Monday May 3, 6:47 pm Eastern Time
Company Press Release
SOURCE: Interface Systems
Interface Systems Reports Second Quarter
Restructuring Plan On Track As New Internet Applications Products Meet With Encouraging Initial Market Acceptance
ANN ARBOR, Mich., May 3 /PRNewswire/ -- Interface Systems, Inc. (Nasdaq: INTF - news), a leading provider of Internet applications and other software tools, today announced results for its second quarter and six-month period ended March 31, 1999.
For the second quarter the Company reported a net loss of $442,000, or $.10 per share, on revenue of $4.9 million. This compares to a net loss a year ago of $2.30 million, or $.52 per share, on revenue of $5.1 million. The year-ago period included a loss of $2.33 million, or $.53 per share, from discontinued operations related to the sale of the Company's Interface Systems International Ltd. hardware distribution business.
For the six-month period the Company reported a net loss of $312,000, or $.07 per share, on revenue of $10.1 million compared with a net loss of $2.4 million, or $.53 per share, on revenue of $10.7 million in the corresponding period last year. The year-ago period included a loss from discontinued operations of $2.5 million, or $.57 per share.
''We are moving forward with our aggressive restructuring program designed to focus our resources on Internet software, implementation services, and related technologies that offer higher margins and outstanding long-term growth prospects,'' said Robert A. Nero, president and CEO. ''During the first half of fiscal 1999 we continued to shrink the low-margin hardware component of our revenue mix; we continued to achieve good margin performance with our Cleo line of software tools; and, perhaps most importantly, we have experienced strong market validation and a growing pipeline of prospects for our new Internet products, e-Statement Direct and e-Bill Manager(TM).''
''We are further encouraged,'' Nero added, ''that sales of our Document Server product and our new Internet products, although a small percentage of the total, have increased more than 50% for the first half of the year. Our Internet products and services, which facilitate the electronic delivery of customer bills and statements, are initially geared toward the financial services and brokerage industries. However, over the long term they are expected to have broad application in numerous industries. It is estimated that as early as next year more than 500 million bills will be presented and paid on the Internet.''
Nero noted that revenue performance at the mid-year point was impacted by the expected lower sales of Cleo Enterprise Networking (EN) software tools as well as Interface's printer products. ''We experienced lower revenue from Cleo EN products due to relatively unpredictable order flow from our major retail industry market segment. While we anticipate Cleo EN sales revenue to decline $2 million for the current fiscal year, we believe it should rebound sharply next year just as it has in the past. In addition, we are extremely encouraged by higher Cleo EN sales to Lucent Technologies-related customers.''
Nero said Interface Systems will continue to reshape its business model in the second half of fiscal 1999 to set the stage for profitable, steady long- term growth. ''Moving forward, we will focus on two complementary businesses,'' Nero said. ''We have a traditional software tools business that will provide a steady revenue base with attractive margins, and we have a rapidly-emerging Internet application business, which we see as the growth engine and foundation for our long-term strategy. To accelerate this strategy, we recently completed a realignment of the executive team to ensure that the sales, marketing, and product development initiatives for both businesses are better focused.''
Interface Systems, Inc. provides software-based tools and solutions to integrate legacy systems with Internet technology, distribute mainframe documents, and provide host connectivity. Interface specializes in Internet bill presentment and payment, as well as electronic delivery of statements and other legacy content to the Internet, fax, email, and other destinations. Interface helps its customers extend the life, the reach, and the value of their existing information systems.
Uncertainties Relating to Forward-Looking Statements
This press release contains ''forward-looking statements'' within the meaning of the Securities Exchange Act of 1934, as amended, based on current management expectations. Actual results could differ materially from those in the forward-looking statements due to a number of uncertainties, including, but not limited to: lower demand for our Cleo EN products, general economic conditions particularly related to demand for the Company's products and services, changes in Company strategy, product life cycles, competitive factors (including the introduction or enhancement of competitive products), pricing pressures, component price increases, delays in introduction of planned hardware and software products, software defects and latent technological deficiencies in new products, changes in operating expenses, inability to attract or retain sales and/or engineering talent, changes in customer requirements and evolving industry standards.
(See Accompanying Financial Statements) |
