Perle Systems Reports Significant Sales and Earnings Growth.
- First Quarter Sales Increase 28% -
Perle Systems Limited (NASDAQ:PERLF)(TSE:PL) today reported sales of CN$11,387,736 for the first quarter ended August 31, 1998 and net profit of CN$457,859. This compares to sales of CN$8,913,544 and net profit of CN$39,053 in the first quarter of fiscal 1998. Earnings per share were CN$0.06 for the quarter, compared to CN$0.01 per share for the comparable quarter last year.
Quarterly sales increased 28% over those in the comparable quarter of fiscal 1998. This increase is primarily attributed to the Company's new Perle 594e Thin Client network controller product line.
Gross margin was 73% for the first quarter of fiscal 1999, as compared to 67% in the comparable quarter of fiscal 1998.
President and Chief Executive officer Joe Perle remarked, "Following a record year for earnings in fiscal 1998 of CN$0.31 per share, I am extremely pleased that we have achieved this record first quarter. We set a target this year of 20% growth in sales and earnings on an annual basis. These outstanding first quarter results put us clearly ahead of this target. Beyond this internal growth expectation, we are progressing with our acquisition plans and are hopeful of completing a transaction during this fiscal year. With our addressable market now over CN$2 billion dollars, I am optimistic about the future."
Perle Systems Limited, founded in 1976, sells products to the remote access segment of the computer networking market. Users in this segment require access from a remote site (e.g. a branch or home office, or hotel, etc.) to a more powerful host/server computer or local area network. Sophisticated network communications software and hardware are required to permit and efficiently manage the transmission of data. Perle develops this software and integrates it into its hardware products. Perle develops, designs, manufactures and sells remote network controllers, workstation controllers, and LAN Remote Access Servers that are used to interconnect its customers' computing resources.
For more information on Perle and its products, access the Company's web site at http://www.perle.com.
The Company's quarterly results vary depending on many factors including, but not limited to, fluctuations in sales levels. These quarterly results are not necessarily indicative of those in the future. Forward-looking statements in this release, including targeted sales and profits and acquisition plans, are made pursuant to the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the Company's products, increased levels of competition for the Company, new products and technological changes, the Company's dependence upon third party suppliers intellectual property rights and other risks detailed from time to time in the Company's periodic reports filed with the United States Securities and Exchange Commission. -0-
PERLE SYSTEMS LIMITED CONSOLIDATED BALANCE SHEETS (Canadian dollars) As at August 31, 1998 May 31, 1998 ASSETS (Unaudited) (Audited) Current: Cash and cash equivalents $6,354,974 $6,776,075 Accounts receivable 9,421,165 9,453,271 Inventories 2,295,584 2,022,257 Prepaid expenses 1,523,479 1,303,276 Income taxes recoverable 772,477 939,585 Total current assets 20,367,679 20,494,464 Capital assets, net 2,261,058 2,409,542 Other assets 8,140,941 7,627,423 Total Assets $30,769,678 $30,531,429 LIABILITIES AND SHAREHOLDERS' EQUITY Current: Accounts payable and accrued liabilities 5,797,495 5,919,439 Deferred revenue 2,218,067 2,315,733 Total current liabilities 8,015,562 8,235,172 Shareholders' Equity: Common share capital - authorized: unlimited (issued and outstanding: 7,172,508) 27,539,584 27,539,584 Deficit (4,785,468) (5,243,327) Total Shareholders' Equity 22,754,116 22,296,257 Total Liabilities and Shareholders' Equity $30,769,678 $30,531,429 CONSOLIDATED STATEMENTS OF INCOME (Canadian dollars) For the three months ended August 31 1998 1997 (Unaudited) (Unaudited) Sales $11,387,736 $8,913,544 Expenses: Cost of sales 3,108,623 2,923,841 Selling, general and administration 4,442,867 3,618,480 Advertising and marketing 1,377,073 1,022,202 Research and development expenditures (net of ITCs) 1,735,881 1,108,709 Amortization of capital assets 276,105 247,779 Interest income (61,545) (46,520) 10,879,004 8,874,491 Income before income taxes 508,732 39,053 Income tax expense 50,873 -- Net income for the period $457,859 $39,053 Earnings per common share - basic $0.06 $0.01 - fully diluted $0.06 $0.01 CONSOLIDATED STATEMENTS OF DEFICIT (Canadian dollars) For the three months ended August 31 1998 1997 (Unaudited) (Unaudited) Deficit, beginning of the period ($5,243,327) ($7,485,876) Net income for the period 457,859 39,053 Deficit, end of the period ($4,785,468) ($7,446,823) PERLE SYSTEMS LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (Canadian dollars) For the three months ended August 31 1998 1997 Cash provided by (used in): (Unaudited) (Unaudited) Operating activities Net income for the period $457,859 $39,053 Add (deduct) items not affecting cash: Investment tax credits recoverable (297,000) (230,000) Amortization of capital assets 276,105 247,779 Deferred income taxes (32,789) (7,093) 404,175 49,739 Net change in non-cash working capital balances related to operations (513,926) 1,732,497 Cash used in operating activities (109,751) 1,782,236 Investing activities Loans to shareholders, officers and directors (183,729) (2,790) Additions to capital assets (127,621) (278,387) Cash used in investing activities (311,350) (281,177) Financing activities Issuance of Common Shares -- -- Cash provided by financing activities -- -- Net increase (decrease) in cash and cash equivalents during the period (421,101) 1,501,059 Cash and cash equivalents, beginning of the period $6,776,075 $4,863,935 Cash and cash equivalents, end of the period $6,354,974 $6,364,994 Components of net change in non-cash working capital balances related to operations: Accounts receivable $32,106 $4,503,370 Inventory (273,327) (15,020) Prepaid expenses (220,203) 129,110 Income taxes recoverable 167,108 12,216 Accounts payable and accrued liabilities (121,944) (2,710,837) Deferred revenue (97,666) (186,342) ($513,926) $1,732,497
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|Date:||Sep 23, 1998|
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