Cornerstone Imaging Sells Display Business: Cornerstone Imaging Changes Name to Input Software Inc.; Reports First Quarter 1998 Results.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--April 20, 1998-- -0- Quarterly highlights include: -- Announces management buy-out buy·out also buy-out n. 1. The purchase of the entire holdings or interests of an owner or investor. 2. The purchase of a company or business: of Display Division, 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). estimated at $10.7 million -- Corporate name changes to Input Software Inc., which remains a public company -- Display Division to continue to operate as a private company under the name Cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to Display Technology Inc. -- Former 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. van Overbeek Overbeek may refer to
orphan wanders streets of India with lama. [Br. Lit.: Kim] See : Adventurousness Hawley Hawley is a surname, and may refer to:
President and CEO of Input Software -- Software revenue for Q1 98 is $3.4 million, up 34% from Q1 97 -0- Cornerstone Imaging Inc. announced today that it has signed a letter of intent to sell its Display Division in order to focus solely on its emerging presence as a software provider. The sale, which is expected to close by June 30, 1998, will be made to a current management team led by John Noellert, general manager of the Display Division. Commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with the decision to focus as a software provider, Cornerstone will change its name to Input Software Inc. The Cornerstone name will be retained by the Display Division. Kimra Hawley, senior vice president and general manager of the software division, has been named president and chief executive officer of Input Software Inc. The sale of the Display Division is expected to net approximately $10.7 million to Input Software and result in a charge against earnings of approximately $2.6 million in the Q1 98 financials. Management Buy Out and Privatization privatization: see nationalization. privatization Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned of the Display Business Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs van Overbeek, chairman of Input Software and former CEO of Cornerstone Imaging, said: "For the past four years, Cornerstone's Display and Software Divisions have evolved in different directions, and today have divergent di·ver·gent adj. 1. Drawing apart from a common point; diverging. 2. Departing from convention. 3. Differing from another: a divergent opinion. 4. technologies, markets, management issues, operational issues, and growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. . As a result, we decided that the most prudent decision was to focus on the area of our business with the greatest future growth potential, which is software. "Over the past four years, we have grown our software business to the point where we are gaining greater customer recognition and market share. We believe this decision will enhance our position in the market as we focus on software exclusively. We also anticipate that this is a significant step toward generating greater shareholder value in the future." Proceeds from the sale of the Display Division will be used to accelerate the growth of the software business. Cornerstone's Software Division will be the ongoing public entity, operating under the new name Input Software Inc. The Display Division will be recapitalized as a private company, called Cornerstone Display Technology Inc. John Noellert, the current general manager of the Display Division will become the president and CEO of the new company. "The market for high bandwidth, large format displays is very large and growing. Cornerstone has more than ten years experience supplying high performance display technology and services to imaging professionals. The Display Division's management team remains intact and is committed to new product development, an expanded channel presence, and growing market share," he said. "I am very pleased that John Noellert and his team are taking the display business forward because it ensures continuity in our customer and employee relationships," said van Overbeek. "John has the right background to successfully lead the business and I have confidence in the success of Cornerstone Display Technology." Under the terms of the proposal, the company will sell certain assets and transfer certain liabilities associated with the Display Division. In addition, the company will retain certain assets, including accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and certain inventory. The value of the inventory will be realized by the company through the sale, on its behalf, of that inventory by Cornerstone Display Technology. The company estimates it will receive approximately a net $10.7 million for receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and inventory less transaction expenses and certain Display Division liabilities. The company will also hold a $1.5 million note, payable over three years, and a minority interest in Cornerstone Display Technology. The minority interest is subject to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. by Cornerstone Display Technology during the first two years for an additional $1.5 million. As a result of the pending transaction, the company will record a loss of approximately $2.6 million on Q1 98 financial statements. Hawley to Lead Input Software, Inc. Cornerstone entered the software business through the acquisition of Pixel pixel in full picture element Smallest resolved unit of a video image that has specific luminescence and colour. Its proportions are determined by the number of lines making up the scanning raster (the pattern of dots that form the image) and the resolution Translations in early 1994. Kim Hawley has been General Manager of Cornerstone's Software Division since that time and now becomes President and CEO of Input Software, Inc. Thomas van Overbeek, who has been Cornerstone's President and CEO for the past ten years and will become Chairman of Input Software, said, "Kim is the obvious choice to lead Input Software. She has built the business to over $12 million in revenue in 1997. During that time she has been instrumental in establishing InputAccel as the de facto standard Hardware or software that is widely used, but not endorsed by a standards organization. Contrast with de jure standard. de facto standard - A widespread consensus on a particular product or protocol which has not been ratified by any official standards body, such as ISO, for capture software by forging alliances with the leading systems providers, as well as the approximately 25 vendors who provide products compatible with InputAccel." John Finegan, the Company's current CFO See Chief Financial Officer. , will be CFO of Input Software. Kim Hawley said, "We are now exclusively a software company. The name Input Software Inc. communicates our focus on creating products to automate To turn a set of manual steps into an operation that goes by itself. See automation. and manage the information 'input' process, namely to accelerate the process of getting external information -- paper, fax, microfilm A continuous film strip that holds several thousand miniaturized document pages. See micrographics.  Microfilm and Microfiche , and electronic -- into enterprise computing Refers to information technology in the larger company. See enterprise data and enterprise networking. systems." Pixel Translations, a provider of software tools for imaging, will remain a wholly-owned subsidiary of Input Software, Inc. Q1 98 Results The financial statements have been reclassified to report separately the net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. and operating results of the discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: display operations. -0-
(Dollars in thousands, except EPS)
Q1:98 Q4:97 Q1:97
Summary from continuing software
operations:
Revenues $ 3,387 $ 3,593 $ 2,519
Gross margin 87% 92% 93%
Operating margin (3)% 8% (17)%
Net income (loss) $ 35 $ 296 $ (156)
EPS $ 0.01 $ 0.05 $ (0.02)
Cash $12,138 $12,284 $22,010
From discontinued display operations:
Revenues $16,510 $19,568 $23,495
Net income (loss) $ (361) $ (146) $ 1,211
Software revenues for Q1 98 of $3.4 million were up 34% from Q1
97 and down 6% from Q4 97. "Although Q1 is our seasonally softest
quarter, we experienced solid growth on a year-to-year comparison,"
said Hawley. "We added 18 new InputAccel customers during Q1 98
including Sprint Communications, ING Barings, and other large
corporations and governmental agencies worldwide. As we have seen in
previous quarters, many of our customers plan to deploy InputAccel in
enterprise-wide applications as it provides them a standardized way to
process and convert incoming information."
Software gross margin for Q1 98 was 87% compared to 93% in Q1 97
and 92% in Q4 97. Sales of InputAccel are resulting in increased
revenues for both software maintenance and professional services.
Gross margin on this portion of revenue is less than that associated
with product licensing revenues, resulting in decreased overall gross
margin for the Company.
Operating expenses were $3.1 million in Q1 98 compared to $2.8
million in Q1 97 and $3 million in Q4 97. The increase in expenses is
attributable to additional staffing in sales.
Net income from continuing operations was $35,000, or one cent
per share, in Q1 98 compared to a net loss of $156,000, or two cents
per share, in Q1 97 and a net income of $296,000, or 4 cents per share
in Q4 97.
The sale and discontinuation of the Display Division results in a
charge against earnings of approximately $2.6 million, or 41 cents per
share, that is included in the Q1 98 financial statements. This charge
includes a loss from Q1 98 operations, net of tax benefit, of $361,000
on revenues of $16.5 million. In addition, it includes an estimated
loss of $2.3 million, net of tax benefit, on the sale of the net
assets of the Display Division. This loss includes expenses related to
the pending transaction and a reduction in value of certain inventory
which is not strategic to the new display business.
Net loss for Q1 98, combining both continued and discontinued
operations, was $2.6 million compared to net income of $1.1 million in
Q1 97.
The cash balance at March 31, 1998 was $12.1 million, essentially
unchanged from Dec. 31, 1997. During the first quarter the company
repurchased $2.1 million of its stock and expects to continue with the
repurchase program, as conditions warrant, in the second quarter. Net
assets of the discontinued display operations have been classified
separately and are stated on the balance sheet at the estimated
realizable value of $10.7 million.
More About Input Software, Inc.
To date, the enterprise computing systems that enable significant
productivity improvements have focused on processes internal to
organizations. Sales automation, help desk systems, and manufacturing
processes are examples. These systems work well because organizations
can require that their employees all utilize the same software
applications and communicate in a way compatible with these
applications.
However, processes involving external entities, like customers or
suppliers, have been slow to benefit from this technology because
external entities are unlikely to provide data in a format existing
computer systems can easily handle. Paper and fax are two examples.
Suppliers mail paper invoices. Customers fax in order forms; send in
mortgage loan applications; mail a medical claim; send letters to
complain, congratulate, enter a contest, or simply change their
address. If organizations want to extend the benefits of technology to
include these external relationships, they must overcome the barrier
posed by external information.
Bridging the gap between the external and internal processing
worlds is what Input Software does. InputAccel, our flagship product,
lets organizations integrate incoming documents -- paper, fax, even
microfilm -- with their enterprise computing systems, thereby
extending the benefits of the digital world to include hard copy data.
It's a client/server software application that
-- Recognizes incoming information
-- Validates that the information is correct within the context of
existing systems
-- Transforms the information to a format installed systems can
understand, without requiring any changes to those systems.
And because no two organizations' problems are exactly the same,
InputAccel is an open architecture product based on Windows/NT and is
extraordinarily flexible and customizable. Because Input/Accel meets
such a wide range of input needs, dozens of vendors have now created
InputAccel-compatible products.
As a result, InputAccel is emerging as a defacto standard way to
address the information input requirements of many vertical market
applications. It provides Global 1000 and governmental agencies a way
to standardize, enterprise-wide, on a single document input
architecture, yet retain the ability to customize and expand the
system as needs dictate.
For example, today the U.S. Government Patent and Trademark
Office (PTO) is using InputAccel to process patent applications.
During 1998, the PTO plans to extend their usage of InputAccel to
process incoming accounts payable documentation. BASF in Germany uses
it to process human resources documents. And Excel Communications uses
InputAccel to speed processing of new business applications.
"By resolving the hard copy problem InputAccel provides a
critical bridge for organizations needing to enter the digital age,"
said Kimra Hawley. "With our new focus as a software company and the
strength of the InputAccel product, we envision a very bright future
for Input Software Inc."
Cornerstone, headquartered in San Jose, CA, is a publicly held
company traded on the Nasdaq under the CRNR symbol. Visit the
Cornerstone Web Site at http://www.corimage.com.
This press release contains forward-looking statements that
involve risk and uncertainties. The Company's actual result may differ
materially from the results discussed in the forward-looking
statements. Factors that might cause such a difference include, but
are not limited to, those discussed in "Risk Factors" in the Company's
1997 Annual Report on Form 10-k as well as the following: the
emergence of the document management and image processing and markets,
potential fluctuations in quarterly results, competition, new products
and technological change, general economic conditions and dependence
on capital spending of customers, a lengthy sales cycle and dependence
on systems sales, inherent risks associated with international sales,
reliance on third-party resellers and dependence on key personnel. In
addition, the letter of intent for the sale of the Display Division is
subject to many closing conditions, some of which are outside the
control of the Company. Accordingly, the failure to satisfy any of
these may result in the sale not taking place on the terms described
in this press release or may not take place at all.
-0-
For more information on Cornerstone Imaging Inc. via fax, dial 800/PRO-INFO, code 045. CORNERSTONE IMAGING, INC CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended March 31, 1998 1997 Net revenues of continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the $ 3,387 $ 2,519 Cost of revenues 425 171 Gross profit 2,962 2,348 Research and development 1,072 1,172 Sales, general, and administrative 1,983 1,599 Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (loss) (93) (423) Interest income/other 144 186 Pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. (loss) 50 (237) Benefit (provision) for income taxes 15 (81) Net income (loss) From continuing operations $ 35 $ (156) Net income (loss) from operations of Discontinued Display Division (361) 1,211 Estimated net loss on sale of Display Division (2,284) -- Net income (loss) $(2,610) $ 1,055 Basic & 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. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. : For continuing operations $ .01 $ (0.02) For discontinued Display Division $ (.41) $ .16 Shares used in basic EPS calculation 6,375 7,508 Shares used in diluted EPS calculation 6,394 7,577 CORNERSTONE IMAGING INC. CONSOLIDATED BALANCE SHEETS consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. (UNAUDITED, IN THOUSANDS) March 31, 1998 Dec. 31, 1997 ASSETS Current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. : Cash and cash equivalents $12,138 $12,284 Accounts receivable 2,768 2,946 Deferred income taxes and other current assets Other Current Assets A balance sheet item that includes the value of non-cash assets due within one year. Notes: Examples are things like prepaid expenses and accounts receivable. 5,499 5,521 Total current assets 20,405 20,751 Property and equipment, net 900 1,056 Other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. 424 424 Net assets related to the discontinued Display Division 10,713 15,642 ------ ------ $32,442 $37,693 LIABILITIES AND STOCKHOLDERS' EQUITY Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. Current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. : Accounts payable $374 $463 Deferred revenue 783 654 Accrued liabilities Accrued liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. 2,310 2,653 Total current liabilities 3,467 3,770 Stockholders' equity: Common stock 63 67 Paid in capital 22,413 24,747 Retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. 6,499 9,109 Stockholders' equity 28,975 33,923 ------ ------ $32,442 $37,693 Note: Dec. 31, 1997 reclassified to reflect separately assets of discontinued display division CONTACT: Cornerstone Imaging Inc. Thomas van Overbeek or Kim Hawley, 408/435-8900 or Financial Relations Board, San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden Betsy Truax, 208/233-8323 Catherine Roberts, 415/986-1591 |
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