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CONTINUUM'S THIRD QUARTER EARNINGS IMPROVE

 CONTINUUM'S THIRD QUARTER EARNINGS IMPROVE
 AUSTIN, Texas, Jan. 20 /PRNewswire/ -- The Continuum Company, Inc.


(NYSE: CNU) announced improved earnings for the quarter ended Dec. 31, 1991 compared to the same quarter last year and compared to the preceding quarter of the current fiscal year.
 For the third fiscal quarter ended Dec. 31, 1991 compared to a year earlier, net income increased from $2,098,000 to $2,332,000 and earnings per share increased from $.21 to $.22. The improvement resulted from increased service revenue of $3,889,000, a 14 percent increase, with the margins on the increased revenue offsetting decreased license revenue of $2,287,000.
 Net income more than doubled during the third fiscal quarter compared to the second fiscal quarter due to increased service revenue and service margin significantly offsetting decreased license revenue. Net income increased from $949,000 or $.09 per share to $2,332,000 or $.22 per share.
 Service revenue grew from $28,237,000 to $31,466,000, or 11 percent, including an increase of $1,300,000 from the Advanced Development Program. Service expenses decreased $339,000 reflecting cost reductions initiated during the second fiscal quarter.
 W. Michael Long, president and chief executive officer, noted that the strongly improved earnings occurred without meaningful license revenue, only $475,000. The improved utilizations and margins resulted from revenue increases and improved cost controls.
 THE CONTINUUM COMPANY, INC.
 Supplemental Information
 Service Revenue Profitability
 Quarter ended ($000 omitted):
 Dec. 31, Sept. 30, Dec. 31,
 1991 1991 1990
 Service revenue $31,466 $28,237 $27,577
 Service expenses 21,366 21,705 21,044
 Service gross profit $10,100 $ 6,532 $ 6,533
 Service gross
 profit (percent) 32 23 24
 With service expenses approximately the same, increases in service revenue have sharply increased service gross profit.
 Customer Geography
 U.S. customers accounted for 42 percent of third quarter revenue and European customers accounted for 40 percent. Australian and Japanese customers accounted for the remainder.
 Service Revenue by Product
 Approximately 39 percent of the third quarter revenue was related to Continuum's CCA(TM) software product and 31 percent was related to Continuum's other life insurance products, LIFE-COMM(R), LIFE/70(R) and CLOAS(R). The remaining 30 percent of revenue was primarily related to COGEN(TM), an administrative system for property and casualty insurance companies.
 Sequential Quarterly Growth in Service Revenue
 Service revenue grew approximately $3,900,000 for the Dec. 31, 1991 quarter compared with the Dec. 31, 1990 quarter. With respect to Continuum's three customer geographies, North America, Europe and Pacific, the year-to-year growth was approximately one-third each. With respect to product revenue COGEN accounted for all of the growth while increased revenues from LIFE-COMM, LIFE/70 and CLOAS of approximately $1,400,000 offset a decrease from CCA revenue.
 Comparing the third fiscal quarter with the second fiscal quarter, service revenue grew approximately $3,200,000 with significantly all of the growth from life insurance products including CCA revenue, which grew approximately $500,000. Revenue growth from U.S. customers was approximately $2,800,000 with the remaining growth from customers in Europe.
 Marketing and Administrative Expenses
 Marketing and administrative expenses for the third fiscal quarter were $6,993,000 or 22 percent of total revenue, compared to a year ago when they were $5,738,000 or 19 percent of revenue. Continuum has continued to invest in growth strategies, increasing its presence outside of the United States and outside of the life insurance industry. These investments are significant but also necessary for Continuum to succeed with its new property and casualty products and for success outside the United States, including France, Germany and Japan.
 U.S. Sales Activities
 Continuum's revenue growth has been affected by the economic difficulties in the U.S. life insurance industry. To achieve growth in the U.S. market, Continuum has recently announced CCA2(TM). CCA2 is a family of life insurance software products developed in accordance with ES/C(TM) (Enterprise Solutions by Continuum), the company's strategy for providing flexible software in an open systems architecture designed to aid insurance companies in both controlling costs and stimulating growth.
 To help ensure the success of these new products, available starting in mid-1992, Continuum recently appointed Warren Weiss as vice president-North American Operations. Weiss is responsible for market development and sales of life insurance products and services. Prior to joining Continuum, Weiss, 35, was a vice president and general manager with Dun & Bradstreet Software.
 Long said, "Warren's experience in creating and implementing successful strategic sales and marketing campaigns, combined with our new advanced software products will strengthen our position in the U.S. life marketplace."
 Cash Increases
 At Dec. 31, 1991, cash balances were almost $26,000,000 an increase of $2,000,000 during the third fiscal quarter. Investments during the quarter totaled $1,349,000, mostly purchased software and computer equipment.
 Personnel
 Employment in the United States at Dec. 31, 1991 was 630, a decrease of six during the third fiscal quarter. Worldwide employment was 1083, an increase of five.
 NOTE: The Continuum Company, Inc. is an international consulting and computer services firm based in Austin, Texas, serving the needs of life insurance, property and casualty insurance and other financial services companies for computer software and services.
 -0- 1/20/92
 /CONTACT: John L. Westermann III of Continuum Company, 512-345-5700/
 (CNU) CO: Continuum Company, Inc. ST: Texas IN: CPR SU: ERN FC -- NY050 -- 1531 01/20/92 16:49 EST
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Date:Jan 20, 1992
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