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Smallworldwide plc Reports Results for Fourth Quarter and Fiscal 1997.



CAMBRIDGE Cambridge, city, Canada
Cambridge (kām`brĭj), city (1991 pop. 92,772), S Ont., Canada, on the Grand River, NW of Hamilton. It was formed in 1973 with the amalgamation of Galt, Hespeler, and Preston, all founded in the early 19th cent.
, England--(BUSINESS WIRE)--Aug. 20, 1997--

Company Reports 30.3% Rise in Revenues to $14.2 Million During

Quarter; Software License Revenues Increased 63.9%

to $10.4 Million

Excluding R&D Write-off Write-Off

A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues.
 for Acquisition of Software Product Line,

Smallworld 1. (legal) SMALLWORLD - A trademark of Smallworldwide Plc..
2. (language) SmallWorld - An object-oriented language.

["SW 2 - An Object-based Programming Environment", M.R. Laff et al, IBM TJWRC, 1985].
 Reports Net Income of $1.5 Million,

or $0.19 Per Share

Smallworldwide plc (Nasdaq: SWLDY) today announced unaudited results for the fourth quarter and fiscal 1997.

Smallworld develops and markets engineering, business and operations support software for utilities, telecommunications companies See telecom company.  and other public and private enterprises.

For the quarter ended June June: see month.  30, 1997, revenues reached $14.2 million compared with revenues of $10.9 million for last year's comparable period on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts.

The phrase pro forma
 basis, an increase of 30.3%. Software license revenues increased 63.9% during the quarter to $10.4 million, or 73.5% of total revenues, from $6.4 million on a pro forma basis, or 58.4% of total revenues last year. Revenues generated from services and maintenance were $3.5 million versus $4.0 million in the comparable 1996 pro forma period resulting from the Company's strategy to reduce the amount of consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.)
service - work done by one person or group that benefits another; "budget separately for goods and services"
 that it provides directly and refer such business to its business partners.

The rise in total revenues was due to increasing sales of software licenses In computing, software that is copyrighted and licensed under a software license is done under a variety of licensing schemes. For end-users there are proprietary licenses and there are free software licenses, and there are proprietary Within these schemes are further classifications.  to existing customers such as National Land Survey of Finland Finland, Finnish Suomi (swô`mē), officially Republic of Finland, republic (2005 est. pop. 5,223,000), 130,119 sq mi (337,009 sq km), N Europe. , Deutsche Post Deutsche Post AG (ISIN: DE0005552004, LSE: DPO) is a German post, logistics and courier headquartered in Bonn, previously the German state-owned mail monopoly. It has 520,000 employees in more than 220 countries and territories worldwide and generated revenue of € 60. , Niagara Niagara, river, United States and Canada
Niagara (nīăg`rə), river, 34 mi (55 km) long, issuing from Lake Erie between Buffalo, N.Y., and Fort Erie, Ont., Canada.
 Mohawk and Deutsche Telekom Deutsche Telekom AG (ISIN: DE0005557508, FWB: DTE, NYSE: DT, LSE: DEU, TYO: 9496 ) (abbreviated DTAG) is a telecommunications company headquartered in Bonn, Germany. It is the largest telecommunications company in Germany and in the EU. , which purchased 462 software licenses as part of its Megaplan project, together with new customers including Tacoma Public Utilities Tacoma Public Utilities is the public utility service for Tacoma, Washington. It was formed in 1893, and is made up of Tacoma Power, Tacoma Water, and Tacoma Rail, and the Click! Network television cable service. ; Helix Water, a U.S. municipal water authority; National Land Agency of Indonesia; and Bayernwerke Netcom, the German telecommunications services In telecommunication, the term telecommunications service has the following meanings:

1. Any service provided by a telecommunication provider.

2.
 provider.

Gross profit for the fourth quarter increased 67.6% to $10.6 million from $6.4 million pro forma last year, reflecting continued gross margin improvement.

The Company reported an operating loss operating loss

The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income.
 of $399,000 for the quarter versus pro forma operating income Operating Income

The profit realized from a business' own operations.

Notes:
This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit.
 of $159,000 last year. The loss includes a write-off for acquired research and development of approximately $2.0 million, or $0.26 per share, for Smallworld's acquisition of a software product line and related operational support from Integration Technologies. Excluding the write-off, operating income would have been $1.6 million.

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.
, excluding the acquisition-related writeoff writeoff

A reduction to zero in the value of an asset carried on a firm's financial statement. Companies often hesitate to make writeoffs because profits reported to stockholders are reduced.
, were $9.0 million versus $6.2 million in last year's pro forma fourth quarter. The increase reflects higher than expected one-time costs in its German subsidiary, related primarily to the Deutsche Telekom order and launch of Smallworld GIS (1) (Geographic Information System) An information system that deals with spatial information. Often called "mapping software," it links attributes and characteristics of an area to its geographic location.  Version 2.2, together with the continuing global expansion of the Company's operations.

Smallworld reported a net loss of $339,000, or a loss of $0.04 per share, compared with a net loss of $67,000, or a loss of $0.01 per share, in last year's fourth quarter. Excluding the write-off, net income would have been $1.5 million, or $0.19 per share.

For the full year ended June 30, 1997, Smallworld's revenues rose 47.8% to $48.3 million from $32.7 million on a pro forma basis during the prior fiscal year. Software license revenues increased 64.0% during the year to $31.5 million, or 65.1% of total revenues, from $19.2 million, or 58.7% of total revenues last year on a pro forma basis. Revenues generated from services and maintenance were $16.2 million versus $12.7 million in the comparable 1996 pro forma period. Gross profit for the year grew 62.3% to $34.3 million, versus pro forma gross profit of $21.2 million in last year's comparable period.

Smallworld reported operating income of $2.4 million for fiscal 1997, versus pro forma operating income of $1.0 million last year, and net income of $1.4 million, or $0.20 per share, compared with pro forma net income of $2.1 million last year. Excluding the write-off, the Company's operating income, net income and earnings per share for fiscal 1997 would have been $4.4 million, $3.3 million, and $0.46 per share, respectively.

The pro forma results reflect Smallworld's acquisitions in 1995 and early 1996 of its German, Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. , Australian Australian

pertaining to or originating in Australia.


Australian bat lyssavirus disease
see Australian bat lyssavirus disease.

Australian cattle dog
a medium-sized, compact working dog used for control of cattle.
 and Swedish distributors as if the acquired businesses had been consolidated with effect from January 1, 1995.

Smallworld's Chairman, Dick Newell Dr. Richard G. Newell has spent over 30 years in the software industry in Computer aided design (CAD) and Geographic Information Systems (GIS).

Dick holds degrees in Civil Engineering and Numerical Analysis and a PhD in Chemical Engineering.
, said, "We are particularly pleased with the continued rapid growth in license revenues, which rose 64% during the year, as well as our impressive new business win rate. During the year, we made substantial progress in expanding our presence around the world and are now approaching 500 customers. We expect to continue growing our market share rapidly in fiscal 1998."

Mr. Newell added, "We are also encouraged by the increasing number of customers that are using our software as the foundation for operations support, like managing power outages This is a list of famous wide-scale power outages. 1965
  • The Northeast Blackout of 1965 on November 9, 1965.
1977
  • The infamous New York City Blackout of July 13-14, 1977, resulted in looting and rioting.
, as well as traditional GIS applications, such as mapping and facilities documentation." GIS represents geographic information systems geographic information system (GIS)

Computerized system that relates and displays data collected from a geographic entity in the form of a map. The ability of GIS to overlay existing data with new information and display it in colour on a computer screen is used primarily to
 technology.

Mr. Andy Stafford, Smallworld's Chief Executive Officer, noted that the acquisition of the product line from Integration Technologies reflects the broader usage of Smallworld's technology, as well as the Company's decision to develop selected applications for its focus markets. "These particular products were developed under a Smallworld licensing agreement and have been designed initially to automate To turn a set of manual steps into an operation that goes by itself. See automation.  business processes which help communications companies Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D.  plan, design, build and manage their complex broadband networks This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.
You can assist by [ editing it] now.
 which integrate voice, video and data services. These are applications that take our technology beyond the historic limitations of GIS." He noted that Smallword added 15, Denver-based, members of Integration Technologies' operations support group to its development staff as a result of the acquisition and also assumed the company's customer base, which includes five U.S. communications companies.

Mr. Stafford also said that the Company intends to continue to place a high priority on expanding its marketing efforts during fiscal 1998 under the leadership of Peter Morse, who was appointed to a new position as Smallworld's international marketing director in early July. Smallworld now has 46 sales and marketing professionals located in 14 offices worldwide, including a new office in Korea opened The Korea Open is an Asian Tour men's professional golf tournament played in South Korea. In 2007 the total purse was US$1,000,000 making it one of the Asian Tour's richest sole-sanctioned events. The 2007 tournament was the 49th edition of the event.  during the quarter.

Another priority will be continuing to expand the number of Smallworld's business partners and the scope of their activities. Most recently, Smallworld's U.S. subsidiary, Smallworld Systems, formed a marketing alliance with Digital Equipment Corporation and Convergent Group, a consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee
consulting company

business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a
, to provide electric and gas utilities with a single-source solution for the engineering and management of complex physical networks.

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 o·ri·ent  
n.
1. Orient The countries of Asia, especially of eastern Asia.

2.
a. The luster characteristic of a pearl of high quality.

b. A pearl having exceptional luster.

3.
 software is designed to deliver a low cost of ownership while supporting rapid deployment of enterprise applications and seamless integration An addition of a new application, routine or device that works smoothly with the existing system. It implies that the new feature or program can be installed and used without problems. Contrast with "transparent," which implies that there is no discernible change after installation.  with other systems. The Company, headquartered in Cambridge, England, has over 470 customers in more than 20 countries around the world.

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 share and per share data)

                                      Three Months Ended
                                            June 30,
                                     1997            1996
                                  (Unaudited)     (Unaudited)
                                                  (pro forma)

Revenues:
     Licenses                  $    10,440    $     6,369
     Services and maintenance        3,540          4,049
     Other                             229            491
          Total revenues            14,209         10,909
Cost of revenues:
     Licenses                        1,312            549
     Services and
       maintenance                   2,139          3,640
     Other                             113            368
     Total cost of revenues          3,564          4,557

Gross profit                        10,645          6,352

Operating expenses:
     Research and development        1,529          1,267
     Acquired research and
       development                   2,026              0
     Sales and marketing             6,123          3,676
     General and administrative      1,366          1,250

          Total operating expenses  11,044          6,193

Income from operations                (399)           159
     Other income (loss), net         (449)           (55)
     Interest expense, net            (302)            12


Income before income taxes            (546)            92
     Provision (benefit) for
       income taxes                   (172)           202
     Share of income from
       equity affiliates                35             43

Net income                     ($      339)   ($       67)
Net income per share           ($     0.04)   ($     0.01)
Shares used to compute net
income per share                 7,807,564      5,960,077

                                         Year Ended
                                           June 30,
                                      1997         1996
                                  (Unaudited)  (Unaudited)
                                               (pro forma)

Revenues:
     Licenses                  $    31,473    $    19,186
     Services and maintenance       16,202         12,713
     Other                             662            806
          Total revenues            48,337         32,705
Cost of revenues:
     Licenses                        2,355            911
     Services and maintenance       11,440         10,157
     Other                             203            475
          Total cost of revenues    13,998         11,543


Gross profit                        34,339         21,162
Operating expenses:
     Research and development        4,923          3,951
     Acquired research and
       development                   2,026              0
     Sales and marketing            19,787         11,864
     General and administrative      5,214          4,343


          Total operating expenses  31,950         20,158

Income from operations               2,389          1,004
     Other income (loss), net         (722)           (79)
     Interest expense, net            (612)            43

Income before income taxes           2,279            882
     Provision (benefit) for
       income taxes                    934         (1,130)
     Share of income from
       equity affiliates                46            125

Net income                     $     1,391    $     2,137
Net income per share           $      0.20    $      0.37
Shares used to compute net
income per share                 7,091,069      5,710,695

               SMALLWORLDWIDE plc AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                         (In thousands)

                                  June 30,           June 30,
                                    1996               1997
                                 (Audited)         (Unaudited)
ASSETS
Current Assets
  Cash and equivalents              $733              $6,975
  Accounts receivable              9,945              15,559
  Inventories                      1,160                 932
  Amounts receivable from equity
     affiliates                      743                 146
  Prepaid expenses and other
     assets                          915               2,616
  Deferred income taxes              385               1,783
  Available-for-sale
     investments                       0               4,000
Total current assets              13,881              32,011

Property and equipment, net        2,840               4,058
Deferred income taxes              1,771                   0
Goodwill                             925                 370
Investments                          214               8,567
  TOTAL ASSETS                   $19,631             $45,006

LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
  Accounts payable                $3,127              $3,619
  Income taxes payable               962                 989
  Personnel taxes                    929                 310
  Accrued liabilities              3,466               9,353
  Deferred revenue                 1,875               2,003
  Current portion of capital
      lease obligations              315                 341
    Total current liabilities     10,674              16,615
Accrued liabilities, less
   current portion                    62                  26
Capital lease obligations,
   less current portion              516                 305
Deferred revenue, less
   current portion                   482                 331
      Total liabilities           11,734              17,277

Redeemable Preference Shares         299                   0
Shareholders' equity:
    Ordinary and Preference Shares   731                 140
    Cumulative translation
      adjustment                    (494)               (512)
    Additional paid-in capital     5,839              25,268
    Accumulated unrealized
      (losses) on investments          0                 (80)
    Retained earnings              1,522               2,913
      Total shareholders' equity   7,598              27,729

TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY             $19,631             $45,006




CONTACT: Smallworldwide plc, Cambridge

Andy Stafford/Ian McShane, 44/1223-301144

Email: Andy.Stafford@Smallworld.co.uk

Email: Ian.McShane@Smallworld.co.uk

or

Gavin Anderson Anderson, river, Canada
Anderson, river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic
  & Co.

Trina Hardiman/Gerard Carney car·ney  
n. Informal
Variant of carny.
, 212/373-0229

Email: Thardiman@gavinanderson.com
COPYRIGHT 1997 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1997, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Date:Aug 20, 1997
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