Smallworldwide plc Reports Results for First Quarter Fiscal 1998.
Company Reports 41.4% Rise in Revenues to $13.0 Million
During Quarter; Software License Revenues Increased 65.3%
to $8.0 Million
Smallworld Reports Net Income of $0.5 Million, or
$0.06 Per Share
Smallworldwide plc (Nasdaq: SWLDY) today announced unaudited results for the first quarter of fiscal 1998. Smallworld develops and markets engineering, business and operations support software for utilities, telecommunications companies and other public and private enterprises.
Revenues for the quarter, ended September 30, reached $13.0 million compared with revenues of $9.2 million for last year's comparable period, an increase of 41.4%. Software license revenues increased 65.3% during the quarter to $8.0 million, or 61.8% of total revenues, from $4.9 million, or 52.9% of total revenues last year. Revenues generated from services and maintenance were $4.8 million versus $4.2 million in the comparable period a year ago.
The increase in revenues was due to increasing sales of software licenses to existing customers such as Sydney Water, Powercor (Melbourne, Australia) and Deutsche Telekom, which completed its purchase of software licenses for its Megaplan project, together with 34 new customers including Metronet (Calgary, Canada) and Utilicorp in the US and City West Water (Melbourne, Australia).
Gross profit for the first quarter increased 58.9% to $9.4 million from $5.9 million last year, reflecting the favorable change in revenue mix towards software licenses, together with improving services and maintenance margins.
Operating expenses were $8.9 million versus $6.1 million in last year's first quarter. The increase reflects continued planned expansion in the Company's research and development and sales and marketing efforts, in particular.
The Company reported an operating income of $588,000 for the quarter versus an operating loss of $174,000 last year and net income of $477,000, or $0.06 per share, compared with a net loss of $197,000, or $0.03 per share, in last year's first quarter.
Smallworld's Chairman, Dick Newell, said, "We are particularly pleased with the increase in license revenues during the quarter, as it demonstrates continued strong demand for our software from leading utilities and telecommunications providers around the world. Revenues generated from business with existing Smallworld customers, together with the new business gained during the period, underline the recognition that our object-oriented technology is receiving for its considerable flexibility, power and ease of use."
Andy Stafford, Smallworld's Chief Executive Officer, said, "In the first quarter, we expanded into markets and business areas that carry tremendous opportunity over the long term. In addition to growing our business in the United States and Europe, we successfully increased our revenues in the Asia Pacific region - most particularly with sales to leading utilities in Australia. We attribute these developments to the ongoing investments we are making to expand, and deepen, our presence in markets of strategic importance."
In other operating highlights, Smallworld made progress on several ongoing initiatives during the quarter. Investment increased in the development of applications aimed at various Smallworld focus markets. In particular, the company commenced work on its Outage and Distribution Management System (ODMS), an application being developed for Smallworld's electricity customers in North America and other overseas markets.
Smallworld (http://www.smallworld-us.com) develops and markets engineering, business and operations support software for utilities, telecommunications companies and other public and private enterprises. The Company's technology automates business processes that are critical for enhancing customer service, business planning, network engineering and facilities maintenance. Smallworld's object-oriented software is designed to deliver a low cost of ownership while supporting rapid deployment of enterprise applications and seamless integration with other systems. The Company, headquartered in Cambridge, England, has about 500 customers in over 22 countries around the world. -0-
Please note: Some statements contained within this report may be of a forward-looking nature and may involve risks and uncertainties. Actual future results and outcomes may differ materially from those discussed. Factors that may cause such differences include, but are not limited to, management of growth, market acceptance of the Company's products and services, risks associated with new product versions, dependence on third party relationships and the activities of competitors. -0-
SMALLWORLDWIDE plc AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data) Three months Three months ended ended Sept. 30, Sept. 30, 1997 1996 (unaudited) (unaudited) Revenues: Licenses $8,039 $4,862 Services and maintenance 4,816 4,169 Other 144 160 Total revenues 12,999 9,191 Cost of revenues: Licenses 689 77 Services and maintenance 2,826 3,055 Other 35 114 Total cost of revenues 3,550 3,246 Gross profit 9,449 5,945 Operating expenses: Research and development 1,926 1,202 Sales and marketing 5,388 3,519 General and administrative 1,547 1,398 Total operating expenses 8,861 6,119 Income (loss) from operations 588 (174) Other income, net 88 3 Interest on securities 151 - Interest income (expense), net 100 (13) Income (loss) before income taxes 927 (184) Provision for income taxes 450 24 Share of income from equity affiliates 0 11 Net income (loss) $477 ($197) Net income (loss) per share $0.06 ($0.03) Shares used to compute net income (loss) per share 8,236 5,960 -0- SMALLWORLDWIDE plc AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) Sept. 30, June 30, 1997 1997 (unaudited) (unaudited) ASSETS Current assets: Cash and equivalents $11,672 $6,975 Short-term investments 1,504 4,000 Accounts receivable 9,505 15,559 Inventories 641 932 Amounts receivable from equity affiliates 487 146 Prepaid expenses and other assets 2,620 2,371 Deferred income taxes 1,952 2,002 Total current assets 28,381 31,985 Long-term investments 8,646 8,291 Property and equipment, net 4,398 4,058 Deferred income taxes 357 357 Goodwill 343 370 Equity investments 268 276 TOTAL ASSETS $42,393 $45,337 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $3,399 $3,619 Income taxes payable 1,227 863 Personnel taxes 584 334 Accrued liabilities 5,299 6,926 Accrued contractual liability 0 2,400 Deferred revenue 2,250 2,002 Current portion of capital lease obligations 337 341 Total current liabilities 13,096 16,485 Accrued liabilities, less current portion 0 26 Capital lease obligations, less current portion 207 305 Deferred revenue, less current portion 587 330 Total liabilities 13,890 17,146 Shareholders' equity: Ordinary and Preference Shares 141 140 Cumulative translation adjustment (367) (48) Additional paid-in capital 25,365 25,268 Accumulated unrealized losses on investments (24) (80) Retained earnings 3,388 2,911 Total shareholders' equity 28,503 28,191 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $42,393 $45,337
CONTACT: Andy Stafford
Chief Executive Officer
+(44) 1223 301144
(44) 1223 301144
Gavin Anderson & Co.
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|Date:||Nov 5, 1997|
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