Lernout & Hauspie Reports Strong Revenues, Earnings and Cash Flow for Second Quarter; Company Achieves Revenues of $76 million and EPS of $0.17; Reduced DSO's.IEPER, Belgium and BURLINGTON, Mass.--(BUSINESS WIRE)--July 28, 1999-- Lernout & Hauspie (Nasdaq:LHSP LHSP List Hosting Service Provider LHSP Left Handed Starting Pitcher , Easdaq:LHSP) (L&H(tm)), a worldwide market leader in speech and linguistic technologies, products and services, today announced financial results for the second quarter ended June 30, 1999. For the second quarter of 1999, L&H's total revenues were $76.0 million, an increase of 69% over reported revenues of $45.0 million for the second quarter of 1998. L&H's total revenues for the six months ending June 30, 1999 were $146.7 million, an increase of 83% over reported revenues of $80.1 million for the same period in 1998. The company attributes the increased revenues to L&H's continued success in expanding the role speech and language technologies play in a broad range of markets and applications. During Q2, L&H shipped the award-winning L&H RealSpeak(tm) text to speech (TTS (1) See text-to-speech. (2) (Transaction Tracking System) Software that monitors a transaction until completion. In the event of a hardware or software failure, it ensures that the database is brought back to its former state before the attempt to ) technology as well as several continuous speech dictation products, including: L&H Voice Xpress(tm) version 4, L&H Voice Xpress(tm) Mobile Professional, L&H Voice Xpress for the Dutch and Flemish languages and various products for the legal and medical markets. Net income of 1999 reached $10.1 million, or $0.17 per share on 59.4 million shares which is a 21% increase when compared to $8.3 million, or $0.15 per share on 55.1 million shares for the second quarter of 1998. Net income for the first six months ended June 30, 1999 reached $17.1 million, or $0.29 per share on 58.8 million average diluted shares outstanding, which is a 17% increase when compared to $14.6 million in net income, or $0.28 per share on 52.5 million average outstanding shares for the six months ended June 30, 1998. The cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the first six months ending June 30, 1999 increased with approximately $25.5 million. 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). (DSO's) for the second quarter of 1999 were reduced from 112 days as of March 31, 1999 to 103 days as of June 30, 1999. Revenue for the second quarter 1999 included approximately $26.5 million from the company's Technologies and Solutions division, $29 million from the Applications division and $20.5 million from the Consulting and Services division. Recurring and repeat revenues from the Technologies and Solutions division increased to $14 million in the second quarter 1999 compared to $8.2 million in the second quarter 1998; the division signed 57 new contracts (45 of which were related to core speech technology). "Our second quarter activities were essential to the company's continued development and particularly important for our ongoing success in high growth speech and language markets, such as in the vertical and horizontal arenas. The introduction of RealSpeak and Voice Xpress 4.0 have both received an overwhelmingly positive response from the industry, further building our positions in both the telecommunications and horizontal/vertical dictation markets," said Gaston Bastiaens Gaston Bastiaens (Westerlo (Belgium) December 16, 1946) is a Belgian engineer and businessman. As a vice president of Philips Electronics, he was responsible for the Compact Disc as well as for CD-i, CD-ROM, Philips' contributions to the MPEG standard and the foundations for the , 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. of L&H. "These offerings will provide an interface for our next generation of sophisticated medical reporting, telephony and electronic commerce applications." "L&H has steadfastly pursued its long-term strategy to be the leading provider of speech and language technologies, products and services, particularly as it relates to opportunities in Natural Language Understanding," said Jo Lernout, L&H co-founder and co-chairman. "We are especially pleased with our Q2 successes because they affirm that our strategy is sound and successful. Our continued ability to attract interest from industry leaders, as evidenced by the Intel agreement announced this quarter, reinforces this long term strategy as well." Highlights of the Quarter Telecommunications Market Presence Expanded During the second quarter of 1999 L&H had a variety of important announcements related to the telecommunications market, a key market for the company. L&H offers a full complement of telephony solutions, including application development expertise, a complete family of small and large vocabulary recognizer engines, and its industry-leading Text-to-Speech (TTS) technology. L&H RealSpeak Ships L&H began shipping its L&H RealSpeak for American English American English n. The English language as used in the United States. Noun 1. American English - the English language as used in the United States American language, American . L&H RealSpeak is a new de facto [Latin, In fact.] In fact, in deed, actually. This phrase is used to characterize an officer, a government, a past action, or a state of affairs that must be accepted for all practical purposes, but is illegal or illegitimate. industry standard in TTS technology that reads aloud any text with a human sounding voice and represents a breakthrough in terms of voice quality and intelligibility in·tel·li·gi·ble adj. 1. Capable of being understood: an intelligible set of directions. 2. Capable of being apprehended by the intellect alone. . The initial contracts for RealSpeak included agreements with Webley, MessageBlaster.com, 4th Peripheral, Edify ed·i·fy tr.v. ed·i·fied, ed·i·fy·ing, ed·i·fies To instruct especially so as to encourage intellectual, moral, or spiritual improvement. and Heartland Information Services See Information Systems. . During Q2, L&H RealSpeak was also named Best of Show at CTI (Computer Telephone Integration) Combining data with voice systems in order to enhance telephone services. For example, automatic number identification (ANI) allows a caller's records to be retrieved from the database while the call is routed to the appropriate party. Spring 99, one of the premier events in the rapidly growing datacom/telecom convergence industry. Korea's Largest Stock Exchange Automated with L&H Technology L&H's Q2 successes in the telecommunications market also included a contract to speech-enable the ASR (Automatic Speech Recognition) Using voice recognition to replace keypad entry for telephone voice menus. Typically used to speak the digits 0 through 9 insted of keying them, ASR systems may be able to recognize a limited vocabulary. See voice recognition and AVSR. Stock Quote Server, Korea's largest telephone based automated stock quote and trading service. As part of the service, L&H's automatic speech recognition (ASR 1500) engine recognizes and responds to as many as 200,000 customer requests daily for stock quotes and trades. The application, developed by L&H business partner Bumil Information & Communications Co. Ltd. (BIC BIC See: Bank Investment Contract ), has been fully operational since March of this year. FDC FDC - Floppy Disk Controller Acquisition Brings Telephony Development Expertise In June, L&H announced the acquisition, for $6.5 million in cash, of the Flanders Dialogue Company (FDC) an Ieper-based firm that develops and implements tailor-made computer telephony See CTI, VoIP and IP telephony. Computer Telephony - Computer Telephone Integration applications in banking, travel, recruitment and stock quotes, among other areas. The acquisition should allow L&H to further build its telephony business and meet growing market demand by bringing L&H a group of developers with expertise in creating robust, multilingual telecommunications applications. Articulate Acquisition Builds Medical Offerings In May, L&H signed an agreement to acquire substantially all the assets of the Fonix Healthcare Solutions Group (Articulate Systems) (NASDAQ:FONX). L&H expects to leverage the resources obtained through this acquisition to further the company's development of transcription solutions and strengthen its position as the leading provider of speech and language technology for the healthcare market. The agreement will add the award-winning PowerScribe(R) Radiology and Emergency Medicine systems to L&H's Industry Solutions Group. L&H will also gain the Fonix Healthcare Solutions Group's blue-chip customer base as well as its sales, marketing, client services and development staff. L&H expects to combine PowerScribe and the L&H Clinical Reporter and apply its localization Customizing software and documentation for a particular country. It includes the translation of menus and messages into the native spoken language as well as changes in the user interface to accommodate different alphabets and culture. See internationalization and l10n. expertise to create multi-lingual product versions that address the needs of the total healthcare enterprise, worldwide. The closing is subject to Fonix shareholder approval. Dictation Product Enhancements L&H's momentum in the continuous speech dictation software market continued during Q2 as it introduced several new L&H Voice Xpress offerings, resulting in a substantial market share increase. During Q2, L&H introduced a new version of its L&H Voice Xpress(tm) family of continuous speech dictation software products that includes breakthrough features expected to accelerate the deployment of speech recognition among mainstream users. L&H Voice Xpress, version 4 offers L&H XpressStart(tm) , a technology that simplifies and substantially reduces software enrollment time. The product also provides a simplified user interface and significantly higher accuracy rates. These new features, combined with L&H's flexible Natural Language Technology (NLT NLT abbr. night letter ), allow users to successfully dictate accurate text shortly after opening the software package. During Q2, L&H also announced the availability of its new L&H Voice Xpress(tm) Mobile Professional. The new product specifically designed to meet the demands of the mobile professional, combines L&H Voice Xpress Professional Version 4, with the new Olympus DS-150 digital hand-held recorder. L&H Voice Xpress(tm) Mobile Professional enables users to conveniently dictate notes, e-mails, letters and other documents while away from their computer and later use L&H's Voice Xpress speech recognition technology to instantly transcribe To copy data from one medium to another; for example, from one source document to another, or from a source document to the computer. It often implies a change of format or codes. recorded .wav files into text. Other dictation software product announcements during Q2 included the introduction of L&H Voice Xpress product versions for Dutch and Flemish languages as well as products for the legal and medical products. BTG BTG BIT (Built-In Test) Target Generator BTG Bridging the Gap BTG British Technology Group BtG Betreuungsgesetz (Germany) BTG Biomass Technology Group BV BTG Begbies Traynor Group Share Purchase Captures iTranslator Revenue L&H purchased, during Q2, all the stock of the Brussels Translation Group (BTG), a private organization that had invested in the development of L&H's iTranslator services. L&H's iTranslator allows fast translation over the Internet and Intranets using a combination of computer programs and human post editing in a multitude of language pairs (currently 14). The purchase, made for approximately $42 million in cash and the assumption of $17 million in debt, will enable L&H to capture all revenues and profits from the sales of L&H iTranslator. During Q2, L&H also finalized agreements with two European ISPs to offer L&H iTranslator to their subscriber bases. Finnish-based Saunalahden Serveri and Dutch-based World Online added their names to the list of L&H iTranslator customers, who now include Lotus Business Partners and ESAT ESAT Employee Satisfaction ESAT Electrician's Self-Assessment Tool ESAT Emergency Services Assistance Team , one of Ireland's largest ISPs. L&H points to these contracts, as well as analyst's optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op predictions regarding e-commerce and World Wide Web globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation , as evidence of the high growth potential for the Internet translation market. Language Development During the first six months of 1999 we have continued to expand our strategic alliance program to develop language versions of our speech and language technologies in addition to our twelve core languages. Our goal is to expand the breadth of our speech and language technologies to include up to a total of 36 languages. We license our software development kits and tools to strategic partners to develop additional language versions of our technologies and applications. Our strategic partners generally take the financial risk and share in the rewards for speech and language applications for these additional languages. Through June 30, 1999 we had entered into strategic alliances for the development of 15 additional languages including Bahassa, Czech, Farsi, Greek, Hungarian, Polish, other Slavic languages Slavic languages, also called Slavonic languages, a subfamily of the Indo-European family of languages. Because the Slavic group of languages seems to be closer to the Baltic group than to any other, some scholars combine the two in a Balto-Slavic subfamily of the , and Scandanavian languages. The company is in further discussions with partners for the development of nine additional languages for the Internet, Microsoft Office Microsoft's primary desktop applications for Windows and Mac. Depending on the package, it includes some combination of Word, Excel, PowerPoint, Access and Outlook along with various Internet and other utilities. and Telephony arenas. About Lernout & Hauspie Lernout & Hauspie (L&H) is a global leader in advanced speech and language solutions for vertical markets, computers, automobiles, telecommunications, embedded products, consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and and the Internet. The company is making the speech user interface (SUI Sui (swā), dynasty of China that ruled from 581 to 618. This short-lived dynasty reunified China in 589 after 400 years of division and laid the foundation for further consolidation under the T'ang dynasty. ) the keystone of simple, convenient interaction between humans and technology, and is using advanced translation technology to break down language barriers. The company provides a wide range of offerings, including: customized solutions for corporations; core speech technologies marketed to OEMs; end user and retail applications for continuous speech products in horizontal and vertical markets; and document creation, human and machine translation services, Internet translation offerings, and linguistic tools. L&H's products and services originate in Verb 1. originate in - come from stem - grow out of, have roots in, originate in; "The increase in the national debt stems from the last war" four basic areas: automatic speech recognition (ASR), text-to-speech (TTS), digital speech and music compression (SMC SMC Saint Mary's College SMC Santa Monica College SMC Solaris Management Console SMC Smooth Muscle Cell SMC Small Magellanic Cloud (also see LMC) SMC Safety Management Certificate (maritime shipping) ) and text-to-text (translation). For more information, please visit Lernout & Hauspie on the World Wide Web at www.lhs.com. This News Release contains forward-looking information that involves risks and uncertainties, including statements about the company's plans, objectives, expectations and intentions. Such statements include, without limitation, discussions concerning the company's strategic direction, new product introductions and developments, and the expected developments of targeted markets. Readers are cautioned that such 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. involve risks and uncertainties, including, without limitation, the company's reliance on sales by its customers to generate recurring revenues, the early stage of the speech technology market, the management of growth, the successful integration of the company's recent acquisitions, the ability of the company to develop and successfully market new products, rapid technological change and competition. The forward-looking statements contained herein speak only as of the date of this News Release. The company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in the company's expectations or any change in events, conditions or circumstance on which any such statement is based. All product names and trademarks mentioned herein are trademarks of L&H or their respective owners. Tables to follow in separate release. |
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