Cumetrix Data Systems Corp. Announces Third-Quarter Results.CITY OF INDUSTRY, Calif.--(BUSINESS WIRE)--Feb. 16, 1999-- Cumetrix Data Systems Corp. (Nasdaq:CDSC See Contingent deferred sales charge. ), a national provider of distribution and systems configuration services, Tuesday Tuesday: see week. announced its third-quarter results for the periods ended Dec. 31, 1998. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the third quarter were $16,251,491, compared with $19,799,736 in the previous year. Net loss for the third quarter ended Dec. 31, 1998, was $110,006 ($.01 per share), compared with net income of $243,775 ($.05 per share) for the third quarter ended Dec. 31, 1997. The decrease in net income is mainly attributable to the decrease in sales, higher selling, general and administrative expenses, partially offset by interest income. Commenting on the quarterly results, Max Toghraie, chief executive officer of Cumetrix noted: "The results for the third quarter are reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of several operational as well as strategic initiatives undertaken during the period. Operationally, we successfully negotiated several manufacturer-supported distribution agreements and made progress in development of key customer relationships for such products." "We also began limited initial shipments of custom configured con·fig·ure tr.v. con·fig·ured, con·fig·ur·ing, con·fig·ures To design, arrange, set up, or shape with a view to specific applications or uses: systems and realized benefits of our transition into a higher margin product mix, which is evidenced by an increase of 10.7 percent in gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. from the previous quarter ended Sept. 30, 1998. The same transition also contributed to lower overall revenues as it resulted in reduced sale of lower margin products due to the company's unwillingness to compete for the lower margin business," Toghraie said. Commenting on the company's net loss, Toghraie added: "Third quarter marks a period in which we committed significant management time and resources to research, development and first stage implementation of our 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 strategy which led to our initial alliance and subsequent equity investment in Online Transaction Technologies (OTT OTT - Over the top. Excessive or uncalled for. ). "As part of this strategy, we have begun to form a wholly owned Internet subsidiary to focus on development of Internet-related ventures in domestic and emerging markets as well as the planned launch of our online store and auction Web sites currently scheduled for release in the fourth quarter. "Although the above factors contributed to increased expenses associated with development of the required infrastructure, we believe that they are vital in positioning the company to develop and operate a profitable model in this segment of the Internet economy The Internet Economy refers to conducting business through markets whose infrastructure is based on the Internet and World-Wide Web. An Internet economy differs from a traditional economy in a number of ways, including: communication, market segmentation, distribution costs, and price. ." Toghraie continued: "We are extremely pleased with our progress and the initial feedback as we approach full-scale full-scale adj. 1. Of actual or full size; not reduced: a full-scale model. 2. Employing all resources; not limited or partial: marketing phase of our Internet-related services. Internet-related investments in the third quarter, which expanded in the fourth quarter, underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. our ongoing commitment to development of our Internet-related subsidiary." Cumetrix Data Systems is a national provider of computer products, peripherals and configuration services. Using licensed proprietary software, the company has developed the Automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. Custom Systems Assembly (ACSA ACSA Association of Collegiate Schools of Architecture ACSA Association of California School Administrators ACSA Airports Company South Africa ACSA Apple Certified System Administrator ACSA Australian Curriculum Studies Association ) process to offer low-cost, high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. , accurate configuration solutions to its target domestic and international markets. The company has headquarters in City of Industry. With the exception of historical information, the matters discussed above include numerous 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. Actual results may vary substantially as a result of a variety of factors. Among the important factors that could cause actual results to differ are market conditions, including conditions in the Asian Markets; possible additional delays in the implementation of ACSA Services (including delays resulting from non-performance by Computer-Aided Computer-aided- or Computer-assisted- is a prefix that hints to the use of a computer as an indispensable tool in a certain field, usually derived from more traditional fields of science and engineering. Software Integration Inc. of its training and support obligations relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the ACSA Solution); possible delays in the implementation of the company's Internet strategy, including delays in the formation of the company's Internet-focused subsidiary; the potential continued oversupply o·ver·sup·ply n. pl. o·ver·sup·plies A supply in excess of what is appropriate or required. tr.v. o·ver·sup·plied, o·ver·sup·ply·ing, o·ver·sup·plies of computer components; the lengthy sales cycle for ACSA Services; market acceptance of the ACSA Services and the company's Internet strategy and the ability of the company to maintain gross revenues along with acceptable gross profit margins. These and other risk factors are discussed in the company's recent filings with the Securities and Exchange Commission 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. , filed on June June: see month. 30, 1998, and Form 10-Q Form 10-Q See 10-Q. to be filed on Feb. 16, 1999, and the reader is directed to these reports for a further discussion of important factors that could cause actual results to differ materially from the forward-looking statements set forth herein.
Cumetrix Data Systems Corp.
Statements of Income
(unaudited)
Three Months Ended
Dec. 31
1998 1997
Net sales 16,251,491 19,799,736
Cost of products 15,740,845 18,972,036
Gross profit 510,646 827,700
Selling, general and
administrative expenses 796,548 418,866
Income (loss) from operations (285,902) 408,834
Interest expense 1,894 12,625
Interest income 101,071 10,082
Income (loss) before provision
for income taxes (186,725) 406,291
Provision for income taxes (76,719) 162,516
Net income (loss) (110,006) 243,775
Earnings per share:
Basic (0.01) 0.05
Diluted (0.01) 0.05
Weighted average number of
common shares outstanding:
Basic 7,432,087 4,499,444
Diluted 7,432,087 4,633,792
Statements of Income
Nine Months Ended
Dec. 31
1998 1997
Net sales 54,084,126 49,175,291
Cost of products 52,592,335 47,100,756
Gross profit 1,491,791 2,074,535
Selling, general and
administrative expenses 1,898,243 1,029,504
Income (loss) from operations (406,452) 1,045,031
Interest expense 4,098 13,908
Interest income 421,738 10,723
Income before provision
for income taxes 11,188 1,041,846
Provision for income taxes 6,052 416,738
Net income 5,136 625,108
Earnings per share:
Basic 0.00 0.13
Diluted 0.00 0.13
Weighted average number of
common shares outstanding:
Basic 7,355,773 4,477,590
Diluted 7,581,973 4,555,984
Balance Sheets
Dec. 31, March 31,
1998 1998
(unaudited) (audited)
ASSETS
Current assets:
Cash 9,439,425 4,415,690
Trade receivables 3,951,435 3,885,803
Inventories 3,580,356 2,001,597
Deferred taxes 159,525 133,647
Prepaid expenses 186,172 45,983
Total current assets 17,316,913 10,482,720
Fixed assets, net 347,623 87,538
Deferred offering costs -- 514,927
Capitalized purchase
software costs 1,100,000 1,100,000
Investment 100,000 --
Total assets 18,864,536 12,185,185
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 6,012,887 7,822,652
Accrued expenses 115,012 641,844
Income taxes payable 6,102 717,013
Current portion of
long-term debt 3,962 1,203,707
Total current liabilities 6,137,963 10,385,216
Long-term debt, net
of current portion 5,860 8,864
Shareholders' equity 12,720,713 1,791,105
Total liabilities and
shareholders' equity 18,864,536 12,185,185
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