Network Express reports 1995 financial results.ANN ARBOR Ann Arbor, city (1990 pop. 109,592), seat of Washtenaw co., S Mich., on the Huron River; inc. 1851. It is a research and educational center, with a large number of government and industrial research and development firms, many in high-technology fields such as , Mich.--(BUSINESS WIRE)--Jan. 31, 1996--Network Express, Inc. (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 :NETK) today announced financial results for the fourth quarter and year ended December December: see month. 31, 1995. 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 year ended December 31, 1995 reached $19.0 million, up 71% from the $11.1 million reported in 1994. The Company reported a net loss of $8.5 million for 1995, or $0.90 per share on 9.4 million weighted average shares outstanding, compared to net income of $466,000 for 1994, or $0.07 per share on 6.3 million weighted average shares outstanding. The results for 1995 include a non-recurring charge for in-process research and development of $8.7 million resulting from the acquisition of Fivemere Limited of Aldershot Aldershot (ôl`dərshôt), town (1991 pop. 53,665), Hampshire, S central England. It is the site of the largest military training center (est. 1854) in Great Britain. The minister of defense appoints most of the town council. , England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. , which was completed in November November: see month. 1995. Excluding the non-recurring charge, net income for 1995 would have been $178,000, or $0.02 per share. For the fourth quarter of 1995, net sales were $2.0 million compared with $3.9 million in the corresponding period of 1994. The quarter included $917,000 in revenue from Fivemere since its acquisition. The net loss for the quarter was $10.2 million or $0.97 per share. Excluding the above mentioned charge, which was recorded in the fourth quarter, the net loss for the quarter would have been $1.6 million, or $0.15 per share. Fivemere Results ``The completion of the Fivemere acquisition was a major accomplishment because it positions us well in the financial information services See Information Systems. market in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). ,'' said Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000.Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a P. Eidswick, president and chief executive of the ISDN ISDN in full Integrated Services Digital Network Digital telecommunications network that operates over standard copper telephone wires or other media. internetworking internetworking - The interconnection of two or more networks, usually local area networks so that data can pass between hosts on the different networks as though they were one network. This requires some kind of router or gateway. provider. Fivemere, a leading supplier of network back-up In cartography, an image printed on the reverse side of a map sheet already printed on one side. Also the printing of such images. systems based on ISDN, had revenue of $8.4 million and profit of $838,000 for the year ended December 31, 1995. The Company is devoting additional sales resources to Fivemere products and expects the business to grow in 1996. New Products The product development organization was restructured to direct efforts at the market's most critical product needs. The three new products to be introduced in the first quarter are: the Digital Modem to allow both ISDN and modem users to access the same central site system; NE Fusion, which provides ISDN connectivity with Novell's Multi Protocol Router router Portable electric power tool used in carpentry and furniture making that consists of an electric motor, a base, two handle knobs, and bits (cutting tools). A router can cut fancy edges for shelving, grooves for storm windows and weather stripping, circles and ovals software; and a new Primary Rate ISDN product that extends the capacity and reduces cost of high end central site systems. Japan Sales Sales in Japan were $600,000 in the fourth quarter compared with $5.5 million in the third quarter of 1995 and $3.5 million in the fourth quarter of 1994. As previously reported in last October's announcement, the lower sales in Japan were due to the completion of a large internal networking project at NTT NTT Nippon Telegraph and Telephone Corporation NTT New Technology Telescope NTT National Technology Transfer, Inc NTT Name That Tune (TV game show) NTT National Tree Trust NTT Number Theoretic Transform , the Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and telephone company. In the first nine months of 1995, the project had contributed in excess of 50 percent of the Company's sales to Japan. Soliton A laser pulse that retains its shape in a fiber over long distances. By generating the pulse at a certain frequency and at a certain power level, the pulse takes advantage of competing dispersion effects. As it travels, the pulse is lengthened and then shortened back to its original size. Systems, the Company's exclusive Japanese distributor, had sufficient inventory to cover its customer needs in the fourth quarter. The Company expects sales in Japan to continue to be weak in the first quarter of 1996 when compared to previous levels. It expects Japanese sales for 1996 to be about half of 1995 sales, which were influenced by the large NTT project. The Company and Soliton successfully launched one of the largest production ISDN networks in the world in the fourth quarter. The network is being used by a transportation delivery system company for tracking package delivery and for internal accounting and administration applications. In the February February: see month. issue of Japan 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. Times, the customer described the system as being the only one that can be used with ISDN to provide the security and cost reductions they required. Multiple central site NE4000's and several hundred regional and remote site NELink1000's worked flawlessly flaw·less adj. Being entirely without flaw or imperfection. See Synonyms at perfect. flaw  less·ly adv. during the peak holiday season
servicing over 70,000 phone calls per day. ``This network was a major
product accomplishment and demonstrated the robustness of our central
site solution,'' said David Hartmann Hartmann is a surname and may refer to:
U.S. Sales and Changes U.S. sales for the fourth quarter of 1995 were $446,000, down from $643,000 in the third quarter of 1995 and $453,000 in the fourth quarter of 1994. Increased competition and the delay in releasing some new products made it difficult to achieve sales targets for the quarter. As a result, the sales and marketing strategies were revised and the organization was restructured to provide better support to distributors and resellers and to focus on implementing the new Universal Access Architecture introduced by the Company in the fourth quarter. European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Sales European sales of $933,000 for the fourth quarter of 1995 resulted primarily from Fivemere. Fivemere's sales were to its base accounts in the financial information service market, primarily in the United Kingdom. Network Express systems have been installed in both the Norwegian Norwegian associated in some way with Norway. Norwegian buhund, Norwegian sheepdog a medium-sized (26-40 lb), spitz-type dog with a short, dense coat in wheaten, black, red or sable, sometimes with black markings on the face, ears and Swedish telephone companies for testing purposes. During the quarter, the Company established a European sales office in Munich, Germany, to expand sales operations into continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. . ``We were disappointed by the fourth quarter results,'' said Eidswick. ``The sharp decline in Japanese revenue could not be offset by revenue from other sources and this resulted in significant losses. Through Soliton Systems in Japan, we are very active in growing the Japanese market and expect significant revenues in 1996, although not as high as 1995. With the contribution of Fivemere and revenue from new products in the U.S. and Europe starting in the second quarter of 1996, we expect to be back on the growth path in 1996.'' Eidswick also noted that ``The Company's financial position is strong with $20 million in cash and no debt entering 1996.'' ``The Company's objective,'' Eidswick stated, `` is to be a profitable growth company that makes the best ISDN products for corporate internetworking on a worldwide basis. To achieve that plan we will `stay the course' and attack the rapidly growing ISDN market with products that customers need.'' The Company also announced that Steven O'Hanlon, Vice President of Sales and Marketing, has left the Company to pursue other interests. The Company is seeking a replacement for Mr. O'Hanlon. The statements contained in this release which are not historical facts are forward looking statements that involve risks and uncertainties, including, but not limited to, dependence on a single customer and on sales in Japan, limited history of operations and profitability, technological change, market acceptance of new products, reliance on ISDN, need to expand product offering, fluctuations in quarterly operating results, competition, management of growth, limited sales and distribution 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. and Europe and other risks detailed in the Company's Securities and Exchange Commission filings. NOTE: Network Express management will be available to discuss this information on a teleconference on Thursday, February 1, at 9 a.m. To participate, callers may dial 1 (415) 904-7318. -0-
NETWORK EXPRESS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31,
_________________
1995 1994
_______ _______
ASSETS
Cash, cash equivalents and short $20,802 $2,223
term investments
Accounts receivable, net 2,131 2,264
Inventories 4,825 1,156
Prepaid expenses and other 356 14
_______ _______
Total current assets 28,114 5,657
Property and equipment, net 1,498 410
Other assets 129 69
Goodwill 2,540 -
_______ _______
$32,281 $6,136
_______ _______
_______ _______
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $2,218 $1,180
Accrued liabilities 2,010 711
_______ _______
Total current liabilities 4,228 1,891
Shareholders' equity 28,053 4,245
_______ _______
$32,281 $6,136
_______ _______
_______ _______
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Quarter ended Year ended
_________________ _________________
Dec. 31, Dec. 31,
1995 1994 1995 1994
_______ _______ _______ _______
(unaudited)
NET SALES:
Japan $ 597 $3,456 $15,634 $ 9812
United States 446 453 2,285 1,301
Europe 933 - 1,078 -
_______ _______ _______ _______
Total net sales 1,976 3,909 18,997 11,113
COST OF SALES 1,073 2,306 10,084 6,413
_______ _______ _______ _______
Gross Profit 903 1,603 8,913 4,700
_______ _______ _______ _______
OPERATING EXPENSES:
Research and development 1,408 717 4,427 2,260
Sales and marketing 1,249 333 3,803 1,147
General and administrative 264 303 1,445 890
In-process research
and development 8,653 - 8,653 -
_______ _______ _______ _______
Total operating expenses 11,574 1,353 18,328 4,297
_______ _______ _______ _______
Income (loss) (10,671) 250 (9,415) 403
from operations
OTHER INCOME 375 24 1,076 78
_______ _______ _______ _______
Income (loss) (10,296) 274 (8,339) 481
before income taxes
PROVISION FOR INCOME TAXES (61) 15 136 15
_______ _______ _______ _______
NET INCOME (LOSS) $(10,235) $259 $(8,475) 466
_______ _______ _______ _______
_______ _______ _______ _______
NET INCOME (LOSS) PER COMMON
AND COMMON EQUIVALENT SHARE $(.97) $.03 $(.90) $.07
_______ _______ _______ _______
_______ _______ _______ _______
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES
OUTSTANDING 10,509 7,370 9,369 6,271
_______ _______ _______ _______
_______ _______ _______ _______
CONTACT: Network Express, Inc., Ann Arbor John R. Ternes, VP Finance and CFO See Chief Financial Officer. , 313/761-5005 |
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