Applix Announces First Quarter Revenues of $12.4 Million and a Loss of $0.07 Per Share.Business/Technology Editors WESTBORO, Mass.--(BUSINESS WIRE)--April 18, 2000 Alan Goldsworthy Named 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. ; Applix Progresses with Spinoff Spinoff A new, independent company created through selling or distributing new shares for an existing part of another company. Notes: Spinoffs may be done through a rights offering. of its Linux Division; Company Increases Investment to Lay Foundation for Future Growth Applix, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : APLX), today announced its results for the first quarter ended March 31, 2000 with revenues of $12.4 million, compared to $12.9 million for the same period in 1999, representing a decrease of 4.1%. Net loss for the quarter ended March 31, 2000 was $797,000, or ($0.07) per 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. share, compared to net income of $395,000, or $0.04 per diluted share, for the same period in 1999. Revenues for the eBusiness Division were $9.3 million, an increase of 12.5% over the $8.2 million for the same period in 1999. Revenues for the Linux Division were $3.1 million compared to $4.7 million for the same quarter in 1999. New business revenues for the Linux Division were $526,000 for the first quarter for 2000, an increase of 38% over the first quarter of 1999. Legacy revenues for the Linux Division were $2.6 million for the quarter ended March 31, 2000, a decrease of 39% from the first quarter of 1999. The Company announced that, effective today it has appointed Alan Goldsworthy to the position of Chief Executive Officer. He will succeed Jit Saxena, who will continue on as Chairman of the Applix Board of Directors. The Company also announced that Alan Goldsworthy and Peter Gyenes, former Chairman, President and CEO of Ardent (Ardent Software, Inc., Westboro, MA) A database vendor formed in 1998 as the merger of VMARK Software, Unidata and O2 Technology. Its products included the UniVerse and UniData databases and DataStage data warehouse utility. Software, Inc., have been elected to Applix's Board of Directors. Mr. Gyenes currently serves as a Director of Informix Software, Cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to 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 Solutions, and Axis Computer Systems. The Company also announced that it has established a wholly-owned subsidiary to facilitate the spin off of its Linux Division. Applix intends to provide up to $6 million in capital to finance the growth of the new company. More information related to the new company will be announced on April 24. Bernie Thompson has been appointed President of the new company, and a Board of Directors has been established to oversee the company. Jit Saxena has been elected to the Board and will serve as Chairman. Bernie Thompson, Alan Goldsworthy, and David Mahoney David Mahoney (born April 14, 1981 in Wellesley, Massachusetts) is an American soccer goalkeeper, who formerly played for the Chicago Fire of Major League Soccer. Mahoney played college soccer at Brown University during the 2001 and 2002 seasons before transferring to , CEO of Dataware Technologies, Inc. have been elected as Directors of the new subsidiary's Board of Directors. Jit Saxena commented, "During the quarter, we focused on strategically separating the two businesses and building the management team and their respective business plans. We feel that the investments in sales and marketing initiatives and increased product development efforts, position us well to achieve our goal of over 40% annual license growth in our eBusiness and over 100% annual license growth in our Linux business by the fourth quarter of 2000. Our efforts this quarter lay the foundation for our focused growth and success as two distinct businesses." Mr. Saxena added, "In this time of dynamic growth and opportunity in the new e-business economy, the Board has full confidence in the vision and change that Alan Goldsworthy brings to Applix. He possesses the winning combination of industry knowledge, strategic thinking and motivational leadership that will best use the talents of our people to deliver innovative, revolutionizing business solutions to our customers. I look forward to working with Alan and the rest of the management team to drive our success forward." Alan Goldsworthy, President and CEO of Applix Inc., stated, "The revenue growth for eBusiness was below our expectations due to our inability to convert our pipeline in 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. and Europe. On the positive side we are pleased with the progress made on our management objectives. Additionally, we did close eight key accounts to whom we will be supplying our iCRM and iPlanning Solutions. We also signed agreements across our three geographic regions, Americas, Europe and the PAC PAC, see political action committee. (1) See perceptual audio coding. (2) (Programmable Automation Controller) A programmable microprocessor-based device that is used for discrete manufacturing, process control Rim, with strategic partners who will deliver Applix-based solutions in banking and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , as well as an ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). service for emerging technology companies. We moved aggressively during the quarter to build new relationships, retain existing customers, and as we look ahead, we feel that the company is well-positioned to deliver products that meet our customer's needs and drive our business." Bernie Thompson, President of the new Linux subsidiary commented, "During the first quarter, we focused the Linux Division on closing significant accounts in our areas of strength, which include the growing ASP and Linux-based thin client markets. As a result, we closed our first substantial ASP account in Q1 and are now targeting a larger pipeline for ASP opportunities for the next few quarters. Additionally, we closed the first account in a potentially significant pipeline of Linux-based IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) thin clients." Mr. Thompson continued, "We see enormous opportunities as a focused, independent entity delivering our technologies and talents to these markets. To that end, on April 24, 2000 we will hold a web-based conference to announce the launch of our new entity and its plan to become a high-growth software company serving the emerging markets of Linux, ASP, and Open Source." Please contact Ed Daly at Miller Shandwick Technologies (Edaly@miller.shandwick.com) to attend the conference. About Applix: Applix, Inc. (NASDAQ: APLX), headquartered in Westboro, Mass., operates two distinct businesses, the eBusiness Division and the Linux Division. The eBusiness Division enables interactive and collaborative eBusiness processes throughout web based Coming from a Web server. See Web application. communities. Applix eBusiness solutions include Applix iEnterprise, and iCustomerCommunity.com - an interactive, Web-based community for the entire eBusiness value chain. Applix delivers a comprehensive community for planning functions (iPlanning) including budgeting, financial, customer and operational analysis with real-time Business Intelligence/OLAP technology provided by Applix iTM1. The Linux Division provides a set of Decision Support applications, consisting of Applixware and Applix Anyware products for both the Linux and the ASP markets. The Company's products are available on a variety of software platforms, including Windows, Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. , UNIX UNIX Operating system for digital computers, developed by Ken Thompson of Bell Laboratories in 1969. It was initially designed for a single user (the name was a pun on the earlier operating system Multics). and Linux environments. More information can be found at http://www.applix.com. Notes to Investors This press 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, which involve a number of risks and uncertainties that could cause actual results to differ materially. Specifically, comments related to achieving our goal, the demand for, revenue from and acceptance of the Company's products and the Company's position in the markets, may be considered forward-looking and subject to a number of risks and uncertainties, including but not limited to: the rate of growth in market demand for the products; the acceptance of the Company's products; intense competitive conditions; rapid technological change; frequent new product introductions; and evolving domestic and international standards, which may render existing products and services obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. . Refer to the Company's 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 year ended December 31, 1999 for a list of factors as discussed under "Risk Factors". Applix does not undertake - and specifically declines any obligation - to publicly release the result of any revision which may be made to any forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after 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" or to reflect the occurrence of anticipated or unanticipated events. All trademarks, registered trademarks, and service marks are the property of their respective owners.
Applix, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data) Three Months Ended
March 31, March 31,
2000 1999
License revenue $6,421 $7,483
Service revenue 6,000 5,463
Total revenues 12,421 12,946
Cost of license revenue 612 525
Cost of service revenue 3,901 3,111
Gross margin 7,908 9,310
Operating expenses:
Selling and marketing 5,863 5,509
Research and development 2,734 2,313
General and administrative 946 1,089
Total operating expenses 9,543 8,911
Operating income (loss) (1,635) 399
Interest income (net) 369 227
Net income (loss) before income taxes (1,266) 626
Provision for (benefit from) income taxes (469) 231
Net income (loss) ($797) $395
Basic earnings (loss) per share ($0.07) $0.04
Diluted earnings (loss) per share ($0.07) $0.04
Applix, Inc.
Balance Sheet Highlights (In thousands) as of
March 31, Dec. 31, March 31,
2000 1999 1999
Cash & Cash Equivalents 24,356 25,476 22,406
Total Current Assets 45,179 46,343 41,374
Total Assets 53,817 54,681 45,956
Total Current Liabilities 17,267 17,888 15,386
Shareholders' Equity 35,470 35,713 30,570
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