AremisSoft Corporation Reports Record First Quarter Results.Business Editors NEW YORK--(BUSINESS WIRE)--April 27, 2000 - Revenue increases 64.1% - Pro-forma net income increases 296% to $3.4 million or $0.20 per diluted share AremisSoft Corporation (Nasdaq:AREM AREM All-Random Easy Mode (gaming, Dota Allstars) AREM Avian Richness Evaluation Method ), a leading international supplier of enterprise-wide software and Internet-enabled solutions for the manufacturing, hospitality, healthcare and construction industries, today announced record results for the first quarter ended March 31, 2000. Total revenue for the quarter increased 64.1% to a first quarter record of $21.5 million from $13.1 million in the prior year quarter. Profit from operations before amortization of goodwill and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. in the first quarter was $4.1 million, a 131% increase from $1.8 million in the 1999 first quarter. Net income before amortization of goodwill and intangible assets increased 296.3% to $3.4 million, or $0.20 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, in the first quarter of 2000, compared to $862,000, or $0.09 per diluted share, in the year-ago first quarter. Shares outstanding in the quarter increased 72.4% to 17.3 million from 10.1 million in the prior year due to 3.5 million shares issued in connection with the Company's successful initial public offering in April 1999, 1.6 million shares issued in connection with the Infoquest investment, and approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 2.1 million shares from stock options. Software license revenue increased 107.8% to $11.1 million in the three months ended March 31, 2000, from $5.4 million in the first quarter of 1999. Maintenance and services revenue was $9.1 million, a 45.6% increase from $6.3 million in the year-ago quarter. As intended, hardware sales decreased 15.6% to $1.3 million from $1.5 million in the year ago period. Roys Poyiadjis, President of AremisSoft, remarked, "We are extremely pleased with the performance of the Company in the first quarter of 2000, with the 64.1% revenue increase being the strongest year over year gain in the Company's history. Our revenue strength was fueled by winning more customers, having higher average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. and achieving increased 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. . All of our key vertical markets showed substantial growth, with our two largest, Healthcare and Manufacturing, rising 70.3% and 64.0%, respectively, and Hospitality and Construction increasing 51.2% and 41.0%, respectively, compared to last year. Our profitability was driven primarily by strong license revenue and solid management of expenses." First Quarter Highlights Manufacturing Division expands its presence in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. with two additional contracts. Two major manufacturing companies in Australia selected AremisSoft's ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. solution. Autrim Nylex Limited selected the Company as its long term partner to be the standard solution across its Textiles textiles, all fabrics made by weaving, felting, knitting, braiding, or netting, from the various textile fibers (see fiber). Types of Textiles Group, which is a major supplier to the Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. . The Tenix Tenix is the parent company of the Tenix Group, Australia’s largest locally-owned defence and technology contractor. Tenix commenced operations in November 1997 (based on a heritage company established in 1956) and has grown to become one of Australia’s Group, Australia's largest defense and high technology contractor contractor n. 1) a person or entity that enters into a contract. 2) commonly, a person or entity that agrees to construct a building or to provide or install specialized portions of the construction. , chose the AremisSoft ERP solution to support the operations within its Defense Systems group. Expansion of AREMIS at the Grand Hinckley Inn. A new order was placed for the AREMIS Property Management System after the success of its initial installation at the Grand Hinckley Resort in November November: see month. , 1999. Future plans include the creation of a central reservation central reservation Noun Brit & NZ the strip that separates the two sides of a motorway or dual carriageway central reservation n (BRIT) (AUT) → mediana office with the installation of the AREMIS Central Reservation System and AREMIS Property Management System, all of which will be directly linked to each of the five Hinckley properties. Expansion of the Hospitality Division's global presence with strategic new hire. AremisSoft opened a new office in Munich Munich (my  `nĭk), Ger. München (mün`khən), city (1994 pop. 1,255,623), capital of Bavaria, S Germany, on the Isar River near the Bavarian Alps. , which will
be overseen by Tillman Till´mann. 1. A man who tills the earth; a husbandman. Starkloff, who joined AremisSoft as Manager of European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. sales and business development. He is responsible for expanding the Company's presence from the United Kingdom and Ireland Ireland, Irish Eire (âr`ə) [to it are related the poetic Erin and perhaps the Latin Hibernia], island, 32,598 sq mi (84,429 sq km), second largest of the British Isles. into Continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. . Mr. Poyiadjis concluded, "We had an excellent quarter and remain on track with all of our initiatives. The implementation of our Internet-enabled healthcare solutions to the Bulgarian Ministry of Health is progressing on schedule. We exit the first quarter with a high level of confidence regarding our prospects for the balance of the year. Our investment in e-nnovations.com has already begun to pay off by enabling us to build a strong backlog in Internet-related applications. We are using e-nnovations.com as a platform to develop an application software provider (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). ) capability to serve our core market of small to mid-size enterprises. Our strong cash position, combined with our other financial resources, provides us with a solid base to continue to grow internally and take advantage of strategic acquisition opportunities as they arise." About AremisSoft Corporation AremisSoft develops, markets, implements and supports enterprise-wide applications software targeted at mid-sized organizations in the manufacturing, healthcare, hospitality and construction industries. The Company's software products help streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. and enhance an organization's ability to manage and execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution mission-critical functions such as accounting, purchasing, manufacturing, customer service and sales and marketing. AremisSoft reported total revenue of $73.4 million for the twelve months ended December December: see month. 31, 1999 and net income of $12.1 million before extraordinary gains for the same period. AremisSoft has over 500 employees, with sales in 10 countries and a customer base in excess of 5,000. The Company also operates a software development and support facility in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. , with 212 employees, which provides significant organizational efficiencies and cost advantages in software development and support. Cautionary Statement for Purposes of 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: All statements, other than historical facts, included in the foregoing press release regarding the Company's financial position, business strategy, and plans of management for future operations are "forward looking statements." These statements are based on management's beliefs and assumptions, and on information currently available to management. Forward looking statements include, but are not limited to, statements in which words such as "expect," "see," "anticipate," "intend," "plan," "believe," "estimate," "consider," or similar expressions are used. Forward looking statements are not guarantees of future performance. They involve risks, uncertainties, and assumptions, including the risks discussed under "Risk Factors" in the Company's prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. included in its registration statement on Form S-1, SEC File No. 333-58351, all of which are incorporated herein by reference. The Company's actual results and stockholder values may differ materially from those anticipated or expressed in these forward looking statements. Many of the factors that will determine these results and values are beyond the Company's ability to control or predict. Readers of this press release are cautioned not to put undue reliance on any forward looking statement. The Company undertakes no obligation to publicly update these forward looking statements, whether as a result of new information, future events or otherwise.
AremisSoft Corporation
Consolidated Statements of Operations (unaudited)
(In thousands, except per share data)
Three Months Ended
March 31,
-------------------
2000 1999
-------------------
Revenues
Software licenses $ 11,137 $ 5,360
Maintenance and services 9,132 6,274
Hardware and other 1,248 1,478
-------- --------
Total revenues 21,517 13,112
-------- --------
Cost of revenues
Software licenses 1,192 716
Maintenance and services 2,822 1,987
Hardware and other 988 1,037
Amortization of purchased software and
capitalized software development costs 74 62
-------- --------
Total cost of revenues 5,076 3,802
-------- --------
Gross profit 16,441 9,310
-------- --------
Operating expenses:
Sales and marketing 8,053 4,865
Research and development 1,853 1,464
General and administrative 2,396 1,188
Amortization of goodwill and intangible assets 1,151 88
-------- --------
Total operating expenses 13,453 7,605
-------- --------
Profit from operations 2,988 1,705
Other income (expense):
Interest expense, net -- (507)
Non operating income 131 --
Income before income taxes 3,119 1,198
Income tax expense 624 395
-------- --------
Net income $ 2,495 $ 803
======== ========
Basic net income per share $ 0.16 $ 0.08
Diluted net income per share $ 0.14 $ 0.08
Basic weighted average shares outstanding 15,202 10,000
Diluted weighted average shares outstanding 17,261 10,015
Excluding amortization of goodwill and
intangible assets:
Net income $3,416 $862
Diluted net income per share $0.20 $0.09
AremisSoft Corporation
Consolidated Balance Sheets
(In thousands, except per share data)
As of As of
March 31, December 31,
----------- -----------
2000 1999
----------- -----------
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 15,238 $ 13,386
Accounts receivable, less allowances
for doubtful accounts of $507, $507 at
March 31, 2000 and Dec. 31, 1999 19,648 18,115
Accounts receivable - disposition proceeds -- 2,592
Other receivables 1,129 705
Inventory 1,287 1,603
Deposit paid on service and maintenance
contracts 2,736 3,712
Prepaid expenses and other assets 1,832 2,423
-------- --------
Total Current Assets 41,870 42,536
Investments 1,803 1,803
Property and equipment, net 1,960 1,847
Purchased and developed software, net of
accumulated amortization of $5,967 and
$5,893 at March 31, 2000 and Dec. 31, 1999,
respectively 874 948
Intangible assets, net of accumulated
amortization of $12,685 and $11,534
at March 31, 2000 and Dec. 31, 1999,
respectively 12,659 13,810
-------- --------
Total assets $ 59,166 $ 60,944
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable 4,154 6,910
Accrued payroll taxes 348 574
Accrued value-added taxes 338 1,055
Accrued income taxes 7,196 6,572
Current portion of capital lease obligations -- 24
Other accrued expenses 2,044 2,371
Bank loans and short term demand facility 3 --
Deferred revenue 6,255 7,190
-------- --------
Total current liabilities 20,338 24,696
Capital lease obligations, less current portion 2 2
Total liabilities $ 20,340 24,698
Stockholders' equity (deficit):
Series-A convertible preferred stock, par
value $0.001; authorized 2,100 shares; 1,137
and no shares issued and outstanding at
March 31, 2000 and Dec. 31, 1999,
respectively, liquidating preference at
par value
Series-B convertible preferred stock, par
value $0.001; authorized 3,500 shares;
no shares issued and outstanding,
liquidating preference at par value -- --
Common stock, par value $0.001; authorized
85,000 shares; 15,202 and 15,193 shares
issued and outstanding at March 31, 2000
and Dec. 31, 1999 15 15
Additional paid-in capital 57,400 57,325
Accumulated deficit (16,426) (18,921)
Accumulated other comprehensive income (2,163) (2,173)
-------- --------
Total stockholders' equity 38,826 36,246
-------- --------
Total liabilities and stockholders' equity
(deficit) $ 59,166 $ 60,944
======== ========
AremisSoft Corporation
Consolidated Statements of Cash Flows
(In thousands, except per share data)
For three months ended
March 31,
2000 1999
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,495 $ 803
Adjustments to reconcile net income
to net cash provided in operating
activities:
Depreciation 188 250
Amortization and write-off of capitalized
software, Goodwill and intangible assets 74 150
Amortization of goodwill and intangible
assets 1,151 --
Changes in assets and liabilities:
Accounts receivable (1,533) 1,316
Accounts receivable - disposition proceeds 2,592 --
Other receivables (424) (39)
Inventory 316 (303)
Deposits paid on service and maintenance
contracts 976 2,526
Prepaid expenses and other assets 591 (905)
Accounts Payable (2,756) 1,145
Deferred revenue (935) (883)
Accrued taxes payable (319) (1,307)
Other accrued expenses (327) (1,336)
Net cash provided from operating activities 2,089 1,417
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (301) (461)
Loan to related party (net) -- (12)
Net cash (used) in investing activities (301) (473)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of warrants 75 --
Loan from related party -- 13
Principal payments of capital lease obligations (24) --
Short-term demand facility 3 --
Net cash provided by financing activities 54 13
Net increase in cash and cash equivalents 1,842 957
Effect of foreign currency exchange rates on
cash and cash equivalents 10 (24)
Cash and cash equivalents, at beginning of
period 13,386 149
Cash and cash equivalents, at end of period $ 15,238 $ 1,082
Supplemental disclosure:
Interest paid $ 0 $ 507
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