CONNECT Inc. Announces Third Quarter Earnings.MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Oct. 24, 1996--In its first quarter since going public, CONNECT 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 : CNKT), a leading provider of Internet-based interactive commerce and order management application software, today announced results for its third quarter ended Sept. 30, 1996. Third quarter revenues were $2,937,000 compared to revenues of $727,000 for the third quarter of 1995, an increase of over 300 percent. Net loss for the third quarter of 1996 was $3,965,000, a decrease when compared to a net loss of $4,033,000 for the third quarter of 1995. For the nine months ended Sept. 30, 1996 revenues were $6,925,000 compared to net revenues of $6,280,000 for the nine months ended Sept. 30, 1995. Net loss for the nine months ended Sept. 30, 1996 was $13,092,000 compared to a net loss of $11,134,000 for the same period of the prior year. In August 1996, CONNECT completed an initial public offering of 2,400,000 shares of Common Stock at $6.00 per share, generating 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). to the company of approximately $12.1 million. The public offering was lead-managed by Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. Inc. and co-managed by Volpe Volpe means "fox" in Italian. As a surname, it may refer to:
American writer known for her tales of rural Southern life. Her works include collections of stories, such as The Golden Apples (1949), and novels, notably The Ponder Heart (1954). Noun 1. & Company and UBS UBS Union Bank of Switzerland UBS United Bible Societies UBS United Blood Services UBS United Buying Service UBS Used Bookstore UBS University Business Services UBS Universal Building Society (UK) UBS Ulaanbaatar Broadcasting System Securities LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . Preceding the offer, CONNECT also received an equity investment of approximately $3 million from one of the company's prominent customers. "We are pleased with our financial results for the quarter and the fact that our customers are generating revenue on 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 using our software," said Tom Kehler, CONNECT president and 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. . "These results demonstrate our ability to create interactive commerce sites while delivering financial results to our plan. In addition, the number of industry awards our software has won in the last six months validates the strength of our technology and our ability to successfully direct the development and implementation process." Third Quarter Milestones During the third quarter, CONNECT brought several accounts to "live," potential revenue-generating status, including Fruit of the Loom Fruit of the Loom is an American company which manufactures clothing, particularly underwear. The company's world headquarters are based in Bowling Green, Kentucky. One manufacturing facility still remains in Jamestown, Kentucky, and several other facilities are located across the and Reader's Digest Reader's Digest U.S.-based monthly magazine. Founded by DeWitt and Lila Wallace, it was first published in 1922 as a digest of articles of topical interest and entertainment value condensed from other periodicals. . Fruit of the Loom selected the CONNECT OneServer(TM) software platform to develop an order management application that will foster commerce between the apparel maker and its Activewear business partners. This order management application provides Fruit of the Loom's Activewear distributors with branded World Wide Web sites, enabling their customers to order products around-the-clock a·round-the-clock adj. Variant of round-the-clock. Adj. 1. around-the-clock - at all times; "around-the-clock nursing care" day-and-night, round-the-clock, nonstop , seven days a week. CONNECT collaborated with Thomas Nicholson Thomas Nicholson is a health educator and epidemiologist.[1] He has coordinated the DRUGNET Study, an on-line survey of adult drug users.[2] He earned his M.P.H. in at the University of Texas School of Public Health and his Ph.D. Associates, a New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of City-based design and integration firm, to build the Reader's Digest Internet site that includes content, merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. and innovative family-oriented activities such as gardening and household maintenance. During the quarter, CONNECT received an Internet & Electronic Commerce Award at the Fall iEC Conference and Exhibition. CONNECT was recognized as the winner of the "New Media Marketing and Selling on the Internet" category for the business-to-business  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. solution developed for Fruit of the Loom. Entries were judged by Gartner Group (company) Gartner Group - One of the biggest IT industry research firms. Address: Connecticut, USA. analysts and InformationWeek editors who determined that CONNECT created the best solution for reaching new customers, opening new markets and demonstrating superior design and user friendliness. Also during the quarter, CONNECT initiated an international distribution strategy that initially focuses on Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia. The
company recently opened a sales office in London and is building a
European Europeanemanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. sales organization. In addition, CONNECT established a non-exclusive Pacific-Rim distribution agreement with Hitechniaga, a division of MBf, one of the Asia's largest financial institutions. The company is limiting and will continue to limit the extent to which it makes 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. . Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties include, without limitation, those mentioned in the company's prospectus dated Aug. 14, 1996, under "Risk Factors" and in particular the company's ability to implement its products, acceptance by the marketplace of the company's products and services and the company's ability to develop new products and services. About CONNECT Inc. CONNECT designs, develops, markets and supports industrial strength, scaleable application software for Internet-based interactive commerce. CONNECT's software and services are designed to reduce the time and overall cost for businesses to implement and maintain a secure sales, marketing and order capture capability on the World Wide Web to support large numbers of customers, products and transactions. The company's software supports key functions necessary for large-scale interactive commerce, including user registration, multimedia catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. and content management, dynamic merchandising, order capture and management, security, payment processing, enterprise integration and systems administration. CONNECT customers include: Compaq, Fruit of the Loom, Time Warner Time Warner Inc. (NYSE: TWX), formerly known as AOL Time Warner, is the world's largest media and entertainment conglomerate headquartered in New York City, with major operations in film, television, publishing, Internet service and telecommunications. , Reader's Digest, Ameritech, ENTEX, PhotoDisc, First Data Corporation, UniDirect and WOMEX. For more information, telephone 800/262-2638 or access the CONNECT World Wide Web site at http://www.connectinc.com. -0- Note to Editors: CONNECT is a registered service mark of CONNECT Inc. OneServer, OrderStream, The Virtual Sales Channel and StatusMinder are trademarks of CONNECT Inc. All other trademarks are property of their respective holders. -0-
CONNECT Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
1996 1995 1996 1995
------- ------- ------- --------
(unaudited)
Revenue:
License $ 1,227 $ 34 $ 2,738 $ 123
Service 1,710 693 4,187 6,157
Total revenue 2,937 727 6,925 6,280
Cost of revenue:
License 221 41 504 98
Service 2,084 842 6,382 4,218
Total cost of revenue 2,305 883 6,886 4,316
Operating expenses:
Research and development 1,372 1,834 3,598 3,342
Sales and marketing 2,678 984 7,786 2,278
General and administrative 643 774 1,864 2,768
Termination of distribution
rights 0 0 0 4,057
Total operating expenses 4,693 3,592 13,248 12,445
Loss from operations (4,061) (3,748) (13,209) (10,481)
Other income (expense) 96 (285) 117 (653)
Loss before income taxes (3,965) (4,033) (13,092) (11,134)
Benefit for income taxes 0 0 0 0
Net Loss $(3,965) $(4,033) $(13,092) $(11,134)
Net Loss per share $ (0.23) $ (0.23) $ (0.74) $ (0.63)
Shares used in computing
net loss per share 17,320 17,810 17,613 17,812
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Sept. 30, Dec. 31,
1996 1995
-------- --------
(unaudited)
Current assets
Cash and short term investments $ 17,035 $ 12,929
Accounts receiveable, net 1,732 1,009
Prepaids and other current assets 448 472
Total Current Assets 19,215 14,410
Property and equipment, net 3,507 3,263
Other assets 163 389
Total Assets $ 22,885 $ 18,062
Current Liabilities:
Accounts Payable and accrued expenses $ 4,702 $ 1,636
Current portion of long-term obligations 300 1,049
Deferred revenue 228 423
Total Current Liabilities 5,230 3,108
Long-term obligations 1,023 1,636
Stockholders' equity:
Common stock and paid-in capital 60,705 44,149
Deferred compensation (150)
Accumulated deficit (43,923) (30,831)
Total liabilities and stockholders equity $ 22,885 $ 18,062
CONTACT: CONNECT Inc. Joe Girata, 415/254-4000 |
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