ILOG Reports Results for the Quarter Ended September 30, 1998.PARIS Paris, in Greek mythology Paris or Alexander, in Greek mythology, son of Priam and Hecuba and brother of Hector. Because it was prophesied that he would cause the destruction of Troy, Paris was abandoned on Mt. , France--(BUSINESS WIRE)--October 21, 1998--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), a leading provider of advanced software components, today reported revenues of $13.3 million for the quarter ended September 30, 1998, an increase of 55% compared to $8.6 million in the September 1997 quarter. These results reflect higher revenues from both license fees and services, which grew by 48% and 66% respectively over the same quarter in the preceding year. The loss from operations was $0.6 million in the September 1998 quarter, compared to $1.6 million before the write-off of acquired intangibles of $28.4 million, related to the CPLEX acquisition in the September 1997 quarter. Loss per share for the September 1998 quarter was $0.07 on 13.9 million shares, compared to a loss per share of $2.57, or $0.13 before the write-off of acquired intangibles, on 11.7 million shares in the September 1997 quarter. Business developments during the quarter "I am pleased to report another successful quarter from ILOG" 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 have been able to maintain a high growth rate and improve our bottom-line in a seasonally weak quarter, and we are strengthening the position of the Company in terms of both competitiveness and market share". During the quarter, the Company experienced some impact of the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. sales reorganization started in the June quarter due to the Company's typical three to six month selling cycle; the revenue effect of this reorganization was, however, mitigated by ISV (Independent Software Vendor) A person or company that develops software. It implies an organization that specializes in software only and is not part of a computer systems or hardware manufacturer. business strength. In the quarter, the Company further consolidated its position in visualization Using the computer to convert data into picture form. The most basic visualization is that of turning transaction data and summary information into charts and graphs. Visualization is used in computer-aided design (CAD) to render screen images into 3D models that can be viewed from all for telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. network management and optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. for manufacturing, and made significant inroads inroads Noun, pl make inroads into to start affecting or reducing: my gambling has made great inroads into my savings inroads npl to make inroads into [+ in the transportation sector. In the visualization for telecommunication network management business, existing ISVs such as Atlantech in the UK are migrating from ILOG Views to 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 , and the visualization suite has been selected for network management projects at 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. and Mitsubishi Electric Mitsubishi Electric Corporation (三菱電機株式会社 , and is under evaluation at ATT ATT ammonia tolerance test. and Lucent. After the release of JTGO JTGO JViews Telecom Graphic Objects , a Java version of TGO, plus a major new version of ILOG JViews, ILOG's visualization suite is now fully available in both C++ and Java and is an attractive proposition in this market. Further, the Company's visualization suite was well received at the recent TeleManagement World conference in Dallas. Beyond the visualization domain, significant ISV agreements for incorporating ILOG Rules for alarm correlation and customer billing in the telecommunication industry were also announced during the quarter with Bull, Compaq/Digital and LHS (filename extension) lhs - The filename extension for literate Haskell source files. . In manufacturing, the Company strengthened its position in the steel industry, with orders from Sollac and Nippon Steel. Also second tier supply chain management vendors such as Dynasys in France are starting to embed em·bed also im·bed v. em·bed·ded, em·bed·ding, em·beds v.tr. 1. To fix firmly in a surrounding mass: embed a post in concrete; fossils embedded in shale. ILOG optimization and visualization technologies in their next generation of products. Such companies, although less well known, represent an interesting market for ILOG. In the transportation industry, ILOG components are used successfully to solve two major problems this industry faces: the real-time monitoring of systems as well as the optimization of the management of personnel and vehicles. Sales in the quarter were made to Airbus Industrie, Alitalia, BMW BMW in full Bayerische Motoren Werke AG German automaker. Founded as an aircraft engine manufacturer in 1916, the company assumed the name Bayerische Motoren Werke and became known for its high-speed motorcycles in the 1920s. - Rolls Royce Rolls Royce the millionaire’s vehicle. [Trademarks: Brewer Dictionary, 928] See : Luxury , Malaysian Airways airways Anatomy The 'pipes'–trachea, bronchi, bronchioles–through which air passes to and from the alveoli. See Small airways. and Qantas for air transportation applications, to CSEE CSEE Council for Spiritual and Ethical Education CSEE Conference on Software Engineering Education CSEE Central and Southeastern Europe CSEE Corporate Systems Engineering Environment (USACE) CSEE Common Software Engineering Environment Transport for subway subway: see rapid transit. subway Underground railway system used to transport passengers within urban and suburban areas. The first subway line, 3. monitoring, CGEA CGEA Community General Export Authorisation (UK) CGEA Canadian Geothermal Energy Association CGEA Compagnie des Grands Express Aériens (Grand Express Air Company, France) for bus monitoring, Dalian Port in China for harbor supervision, Tussam, a Spanish bus company for personnel planning, Korean Railways for train scheduling and to LG-Caltex Oil in Korea for oil tanker scheduling. This business brings revenue, but more importantly, these endorsements position ILOG's offerings as engines for supervision and optimization systems in the transportation industry. In order to reach a larger market with its optimization product line, ILOG has recently unveiled a new modeling environment named "OPL OPL Open Publication License OPL Olympus Product Line (Sun) OPL outer plexiform layer OPL Organiser Programming Language (PSION) OPL On-Premise Laundry OPL Optical Path Length OPL Open Public License Studio" which simplifies the development of constraint Constraint A restriction on the natural degrees of freedom of a system. If n and m are the numbers of the natural and actual degrees of freedom, the difference n - m is the number of constraints. based applications. This product extends to non-programmers the benefits of constraint programming Constraint programming is a programming paradigm where relations between variables can be stated in the form of constraints. Constraints differ from the common primitives of other programming languages in that they do not specify a step or sequence of steps to execute but rather . The environment allows a user to simply state the equations describing his or her problem and delegate A person who is appointed, authorized, delegated, or commissioned to act in the place of another. Transfer of authority from one to another. A person to whom affairs are committed by another. A person elected or appointed to be a member of a representative assembly. to the OPL Studio environment the task to solve them using the underlying ILOG Solver Ilog Solver - A commercial constraint programming system. , ILOG Scheduler and ILOG Planner libraries. 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 See information visualization. for 2D and 3D user interfaces; integer integer: see number; number theory , 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 440 people in seven countries. Visit www.ilog.com for additional information. -0-
ILOG S.A.
Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
Three Months Ended
Sept. 30 Sept. 30
1998 1997
Revenues:
License fees $7,903 $ 5,329
Services 5,396 3,242
Total revenues 13,299 8,571
Cost of revenues
License fees 223 266
Services 3,176 1,694
Total cost of revenues 3,399 1,960
Gross profit 9,900 6,611
Operating expenses
Marketing and selling 6,271 5,595
Research and development 2,239 1,323
General and administrative 1,926 1,295
Write-off of acquired intangibles 61 28,367
Total operating expenses 10,497 36,580
Loss from operations (597) (29,969)
Net interest income (expense) and other (384) 28
Net loss $ (981) $ (29,941)
Net loss per share $ (0.07) $ (2.57)
Share and share equivalents used
in per share calculations 13,876 11,661
ILOG S.A.
Condensed Consolidated Balance Sheets (unaudited)
(in thousands)
Sept. 30 June 30
1998 1998
Assets
Current assets
Cash and cash equivalents $ 19,649 $ 20,101
Accounts receivable 15,817 15,328
Other receivables and prepaid expenses 5,146 4,370
Total current assets 40,612 39,799
Property and equipment-net and other assets 4,192 3,850
Total assets $ 44,804 $ 43,649
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable and accrued expenses $ 10,094 $ 10,772
Current debt 2,106 2,055
Deferred revenue 4,955 5,044
Total current liabilities 17,155 17,871
Long-term portion of debt 5,987 5,979
Total liabilities 23,142 23,850
Shareholders' equity
Paid-in capital 61,639 60,296
Accumulated deficit and currency translation
adjustment (39,977) (40,497)
Total shareholders' equity 21,662 19,799
Total liabilities and shareholders' equity $ 44,804 $ 43,649
Discussion of Financial Highlights Revenues and Gross Margin Revenues in the quarter grew by 55% over the same quarter in the previous year reflecting growth in ISV revenues. Overall gross margin for the quarter decreased to 74% from 77% for the same period in the preceding year due to lower consulting margins. 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 12% over the same period in the prior year. Research and development expenses, net of government funding, for the quarter increased by 69% over the same period in the prior year primarily due to the expansion of the Company's product offerings over the last year. General and administrative expenses for the quarter increased by 49% over the same period in the prior year reflecting continuing augmentation AUGMENTATION, old English law. The name of a court erected by Henry VIII., which was invested with the power of determining suits and controversies relating to monasteries and abbey lands. of the Company's reserve for doubtful accounts. The write-off of acquired intangibles for the quarter decreased from $28.4 million to $61,000 over the same period in the prior year reflecting the one time nature of this expense in the prior year in connection with the acquisition of CPLEX in August 1997. Other Income (expense) Net interest and other income (expense) for the quarter decreased from $28,000 to $(384,000) over the same period in the prior year reflecting an exchange rate loss of $317,000 on intercompany indebtedness, and interest expense arising on the $5.0 million of notes payable issued in the prior year in connection with the CPLEX acquisition. Balance Sheet Cash at September 30, 1998 decreased to $19.6 million from $20.1 million at June 30, 1998. 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 at September 30, 1998 represented 107 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). compared to 96 days in the prior year. The increase reflects longer payment terms offered to certain strategic customers over the last six months. 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. increased by $1.3 million to $61.6 at September 30, 1998 reflecting the purchase of shares by employees under the Company's stock option and share purchase plans. At September 30, 1998 the Company had 14.0 million shares issued and outstanding compared to 13.7 million at June 30, 1998. Compass Acquisition On August 31, 1998 the Company acquired Compass Modeling Solutions, Inc. (Compass) for 51,852 ILOG shares, which acquisition has been 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. . Accordingly, ILOG's results of operations for the quarter ended September 30, 1997 and the balance sheet as of June 30, 1998 have been restated to include those of Compass. For the quarter ended September 30, 1997 Compass had net revenues of $128,000 and a profit of $3,000. Forward Looking Information This release contains "forward looking" information within the meaning of 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. 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 and Asian operations, the impact of the recently completed sales personnel reorganization, 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 For the benefit of our French shareholders a translation of this announcement is also being sent to our shareholders with French addresses of record and to anyone else upon request. In addition, to facilitate their comprehension comprehension Act of or capacity for grasping with the intellect. The term is most often used in connection with tests of reading skills and language abilities, though other abilities (e.g., mathematical reasoning) may also be examined. of the Company's financial results the foregoing financial statements, which are prepared under accounting principles generally accepted in the United States, have been translated into French Francs at the average historical exchange rates for the related periods and the exchange rates at the relevant balance sheet dates. These translated financial statements for the benefit of shareholders generally follow below. -0-
ILOG S.A.
Donnees Financieres
Consolidees Clefs (non auditees) (Montants en
milliers de francs francais, sauf nombre
d'actions et donnees par action)
Trimestre clos le 30 Sept.
1998 1997
Chiffre d'affaires
Logiciels 47,256 32,151
Services 32,266 19,559
------- ------
Total chiffre d'affaires 79,522 51,710
------- ------
Prix de revient des ventes
Logiciels 1,333 1,604
Services 18,991 10,222
------- ------
Total prix de revient des ventes 20,324 11,826
------- ------
Marge Brute 59,198 39,884
------- ------
Frais generaux et commerciaux
Frais commerciaux 37,498 33,756
Frais de recherche et developpement 13,388 7,982
Frais generaux et administratifs 11,517 7,811
Amortissements Intangibles 365 171,148
------ -------
Total frais generaux et commerciaux 62,768 220,697
------- -------
Resultat operationnel (3,570) (180,813)
Produits (charge) financiers et autres (2,297) 169
------- -------
Resultat net (5,867) (180,644)
------- ---------
Resultat net par action (francs) (0.42) (15.49)
Nombre moyen d'actions
en circulation (milliers) 13,876 11,661
ILOG S.A.
Bilans Consolides Resumes (non audites)
(en milliers de francs francais)
30 Sept. 30 Juin
-------- -------
1998 1998
---- ----
Actif
Actif circulant:
Disponibilites et valeurs
mobilieres de placement 110,425 121,611
Clients, nets 88,890 92,733
Autres elements d'actif circulant 28,922 26,440
------------ -------------
Total de l'actif circulant 228,237 240,784
Immobilisations corporelles, nettes
et autres actifs 23,558 23,294
============ =============
Total de l'actif 251,795 264,078
============ =============
Passif
Passif a moins d'un an:
Fournisseurs et comptes rattaches 56,727 65,167
Dette financiere a court terme 11,837 12,433
Produits constates d'avance 27,848 30,518
------------ -------------
Total passif a moins d'un an 96,412 108,118
Dette financiere a long terme 33,644 36,173
------------ -------------
Total passif a court et long terme 130,056 144,291
Capitaux propres
Capital souscrit et prime d'emission 346,403 364,793
Report a nouveau et ecart de
conversion (224,664) (245,006)
------------ -------------
Total des capitaux propres 121,739 119,787
============ =============
Total du passif 251,795 264,078
============ =============
Pour l'information de nos actionnaires francais, une traduction
de cette annonce sera egalement envoyee a nos actionnaires enregistres
avec une adresse francaise et a toute personne en faisant la demande.
De plus, afin de faciliter la comprehension des resultats financiers
de la societe, les comptes consolides precedents aux normes amercaines
(US GAAP) ont ete traduits en francs francais aux taux moyens
historiques des periodes considerees et aux taux de cloture aux dates
de bilan.
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