitely headed in the right direction as our revenue enhancement and cost containment efforts continue to improve our operating performance," stated Chief Financial Officer John Juska. For the nine months ended September 30, the reported loss decreased from $8.4 million ($1.14 per share loss) in 1997 to $5.2 million ($0.40 per share loss) in 1998.
For the quarter ended September 30, 1998, revenue increased 40% to $6.2 million, compared to $4.4 million reported the prior year period. "46% of our total revenue for the quarter came from our Internet products and services," noted Chairman of the Board and Chief Executive Officer Jim Porter. "This continued growth, coupled with an increase of 8% for the quarter in Satellite and Terrestrial Services, is the direct result of changes we have made within sales and operations over the last year." Revenue for the first nine months of 1998 was $17.0 million, 34% higher than the $12.7 million reported for the comparable 1997 period.
Total Operating Expenses increased 3.6% to $20.5 million for the nine months ended September 30, 1998 from the comparable 1997 period, and increased 15.2% for the quarter. Increases in License and Exchange Fees and Sales expenses were directly attributable to increased revenue. Increased advertising expenditures, a component of Sales expense, during the periods were mitigated to an extent by a lower percentage sales compensation plan implemented in the fourth quarter of last year. These increases, together with an increase in non-cash charges for Depreciation and Amortization, were offset to a degree by decreases in Operations and Customer Services, General and Administrative, and Product and Market Development costs when compared to the prior year nine month period. "As we move toward profitability, we continue to strengthen our infrastructure, technological capabilities, and product development, we are already seeing the benefits from changes made earlier this year," added Porter.
Net cash and cash equivalents declined $942,000 from year-end 1997 to $171,000 at the end of the quarter. Expenditures for new equipment were 28%, higher for the first nine months of 1998 versus 1997 as operating cash was used to effect new purchases. Capitalized software costs were 28%, higher for the nine months ended September 30, 1998, compared to the same period for 1997. Although the Company decreased its overhead allocation to capitalizable projects, there was an increase in development resources devoted to the construction phase of new systems and products. The Company borrowed an additional $1.0 million on the credit facility with PICO Holdings, Inc. ("PICO) during the period, and the Company repaid $225,000 of the principal balance on the bank term loan. The Company received approximately $4.3 million in net proceeds from, (i) the sale of shares of Common Stock underlying rights exercised pursuant to its rights offering, (ii) the purchase of Common Stock by PICO Holdings and the Wexford Affiliates through exercise of previously issued warrants, (iii) the sale of shares of Common Stock to employees pursuant to the Company's Employee Stock Purchase Plan, (iv) the sale of shares of Common Stock to employees who exercised options previously granted to them under the Company's Employee Incentive Stock Option Plan, and (v) the issuance of shares to the Chairman and CEO in lieu of cash payments for previously deferred and current compensation. The Company repurchased 2,988,949 shares of its Common Stock, at one dollar per share, from Imprimis Investors LLC and Wexford Spectrum Investors LLC (collectively, the "Wexford Affiliates"), fulfilling its obligation under its October 1997 Stock and Warrant Purchase Agreement with the Wexford Affiliates.
Due to the decline in cash flow to levels expected to be insufficient for working capital, capital expenditures, and debt services, the Company has explored multiple alternatives available to the Company, for the purposes of raising capital to fund operations and enhancing shareholder value. On July 31,1998 the Company increased its borrowings under the Loan Agreement with PICO by $1.0 million.
As previously reported, on September 23, 1998 the Company and PICO and Physicians Insurance Company of Ohio (together "Holdings") entered into a Securities Purchase Agreement whereby, subject to shareholder approval at a special meeting on December 15, 1998, the $2.5 million convertible subordinated debenture, the $3.3 million in principal borrowings under the Loan Agreement (including the $1.0 million borrowed on July 31, 1998) and related accrued interest of approximately $800,000 would be converted into convertible preferred shares. If approved by the shareholders of the Company, the Securities Agreement and proposed debt recapitalization would:
1) eliminate the Company's obligation to pay $3.8 million in principal and
accrued interest when due on December 31, 1998 and $3.1 million
(principal and accrued interest) when due on April 30, 1999;
2) represent a permanent $6.7 million equity infusion increasing
stockholders' equity from a negative $3.8 million at September 30, 1998
to a positive pro-forma $2.8 million (adjusted for interim interest);
and
3) increase September 30, 1998 working capital (current assets minus
current liabilities) by $6.6 million.
There can be no assurances, however, that the Company will be successful in obtaining shareholder approval.
The Company continues to explore additional alternatives to fund operations and enhance shareholder value. Such alternatives include a merger, a spin-off or sale of part of the Company's business, a strategic relationship or joint venture with another technology or financial service firm or other financing to further fund the Company's business./ Any capital raised may be costly to the Company and/or dilutive to stockholders. There can be no assurances, however, that the Company will be successful in concluding a transaction, or that if a transaction is concluded that such transaction will result in alleviating the Company's present financial situation. If the Company is not able to obtain shareholder approval for the Holdings debt conversion and, in turn, secure additional capital to repay the debts, when due, the lack of funds may significantly limit the Company's ability to realize value from its assets and its product offerings, and its ability to continue its business as currently conducted.
The Company continues to make investments in operations to ensure speed and reliability of data at a competitive price, allowing the Company to expand its service offerings to the individual investor, application developers and businesses by offering its products through the Internet. After converting its ticker plant to 100% Windows NT-based technology earlier this year and a recent successful upgrade of its PC Quote 6.0 on the Internet server farm to accept its premium 1024KB HyperFeed(TM), the Company plans to continue to introduce new product and service enhancements. Current projects include the development of new data analysis software and programmer tools (application programming interfaces) designed to afford easy access to HyperFeed(TM) for data retrieval and analysis purposes, and application of new technology to increase the data volume and delivery speed of its distribution system and network.
The statements made herein that are not historical facts may contain forward-looking information that involve substantial risks and uncertainties. The Company's actual results, performance or achievements could differ materially from the results, performance or achievements expressed in, or implied by, these forward-looking statements. Among the factors that could cause or contribute to such differences are those set forth in the Company's filings with the Securities and Exchange Commission and include the Company's ability to (i) obtain adequate financing to continue as a going-concern and fund its current and future business strategies, (ii) attract and retain its key employees, (iii) compete successfully against competitive products and services, (iv) obtain shareholder approval to recapitalize or pay, refinance, or extend the up to $3.25 million loan from PICO Holdings, Inc. on or before December 31, 1998, (v) maintain its relationships with key suppliers and providers of market data, and (vi) the effect of economic and business conditions generally.
About PC Quote, Inc.
Widely known as possessing the fastest and most accurate real-time ticker plant in the financial industry, PC Quote is the engineer of HyperFeed(TM), the first datafeed to be powered by a 100% Windows NT-based ticker plant. PC Quote's professional clients include brokerage firms, banks, insurance companies, fund managers as well as institutional and professional investors. The company has expanded its service offerings to the individual investor, application developers and businesses by offering its products through the Internet. The company's website, www.pcquote.com, receives over 987,000 unique visitors each month and offers non-fee delayed quotes to all visitors as well as fee-based real-time subscription market data services.
PC QUOTE, INC.
BALANCE SHEETS
SEPTEMBER 30, 1998 and DECEMBER 31, 1997
ASSETS September 30, December 31,
1998 1997
(Unaudited) (Audited)
CURRENT ASSETS
Cash and cash equivalents $170,912 $1,113,130
Accounts receivable,
net of allowance for
doubtful accounts of:
1998: $485,000;
1997: $346,000 2,596,481 1,435,450
Prepaid expenses and
other current assets 80,724 61,981
Total current assets 2,848,117 2,610,561
PROPERTY AND EQUIPMENT
Satellite receiving equipment 932,764 895,126
Computer equipment 7,641,610 7,266,576
Communication equipment 2,922,666 2,716,415
Furniture and fixtures 314,208 293,240
Leasehold improvements 402,692 366,325
12,213,940 11,537,682
Less: Accumulated depreciation
and amortization 9,942,896 9,035,571
2,271,044 2,502,111
OTHER ASSETS
Software development costs,
net of accumulated
amortization of:
1998: $4,805,059;
1997: $5,045,080 5,109,555 5,126,473
Deposits and other assets 244,567 297,303
TOTAL ASSETS $10,473,283 $ 10,536,448
PC QUOTE, INC.
BALANCE SHEETS (CONTINUED)
SEPTEMBER 30, 1998 and DECEMBER 31, 1997
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
September 30, December 31,
1998 1997
(Unaudited) (Audited)
CURRENT LIABILITIES
Note payable, bank, current $300,000 $300,000
Convertible subordinated
debenture payable 2,500,000 --
Note payable, credit facility 3,250,000 2,250,000
Accounts payable 4,591,232 2,834,460
Accrued expenses 300,577 604,916
Accrued compensation 405,113 618,289
Accrued interest 817,290 388,253
Income taxes payable -- 5,192
Unearned revenue, current 1,122,087 635,275
Total current liabilities 13,286,299 7,636,385
LONG-TERM LIABILITIES
Note payable, bank, noncurrent 574,634 799,634
Convertible subordinated debenture
payable, net of unamortized
discount of $1,096,402 -- 1,403,598
Unearned revenue, noncurrent 268,833 442,953
Accrued expenses, noncurrent 167,727 187,549
Total long-term liabilities 1,011,194 2,833,734
TOTAL LIABILITIES 14,297,493 10,470,119
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.001;
50,000,000 shares authorized:
1998: 13,357,307 and
1997: 12,436,800 shares issued and
outstanding 13,357 12,437
Additional paid-in capital 18,653,417 17,386,591
Additional paid-in capital --
convertible subordinated
debenture and warrants 2,750,491 2,750,491
Accumulated deficit (25,241,475) (20,083,190)
TOTAL STOCKHOLDERS' EQUITY
(DEFICIT) (3,824,210) 66,329
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $10,473,283 $10,536,448
PC QUOTE, INC.
STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30,
1998 1997
(Unaudited) (Unaudited)
Revenue
Satellite and terrestrial
services $ 9,580,113 $ 9,279,867
Internet products and services 7,393,902 3,395,905
Total revenue 16,974,015 12,675,772
Operating expenses
Operations and customer service 6,110,165 6,283,608
License and exchange fees 4,910,316 3,312,426
Sales 3,518,483 2,756,635
Depreciation and amortization 2,409,325 2,152,356
General and administrative 2,430,267 2,911,913
Product and market development 1,172,461 1,265,210
Restructuring expense -- 1,146,677
Total operating expenses 20,551,017 19,828,825
Loss from operations (3,577,002) (7,153,053)
Other income (expense)
Interest income 14,904 14,721
Interest expense (1,596,187) (1,259,944)
Net loss ($5,158,285) ($8,398,276)
Net basic and diluted loss
per common share ($0.40) ($1.14)
Shares used in computing net
basic and diluted loss per
common share 12,841,886 7,364,987
PC QUOTE, INC.
STATEMENTS OF OPERATIONS
For the Three Months Ended September 30,
1998 1997
(Unaudited) (Unaudited)
Revenue
Satellite and terrestrial
services $ 3,372,881 $ 3,111,677
Internet products and services 2,864,829 1,337,691
Total revenue 6,237,710 4,449,368
Operating Expenses
Operations and customer service 1,871,198 2,127,392
License and exchange fees 1,955,474 1,131,224
Sales 1,127,987 903,055
Depreciation and amortization 837,307 757,242
General and administrative 794,922 796,953
Product and market development 388,201 341,203
Total operating expenses 6,975,089 6,057,069
Loss from operations (737,379) (1,607,701)
Other Income (Expense)
Interest income 2,948 1,587
Interest expense (176,624) (705,886)
Net loss ($911,055) ($2,312,000)
Net basic and diluted loss
per common share ($0.07) ($0.31)
Shares used in computing net
basic and diluted loss per
common share 13,284,274 7,373,085
SOURCE PC Quote, Inc.
-0- 11/12/98
/NOTE TO EDITORS: For more information on PC Quote via facsimile at no additional cost, simply dial 1-800-PRO-INFO and enter the ticker symbol "PQT" or visit PC Quote's website at www.pcquote.com/
/CONTACT: Jim R. Porter, Chairman and CEO, 312-913-2800, or Lorelei M. Lenzen, Manager, Marketing Communications, 312-913-3517, both of PC Quote; or General, William Murphy, 312-266-6764, or Carol Barbour, 312-640-6693, both of The Financial Relations Board/
Companies or Securities discussed in this article:
Symbol Name
AMEX:PQT PC Quote Inc
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