AlphaServ.com Reports First-Quarter 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)--May 11, 2000 AlphaServ.com(TM) (Nasdaq/NM:ALMI ALMI Application Level Multicast Infrastructure ALMI Automated Listing and Mapping Instrument (US Census Bureau) ), a premier provider of Internet software solutions and professional information technology (IT) services, Thursday reported financial results for its first quarter ended March 31, 2000. The company reported revenue for the first quarter of $4.6 million, compared with revenue of $9.6 million for the comparable quarter ended March 31, 1999. Approximately $4 million 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, as well as the sale of the company's telephone installation business. The company reported a net loss for the quarter of $238,000, compared with a net loss of $819,000 during the comparable quarter of the previous year. The diluted net loss attributable to common shareholders declined from $0.10 for the quarter ended March 31, 1999, to $0.08 for the quarter ended March 31, 2000. The computation of diluted net loss per share includes $753,000 ($0.06 per share) and $382,000 ($0.03 per share) in accretion 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 periods ended March 31, 2000 and 1999, respectively. The current quarter's results also include approximately $300,000 of losses related to the operations of the company's managed services division, which includes its 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 first quarter of 2000, the company recognized a gain on the sale of business of $884,000. "We are behind revenue projections in our professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. division, DCi," 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. "As a result of predicted Y2K problems Y2K problem or Y2K bug: see Year 2000 problem. (Year 2000 problem) The inability of older hardware and software to recognize the century change in a date. , we experienced a revenue shortfall in the fourth quarter with an anticipated ramp-up of revenue in the first quarter as budgets were approved and projects got underway. The pace is just beginning to pick up and revenue is expected to increase slightly in the second quarter and should be back on track in the second half of the year." "The disposition of non-core businesses has allowed us to stay focused on our strengths and objectives -- growing our Internet technology division and expanding our professional services group," added Tullio. "The completion of a $14.6 million private placement in March provides the working capital necessary to accelerate the company's sales and marketing expansion, as well as increase our technical development and support group. Our investments in the NQL NQL Network Quality Lab (Intel Corporation) NQL Not Quite Legal NQL Network Query Language Solutions division have already provided several important technology introductions during the first quarter." "As announced earlier this week," continued Tullio, "we have already made significant progress in implementing our marketing campaign by expanding our internal marketing group, and have further augmented this campaign through the engagement of three well-known marketing and consulting agencies to lend their expertise and industry presence. "As we move forward, we believe the combination of internal and external efforts will become the vehicle that enables us to reach our goal of branding NQL as the standard for the development of intelligent agents." Throughout the past quarter, the company's NQL Internet division continued to gain recognition within the Internet business community through the introduction of several new developments including the "Virtual VCR VCR: see videocassette recorder. VCR in full videocassette recorder Electromechanical device that records, stores on a videotape cassette, and plays back on a TV set recorded images and sound. " function and support for the Palm VII The Palm VII product family consisted of two products, the Palm VII and the Palm VIIx Palm Pilots. These were produced by Palm, Inc., before it was split into PalmOne and PalmSource. They had antennas for wireless data communication on the Mobitex network under the now defunct Palm. . The NQL Solutions division also extended its wireless capabilities beyond the Palm VII through its adoption of Wireless Application Protocol (WAP (1) (Wireless Access Point) See access point. (2) (Wireless Application Protocol) A standard for providing cellular phones, pagers and other handheld devices with secure access to e-mail and text-based Web pages. ), which is supported by many Web and wireless companies such as Motorola, Ericsson, Amazon.com and AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. . 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 is a premier provider of 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, 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 premier provider of Internet and Intranet consulting and networking, onsite network support for customers primarily located in the Northeastern United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . 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 belief that the internal and external efforts will lead to the acceptance of NQL as an industry standard, and that revenue should be back on track in the second half of the 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) the successful implementation of the company's marketing campaign (ii) actual amount of revenue in the second half of the year (iii) undiscovered competition in the area of intelligent agent development (iv) the company's ability to manage personnel and external resources (v) the company's ability to continue developing technology that is competitive 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. 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.
ALPHASERV.COM
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per-share data)
Three Months Ended
March 31, March 31,
2000 1999
Net sales:
IT Services $ 4,357 $ 8,391
Product 262 1,214
Total net sales 4,619 9,605
Cost of sales:
IT Services 3,361 6,356
Product 256 888
Total cost of sales 3,617 7,244
Gross margin 1,002 2,361
Operating expenses:
Selling, general and administrative 1,939 2,861
Engineering, research and development 171 321
Total operating expenses 2,110 3,182
Loss from operations (1,108) (821)
Other expense (income):
Interest income (7) (40)
Interest expense 20 27
Gain on dispositions of businesses (884) --
Other expense (income), net (12) 11
Total other expense (income) (883) (2)
Loss before taxes (225) (819)
Income tax expense (benefit) 13 --
Net loss (238) (819)
Accretion on redeemable preferred stock (116) (44)
Dividends on redeemable preferred stock (637) (338)
Net loss attributable to common shareholders $ (991) $ (1,201)
Basic and diluted net loss per share $(0.08) $ (0.10)
Number of shares used in computing
basic and diluted per-share amounts 11,787 11,549
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