4Front Software International, Inc. announces fiscal 1997 first quarter results.LONDON--(BUSINESS WIRE)--June 11, 1997--4Front Software International, Inc. ("4Front") (Nasdaq NM: FFST FFST First Failure Support Technology
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FFST Full and Flat Square Tube (Cathode Ray Tube design) ) today announced results for the first quarter ended April 30, 1997.
Highlights(a) First Quarter ended April 30, 1997 1996 %Increase Revenues $ 18,624,000 $ 10,550,000 77% Net income $ 631,000 $ 198,000 219% Net income per share (basic) $ 0.10 $ 0.07 43% Net income per share (diluted) $ 0.09 $ 0.05 80% Fully diluted shares outstanding 6,695,698 3,697,573 (a) A substantial part of the company's growth in the past three years has been achieved through acquisition. Accordingly, the results of operations from period to period are not necessarily comparable. For the first quarter ended April 30, 1997, revenues increased 77% to $18,624,000, versus $10,550,000 reported for the comparable year-ago period. Net income for the most recent quarter was $631,000, or $0.09 per share fully diluted (based on 6,695,698 shares), versus $198,000, or $0.05 per share fully diluted (based on 3,697,573 shares), for the comparable year-ago period. The significant increase in shares outstanding reflects the impact of the company's secondary offering of Common Stock that was completed during the second quarter of 1996 and the assumed conversion of applicable stock options and warrants for the first quarter ended April 30, 1997. Anil Doshi, Chairman and Chief Executive Officer of 4Front, said, "Overall, we are pleased with our performance for the quarter, especially with that of our services business, where most activities continue to surpass our expectations. Reflecting the increased service contribution, margins continued to improve. As we have stated, margin improvement, and profitability, is now our main focus. "A year ago, 4Front was not even ranked among the UK's top 25 largest third party computer maintenance companies. It is a sign of the pace of growth in 4Front's services business that it is now ranked as the 13th largest such company. During the quarter the new 4Front National Call Center became operational. All of our hardware and software support activities are coordinated from this new central facility, which is currently handling an average of 1,000 support calls a day. The move to this facility provides 4Front with a stronger foundation from which to handle the increasing level of business being contracted. "During the quarter, 4Front's help-desk business made significant progress in attracting customers on both the retail and the corporate fronts. On the retail side, a new large supply contract with Byte Ltd. was signed and, after the quarter-end, 4Front signed an agreement to provide the John Lewis Group, a major retailer, with an estimated $500,000 worth of software support contracts. On the corporate side, the company is increasing its participation in major corporate help-desk bids, following its recent contract successes." Mr. Doshi concluded, "In general, our services business is gaining an increasing number of higher value contracts, which reflects both our excellent record of service and the benefit of `critical mass' that 4Front has worked hard to achieve over the past few years." Mark Ellis, President of 4Front, added, "Orders in our storage business were in line with targets. However, overall first quarter business was affected by worldwide product shortages, particularly in the high-end disc drive market. Elsewhere on the product side, indications are that the network computer technology is being well received on both sides of the Atlantic and looks to be a fast growing market. Our sales of network computers are picking-up steadily and we have a number of promising large-scale opportunities where pilot systems are being evaluated." Mr. Ellis concluded, "Lastly, the UK economy remains strong and conditions in the computer service markets in which 4Front operates continue to be good." 4Front Software International, Inc., a UK-based specialized computer services company provides a wide range of specialized high-end information technology solutions and services principally to Financial Times UK Top 500 companies and government authorities. The company provides key elements of distributed computing, including systems development and integration, storage and client-server solutions and products, as well as extensive hardware and software support services. The company's customers include Mobil Oil, Royal Dutch/Shell Group, GEC/Marconi, JP Morgan, Fujitsu, Dupont, Reuters and the U.K. Ministry of Defense. -0- 4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended April 30, April 30, 1997 1996 (unaudited) (unaudited) REVENUES: Products $ 10,427,687 $ 7,328,339 Services 8,196,598 3,221,899 18,624,285 10,550,238 Cost of Products 8,880,689 6,002,795 Cost of Services 4,148,921 1,276,346 13,029,610 7,279,141 GROSS PROFIT Products 1,546,998 1,325,544 Services 4,047,677 1,945,553 5,594,675 3,271,097 OPERATING EXPENSES: Selling, general and administrative 4,354,626 2,712,078 Depreciation 195,166 80,959 Amortization 210,481 61,870 Total operating expenses 4,760,273 2,854,907 INCOME BEFORE INTEREST, INCOME TAXES AND SHARE OF RESULTS IN EQUITY INVESTEE: 834,402 416,190 Interest income 77,644 3,841 Interest expense (71,145) (103,614) INCOME BEFORE INCOME TAXES AND SHARE OF RESULTS IN EQUITY INVESTEE: 840,901 316,417 SHARE OF OPERATING (LOSS) OF EQUITY INVESTEE --- (52,173) INCOME BEFORE INCOME TAXES 840,901 264,244 INCOME TAXES 210,225 66,061 NET INCOME $ 630,676 $ 198,183 NET INCOME PER COMMON SHARE (Basic) $ 0.10 $ 0.07 NET INCOME PER COMMON SHARE (Fully Diluted) $ 0.09 $ 0.05 WEIGHTED AVERAGE SHARES OUTSTANDING 6,514,747 3,011,068 FULLY DILUTED SHARES OUTSTANDING 6,695,698 3,697,573 -0- 4FRONT SELECT BALANCE SHEET INFORMATION April 30, 1997 January 31, 1997 (unaudited) (audited) Current assets $ 29,747,000 $ 30,349,000 Current liabilities 23,417,000 24,764,000 Total assets 41,216,000 42,021,000 Long-term debt 421,000 489,000 Shareholders' equity $ 17,378,000 $ 16,769,000
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