Applix Reports Strong Third Quarter 2003 Results; Analytics Revenue Increases 25% Annually, With Analytics License Revenue Up 17% Sequentially; Net Loss Continues to Narrow.Business Editors/High-Tech Writers WESTBOROUGH Westborough, town (1990 pop. 14,133), Worcester co., E central Mass., on the Assabet River; inc. 1717. The town, which is largely residential, produces electronic components, tools, dyes, and other products. , Mass.--(BUSINESS WIRE)--Oct. 23, 2003 Applix Applix Inc. is a software company based in Westborough, Massachusetts that publishes Applix TM1, a MOLAP database server, and related presentation tools, including Applix Web and Applix Executive Viewer. , 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 APLX is a modern, second generation, cross-platform dialect of the APL programming language. APLX is targeted at applications such as financial planning, market research, statistics, management information, and various kinds of scientific and engineering work. ), a global provider of Business Intelligence (BI) and Business Performance Management (BPM (Business Process Management) A structured approach that models an enterprise's human and machine tasks and the interactions between them as processes. BPM software provides users with a dashboard interface that offers a high-level view of the operation that typically ) software solutions, today reported that revenue for the quarter ended September September: see month. 30, 2003 was $6.42 million, compared to $8.18 million in the third quarter of 2002. For comparison purposes, revenue for the year ago quarter included $5.14 million in revenues from the Company's analytics business (BI and BPM software) and $3.04 million from the Company's customer relationship management (CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. ) business, which was sold during the first quarter of 2003. Reported revenue for the third quarter of 2003 consists exclusively of revenue derived from the analytics business, representing a 25% increase in analytics revenues from the same period last year. Sequentially during 2003, total analytics revenue increased from $5.58 million in the first quarter to $5.94 million in the second quarter to $6.42 million in the third quarter, increases of 7% and 8.1%, respectively. Analytics license revenue for the third quarter of 2003 was $3.11 million compared to $2.67 million for the same period a year ago. Sequentially during 2003, total analytics license revenue increased from $2.44 million in the first quarter to $2.66 million in the second quarter to $3.11 million for the third quarter, increases of 9% and 17%, respectively. The net loss for the third quarter of 2003 narrowed to $708,000, or $0.06 per basic and 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 a net loss of $2.16 million, or $0.18 per basic and diluted share, for the year ago period. David C. Mahoney, President and Chief Executive Officer of Applix, said, "We are very pleased with the progress we have seen from our continuing efforts to execute the strategy we put in place earlier in the year: increasing sales of our core analytics software to companies from the Global 2000 to the mid-market throughout the world. We believe there is tremendous opportunity in this market, which is being constantly validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. through our success in selling the new version of TM1, which includes a variety of enhancements, and the newly introduced TM1 Web product, to existing customers and new customers. We also continued to successfully establish partnerships with leading resellers to expand and enhance our distribution channels worldwide. All told, our continuing business success, combined with our efforts to control costs, is enabling us to reach the 'steady state' operational and financial model we believe will serve to optimize optimize - optimisation our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. success." Gross margin for the third quarter of 2003 improved to 76.8% from 65.3% for the third quarter 2002. The improvement in gross margin was attributable to the higher percentage of license revenues, as well as the reduction of lower margin services revenue and the related cost of that revenue associated with the Company's CRM business sold in the first quarter of 2003. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the quarter ended September 30, 2003 totaled $5.46 million compared to $7.38 million in the year ago period. The third quarter this year included approximately $217,000 in legal and accounting costs associated with matters related to the Company's two previously announced financial restatements. Results for the Nine Months Ended September, 30, 2003 Revenue for the nine months ended September 30, 2003 was $19.20 million, compared to $26.76 million in the same period in 2002. For comparison purposes, revenue for the 2002 period included $15.10 million in analytics revenue and $11.66 million from the Company's CRM business, sold during the first quarter of 2003. Reported revenue for the first nine months of this year included $17.95 million in analytics revenue and $1.25 million in CRM-related revenue, reflecting a 19% increase in analytics revenues from the same period last year. Net income for the first three quarters of 2003, which includes a $7.91 million pre-tax gain from the sale of the CRM business, totaled $2.66 million, or $0.21 per basic and diluted share, compared to a net loss of $2.82 million, or $0.23 per basic and diluted share, for the year ago period. Third Quarter Operational Highlights -- The analytics product offering was expanded and strengthened through the release of an upgraded version of the Company's flagship TM1 OLAP (OnLine Analytical Processing) Decision support software that allows the user to quickly analyze information that has been summarized into multidimensional views and hierarchies. OLAP tools are used to perform trend analysis on sales and financial information. engine with new features that ease deployment and management for IT departments, lowering the total cost of ownership of BI and BPM applications, and then with the mid-September introduction of TM1 Web that provides for cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. enterprise reporting With the dramatic expansion of information technology, and the desire for increased competitiveness in corporations, there has been an increase in the use of computing power to produce unified reports which join different views of the enterprise in one place. and budgeting. -- Applix continued to build its customer base with companies that are realizing measurable benefits of employing real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. analytics for forecasting, planning and consolidations. During the quarter, BAE Systems BAE Systems British manufacturer of aircraft, missiles, avionics, naval vessels, and other aerospace and defense products. BAE Systems was formed (1999) from the merger of British Aerospace (BAe) with Marconi Electronic Systems. , DHL DHL abbr. 1. Doctor of Hebrew Letters 2. Doctor of Hebrew Literature , Liberty International and PriceWaterhouseCoopers are just a few examples of the global leaders who selected the Company's TM1 BI engine. -- The Company continued to expand its worldwide distribution channel by signing 15 partners during the third quarter, including Allegiant al·le·giance n. 1. Loyalty or the obligation of loyalty, as to a nation, sovereign, or cause. See Synonyms at fidelity. 2. The obligations of a vassal to a lord. Technology, Inc., Garland Garland, city (1990 pop. 180,650), Dallas co., N Tex., a suburb of Dallas; inc. 1891. Since World War II, Garland has grown from an agricultural community into an important center for electronics research and for the production of electronic equipment. Group, Nimbus, Ranzal, Rock Creek Rock Creek may refer to:
Information Technologies. -- Applix recorded four Applix Integra Integra™ Dermatology An acellular artificial skin used to cover severe burns and wounds. See Artificial skin, Burns. deals in the quarter, adding $250,000 in new license revenues. -- Larry Piccioli joined Applix in September as Vice President of Business Development, bringing significant experience in direct and indirect sales in the BI sector, particularly with managing worldwide OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and and partner relationships. -- Delta Apparel, whose solution was developed via Applix partner Stratature, received the Start Magazine 2003 Technology & Business award for its use of TM1 to make timely, strategic decisions across its inventory, sales and order backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. . Milt Alpern, Chief Financial Officer of Applix, commented, "By continuing to narrow our net loss, guard our cash position - cash burn in the third quarter was only $589,000, compared to $1.61 million in the second quarter this year - and improve the overall financial condition of Applix, we are fueling the ability of our entire company to focus on achieving the overall strategic plan for growth. As these trends continue to develop over time, we are moving closer and closer to a solid, sustainable business A business is sustainable if it has adapted its practices for the use of renewable resources and holds itself accountable for the environmental and human rights impacts of its activities. model. Our objective remains to be operating in a profitable manner by year-end, positioning us for positive financial results in 2004 and beyond." Third Quarter Financial Highlights -- Cash and cash equivalents totaled $ 9.90 million at 9/30/03 -- Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). was reduced to 48 days at 9/30/03 from 59 days at 6/30/03 -- Average deal size remained constant at $25,000 - $35,000 and the number of +$100,000 transactions increased Investor Conference Call and Webcast The senior management of Applix will host a conference call and Webcast to discuss the third quarter results tomorrow morning, Friday, October 24, 2003 at 8:30 am EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . To access the call, please dial 1-800-299-7635, using the confirmation code APPLIX. Internationally, the call may be accessed by dialing 1-617-786-2901, using the same confirmation code. To listen via live audio Webcast, please visit the Company's website, www.applix.com at least ten minutes prior to the start of the call. The Webcast will be available as a replay starting one hour after the call is completed at the same location. About Applix Applix (NASDAQ: APLX) is a global provider of Business Intelligence and Business Performance Management software solutions based on its TM1 product. These solutions enable the continuous management and monitoring of performance across the financial, operational, customer and organizational functions within the enterprise. More than 1,700 customers worldwide use Applix's adaptable a·dapt·a·ble adj. Capable of adapting or of being adapted. a·dapt  a·bil , scalable and real-time
solutions, delivered by Applix and by a global network of partners, to
manage their business performance and respond to the marketplace in
real-time. Headquartered in Westborough, MA, Applix maintains offices in
four countries in Europe, 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 the Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. . For more
information about Applix, please visit www.applix.com.
This news release contains 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. that involve risks and uncertainties. Forward-looking statements in this document are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions 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. Forward-looking statements concerning future plans or results are only estimates and actual results could differ materially from expectations. Certain factors that could cause or contribute to such differences include without limitation, competitive pressures, changes in customer demands, adverse economic conditions, loss of key personnel, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , potential fluctuations in quarterly results, lengthy sales cycles, market acceptance of new or enhanced products and services, factors affecting spending by customers and other risks, uncertainties and factors including those described in the Company's Annual 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 year ended December 31, 2002 under the heading "Risk Factors" and its most recent Quarterly Report on Form 10-Q Form 10-Q See 10-Q. under the heading "Factors That May Affect Future Results." The forward-looking statements provided by the Company in this press release represent the Company's views as of the date of this release. While the Company anticipates that subsequent events and developments may cause the Company's views to change, it disclaims any obligation to update these forward-looking statements, and these forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release. (C)2003 Applix, Inc. All rights reserved. Applix and TM1 are registered trademarks of Applix, Inc. Applix Integra is a trademark of Applix, Inc. All other trademarks and company names mentioned are the property of their respective owners.
Applix, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2003 2002 2003 2002
Revenues
Software license $3,108 $3,231 $8,457 $11,682
Professional services and
maintenance 3,315 4,951 10,741 15,082
Total revenues 6,423 8,182 19,198 26,764
Cost of revenues
Software license 329 502 1,161 1,275
Professional services and
maintenance 1,164 2,341 4,089 7,605
Total cost of revenues 1,493 2,843 5,250 8,880
Gross margin 4,930 5,339 13,948 17,884
Operating expenses
Product development 1,343 1,615 4,233 4,060
Sales and marketing
(includes $23 of stock-
based compensation for
the three and nine months
ended September 30, 2003) 2,332 3,435 7,812 10,411
General and administrative
(includes $105 and $252
of stock-based
compensation for the
three and nine months
ended September 30, 2003,
respectively) 1,723 1,318 6,003 3,836
Compensation expenses and
amortization of acquired
intangible asset 63 616 771 1,792
Restructuring expenses - 398 - 361
Total operating expenses 5,461 7,382 18,819 20,460
Operating loss (531) (2,043) (4,871) (2,576)
Non-operating income (expense)
Net gain from sale of
subsidiary (144) - (164) -
Interest and other income
(expense), net 85 (126) 710 (9)
Net gain from sale of CRM
business (12) - 7,910 -
Net Income (loss) before
income taxes (602) (2,169) 3,585 (2,585)
Provision (benefit) for
income taxes - (49) 764 111
Net Income (loss) from
continuing operations (602) (2,120) 2,821 (2,696)
Loss from discontinued
operations (106) (43) (162) (128)
Net income (loss) $(708) $(2,163) $2,659 $(2,824)
Net income (loss) per share,
basic and diluted:
Continuing operations -
basic ($0.05) ($0.17) $0.23 ($0.22)
Discontinued operations -
basic ($0.01) ($0.00) ($0.01) ($0.01)
Net income (loss) per
share - basic ($0.06) ($0.18) $0.21 ($0.23)
Net income (loss) per
share - diluted ($0.06) ($0.18) $0.21 ($0.23)
Weighted average number of
shares outstanding:
Basic 12,641 12,282 12,508 12,184
Diluted 12,641 12,282 12,839 12,184
Applix, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)
September 30, December 31,
2003 2002
ASSETS
Current assets:
Cash and cash equivalents $8,970 $8,389
Accounts receivable, net 3,419 5,810
Other current assets 2,341 1,906
Total current assets 14,730 16,105
Restricted cash 933 933
Property and equipment, net 1,121 1,875
Capitalized software costs, net 771 1,460
Goodwill 1,158 1,187
Intangible asset, net 875 1,062
Other assets 796 925
Total assets $20,384 $23,547
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable 1,753 2,296
Accrued expenses 7,206 9,563
Deferred revenue 5,790 8,703
Total current liabilities 14,749 20,562
Long term liabilities 503 566
Total liabilities 15,252 21,128
Stockholders' equity:
Preferred stock; $.01 par value;
1,000,000 shares authorized, none issued - -
Common stock; $.0025 par value;
30,000,000 shares authorized; 13,123,939
and 12,675,176 issued, respectively 33 32
Additional paid in capital 50,292 49,600
Accumulated other comprehensive loss (1,126) (487)
Accumulated deficit (42,706) (45,365)
6,493 3,780
Less: treasury stock, 357,627 and 306,198
shares, respectively (1,361) (1,361)
Total stockholders' equity 5,132 2,419
Total liabilities and stockholders' equity $20,384 $23,547
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