Aspeon Inc. Reports Financial Results for Third Quarter 2000; Company Announces Management Changes To Facilitate Growth of Key Business Segments.Business Editors IRVINE Irvine, town, Scotland Irvine (ûr`vĭn), town (1991 pop. 32,507), North Ayrshire, SW Scotland, on the Irvine River estuary. Industries include iron and brass foundries. Other products are chemicals, electric goods, and clothing. , Calif.--(BUSINESS WIRE)--May 3, 2000 Aspeon Inc. (Nasdaq:ASPE ASPE Assistant Secretary for Planning and Evaluation (US Department of Health and Human Services) ASPE American Society of Plumbing Engineers ASPE American Society for Precision Engineering ASPE Association of Standardized Patient Educators ), formerly Javelin Systems Inc., today announced revenues and results of operations for its fiscal third quarter ended March 31, 2000. Revenues for the third quarter of fiscal 2000 were $20.0 million, compared with last year's revenues for the third quarter of $21.1 million. Results for the third quarter of fiscal 2000 for Aspeon's two business units on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis were as follows:
Javelin Systems Aspeon Solutions
Revenues $16.7 million $ 3.3 million
EBITDA $ 653,600 $ (1.1 million)
Net (loss) $ (26,000) $ (1.2 million)
"The March quarter was a watershed watershed, elevation or divide separating the catchment area, or drainage basin, of one river system or group of river systems from another system or group of systems. The term is also often used synonymously with drainage basin. period for Aspeon as we separated the company into two operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon , Aspeon Solutions and Javelin Systems. During the quarter, we raised $10 million to grow the 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). business and we launched a brand new ASP sales force. Our ASP sales funnel is filling up and we have a clear path to profitability in that business unit," stated Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a Stack, chairman of Aspeon. "We're we're Contraction of we are. we're we are disappointed in revenues from our Javelin division, which experienced some drop off as a result of delays in several rollouts. Our results for Javelin were also impacted by customers delaying purchases in anticipation of our new Viper product introduced in February," said Stack. He noted that production of the Viper RT ramped up during the quarter with more shipments being scheduled to begin in the fourth fiscal quarter. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss for the third quarter of fiscal 2000 was $782,400, or $0.08 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, as compared with pro forma net income of $1.2 million, or $0.17 per diluted share, for the comparable period in fiscal 1999. Pro forma results are presented for informational purposes only and are not prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . Pro forma net income (loss) presents the operating results of Aspeon, excluding charges of $716,300 and $102,500 for the 3-months periods ended March 31, 2000 and 1999, respectively, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the amortization of goodwill and excluding the impact on the pro forma net loss per share for the 3-month period ended March 31, 2000 of the beneficial conversion feature discussed below. On a GAAP basis, net loss for the third quarter of fiscal 2000 was $1.2 million, or $0.56 per diluted share (including the impact on net loss per diluted share of the beneficial conversion feature discussed below) compared with net income of $1.1 million, or $0.16 per diluted share, for the comparable period in fiscal 1999. On a GAAP basis, the net loss per diluted share was increased by $0.42 per share to reflect the impact of a charge for 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 of 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. due to a beneficial conversion feature ("BCF BCF Billion Cubic Feet BCF Bioconcentration Factor BCF British Chess Federation BCF British Coatings Federation BCF Breast Cancer Fund BCF Bank Credit Facility BCF Bulked Continuous Filament BCF British Cycling Federation BCF Boeing Converted Freighter ") relating to the issuance of convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". in March 2000 and by $0.01 per share to reflect the dividends to the preferred shareholder. The BCF charge is analogous analogous /anal·o·gous/ (ah-nal´ah-gus) resembling or similar in some respects, as in function or appearance, but not in origin or development. a·nal·o·gous adj. to a dividend to the preferred shareholder to reflect the excess of the aggregate fair value of common stock that the preferred shareholder would receive upon conversion over the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). allocated to the convertible preferred stock. The BCF charge represents a non-cash, non-recurring charge in calculating the loss per share, but it does not affect the results of operations or net loss. Revenues for the nine months ended March 31, 2000, amounted to $64.5 million, as compared with last year's revenues for the nine months ended March 31, 1999 of $51.9 million. Pro forma net income for the nine months ended March 31, 2000 was $1.5 million, or $0.17 per diluted share, as compared with pro forma net income of $2.4 million, or $0.43 per diluted share, for the comparable period in fiscal 1999. Pro forma net income presents the operating results of Aspeon, excluding charges of $1.8 million and $250,900 for the 9-month periods ended March 31, 2000 and 1999, respectively, relating to the amortization of goodwill, and excluding the impact on pro forma net income per share for the 9-month period ended March 31, 2000 of the BCF discussed above. On a GAAP basis, net income for the nine months ended March 31, 2000 was $434,900, or a loss per share of $0.39 including the impact of the BCF discussed above, compared with net income of $2.2 million, or earnings per share of $0.39, for the comparable period in fiscal 1999. The company also announced the promotion of four, seasoned Aspeon veterans to head up the Javelin Systems line of business: former Executive Vice President Ed Brooks will assume the responsibilities of president and chief executive officer; Mark LeMay to chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. ; Larry McCorkle to chief financial officer; and Ken Kadlec to chief technology officer. Stack commented that the changes were made to enable management to better focus on the development and growth of both the Javelin Systems and Aspeon Solutions business segments. About Aspeon Aspeon operates in two lines of business. Aspeon Solutions Inc., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , is the first "Next Generation" Application Service Provider (ASP) focused on delivering pre-integrated mission-critical business applications customized to meet industry-specific needs. Javelin Systems is the leading provider of integrated touchscreen See touch screen. computers and system integration services to the global foodservice industry. Visit Aspeon at www.aspeon.com The statements in this news release that relate to future financial results, future plans by the Company, customer contracts or financial performance by the Company are 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 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 customer orders, demand for products and services, development of markets for the Company's products and services and other risks identified in the Company's SEC filings. The Company's actual results and performance may differ materially; therefore, 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" . The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made 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 or to reflect the occurrence of unanticipated events.
ASPEON INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
2000 1999 2000 1999
Revenues:
Product Sales $14,290,600 $17,547,000 $44,405,700 $43,132,400
Services 5,666,600 3,544,000 20,092,900 8,758,200
Total revenues 19,957,200 21,091,000 64,498,600 51,890,600
Cost of sales:
Product Sales 10,754,500 12,430,900 31,876,900 30,752,400
Services 4,769,400 2,942,300 15,843,700 6,993,300
Total cost of
sales 15,523,900 15,373,200 47,720,600 37,745,700
Gross profit 4,433,300 5,717,800 16,778,000 14,144,900
Operating expenses:
Research and
development 531,200 349,400 1,493,200 932,600
Selling and
marketing 1,915,100 1,101,300 5,565,000 2,506,700
General and
administrative 3,872,900 2,318,300 8,895,000 6,535,900
Total operating
expenses 6,319,200 3,769,000 15,953,200 9,975,200
Income (loss)
from operations (1,885,900) 1,948,800 824,800 4,169,700
Interest expense (147,400) (157,300) (424,900) (615,200)
Other income 34,300 8,100 313,000 22,900
Income (loss)
before income
taxes (1,999,000) 1,799,600 712,900 3,577,400
(Provision)
benefit for
income taxes 779,600 (664,700) (278,000) (1,395,700)
Net income (loss) (1,219,400) 1,134,900 434,900 2,181,700
Accretion of
Series A
Preferred
Stock discount
and dividends (3,993,700) -- (3,993,700) --
Net income (loss)
available to
common
shareholders $(5,213,100) $ 1,134,900 $(3,558,800) $ 2,181,700
Earnings (loss)
per common share:
Basic $ (0.56) $ 0.16 $ (0.39) $ 0.40
Diluted $ (0.56) $ 0.16 $ (0.39) $ 0.39
Shares used in
computing
earnings (loss)
per share:
Basic 9,268,478 6,951,212 9,060,863 5,444,549
Diluted 9,268,478 7,237,141 9,060,863 5,633,269
ASPEON INC.
CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2000 1999(a)
ASSETS
Current assets:
Cash and cash equivalents $ 11,358,400 $ 5,641,500
Investment in securities 2,041,600 7,472,000
Accounts receivable, net 14,466,000 16,000,200
Inventories 16,595,400 14,565,700
Deferred income taxes 530,900 530,900
Other current assets 1,771,600 823,500
Total current assets 46,763,900 45,033,800
Property and equipment, net 5,541,500 2,861,400
Excess of cost over net
assets of purchased
businesses 35,021,000 27,021,200
Deferred financing costs 391,600 617,600
Other assets, net 281,900 273,600
Total assets $ 87,999,900 $ 75,807,600
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $ 2,310,500 $ 2,056,600
Accounts payable 6,334,600 7,681,800
Accrued expenses 2,544,800 2,446,200
Current maturities of
long-term debt 300,000 300,000
Customer deposits 2,700 2,700
Deferred maintenance revenues 1,460,800 397,500
Income taxes payable (1,117,400) 1,517,400
Total current liabilities 11,836,000 14,402,200
Deferred rent expense 32,300 21,000
Long-term debt, net of
current portion 980,800 1,774,000
Mandatorily redeemable
Series A Preferred stock,
$0.01 par value: authorized
shares -- 1,000,000; issued
and outstanding shares --
10,000 shares at March 31,
2000 and none at June 30, 1999 3,993,700 --
Mandatorily redeemable
warrants 5,647,300 --
Stockholders' equity:
Common stock, $0.01 par value:
authorized shares --
20,000,000; issued and
outstanding shares --
9,381,170 at March 31,
2000 and 8,887,203 at
June 30, 1999 93,800 88,900
Additional paid in capital 65,309,900 55,800,700
Deferred compensation -- (6,700)
Retained earnings 240,800 3,799,700
Accumulated other
comprehensive income (loss) (134,700) (72,200)
Total stockholders' equity 65,509,800 59,610,400
Total liabilities and
stockholders' equity $ 87,999,900 $ 75,807,600
(a) The balance sheet at June 30, 1999 has been derived from audited
financial statements.
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