Bitstream Inc. Reports Q4 2001 Results - Highlights Include a 12.8% Increase in Consolidated Revenues and a 45.6% Decrease in Consolidated Net Loss, as Compared To Q4 2000.Business/Technology Editors CAMBRIDGE Cambridge, city, Canada Cambridge (kām`brĭj), city (1991 pop. 92,772), S Ont., Canada, on the Grand River, NW of Hamilton. It was formed in 1973 with the amalgamation of Galt, Hespeler, and Preston, all founded in the early 19th cent. , Mass.--(BUSINESS WIRE)--February 19, 2002 Bitstream The transmission, or flow, of binary data (bits). Inc. (Nasdaq: BITS) today reported that revenues for the three months ended December December: see month. 31, 2001 were $2,355,000 compared to $2,088,000 for the three months ended December 31, 2000, an increase of $267,000 or 12.8%. 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 three months ended December 31, 2001 were $2,499,000, a decrease of $213,000 or 7.8% from $2,712,000 for the three months ended December 31, 2000 due primarily to decreases in expenses incurred by the Company's Pageflex business segment. The loss from operations for the three months ended December 31, 2001 decreased $464,000 or 50.5% to $(455,000) from $(919,000) for the three months ended December 31, 2000. Revenues for the year ended December 31, 2001 were $7,968,000 compared to $8,982,000 for the year ended December 31, 2000, a decrease of $1,014,000 or 11.3%. Operating expenses for the year ended December 31, 2001 decreased $1,105,000 or 10.1% to $9,828,000 as compared to $10,933,000 for the year ended December 31, 2000. The loss from operations for the year ended December 31, 2001 decreased $57,000 or 1.7% to $(3,287,000) as compared to $(3,344,000) for the year ended December 31, 2000. The Company's net loss for the three months ended December 31, 2001 was $(489,000), representing a decrease of $410,000, or 45.6%, from a $(899,000) loss for the three months ended December 31, 2000. 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. net loss per share were $(0.06) for the three months ended December 31, 2001, versus $(0.12) for the three months ended December 31, 2000. The net loss for the year ended December 31, 2001 increased $342,000 to $(3,481,000) or 10.9% compared to a net loss of $(3,139,000) for the year ended December 31, 2000. Basic and diluted net loss per share were $(0.43) for the year ended December 31, 2001 versus basic and diluted net loss per share of $(0.41) for the year ended December 31, 2000. The Company's cash and cash equivalent balance at December 31, 2001 was $5,716,000, a decrease of $287,000 from the September September: see month. 30, 2001 balance of $6,003,000. The net decrease in cash for the year ended December 31, 2001 was $1,433,000 versus a decrease of $1,888,000 for the year ended December 31, 2000. Bitstream is composed of three different businesses: (1) its type and technology business, whose primary revenues are generated from the license of font font or typeface or type family Assortment or set of type (alphanumeric characters used for printing), all of one coherent style. Before the advent of computers, fonts were expressed in cast metal that was used as a template for printing. rendering See render. (graphics, text) rendering - The conversion of a high-level object-based description into a graphical image for display. For example, ray-tracing takes a mathematical model of a three-dimensional object or scene and converts it into a bitmap image. software and fonts to the embedded Inserted into. See embedded system. , set-top box The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. , wireless device and information appliance See Internet appliance. (hardware) Information Appliance - (IA) A consumer device that performs only a few targeted tasks and is controlled by a simple touch-screen interface or push buttons on the device's enclosure. markets; (2) MyFonts MyFonts is a distributor of digital fonts, based in Cambridge, MA, selling fonts through the www.myfonts.com web site. It launched in September 1999 (during the ATypI conference in Boston), and started selling fonts in March 2000. .com, 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. that was formed in late 1999 as the first e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. site to aggregate fonts from multiple vendors on one easy-to-use Web site ("MyFonts.com"); and (3) Pageflex, a wholly owned subsidiary that was formed in early 1999 to establish the Company as a leader in dynamic page composition technologies ("Pageflex"). The performance of each business segment is discussed in greater detail below. Type and Technology Results Type and technology revenues for the three months ended December 31, 2001 increased $253,000 or 19.1% to $1,581,000 from $1,328,000 for the three months ended December 31, 2000. Revenues for the year ended December 31, 2001 were $5,348,000 compared to $6,197,000 for the year ended December 31, 2000, a decrease of $849,000 or 13.7%. Operating expenses and cost of revenues (which primarily represent engineering costs attributable to customer specific customizations) for the three months ended December 31, 2001 increased $39,000 or 3.1% to $1,280,000 as compared to $1,241,000 for the three months ended December 31, 2000. Operating expenses and cost of revenue for the year ended December 31, 2001 decreased $305,000 or 5.8% to $4,983,000 as compared to $5,288,000 for the year ended December 31, 2000. Income from operations for the Company's type and technology business segment increased $214,000 or 246% to $301,000 for the three months ended December 31, 2001 as compared to $87,000 for the three months ended December 31, 2000. Income from operations decreased $544,000 or 59.9% to $365,000 for the year ended December 31, 2001 as compared to $909,000 for the year ended December 31, 2000. "We are pleased to report that type and technology revenues increased $167,000 or 11.8% as compared to the third quarter of 2001, and $253,000 or 19.1% as compared to the fourth quarter of 2000," said Anna M. Chagnon, President and 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. . "In addition, 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 license revenues for the fourth quarter increased $440,000 or 53.7% as compared to the prior year resulting from the Company's continued focus on signing royalty-bearing deals with major set-top box, wireless device and information appliance manufacturers. We also continue to invest extensively in new product development and are about to release our newest technology, ThunderHawk Thunderhawk may refer to:
Hewlett-Packard - (HP) Hewlett-Packard designs, manufactures and services electronic products and systems for measurement, computation and communications. The company's products and services are used in industry, business, engineering, science, medicine and for use with its Jornada
The Jornada was a line of personal digital assistants or PDAs manufactured by Hewlett-Packard computers. PDA (Personal Digital Assistant) A handheld computer for managing contacts, appointments and tasks. It typically includes a name and address database, calendar, to-do list and note taker, which are the functions in a personal information manager (see PIM). ." MyFonts.com Results The Company's MyFonts.com business segment generated revenues of $233,000 and $702,000 for the three months and one year ended December 31, 2001 respectively. Revenues attributable to this segment after the inter-company elimination of royalties due on the resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. of Bitstream products for the three months ended December 31, 2001 increased $132,000 or 322% to $173,000 from $41,000 for the three months ended December 31, 2000. Revenues for the year ended December 31, 2001 were $510,000 compared to $50,000 for the year ended December 31, 2000, an increase of $460,000 or 920%. Operating expenses for the three months ended December 31, 2001 increased $48,000 or 36.1% to $181,000 from $133,000 for the three months ended December 31, 2000. Operating expenses for the year ended December 31, 2001 increased $391,000 or 87.3% to $839,000 from $448,000 for the year ended December 31, 2000. Loss from operations for the MyFonts.com business increased $18,000 or 14.8% to $(140,000) for the three months ended December 31, 2001 as compared to $(122,000) for the three months ended December 31, 2000. The loss from operations for the year ended December 31, 2001 increased $292,000 or 67.6% to $(724,000) from $(432,000) for the year ended December 31, 2000. "We are excited that MyFonts.com's revenue for the fourth quarter of 2001 exceeded by $169,000 or 264% the revenue for the fourth quarter of 2000," said Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by Ying, Chief Executive Officer. "In addition, over 20% of our customers have returned to purchase additional fonts online through the site. To continue to grow MyFonts.com revenues, we remain committed to pursuing new advertising campaigns and marketing promotions and increasing the number of fonts on the site as well as the number of font foundries selling their fonts through MyFonts.com. We have already made significant progress on this goal as the number of font foundries that have made sales through the site has increased from five in December 2000 to 54 in December 2001." Pageflex Results Revenues from the Company's Pageflex business increased $318,000 or 112% to $601,000 for the three months ended December 31, 2001 as compared to $283,000 for the three months ended December 31, 2000 excluding $436,000 in non-recurring engineering Non-recurring engineering (NRE) refers to the one-time cost of researching, designing, and testing a new product. When budgeting for a project, NRE must be considered in order to analyze if a new product will be profitable. revenue from a worldwide software development and licensing agreement with Xerox Corporation (company) XEROX Corporation - http://xerox.com/. See also XEROX PARC, XEROX Network Services. . Including the non-recurring engineering revenue from Xerox in revenue for the three months ended December 31, 2000, revenues from the Company's Pageflex business decreased $118,000 to $601,000 for the three months ended December 31, 2001 as compared to $719,000 for the three months ended December 31, 2000. Revenues from the Company's Pageflex business increased $565,000 or 38.7% from $1,460,000 for the year ended December 31, 2000 to $2,025,000 for the year ended December 31, 2001 excluding the $436,000 in non-recurring engineering revenue from Xerox Corporation described above, and $839,000 and $85,000 from non-recurring engineering and exclusivity fees related to the Company's NuDoc(TM) OEM relationship with Atex Media Solutions for the years ended December 31, 2000 and 2001, respectively. Including the non-recurring revenue from Xerox and Atex described above, revenues decreased $625,000 or 22.9% to $2,110,000 for the year ended December 31, 2001 as compared to $2,735,000 for the year ended December 31, 2000. Operating expenses for the three months ended December 31, 2001 decreased $374,000 or 24.4% to $1,156,000 as compared to $1,530,000 for the three months ended December 31, 2000. Operating expenses for the year ended December 31, 2001 decreased $1,350,000 or 22.2% to $4,726,000 as compared to $6,076,000 for the year ended December 31, 2000. Operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. decreased by $268,000 or 30.3% and $893,000 or 23.4% for the three months and one year ended December 31, 2001, respectively, as compared to the same periods ended December 31, 2000. Operating losses were $(616,000) and $(2,928,000) for the three months and one year ended December 31, 2001, respectively, and $(884,000) and $(3,821,000) for the three months and one year ended December 31, 2000, respectively. The decrease in loss from operations was primarily due to the decrease in expenses described above. "Revenues from sales of Pageflex products increased $213,000 or 101% as compared to the fourth quarter of 2000 evidencing our commitment to growing the Pageflex business overall through sales of products rather than through non-recurring engineering revenues," said Sang Lee, Vice President of Sales & Marketing for Pageflex. "On a quarter by quarter basis, Pageflex product revenues steadily increased throughout 2001 as the Pageflex customer base continues to grow. In October 2001, we restructured the Pageflex business to focus specifically on developing applications and delivering new products to the marketplace and reduced expenses accordingly. We believe this restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). will better position us to achieve profitability." On Wednesday, February 20, 2002, at 3.00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. , Bitstream will host a conference call with the financial community to discuss its fourth quarter and year-end results. Interested participants should call 1-800-781-0003 no sooner than ten minutes before the call begins. This press release may contain 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 statements are based on management's current expectations. Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties, including, without limitation, market acceptance of the Company's products, competition and the timely introduction of new products. Additional information concerning certain risks and uncertainties that would cause actual results to differ materially from those projected or suggested in the forward-looking statements is contained in the Company's filings with the Securities and Exchange Commission, including Bitstream'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, 2000. Bitstream Inc. Bitstream Inc. (Nasdaq:BITS) is the leading developer of font technology, digital fonts, and custom font designs. Bitstream licenses its award-winning TrueDoc and Font Fusion Bitstream Font Fusion is a small, fast, object-oriented font engine written in ANSI C capable of rendering high-quality text on any platform, any device, and at any resolution. The entire source code is portable, optimized, and executes independent of operating system and processor. technologies to Web and application developers, and to manufacturers of information appliances, wireless and handheld devices, set-top boxes, embedded systems Embedded systems Computer systems that cannot be programmed by the user because they are preprogrammed for a specific task and are buried within the equipment they serve. , and printers. Setting the standard for excellence in font technology, Bitstream holds numerous key patents that cover the creation of portable fonts for the 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 . Building on this experience, Bitstream is currently developing ThunderHawk, a breakthrough technology for the wireless Web. Pageflex, Inc. Pageflex, Inc. (www.pageflexinc.com) is a leading developer of dynamic page composition technologies for a wide variety of markets including Web-to-print, cross-media publishing, document customization and on-demand marketing. Pageflex licenses its award-winning products worldwide to Web-to-print companies, application service providers, 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. ) companies, and print service providers. The Company was established in 1999 as a wholly owned subsidiary of Bitstream Inc. MyFonts.com MyFonts.com, Inc., a venture funded by Bitstream Inc. and established as a wholly owned subsidiary in 1999, is a showcase of the world's fonts available from one easy-to-use Internet portal. It provides the largest collection of fonts ever assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. for on-line delivery, and offers easy ways to find and purchase fonts on-line, unique typographic See typography. resources, and a forum for interacting with font experts. For more information, visit http://www.myfonts.com, the Web site for finding, trying, and buying fonts on line. Bitstream and TrueDoc are registered trademarks and Font Fusion and ThunderHawk are trademarks of Bitstream Inc. Pageflex, Mpower and NuDoc are trademarks of Pageflex, Inc., a wholly-owned subsidiary of Bitstream Inc. MyFonts.com is a trademark of MyFonts.com, Inc., a wholly-owned subsidiary of Bitstream Inc. All other trademarks mentioned are for identification purposes only and may be trademarks of their respective owners.
Bitstream Inc.
Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
Three Months Ended Year Ended
December 31, December 31,
2001 2000 2001 2000
Revenues
Software licenses $ 2,072 $ 1,476 $ 6,859 $ 7,341
Services 283 612 1,109 1,641
Total revenues 2,355 2,088 7,968 8,982
Cost of revenues 311 295 1,427 1,393
Gross profit 2,044 1,793 6,541 7,589
Operating expenses
Selling and
marketing 726 871 2,927 3,680
Research and
development 1,260 1,200 5,044 4,821
General and
administrative 513 641 1,857 2,432
Total operating
expenses 2,499 2,712 9,828 10,933
Loss from operations (455) (919) (3,287) (3,344)
Other income (expense):
Loss on investment
in DiamondSoft, Inc. (41) (14) (260) (13)
Other income, net 35 108 233 463
Loss before
income Taxes (461) (825) (3,314) (2,894)
Provision for
income taxes 28 74 167 245
Net loss $ (489) $ (899) $ (3,481) $ (3,139)
Net loss per share:
Basic and diluted $ (0.06) $ (0.12) $ (0.43) $ (0.41)
Weighted average shares
outstanding:
Basic and diluted 8,214 7,771 8,069 7,738
Bitstream Inc.
Consolidated Balance Sheets
(In Thousands)
Dec. 31, Dec. 31,
2001 2000
ASSETS
Current assets:
Cash and cash equivalents $ 5,716 $ 7,149
Accounts receivable, net 679 2,043
Prepaid expenses and other current assets 122 198
Total current assets 6,517 9,390
Property and equipment, net 473 636
Restricted cash 300 300
Goodwill, net 727 1,196
Investment in DiamondSoft, Inc. 599 449
Other assets 223 136
------- -------
1,849 2,081
Total assets $ 8,839 $12,107
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 93 $ 261
Accrued expenses 1,126 1,287
Deferred revenue 610 471
Total current liabilities 1,829 2,019
Long-term deferred revenue 14 39
Total liabilities 1,843 2,058
Total stockholders' equity 6,996 10,049
Total liabilities and
Stockholders' equity $ 8,839 $12,107
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