CONNECT INC files 0331 qtr 10-Q. Reports $2 mil tot rev and $0.02 EPS.
IFN Smart Edgar News - May 14, 1999 17:04
Excerpted from 10-Q filed on 05/14 by CONNECT INC:
CONNECT INC files 0331 qtr 10-Q. Reports $2 mil tot rev and $0.02 EPS.
RESULTS OF OPERATIONS
This report contains, in addition to historical information, forward-
looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, that involve risks and uncertainties. The Company's
actual results could differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to
such differences include, but are not limited to, those discussed under
the caption, "Risk Factors" in the Annual Report, as well as the risks
discussed elsewhere in this Quarterly Report. In particular, such
factors include: the Company's ability to implement and execute its
revised business model focused on software services; acceptance by the
marketplace of the Company's services; the Company's ability to implement
its revised business model with its existing cash resources; the
Company's ability to obtain additional capital on terms favorable to the
Company, or at all; the Company's ability to offer new services to meet
market demand or that incorporate evolving industry standards; the
Company's ability to compete effectively; acceptance of the Internet as a
medium for electronic commerce and order management; the Company's
dependence on the Internet infrastructure; and the Company's dependence
on certain third party software and services vendors. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which may be made to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
Readers should carefully review the risk factors described in other
documents the Company files from time to time with the Securities and
Exchange Commission, including, the Annual Report on Form 10-K, the
Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K filed
by the Company.
OVERVIEW
The Company provides integration solutions to enable its customers to
engage in Internet-based electronic commerce and extend their businesses
through the emerging network supply chain. The Company's MarketStream
software applications and Web time-driven professional services are
designed to enable corporations to build open, multi-vendor e-business
solutions that help them to compete effectively in the digital economy
using best-of-breed technologies. The Company utilizes innovative
methodologies and advanced technical expertise to conceptualize, design,
develop and deploy e-business solutions. This process is facilitated by
the use of emerging Internet technologies. This business strategy allows
the Company to leverage its core competencies and deliver to its
customers effective applications and consulting services solutions.
The Company historically designed, developed, marketed and supported
application software for Internet-based interactive commerce. In October
1998, the Company announced a shift in business direction and focus, to
providing Internet systems and systems integration services based on
technologies from both the Company and industry partners. These combined
applications, services and intellectual property strategy is the
Company's "ServiceWare" approach to providing solutions for e-business.
This decision effectively unified the Company's consulting engineering
organization and its software products group into a single consulting
services organization providing Internet systems integration, as well as
extending its current service business to emphasize building cross-
enterprise e-business solutions. Because of this recent shift in
business direction and focus, the Company believes that consecutive
quarter operating results comparisons are more meaningful than
comparisons of the current quarters' results to the prior years' similar
quarter.
During the second half of 1998 the Company executed a number of
strategic initiatives consistent with its new business direction and
focus. These initiatives included reductions in headcount, and other
cost reduction measures, directed at more appropriately aligning expenses
with revenues. Because of these actions, and expectations from the
marketplace, we have begun to expand our operations. This expansion
includes an increase in headcount, during the first quarter of 1999.
Further expansion is anticipated, including growth in our investment in
the sales and marketing functions, as well as the continued growth of our
technology center in the Chicago area.
RESULTS OF OPERATIONS
Revenue
Total revenue was $2,026,000 for the three months ended March 31, 1999,
compared to $2,252,000 for the comparable period in 1998. For the three
months ended March 31,1999, one customer represented approximately 25% of
total revenue.
(End of Item Excerpt)
----------FINANCIAL DATA SCHEDULE--------
LEGEND THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
MULTIPLIER 1,000
PERIOD-TYPE 3-MOS
FISCAL-YEAR-END DEC-31-1999
PERIOD-START JAN-01-1999
PERIOD-END MAR-31-1999
CASH 6,707
SECURITIES 0
RECEIVABLES 1,523
ALLOWANCES 111
INVENTORY 0
CURRENT-ASSETS 8,366
DEPRECIATION 4,273
TOTAL-ASSETS 8,982
CURRENT-LIABILITIES 2,561
BONDS 0
PREFERRED-MANDATORY 0
PREFERRED 0
COMMON 15
OTHER-SE 6,214
TOTAL-LIABILITY-AND-EQUITY 8,982
SALES 675
TOTAL-REVENUES 2,026
CGS 60
TOTAL-COSTS 903
OTHER-EXPENSES 923
LOSS-PROVISION 0
INTEREST-EXPENSE 32
INCOME-PRETAX 274
INCOME-TAX 0
INCOME-CONTINUING 274
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET-INCOME 274
EPS-PRIMARY 0.02
EPS-DILUTED 0.02
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