Alpha Microsystems Reports Third Quarter Results And Announces Stronger Strategic Focus On Its High Growth IT Services Business As It Develops New Direction for AlphaCONNECT.SANTA ANA Santa Ana, city, El Salvador Santa Ana (sän'tä ä`nä), city (1993 pop. 129,873), W El Salvador. It is the second largest city in the country and the commercial and processing center for a sugarcane, coffee, and cattle region. , Calif.--(BUSINESS WIRE)--Dec. 21, 1998-- Company to change name to ALPHASERV.COM (1) (Computer Output Microfilm) Creating microfilm or microfiche from the computer. A COM machine receives print-image output from the computer either online or via tape or disk and creates a film image of each page. as it moves to be the premier IT services provider offering interactive services capabilities to customers through the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . Alpha Microsystems Alpha Microsystems is a computer company founded in 1977 by Dick Wilcox and Bob Hitchcock. The first Alpha Micro computer was based upon the WD16 microprocessor chip from Western Digital. (Nasdaq: ALMI ALMI Application Level Multicast Infrastructure ALMI Automated Listing and Mapping Instrument (US Census Bureau) ) Monday reported that revenue for the third quarter ended Nov. 22, 1998, increased to $9.08 million, a 77 percent increase compared with revenue of $5.12 million for the same period in the prior fiscal year. This significant increase in revenue was due to the recent acquisition of Delta CompuTec Inc. (DCI (Display Control Interface) An Intel/Microsoft programming interface for full-motion video and games in Windows. It allowed applications to take advantage of video accelerator features built into the display adapter. ) and to the continued growth of the company's core business, information technology (IT) services. Acquired on Sept. 1, 1998, DCI provides IT network design, installation and maintenance services as well as management and consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" to Fortune 500 companies, including a number of major Wall Street financial institutions and big five accounting firms. The net loss for the third quarter ended Nov. 22, 1998, was $6.17 million, or a loss per share of $0.57, compared with a loss of $688,000, or $0.06 per share for the same period in fiscal 1998. The loss for the third quarter includes approximately $4.6 million of charges consisting primarily of adjustments to the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of certain long-lived assets and certain other current assets Other Current Assets A balance sheet item that includes the value of non-cash assets due within one year. Notes: Examples are things like prepaid expenses and accounts receivable. down to their estimated fair value. Such assets, associated with the company's non-core business, include end-of-life end-of-life Cardiac pacing noun The point at which a pacemaker signals need for replacement, as its battery is nearing depletion Medtalk adjective proprietary products, goodwill, notes receivable arising from previously sold operations, and software. As Alpha Microsystems goes forward into 1999, the company's new strategic focus will be directed toward maximizing the strong competitive position Alpha Microsystems has in the high-growth IT services business, Alpha Microsystems' Chief Executive Officer, Chairman and President Doug Tullio said. "Alpha Microsystems has set itself apart from the competition in several key areas: 1) its unparalleled responsiveness to customers' needs and a proven commitment to the highest quality of services, 2) a true multi-vendor approach aimed at providing product neutral IT services, 3) a focus on partnering with major IT distributors and OEMs to provide installation and warranty services across the country, 4) a highly-regarded total solution services in network consulting, integration and administration, and 5) broad geographic coverage through a network of 60 company locations nationwide," he said. Alpha Microsystems expects to further differentiate its services by integrating its Internet expertise with its high-quality IT services offering to become the premier provider of interactive IT services capabilities to customers through the power of the Internet. "Changing the company's name to ALPHASERV.COM reflects this new service direction," Tullio said. "We expect to introduce our first Internet service module, a secure on-line tracking system, within the next 30 days." Based on this new strategic focus on its core IT services business and Alpha Microsystems' strong competitive position in the IT services marketplace, the company's goal is to achieve positive net income in the second half of the 1999 calendar year and an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. organic growth rate of 30 percent above the current annualized revenue of approximately $35 million attributable to the core business. Tullio also said that the company's AlphaCONNECT Internet division has attracted significant ongoing interest from well-known Fortune 500 companies as a result of AlphaCONNECT's initial knowledge management software development for a recent Microsoft project (product) Microsoft Project - A Microsoft Windows program offering various project management tools. http://microsoft.com/office/project/. . "To take advantage of the many opportunities presented by this increased interest and to maximize AlphaCONNECT's full potential for the company and its shareholders, management will be pursuing a variety of options related to the AlphaCONNECT division over the next six months," he said. "These options include a strategic partnership, a spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. from the parent company, or the sale of the technology, and we plan to engage a major investment banking firm to assist us in this process. We believe that the selection of any one of these options will benefit both the IT services and Internet divisions by allowing them to independently focus their efforts and assets in obtaining their maximum potential." According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Tullio, the company will begin doing business on Jan. 1, 1999, under the new name of ALPHASERV.COM. Shareholders will be asked to amend the articles of incorporation The document that must be filed with an appropriate government agency, commonly the office of the Secretary of State, if the owners of a business want it to be given legal recognition as a corporation. to change the name of the company at the annual meeting in May 1999. At that time, shareholders also will be asked to approve the re-incorporation of the company in the state of Delaware Delaware, state, United States Delaware (dĕl`əwâr, –wər), one of the Middle Atlantic states of the United States, the country's second smallest state (after Rhode Island). . The company also has adopted a new fiscal year based on a calendar year-end and will be filing on or before March 31, 1999, a Transition Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the 10 month period ending Dec. 31, 1998. Alphaserv.com is dedicated to being the premier provider of true multi-vendor services to the IT marketplace, including on-site network support and nationwide on-call support through over 60 company locations throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . For more information, visit the company's Web site at www.alphamicro.com or www.alphaserv.com. AlphaCONNECT, a division of Alpha Microsystems, offers powerful foundation technologies for business intelligence software serving the Internet, intranet, corporate information technology, and software development markets. Both the company and its independent vendor partners use AlphaCONNECT to create award-winning business-to-business and consumer-based products. For more information, visit the company's Web site at www.alphaconnect.com or www.alphaserv.com. This news release contains certain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These include statements that our goal is to achieve positive net income in the second half of the 1999 calendar year and an annualized organic growth rate of 30 percent above the current annualized revenue of approximately $35 million attributable to the core business. These statements are not and should not be construed as projections. Such forward-looking statements involve known and unknown risks and uncertainties, including (i) the economic and competitive environment of the computer maintenance and IT support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services industry in general, and in the company's specific market areas, (ii) the company's ability to successfully integrate acquired operations with its existing operations, (iii) the company's ability to develop, produce, market and deliver products and services that incorporate new technology, are priced competitively, and achieve significant market acceptance, (iv) whether the company's products and IT services will be commercially successful or technically advanced due to the rapid improvements in computer technology and resulting product obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. , (v) changes in the cost of IT services, (vi) changes in the company's operating strategy (vii) the company's ability to manage risks associated with its IT services operating strategies and other factors which may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" .
ALPHA MICROSYSTEMS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
Nov. 22, Nov. 23, Nov. 22, Nov. 23,
1998 1997 1998 1997
Net sales:
IT Services $ 7,883 $ 3,370 $16,574 $ 9,609
Product 1,200 1,748 3,644 4,659
Total net sales 9,083 5,118 20,218 14,268
Cost of sales:
IT Services 6,689 2,456 14,363 6,914
Product 1,036 1,161 2,732 3,183
Total cost of sales 7,725 3,617 17,095 10,097
Gross Margin 1,358 1,501 3,123 4,171
Operating expenses:
Selling, general
and administrative 3,461 1,897 6,771 5,895
Engineering, research
and development 375 357 1,011 1,101
Impairment of
long-lived assets 3,160 -- 3,160 --
Total operating
expenses 6,996 2,254 10,942 6,996
Loss from operations (5,638) (753) (7,819) (2,825)
Other (income) expense:
Interest income (17) (61) (61) (241)
Interest expense 43 1 95 6
Other expense, net 505 13 536 25
Foreign exchange
(gain) loss (3) (19) (39) (2)
Total other
(income) expense 528 (66) 531 (212)
Loss before taxes (6,166) (687) (8,350) (2,613)
Provision for income
taxes 1 1 14 10
Net loss $ (6,167) $ (688) $ (8,364) $ (2,623)
Net loss per share $ (0.57) $ (0.06) $ (0.78) $ (0.24)
Number of shares used
in the computation of per
share amounts 11,188 10,887 11,011 10,848
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