LOS GATOS, Calif., July 16 /PRNewswire/ -- Red Brick(R) Systems, Inc.
(Nasdaq: REDB), The Data Warehouse Company(R), today reported operating
results for the second quarter ended June 30, 1998.
Total second-quarter 1998 revenues were $7.7 million, compared with
$10.4 million in second-quarter 1997. In second-quarter 1998, Red Brick's
software license revenues were $3.3 million, or 43 percent of total revenues,
and maintenance and service revenues were $4.4 million, or 57 percent of total
revenues.
Net loss for the second-quarter 1998 was $6.1 million, or a diluted loss
per share of forty-eight cents, versus a net loss in second-quarter 1997 of
$1.5 million, or a diluted loss per share of fourteen cents.
On Red Brick's balance sheet, cash, cash equivalents and short-term
investments were $22.5 million at June 30, 1998. Working capital was
$16.4 million, and total stockholders' equity was $21.0 million. Days sales
outstanding in accounts receivable at June 30, 1998 were 66. Red Brick had no
outstanding short-term or long-term borrowings at June 30, 1998.
During the second quarter, Red Brick faced various challenges from the
marketplace. Competition has increased in core technology and in platform
initiatives due to recent growth and significant opportunity in the decision
support market. The demand for single-source solutions in data warehousing
has also increased.
To meet these changing needs, Red Brick has focused its attention over the
past two quarters on strategic changes in its core identity and business
proposition to new and existing customers. Red Brick has realigned its
organization and infrastructure to address the changing market. The company
believes its strategy of delivering decision support solutions and analytic
applications based on its comprehensive, integrated platform addresses the
market growth opportunities, even in light of increased activity and
competition.
"While we are disappointed with our overall quarterly results, we have
laid the groundwork for our strategy which we believe is highly responsive to
market requirements," said Christopher Erickson, president and CEO of Red
Brick. "We have made significant progress on our strategic objectives,
including the introduction of Red Brick DecisionScape(SM), the continuation of
leading technical innovation, the strengthening of our partnerships to deliver
applications, and the expansion of our consulting and services capabilities.
We believe our strategy of delivering analytic applications strengthens our
ability to differentiate ourselves from technology providers in data
warehousing and enables us to address targeted vertical industries. However,
full implementation of this strategy requires a long-term effort."
Recent Developments
During the second quarter Red Brick achieved a number of milestones,
including:
* Released Red Brick Formation(TM) to customer beta program
* Signed partnerships with DataSage and Paradigm Ovation to deliver
analytic applications
* Continued strengthening its management team and sales force
* Added 30 new accounts including Boeing North America, Kawasaki Steel
Systems, Mizuno Corporation, Nations Bank, Pegasus Systems and
The Kroger Company
About Red Brick
Red Brick Systems, Inc. is a premier provider of data warehousing
solutions. Through Red Brick DecisionScape, a comprehensive, integrated
environment of products, services, methodology and partnerships, Red Brick
helps its customers and partners improve the quality, speed and accuracy of
their business decision-making. Red Brick's leading expertise and innovative,
server-integrated technology deliver scalable decision support solutions for
data warehousing, data marts, OLAP and data mining. Red Brick is based in Los
Gatos, Calif., with 290 employees worldwide and FY97 annual revenues of
approximately $43 million.
NOTE:
Except for the historical information contained herein, the matters
discussed in this news release include forward-looking statements that involve
risks and uncertainties described from time to time in the Company's filings
with the Securities and Exchange Commission (SEC). Factors that could cause
actual events or results to differ materially include without limitation:
Competition; Repositioning the Company towards Solutions and Applications;
Newly Announced Changes in Management Personnel; Dependence on New Products
and Rapid Technological Change; Feasibility of In-Process Technology;
Dependence upon Key Personnel; Dependence on Continued Growth of the Data
Warehouse Market; and other factors discussed in the "Risk Factors" sections
of the most recent Annual Report filed with the SEC on Form 10-K for the year
ended December 31, 1997 and the most recent Form 10-Q for the quarter ended
March 31, 1998.
News releases and corporate background information may also be retrieved
by fax. For an index of available materials, please call 800-758-5804, and
enter PIN #105756. Red Brick, the Red Brick logo and The Data Warehouse
Company are registered trademarks, Red Brick Formation is a trademark and Red
Brick DecisionScape is a service mark of Red Brick Systems, Inc. All other
trademarks and registered trademarks are the property of their respective
holders.
RED BRICK SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data; unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Revenues:
Software license $3,332 $7,401 $7,967 $11,046
Maintenance and service 4,351 3,010 9,142 5,888
Total revenues 7,683 10,411 17,109 16,934
Cost of revenues:
Software license 338 308 747 690
Maintenance and service 2,640 2,115 5,082 3,954
Total cost of revenues 2,978 2,423 5,829 4,644
Gross margin 4,705 7,988 11,280 12,290
Operating expenses:
Sales and marketing 6,424 6,765 13,010 14,041
Research and development 3,380 2,065 6,616 4,776
General and administrative 1,179 1,176 2,082 2,156
Total operating expenses 10,983 10,006 21,708 20,973
Loss from operations (6,278) (2,018) (10,428) (8,683)
Interest and other income, net 335 495 708 961
Loss before provision
for income taxes and
minority interest (5,943) (1,523) (9,720) (7,722)
Provision for income taxes 129 105 290 205
Loss before minority interest (6,072)(1,628) (10,010) (7,927)
Minority interest -- 95 0 32
Net loss $(6,072) $(1,533) $(10,010) $(7,895)
Basic loss per share $(0.48) $(0.14) $(0.80) $(0.70)
Diluted loss per share $(0.48) $(0.14) $(0.80) $(0.70)
Shares used to compute basic
loss per share 12,521 11,318 12,456 11,288
Shares used to compute diluted
loss per share 12,521 11,318 12,456 11,288
RED BRICK SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
1998 1997
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 8,891 $ 12,358
Short-term investments 13,608 14,551
Accounts receivable, net 5,653 12,291
Prepaid expenses
and other current assets 1,473 955
Total current assets 29,625 40,155
Property and equipment, net 3,743 2,677
Intangible assets, net 270 361
Deposits and other assets 730 372
Total assets $ 34,368 $ 43,565
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 682 $ 518
Accrued expenses 2,640 3,719
Accrued compensation 2,791 2,031
Deferred revenue 6,946 7,370
Capital lease
obligations due
within one year 126 385
Total current
liabilities 13,185 14,023
Capital lease obligations 142 60
Commitments and contingencies
Total stockholders' equity 21,041 29,482
Total liabilities
and stockholders'
equity $ 34,368 $ 43,565
SOURCE Red Brick Systems, Inc.
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Related links:
http://www.redbrick.com
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 105756
CONTACT:
investors, Rebecca Kreps, 408-399-7824, or
rkreps@redbrick.com, or media, Carolyn Hughes, 408-399-7216, or
chughes@redbrick.com, both of Red Brick Systems, Inc.
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