1MAGE Announces Amendment to Merger Agreement with SupraLife International.ENGLEWOOD Englewood (ĕng`gəlw  d).1 City (1990 pop. 29,387), Arapahoe co., N central Colo., on the South Platte River, a residential and industrial suburb of Denver; inc. 1903. , Colo.--(BUSINESS WIRE)--Aug. 31, 1998-- SupraLife Announces Return of Peter Holliday Hol·li·day , Judith Tuvim Known as "Judy." 1922-1965. American comedian best remembered for her performance in the play (1946-1950) and film (1950) Born Yesterday. as CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. ; SupraLife Reports Historical Financial Results; 1MAGE and SupraLife Report Pro Forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Financial Results 1MAGE Software, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ISOL) announced today that the terms of its merger agreement with SupraLife International have been amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. so that 1MAGE's shareholders will own 25% of the outstanding shares of the combined company rather than only 20% as was previously reported. SupraLife reported its historical financial results for the first six months of 1998 and for the years ended December 31, 1997, 1996 and 1995. SupraLife also announced that Peter Holliday, the Chairman of SupraLife's Board of Directors, has agreed to reassume Re`as`sume´ v. t. 1. To assume again or anew; to resume. the position of Chief Executive Officer of SupraLife, effective immediately. 1MAGE and SupraLife also announced their pro forma condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated results of operations for the first six months of 1998 and for the year ended December 31, 1997, and their pro forma combined condensed balance sheet information as of June 30, 1998. 1MAGE and SupraLife have entered into an agreement to merge, whereby SupraLife, a privately-held company which develops, manufactures and distributes preventative health, personal care, sports & fitness and weight management products, will become a wholly-owned subsidiary of 1MAGE. The merger still must be approved by the shareholders of each company. 1MAGE anticipates scheduling a meeting of its shareholders in October 1998 to approve the merger. Peter Holliday previously served as President and Chairman of the Board of SupraLife, when he led the private company's growth from annual sales of around $3 million in 1991 to revenues of $33.3 million in 1996. Holliday, who resumed the position of Chairman of SupraLife's Board of Directors in February 1998, is returning to the CEO position at the request of that Board in response to the trend of declining sales that began in the second half of 1997 and led to losses in the first six months of 1998. SupraLife reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $7,950,000 for the first six months of 1998, compared to $18,813,000 for the first six months of 1997. Net sales for the full years of 1997, 1996 and 1995 were $29,113,000, $33,331,000 and $10,478,000, respectively. SupraLife's net loss for the first six months of 1998 was $978,000, or $0.10 per basic share, compared to net income of $2,194,000, or $0.22 per share, for the first six months of 1997. Net income for the full years of 1997, 1996 and 1995 was $2,315,000, $3,130,000 and $411,000, respectively, or $0.23, $0.31 and $0.05 per share, respectively. Peter Holliday stated "Net sales decreased during the second half of 1997 and during 1998 for a number of reasons, including SupraLife management's decision during the first half of 1997 to terminate several major distributors who had violated vi·o·late tr.v. vi·o·lat·ed, vi·o·lat·ing, vi·o·lates 1. To break or disregard (a law or promise, for example). 2. To assault (a person) sexually. 3. SupraLife policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental , creating a significant business risk to the company." "The terminations of these distributors significantly reduced sales and led to expensive and distracting dis·tract tr.v. dis·tract·ed, dis·tract·ing, dis·tracts 1. To cause to turn away from the original focus of attention or interest; divert. 2. To pull in conflicting emotional directions; unsettle. litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Management focus was also diverted di·vert v. di·vert·ed, di·vert·ing, di·verts v.tr. 1. To turn aside from a course or direction: Traffic was diverted around the scene of the accident. 2. to costly start-up Start-up The earliest stage of a new business venture. operations in Europe and the company's new weight management seminar services company, Proven Results, Inc., which together lost approximately $900,000 in the first half of 1998 and $800,000 in the second half of 1997." Mr. Holliday added, "In addition to the change in top management, SupraLife's Board of Directors has implemented an aggressive program to improve results of operations in future periods. We have drastically dras·tic adj. 1. Severe or radical in nature; extreme: the drastic measure of amputating the entire leg; drastic social change brought about by the French Revolution. 2. cut the expenses of our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and have taken steps to reduce losses at Proven Results. We have reduced our employee headcount by around 20%. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , we have renewed our focus on our domestic distributors, implementing new programs designed to increase their interest in and involvement with our company, including a revised compensation plan which better rewards individual efforts." "We are also exploring the possibility of using our recently acquired manufacturing facility to develop and produce new products. We will investigate alternative product lines and distribution channels that could provide opportunities for the company but our primary concern will be to ensure the continuing strength of our current distribution network." David R. DeYoung, president and chief executive officer for 1MAGE, commented, "Because SupraLife's financial results for the first half of 1998 were not as strong as in prior periods, we felt it was reasonable for 1MAGE shareholders to retain a larger percentage of the combined company. We are very pleased that Peter Holliday has agreed to return to the role in which he built the company up to more than $33 million in sales and more than $3 million in annual earnings." Mr. DeYoung added, "1MAGE management is encouraged by the other steps taken to address SupraLife's recent problems and continues to believe that the merger represents an outstanding opportunity for 1MAGE and its shareholders." On a pro forma combined basis, 1MAGE and SupraLife had net sales of $8,776,000 for the first six months of 1998, and net sales of $30,921,000 for the year ended December 31, 1997. Pro forma combined net loss for the first six months of 1998 was $1,133,000, or $0.13 per share (based on a weighted average number of shares outstanding after the merger of 8,751,471). Pro forma combined net income for the full year ended December 31, 1997 was $1,818,000, or $0.21 per share (based on a weighted average of 8,755,388 shares). The combined companies would have pro forma combined total assets of $6,442,000, and pro forma combined shareholders equity of $1,665,000, as of June 30, 1998. 1MAGE Software, Inc. is the leading provider of electronic imaging systems to end users of Ardent (Ardent Software, Inc., Westboro, MA) A database vendor formed in 1998 as the merger of VMARK Software, Unidata and O2 Technology. Its products included the UniVerse and UniData databases and DataStage data warehouse utility. Software, Inc. 1MAGE(R) is marketed through a direct sales force and through an international network of Value Added Resellers See VAR. (company) value added reseller - (VAR, or "value added retailer") A company which sells something (e.g. computers) made by another company (an OEM) with extra components added (e.g. specialist software). (VARs). For additional information contact 1MAGE at 303/773-1424 or visit its website at www.1mage.com. SupraLife International was founded in 1991 and develops, manufactures and distributes preventative health, personal care, sports & fitness and weight management products designed to promote a healthy lifestyle. SupraLife distributes its products in all 50 states and in the United Kingdom and the Netherlands through a network of approximately 37,000 independent distributors and preferred customers. SupraLife is a privately-held company based in San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. . For more information contact SupraLife at 619/653-6510, or visit its website at www.toddy.com. Statements expressing the beliefs and expectations of 1MAGE and SupraLife management regarding future performance are forward-looking and involve risks and uncertainties, including but not limited to: market demand for products, the overall market demand for imaging software, nutritional supplements Nutritional Supplements Definition Nutritional supplements include vitamins, minerals, herbs, meal supplements, sports nutrition products, natural food supplements, and other related products used to boost the nutritional content of the diet. and personal care products, the success of new SupraLife management in improving near term financial results, the actual effect of changes in policies or strategies at 1MAGE and SupraLife, uncertainties as to the outcome and ultimate financial impact of SupraLife's distributor litigation, maintenance of adequate cash flow to sustain operations at both companies, quarterly fluctuations in financial results, and other risk factors identified from time to time in 1MAGE's reports filed with the Securities and Exchange Commission, copies of which may be obtained at www.sec.gov or by written request submitted to 1MAGE. -0-
SUMMARY OF SUPRALIFE HISTORICAL FINANCIAL STATEMENTS
The following tables summarize selected financial data of
SupraLife for the periods indicated.
CONSOLIDATED BALANCE SHEETS OF SUPRALIFE INTERNATIONAL
In thousands,
except per share data
June 30, December 31,
1998 1997 1996
Current assets $2,467 $2,965 $4,786
Total assets 4,665 5,146 6,376
Current liabilities 3,130 2,521 4,921
Long-term obligations 734 547 49
Total shareholders' equity 801 2,079 1,406
Dividends per share 0 0.18 0.05
CONSOLIDATED STATEMENTS OF OPERATIONS OF SUPRALIFE INTERNATIONAL
In thousands, except
per share data
Six Months Ended
June 30, Years Ended
1998 1997 1997 1996 1995
Net sales $ 7,950 $18,813 $29,113 $33,331 $10,478
Income (loss) from
operations (1,451) 3,535 3,809 5,126 131
Net income (loss) (978) 2,194 2,315 3,130 411
Basic earnings
(loss) per share (0.10) 0.22 0.23 0.31 0.05
-0- SUMMARY PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge The Summary Pro Forma Condensed Consolidated Balance Sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. has been prepared based on the unaudited historical condensed consolidated balance sheets of SupraLife and 1MAGE as of June 30, 1998, and gives effect to the merger as if it had occurred as of June 30, 1998. The Summary Pro Forma Condensed Consolidated Statements of Operations for the six months ended June 30, 1998 and for the year ended December 31, 1997, give effect to the merger as if it had occurred as of January 1, 1997. These summary Pro Forma Condensed Consolidated Statements of Operations are not necessarily indicative of the actual results of operations that would have been reported had the merger been consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. as of January 1, 1997, nor do they purport To convey, imply, or profess; to have an appearance or effect. The purport of an instrument generally refers to its facial appearance or import, as distinguished from the tenor of an instrument, which means an exact copy or duplicate. PURPORT, pleading. to indicate the results of future operations of the combined companies. Furthermore, the pro forma results do not give effect to any cost savings or incremental costs Costs which are additional costs to the Service appropriations that would not have been incurred absent support of the contingency operation. See also financial management. which may occur as a result of the merger. In the opinion of management, all adjustments necessary to present fairly such pro forma financial statements Pro forma financial statements A firm's financial statements as adjusted to reflect a projected or planned transaction. "What-if" analysis. have been made. The merger has been accounted for using the purchase method of accounting. -0-
SUMMARY PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of June 30, 1998
Pro Forma Pro Forma
1MAGE SupraLife Adjustment Consoli-
dated
In thousands
Current assets $ 574 $2,467 -- $3,041
Total assets 1,558 4,665 218 6,442
Current liabilities 631 3,130 125 3,886
Long-term obligations 157 734 -- 891
Total shareholders' equity 770 801 93 1,665
SUMMARY PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1998
Pro Forma Pro Forma
1MAGE SupraLife Adjustment Consolidated
In thousands,
except per share
data
Net sales $ 826 $ 7,950 -- $ 8,776
Income (loss) from
operations (130) (1,451) (11) (1,592)
Net income (loss) (145) (978) (11) (1,133)
Net earnings (loss)
per share $ (0.07) $ (0.10) -- $ (0.13)
Weighted avg. no. of
common shares 2,142 9,822 (3,212) 8,751
Year Ended December 31, 1997
Pro Forma Pro Forma
1MAGE SupraLife Adjustment Consolidated
In thousands,
except per share
data
Net sales $ 1,809 $29,113 -- $30,921
Income (loss) from
operations (464) 3,809 (22) 3,324
Net income (loss) (475) 2,315 (22) 1,818
Net earnings (loss)
per share $ (0.22) $ 0.23 -- $ 0.21
Weighted avg. no
of common shares 2,146 9,928 (3,319) 8,755
CONTACT: 1MAGE Software Inc.
Investor Relations, 303/773-1424 ext. 123
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