AlphaServ.com Reports 2000 Second-Quarter and Six-Month Results.Business Editors & High-Tech Writers 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)--Aug. 8, 2000 AlphaServ.com (Nasdaq/NM:ALMI ALMI Application Level Multicast Infrastructure ALMI Automated Listing and Mapping Instrument (US Census Bureau) ), a provider of Internet software solutions and professional information technology (IT) services, Tuesday reported financial results for its second quarter and six months ended June 30, 2000. Revenue for the second quarter ended June 30, 2000, was $3.0 million, compared with revenue of $9.1 million for the comparable quarter ended June 30, 1999. Approximately $5.6 million, or more than 90 percent, of this decline in revenue is due to the sale of the company's managed services An umbrella term for third-party monitoring and maintaining of computers, networks and software. The actual equipment may be inhouse or at the third-party's facilities, but the "managed" implies an ongoing effort; for example, making sure the equipment is running at a certain quality and computer hardware manufacturing division on Jan. 31, 2000, as well as the sale of the company's telephone installation business on April 1, 1999. The company reported a net loss for the quarter of $1.2 million and a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net loss of $0.14 per share, compared with a net loss of $787,000 and a diluted net loss of $0.10 per share during the comparable quarter of the previous year. The computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. of diluted net loss per share includes $754,000 ($0.05 per share) and $348,000 ($0.03 per share) in accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the and dividends related to the company's outstanding preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. for the quarters ended June 30, 2000, and 1999, respectively. The company reported revenue of $7.6 million for the six-month period ended June 30, 2000 vs. revenue of $18.7 million for the same period last year. Approximately $9.6 million of this decline is due to the sale of the company's managed services and computer hardware manufacturing division, as well as the sale of the company's telephone installation business. The company reported a net loss for the six-month period of $1.4 million and a diluted net loss of $0.22 per share, compared with a net loss of $1.6 million and a diluted net loss of $0.20 per share for the same period in 1999. The computation of diluted net loss includes $1.5 million ($0.12 per share) and $730,000 ($0.06 per share) in accretion and dividends related to the company's outstanding preferred stock for the six-month periods ended June 30, 2000, and 1999, respectively. 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. AlphaServ.com chief financial officer, Robert O. Riiska, "The six-month results also include approximately $300,000 ($0.02 per share) of losses related to the operations of the company's managed services division and proprietary hardware manufacturing group through Jan. 31, 2000." Under the terms of the agreement, AlphaServ.com retained a deferred revenue balance and reclassified it to a deferred gain of $2.7 million that the company expected to recognize during fiscal years 2000 and 2001 as the contingent contractual obligations lapsed LEGACY, LAPSED. A legacy is said to be lapsed or extinguished, when the legatee dies before the testator, or before the condition upon which the legacy is given has been performed, or before the time at which it is directed to vest in interest has arrived. Bac. Ab. Legacy, E; Com. Dig. . Accordingly, in the second quarter of 2000, the company recognized a gain on the sale of business of $443,000 ($0.03 per share) and for the six-month period, recognized a gain of $1.3 million ($0.10 per share). "As of the second quarter, we are a new company," commented AlphaServ.com chairman, 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. and president, Douglas J. Tullio. "With the sale of our managed services and proprietary hardware businesses completed, we are focused solely on branding and marketing our NQL NQL Network Quality Lab (Intel Corporation) NQL Not Quite Legal NQL Network Query Language Internet technology and expanding our DCi professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. division. "Revenue has already started to pick up in the third quarter as we regain business in our DCi division, which fell short in the last couple quarters due to Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 concerns." "In the second quarter we successfully launched our NQL product, built the infrastructure we believe to be necessary for future growth and tested various messages in preparation for an aggressive marketing campaign in the second half of this year," Tullio continued. "We staffed up both internally with an experienced sales and marketing staff, and externally through the engagement of public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most , advertising and market research firms. We expect that the third quarter will reflect these increased expenses, as well as continued revenue growth. "Over the quarter we achieved our internal goal of improving revenue from the NQL division by over 80 percent and hope to continue increasing quarterly revenue at this growth rate for the remainder of this year. Other key measurements of our success will be our ability to sign well-known customers which should bring recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenue as NQL is integrated into these accounts." The company will broadcast its quarterly results conference call live at 11 a.m. Eastern. The call can be accessed at www.vcall.com/NASApp/VCall/EventPage?ID=28561. For those unable to attend the live broadcast, a replay will be available beginning approximately one hour after the event. About AlphaServ.com AlphaServ.com, the d.b.a. name for 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. , operates an Internet technologies division, NQL Solutions, and the DCi professional services division. NQL Solutions provides Internet software solutions to the global marketplace. This division develops and deploys enabling software technologies based on its Network Query Language A generalized language that allows a user to select records from a database. It uses a command language, menu-driven method or a query by example (QBE) format for expressing the matching condition. to partner systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. , Fortune 1000 corporations, Internet communities and marketplaces, software vendors and Internet-based service providers. For more information, visit www.nqlsolutions.com or call 888/785-3370. The company's professional services division is a provider of Internet and Intranet consulting and networking, onsite network support for customers primarily located in the Northeastern U.S. For more information, visit the company's Web site at www.alphaserv.com. Certain statements in this news release, including the statements pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to the company's expectation that DCi will continue to regain business, that its infrastructure is sufficient to support future growth, that the third quarter will reflect increased expenses, as well as revenue growth and that it hopes to increase quarterly revenue at an 80 percent growth rate for the remainder of this year are considered "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. Such forward-looking statements involve known and unknown risks and uncertainties, including (i) DCi's continued success in regaining business (ii) the company's ability to manage personnel and external resources (iii) the actual amount of revenue and expenses in the second half of the year (iv) the successful implementation of the company's marketing campaign (v) undiscovered competition in the area of intelligent agent development and (vi) the company's ability to continue developing technology that is competitive according to industry standards along with 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" .
ALPHASERV.COM
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per-share data)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
Net sales:
IT Services $ 2,834 $ 7,767 $ 7,191 $ 16,158
Product 123 1,291 385 2,505
Total net sales 2,957 9,058 7,576 18,663
Cost of sales:
IT Services 2,373 5,789 5,734 12,145
Product 41 896 297 1,784
Total cost of sales 2,414 6,685 6,031 13,929
Gross margin 543 2,373 1,545 4,734
Operating expenses:
Selling, general and
administrative 2,111 3,068 4,050 5,929
Engineering, research
and development 203 303 374 624
Total operating expenses 2,314 3,371 4,424 6,553
Loss from operations (1,771) (998) (2,879) (1,819)
Other (income) expense:
Interest income (162) (10) (169) (50)
Interest expense 1 24 21 51
Gain on dispositions of
businesses (443) - (1,327) -
Other income, net (6) (225) (18) (214)
Total other income (610) (211) (1,493) (213)
Loss before taxes (1,161) (787) (1,386) (1,606)
Income tax expense 2 - 15 -
Net loss (1,163) (787) (1,401) (1,606)
Accretion on redeemable
preferred stock (116) (11) (232) (55)
Dividends on redeemable
preferred stock (638) (337) (1,275) (675)
Net loss attributable to
common shares $ (1,917) $(1,135) $(2,908) $ (2,336)
Basic and diluted net loss
per common share $ (0.14) $ (0.10) $ (0.22) $ (0.20)
Number of shares used
in computing basic and
diluted per-share amounts 14,142 11,602 12,964 11,576
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