4Front Software International announces second quarter and six months results.
Second Quarter Ended July 31, 1996 1995 % Increase Revenues $10,060,000 $8,594,000 17%
Net income $ 313,000 $ 190,000 65%
Basic net income per share $ 0.07 $ 0.07 --
Basic weighted avg. shares outstanding 4,535,920 2,723,783
Fully diluted net income per share(a) $ 0.06 $ 0.07 N/A
Fully diluted shares outstanding(a) 6,922,924 2,723,783
Six Months Ended July 31, 1996 1995 % Increase Revenues $20,611,000 $13,288,000 55%
Net income $ 511,000 $ 304,000 68%
Basic net income per share $ 0.14 $ 0.12 16%
Basic weighted avg. shares outstanding 3,785,867 2,637,717
Fully diluted net income per share(a) $ 0.12 $ 0.12 N/A
Fully diluted shares outstanding(a) 6,172,871 2,637,717
(a) Fully diluted earnings per share assume conversion under the Treasury Stock Method of 2,387,004 Stock Options and Warrants for both 1996 periods.
For the second quarter ended July 31, 1996, revenues for 4Front increased 17% to $10,060,000, versus $8,594,000 reported for the comparable 1995 quarter. Net income for the second fiscal quarter of 1996 increased 165% to $313,000 versus $190,000 recorded for the comparable 1995 quarter. Fully diluted net income per share for the 1996 quarter was $0.06, based on 6,922,924 weighted average common shares outstanding, versus $0.07 per share for the comparable 1995 quarter, based on 2,723,783 weighted average common shares outstanding. The significant increase in the weighted average shares outstanding reflects the impact of the Company's recently completed secondary offering of common stock in the second quarter of 1996 and the assumed conversion using the treasury stock method of 2,387,004 stock option and warrants for the second quarter of 1996.
For six months ended July 31, 1996, revenues for 4Front increased 55% to $20,611,000 versus $13,288,000 for the comparable 1995 period. Net income for the 1996 period was up 68% to $511,000 versus $304,000 for the comparable period. Fully diluted net income per share for the 1996 period was $0.12, based on 6,172,871 weighted average common shares outstanding, versus $0.12 per share based on 2,637,717 weighted average common shares outstanding for the 1995 period. The increase in the weighted average shares outstanding reflects the impact of the Company's recently completed secondary offering of common stock in the second quarter of 1996 and the assumed conversion using the treasury stock method of 2,387,004 stock option and warrants for the six months ended July 31, 1996.
Anil Doshi, Chairman and CEO of 4Front Software International, said, "During the quarter we saw good performances from our information storage, systems integration and hardware maintenance businesses. In the network computing business, revenues were held back primarily by the discontinuation of Digital's desk-top product, Multia. New products have been added in this business and a refocusing of the product mix is taking place. Of all core areas of activity hardware maintenance returned the best performance.
"A major accomplishment during the quarter was the successful completion of our secondary offering of Common Stock. Net proceeds to 4Front were over $16 million and we have already successfully put a portion of the proceeds to good use with our recently announced acquisition of the Hammer specialized storage business. This acquisition consolidates 4Front's leading position in the UK high-end information storage market. The Hammer acquisition also provides us with access to approximately 400 new corporate end users and trade customers in which we intend to market our other core competencies.
"On the customer side, recent significant orders include two new contracts of note. One of these is a contract to provide the UK Ministry of Defense with specialized mobile geographical and mapping information storage systems and support for the North Atlantic Treaty Organization (NATO) within designated war zones. The contract, achieved in partnership with Ultra Electronics plc, includes 12 specialized systems together with systems support. A prototype of the system is currently deployed by NATO forces in Bosnia. This contract is further demonstration of our leading position in the high-end information storage business. The second significant contract was an order awarded to our systems integration business by Action Computer Supplies, the leading UK computer catalog company, for the provision of account management and telemarketing systems solutions. This contract has led to further interest from other computer service companies, a new 4Front customer niche."
Mark Ellis, President of 4Front Software International, Inc., said, "The acquisition environment in the UK remains fertile. The recently completed Hammer acquisition was within our stated strategy of supplementing organic growth with strategic acquisitions in order to capitalize on the burgeoning computer services market in the UK and Europe. We are continuing to seek out attractive businesses, focusing in particular presently on service oriented businesses, and additional acquisitions are anticipated. In new business areas, we are currently evaluating our priorities in resource allocation in light of our recent agreement with Alydaar to market their "Year 2000" solution in the UK market. We believe the "Year 2000" problem represents a significant opportunity in the UK marketplace."
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 National Westminster Bank plc, British Aerospace plc, Oracle Corporation, Royal Dutch/Shell Group plc, Orange plc, Cambridge University and the UK Ministry of Defense. -0-
4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months For the Six Months Ended July 31, Ended July 31, 1996 1995 1996 1995 (unaudited) (unaudited)
REVENUES $10,060,425 $8,594,002 $20,610,663 $13,288,104
Cost of revenues 6,655,556 5,433,016 13,934,697 8,241,828 GROSS PROFIT 3,404,869 3,160,986 6,675,966 5,046,276
OPERATING EXPENSES: Selling, general & administrative 2,832,116 2,593,407 5,544,194 4,133,794 Depreciation 73,437 96,346 154,396 150,542 Amortization 61,870 50,922 123,740 78,905 Total operating expenses $2,967,423 $2,740,675 $5,822,330 $4,363,241
INCOME BEFORE INTEREST EXPENSE, INCOME TAXES AND SHARE OF RESULTS IN EQUITY INVESTEE: 437,446 420,311 853,636 683,035
INTEREST INCOME (EXPENSE) Interest income 77,747 -- 81,588 -- Interest expense (25,322) (76,058) (128,936) (186,398) Total interest income (expense) 52,425 (76,058) (47,348) (186,398)
INCOME BEFORE TAXES AND SHARE OF RESULTS IN EQUITY INVESTEE: 489,871 344,253 806,288 496,637
SHARE OF OPERATING (LOSS) OF EQUITY INVESTEE (72,219) (72,947) (124,392) (72,947)
INCOME BEFORE INCOME TAXES 417,652 271,306 681,896 423,690
INCOME TAXES 104,413 81,392 170,474 119,489
NET INCOME $313,239 $189,914 $511,422 $304,201
NET INCOME PER COMMON SHARE $0.06 $0.07 $0.12 $0.12 (see "Earnings Per Share Data")
EARNINGS PER SHARE DATA (1)
Net income $313,239 $189,914 $511,422 $304,201
Basic weighted average shares outstanding 4,535,920 2,723,783 3,785,867 2,637,717
Basic net income per common share $0.07 $0.07 $0.14 $0.12
Fully diluted shares outstanding (using treasury method) 6,922,924 2,723,783 6,172,871 2,637,717
Fully diluted net income per share (using treasury method) $0.06 $0.07 $0.12 $0.12
4FRONT SELECT BALANCE SHEET INFORMATION
July 31, 1996 January 31, 1996 (unaudited) (audited)
Current assets $24,241,000 $13,464,000 Current liabilities 8,889,000 14,750,000 Total assets 28,857,000 17,943,000 Long-term debt 101,000 93,000 Shareholders' equity $19,867,000 $3,101,000
(1) For the three and six month periods ended July 31, 1995 the effect of Stock Options and Warrants was anti-dilutive. For the three and six month periods to July 31, 1996 the treasury stock method of calculating earnings per share was utilized to reflect the dilutive effects of Stock Options and Warrants.
CONTACT: 4Front Software International Inc., London
Mark Ellis or Ken Newell, 011/44-1923-816266
Investor Relations Contact:
Lippert/Heilshorn & Associates Inc., New York
Jason Thompson, 212/838-3777