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APPLIED RESEARCH CORPORATION POSTS SECOND QUARTER PROFIT

 LANDOVER, Md., Jan. 12 /PRNewswire/ -- Applied Research Corporation (Philadelphia Stock Exchange: ARL.X) announced today its results for the second quarter ended Nov. 30, 1993.
 The Company's revenues for the second quarter were $2.4 million, 33% higher than revenues during the second quarter of last year.
 -- Government contract revenues contributed by Applied Research of Maryland, Inc. (ARM) increased 27% during the current quarter primarily from an increase in billable direct cost of services of $328,995.
 -- Software product sales contributed by ARSoftware Corporation (ARS) increased over 400% compared to 1992 levels. ARS maintained sales volume during the second quarter of $44,000 per month; up from $33,000 per month during the first quarter.
 The Company posted an operating profit of $68,841 for the quarter compared with a year earlier operating loss, of $30,214.
 -- ARM provided an operating profit of $140,585 during the quarter compared with an operating profit of $35,506 during the three months ended Nov. 30, 1992. During the current quarter existing contracts continued to meet cost and schedule targets and new programs steadily ramped up to capacity.
 -- ARS sustained an operating lose of $71,744 for the quarter compared to an operating loss of $65,720 for the second quarter of last year. Although sales for the quarter increased substantially over the same period a year ago, selling, general and administrative costs also rose due to staff increases and product acquisition costs that have not yet produced sales.
 The Company's revenues for the six months ended Nov. 30, 1993, were $4.6 million, 30% above revenues of $3.5 million for the six months ended Nov. 30, 1992.
 -- ARM increased revenues by $891,441 to $4.4 million, an increase of 26% over the same period a year ago, The Company now employs 125 people involved in government contract technical services and anticipates continued growth during fiscal '94 as management seeks to reach full staffing capacity on all contracts.
 The Company posted an operating profit of $67,249 for the six months ended Nov. 30, 1993, compared to an operating loss of $24,790 a year ago.
 -- ARM's operating profit more than doubled over that of the previous year during the six months ended Nov. 30, 1993, from $130,469 to $290,130. The increase in profit is attributed to substantial growth in the government contract business base, higher profit margin business and programs to ensure that costs and budgets are tightly controlled.
 -- ARS sustained an operating loss of $125,773 through the first six months of the current fiscal year, approximating the operating loss sustained last year during the same six month period. Although gross margin on sales has grown from $16,345 to $137,536 and improved from 34% of sales to 59% of sales over that of the previous year, selling, general and administrative expenses have also grown to meet the demands of "growing" the business.
 APPLIED RESEARCH CORPORATION
 (In thousands)
 Period ended Three months Six months
 Nov. 30, 1993 1992 1993 1992
 Revenues $2,398 $1,804 $4,612 $3,537
 Operating Income (Loss) 69 (30) 164 11
 Net Income (Loss) 12 (39) 67 (25)
 Net Income (Loss) Per Share --- 0.01 0.01 (0.01)
 -0- 1/12/94
 /CONTACT: J. Andrew Moorer, CFO of Applied Research Corporation, 301-459-8833, or Rodney O'Connor of Cameron Associates, 212-644-9560/
 (ARL.X)


CO: Applied Research Corporation ST: Maryland IN: SU: ERN

SH-MP -- NY015 -- 1318 01/12/94 09:49 EST
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Date:Jan 12, 1994
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