ILOG Reports Results for Quarter Ended December 31, 1998.PARIS--(BUSINESS WIRE)--Jan. 28, 1999--ILOG S.A. (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 NMS See NetWare Management System. : ILOGY and EURO.NM: ILOG), the world's leading provider of software components, today reported revenues of $18.3 million for its second fiscal quarter of 1999, ended December 31, 1998 -- an increase of 20% compared to $15.3 million in the same quarter of the prior year. Income from operations before one-time charges was $1.3 million, compared to $1.6 million in the previous year. Earnings per share, excluding the one-time charges, was $0.09 for the December 1998 quarter compared to $0.10 in the December 1997 quarter. The loss per share in the latest quarter was $0.08, compared to earnings per share of $0.01 in the prior year after including the one-time charges associated with the write off of software and intangibles acquired from CPLEX Optimization, Inc. One-time charges in the December 1998 quarter were the write off of software under development acquired from Oasis Software, Inc., of $1.8 million, and $0.5 million of expenses incurred in connection with the listing of the Company's shares on the Paris Nouveau Marche Nouveau Marche An equity market unit of the Paris Bourse that deals solely in innovative, high-growth companies. (EURO.NM), which resulted in a net loss for the quarter of $1.1 million. "This quarter was ILOG's best revenue quarter to date," said Pierre Haren, ILOG's 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. . "We were able to achieve a license fee revenue growth of 26% despite weakness in license and consulting revenues in our U.S. transportation business. In the short term, this continuing U.S. transportation weakness, together with the reported Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 related worldwide softening of the supply chain management industry may cause the year-over-year growth rate for the March 1999 quarter to be similar to the year-over-year growth rate in the December 1998 quarter. "We continued our R&D efforts in order to expand our addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be markets. The technology acquisition from Oasis was praised by industry analyst firm AMR (1) (Adaptive Multi-Rate) A variable rate speech codec selected by the 3GPP for the 3G evolution of the GSM cellphone system (WCDMA). Using the Algebraic CELP (ACELP) compression technology, AMR provides toll quality sound at transmission rates from 4.75 to 12. Research, which called it a natural extension of ILOG's strategy," added Mr. Haren. Business Developments During the Quarter ILOG further consolidated its position in telecommunications network A telecommunications network is a of telecommunications links and nodes arranged so that messages may be passed from one part of the network to another over multiple links and through various nodes. management and manufacturing. In the telecommunications sector, the company introduced a new Java version of ILOG TGO TGO Togo (ISO Country code) TGO Tarifverbund Ortenau GmbH (German) TGO The Great One (Wayne Gretzky) TGO Toxic Gas Ordinance TGO Total Gross Output (Telecom Graphic Objects) and other new Java products within its visualization and other product lines. These advanced new Java products are well positioned to help ILOG capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. fast-growing demand for web-enabled solutions. During the quarter, ILOG signed agreements with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) (NYSE NYSE See: New York Stock Exchange : IBM) and other companies for its ILOG TGO family, and received additional business from existing customers including Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. (NASDAQ: CSCO CSCO Cisco Systems Incorporated (stock symbol) CSCO Chief Supply Chain Officer ) and Alcatel (NYSE: ALA). During the quarter, ILOG announced an increase in multiple-product licenses, such as an agreement with American Management Systems American Management Systems (previous NASDAQ symbol: AMSY) was founded in 1970 as a technology and management consulting firm. It was founded by a group of five former United States Department of Defense officials who worked under Robert McNamara in the Kennedy and Johnson (NASDAQ: AMSY AMSY American Management Systems, Inc (stock symbol) ), as well as a corporate-wide license for all ILOG products for the 1,000 developers within Telefonica Group, the largest supplier of telecommunications services in the Spanish-speaking world. In the manufacturing sector, the Company continued its leadership in the area of optimization components used within supply chain management (SCM (1) (Software Configuration Management, Source Code Management) See configuration management. (2) See supply chain management. ) applications. New agreements were signed with UK-based company Enterprise Software Systems, Cybertec in Italy and Ford (NYSE: F) in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The attention ILOG has received through its relationships with market leaders such as SAP (NYSE: SAP), JD Edwards See J.D. Edwards. (NASDAQ: JDEC JDEC Joint Data Exchange Center (US/Russian missile warning) JDEC Joint Document Exploitation Center (US DoD) ), i2 Technologies (NASDAQ: ITWO ITWO I2 Technologies (stock abbreviation, AMEX) ) and Manugistics (NASDAQ: MANU) helped its SCM business. Called "the indisputable world leader in optimization software Free and Open Source software
In the transportation sector outside the United States, ILOG components were again chosen to help address two major industry needs -- for real-time system monitoring A System Monitor (SM) is a process within a distributed system for collecting and storing state data. There are many issues involved with designing and implementing a system monitor. , as well as optimizing the management of personnel and vehicles. Sales in the quarter were made to Aena, Air France, Singapore Aeradio, Smith System Engineering and the U.S. leader, The SABRE Group (NYSE: TSG TSG The Smoking Gun (web site) TSG Technology Services Group (UK) TSG Technical Specification Group TSG Timing Signal Generator TSG Technical Support Group TSG Tumor Suppressor Gene TSG ThermoSalinoGraph ) for air transportation applications, and to a number of bus transportation providers in Spain for optimization applications. In December, ILOG successfully completed the listing of its shares on the Paris Nouveau Marche, which is part of the EURO.NM stock market. This has increased the Company's visibility in the financial community and has simplified trading for European investors while supplementing the Company's NASDAQ listing in the United States. About ILOG ILOG is a leading provider of advanced C, C++ and Java software components for advanced graphics and resource optimization. ILOG products deliver high-performance data visualization for 2-D and 3-D user interfaces; integer, linear and constraint solvers for resource optimization, scheduling, logistics and planning applications; dynamic rule systems for intelligent agents and real-time data flow control, and components for integrating modules with real-time and relational data sources. ILOG was founded in 1987 and now employs approximately 460 people in seven countries. Visit www.ilog.com for additional information.
ILOG S.A.
Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
Three Months Ended Six Months Ended
Dec. 31 Dec. 31 Dec. 31 Dec. 31
1998 1997 1998 1997
Revenues:
License fees $11,983 $ 9,532 $19,886 $14,861
Services 6,330 5,725 11,726 8,967
Total revenues 18,313 15,257 31,612 23,828
Cost of revenues
License fees 262 303 477 568
Services 3,876 3,015 7,059 4,710
Total cost of
revenues 4,138 3,318 7,536 5,278
Gross profit 14,175 11,939 24,076 18,550
Operating expenses
Marketing and
selling 8,777 7,310 15,048 12,905
Research and
development 2,524 1,664 4,763 2,987
General and
administrative 1,596 1,412 3,522 2,707
Nouveau Marche
expenses 466 - 466 -
Write-off of acquired
intangibles 1,847 1,327 1,908 29,694
Total operating
expenses 15,210 11,713 25,707 48,293
Income (loss) from
operations (1,035) 226 (1,631) (29,743)
Net interest income
(expense) and other (87) (110) (471) (82)
Net income (loss) $(1,122) $ 116 $(2,102) $(29,825)
Net income (loss)
per share -
basic & diluted $ (0.08) $ 0.01 $ (0.15) $ (2.43)
Share and share
equivalents used
in per share
calculations 13,973 14,289 13,927 12,252
ILOG S.A.
Condensed Consolidated Balance Sheets (unaudited)
(in thousands)
Dec. 31, June 30,
1998 1998
Assets
Current assets
Cash and cash equivalents $14,838 $20,101
Accounts receivable 21,483 15,328
Other receivables and prepaid expenses 5,143 4,370
Total current assets 41,464 39,799
Property and equipment-net and other assets 4,466 3,850
Total assets $45,930 $43,649
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable and accrued expenses $12,309 $10,772
Current debt 1,483 2,055
Deferred revenue 5,166 5,044
Total current liabilities 18,958 17,871
Long-term portion of debt 6,181 5,979
Total liabilities 25,139 23,850
Shareholders' equity
Paid-in capital 61,760 60,296
Accumulated deficit and currency
translation adjustment (40,969) (40,497)
Total shareholders' equity 20,791 19,799
Total liabilities and
shareholders' equity $45,930 $43,649
Discussion of Financial Highlights Six-Month Results The company reported revenues of $31.6 million for the six months ended December 31, 1998, an increase of 33% compared to $23.8 million in the prior year. Excluding the one-time write offs of acquired intangibles (CY 1998 and 1997) and Nouveau Marche listing expenses (CY 1998) totaling $2.4 million and $29.7 million in CY1998 and 1997, respectively, the income from operations for the six-month period was $0.7 million compared to a $49,000 loss in the corresponding period of the prior year. Earnings per share for the six-month period, excluding the one-time write offs, was $0.02, compared to a $0.01 per share loss in the corresponding period of the prior year. The loss per share in the six-month period was $0.15 compared to $2.43 in the corresponding period of the prior year after including the write offs. Revenues and Gross Margin Revenues in the quarter grew by 20%, with license and service revenues increasing by 26% and 11%, respectively, over the same period in the preceding year. The revenue growth was derived from license fees in North America and Europe, and from consulting and support activities in Europe and Asia. Overall gross margin for the quarter declined to 77% from 78% in the same period of the preceding year due to lower capacity utilization of consulting resources in North America. 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. Marketing and selling expenses for the quarter increased by 20% over the same period in the prior year, reflecting continuing investment in the sales and marketing organization. Research and development expenses for the quarter, net of government funding, increased by 52% over the same period in the prior year, reflecting R&D headcount growth from 59 to 90 between December 31, 1997 and December 31, 1998 and is related to the growth in ILOG product offerings over the last year. Government research and development funding in the quarter was $274,000 compared to $183,000 for the same period in the preceding year. General and administrative expenses for the quarter increased by 13% over the same period in the prior year. $466,000 of one-time expenses were incurred during the quarter in connection with the Company's listing on the Paris Nouveau Marche stock exchange. The write off of acquired intangibles for the quarter totaling $1.8 million primarily represents research and development acquired from Oasis Software, Inc., which will form the core of a new version of an ILOG optimization product to be launched this year. Other Income (Expense) Net interest and other income (expense) for the quarter decreased from $(110,000) to $(87,000) over the same period in the prior year due to currency fluctuations. However, currency fluctuations did not have a material effect on the company's income from operations, net income or earnings per share for the quarter ended December 31, 1998. Balance Sheet Cash at December 31, 1998 decreased to $14.8 million from $20.1 million at June 30, 1998. This reflected $1.8 million paid in connection with the acquisition of software acquired from Oasis Software, Inc., $0.5 spent in connection with the Company's Nouveau Marche listing and the timing of operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. . Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). of receivables improved to 106 days at December 31, 1998, compared to 107 days at September 30, 1998. The length of receivables reflects longer payment terms offered to certain strategic customers. Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. during the six-month period increased from $6.0 million to $6.2 million at December 31, 1998. Shareholders' paid-in capital Paid-in capital Capital received from investors in exchange for stock, but not stock from capital generated from earnings or donated. This account includes capital stock and contributions of stockholders credited to accounts other than capital stock. during the six-month period increased by $1.5 million to $61.8 at December 31, 1998, reflecting the purchase of shares by employees under the Company's stock option and share purchase plans. At December 31, 1998, the Company had 14.0 million shares issued and outstanding compared to 13.7 million at June 30, 1998. Prior Year Comparative Data ILOG's results of operations for the quarter and six months ended December 31, 1997 and the balance sheet as of June 30, 1998 have been restated to include those of Compass Modeling Solutions, Inc., which was acquired in August 1998 and accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. . For the quarter and six months ended December 31, 1997, Compass had net revenues of $238,000 and $366,000, respectively, and profits of $82,000 and $85,000, respectively. Forward-Looking Information This release contains "forward-looking" information within the meaning of the United States Securities laws that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, without limitation, the economic, political and currency risks associated with the company's European, North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and Asian operations, the timing and seasonality of significant revenues and those risks and uncertainties mentioned under "Risk Factors" in the Company's Form 20-F for the year ended June 30, 1998, which is on file with the United States Securities and Exchange Commission. ILOG and CPLEX are registered trademarks of ILOG. All other product and company names are trademarks or registered trademarks of their respective owners. Results and Press Release for French Shareholders A translation of this press release in the French language and with the financial statements expressed in French Francs is also available. |
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