Data Race Announces First Quarter FY 1997 Results.SAN ANTONIO--(BUSINESS WIRE)--Oct. 28, 1996--DATA RACE, Inc. (Nasdaq National Market: RACE) reported a loss of $1,381,000 for its first quarter ended Sept. 30, 1996 on $7,943,000 in revenue. For the comparable quarter of the prior year, the company reported a loss of $1,147,000 on revenue of $5,573,000. The 43 percent increase in revenue from the comparable quarter of the prior year was primarily a result of shipments of custom modems under contracts with NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98). NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. Technologies, Inc. and Texas Instruments See TI. (company) Texas Instruments - (TI) A US electronics company. A TI engineer, Jack Kilby invented the integrated circuit in 1958. Three TI employees left the company in 1982 to start Compaq. . 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. were 18 percent for the first quarter ended Sept. 30, 1996, down from 22 percent for the first quarter ended Sept. 30, 1995. The decrease was primarily due to the lower gross margins in the 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 modem modem [modulator/demodulator], an external device or internal electronic circuitry used to transmit and receive digital data over a communications line normally used for analog signals. business, which represented an increased proportion of revenue in the first quarter of fiscal 1997. During the first quarter of fiscal 1997, engineering and product development expenses increased 40 percent to $1,215,000 from $866,000 in the comparable quarter of the prior year, primarily due to increased development costs associated with the new telecommuter A person who telecommutes. See telecommuting. product line. Sales and marketing expenses decreased 2 percent during the first quarter of fiscal 1997 to $934,000 from $951,000 during the comparable quarter of the prior year. General and administrative expenses increased 9 percent to $703,000 during the first quarter of fiscal 1997 from $643,000 during the comparable quarter of the prior year, primarily due to a compensation accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. ; excluding this accrual, general and administrative expenses would have been 14 percent below the comparable period in the previous year. At Sept. 30, 1996, the company had $3.2 million in cash and cash equivalents, down from $4.0 million at June June: see month. 30, 1996. During the first quarter of fiscal 1997, strong sales of custom modems to notebook computer A laptop computer that weighs in a range from five to seven pounds. The term originated when laptops were routinely more than 10 pounds, and those that became lighter were placed in a special "notebook" category. In practice, notebook computer and laptop computer are synonymous. manufacturers more than offset a decline in sales of multi-media multiplexers compared to the prior quarter. These custom modem sales consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. most of the reported backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at June 30, 1996. The market for the company's custom modems continues to be characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by an increasing level of volatility. While the typical market life of a notebook computer is now six months, or less, the level of volatility within that period has also increased. Under existing contracts, a disproportionate dis·pro·por·tion·ate adj. Out of proportion, as in size, shape, or amount. dis  pro·por quantity of the units have been shipped in
the first months of production. As a result, much of the revenue
previously planned for the second quarter was recognized during the
first quarter.The company recently released the MACH BRouter Bridge/Router feature module for its MACH DS plus line of multi-media multiplexers. With the MACH BRouter, companies extending Ethernet Ethernet Telecommunications networking protocol introduced by Xerox Corp. in 1979. It was developed as an inexpensive way of sending information quickly between office machines connected together in a single room or building, but it rapidly became a standard computer local area networks to multiple sites over wide area networks are able to seamlessly combine routed LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. traffic with voice, fax, terminal server and other data traffic over the same digital link. This feature module is also packaged into the new NetEscort multiplexer See multiplexor and multiplexing. multiplexer - multiplexor line designed for companies needing routing capabilities integrated with voice and fax over a single link to smaller branch offices. In preparation for the introduction of its new Personal Multiplexer product line, over the past year, the company has worked with a small number of Fortune 100-class User Partners to help define the product requirements and evaluate the product's capabilities. In June, concept demonstration equipment was delivered to one of these User Partners. During the second fiscal quarter, the company intends to deliver beta test A test of new or revised hardware or software that is performed by users at their facilities under normal operating conditions. Beta testing follows alpha testing. Vendors of packaged software often offer their customers the opportunity of beta testing new releases or versions, and the equipment to large potential customers. If this program continues according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. plan, the company believes it could begin to realize revenue from these products as early as the middle of fiscal 1997. Dr. W.B. Barker barker a term for an animal that does not usually bark which makes a violent respiratory effort, often during a convulsion, accompanied by a sound which roughly resembles a dog's bark. , DATA RACE president and chief executive officer, commented, "This is an exciting time for DATA RACE, and if we can successfully overcome the challenges, this new product line has the potential to position DATA RACE as a leader in the emerging telecommuter market, which is predicted to be a multi-billion dollar market by the year 2000." Except for the historical information, this press release contains various "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. " which represent the company's expectations or beliefs concerning future events, including the company's ability to capture new custom modem contracts and maintain or increase shipments under existing contracts, the growth of the telecommuter market and the company's ability to address the needs of users within such market, and the company's ability to develop and release its telecommuter products on a timely basis and the timing of revenue from such products. The company cautions that these forward-looking statements involve a number of risks and uncertainties and are qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. Such factors include changing market trends and market needs; rapid or unexpected technological changes; new or increased competition from companies with greater resources than the company; inability to resolve technical issues or overcome other development obstacles; lack of adequate capital or inability to raise additional capital; and certain other factors set forth in the company's SEC filings, including the 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 fiscal 1996. The company's failure to succeed in its efforts, including the timely release of its telecommuter products, could have a material adverse effect on the company's financial condition and operations. About the Company DATA RACE, Inc. designs, manufactures and markets a line of communication products that meet the need for "Remote Access to the Corporate Environment." These products include modems for notebook computers that support data and fax connections, as well as voice connections through speakerphone speak·er·phone n. A telephone or telephone attachment that contains both a loudspeaker and a microphone, allowing several persons to participate in a call at the same time without the telephone receiver being held. Noun 1. and answering machine functions, sold primarily to manufacturers of notebook computers. Also included is a line of network multiplexers which carry terminal, LAN, voice and fax traffic between a company's branch and headquarters offices, over a broad range of wide area communications speeds and services. These networking products are sold through distributors, resellers and system integrators See systems integrator. throughout the world. The company is also developing a line of products for the telecommuter market that employ the company's modem and multiplexer technologies to allow the telecommuter access to the corporate LAN, intranet, voice and fax services. The products will provide the telecommuter with much of the functionality of three dedicated phone lines -- one each for voice, fax and data transmission -- over a single standard telephone connection. For more information about DATA RACE, please visit the company's web site at http:/www.datarace.com. -0- Note to Editors: DATA RACE and the DATA RACE logo are trademarks of DATA RACE, Inc. registered in the U.S. Patent and Trademark Office. FUTURE PROOF, MACH DS plus and NetEscort are trademarks of DATA RACE, Inc. -0-
DATA RACE, Inc.
STATEMENTS OF INCOME:
(in thousands, except per share data)
Quarter Ended
Sept. 30,
1996 1995
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Total Revenue $ 7,943 $ 5,573
Cost of Revenue 6,516 4,360
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Gross Profit 1,427 1,213
Engineering & Product Development 1,215 866
Sales & Marketing 934 951
General & Administrative 703 642
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Total Operating Expenses 2,852 2,459
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Operating Income (Loss) (1,425) (1,246)
Other Income/(Expense) 44 99
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Income (Loss) Before Income Taxes (1,381) (1,147)
Income Tax (Expense)/Benefit -- --
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Net Income (Loss) $(1,381) $(1,147)
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Net Income (Loss) Per Share $ (0.29) $ (0.25)
Weighted Average Shares Outstanding 4,754 4,661
BALANCE SHEETS: Sept. 30, June 30,
(in thousands) 1996 1996
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Cash and Short-term Investments $ 3,200 $ 3,991
Accounts Receivable, Net 2,640 2,035
Inventory 2,664 4,111
Other Current Assets 27 47
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Total Current Assets 8,531 10,184
Property and Equipment, Net 2,022 2,199
Other Assets, Net 112 112
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Total Assets $10,665 $12,495
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Current Liabilities $ 4,198 $ 4,539
Other Long-term Liabilities -- --
Shareholders' Equity:
Common Stock 24,272 24,380
Retained Earnings (Deficit) (17,805) (16,424)
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Total Shareholders' Equity 6,467 7,956
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Total Liabilities & Shareholders'
Equity $10,665 $12,495
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CONTACT: DATA RACE, Inc. W.B. Barker, 210/263-2200 barker@datarace.com or Greg GREG Great Egg Harbor National Scenic and Recreational River (US National Park Service) Skalla, 210/263-2208 skalla@datarace.com |
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