Earnings, Revenue In Line With Expectations; New Products On Track
OTTAWA, CANADA, May 5 /PRNewswire/ - Fulcrum Technologies Inc. (Nasdaq:
FULCF; TSE: FUL) today announced results for the first quarter of 1997. All
financial figures are expressed in Canadian dollars.
Revenue for the first quarter ended March 31, 1997 was $11.6 million,
slightly higher than revenue in the first quarter of 1996. The net loss in
the quarter was $3.8 million, or $0.25 per share, compared to a profit of
$579,000, $0.04 per share, in the first quarter of 1996.
In the three months ended March 31, 1997, Fulcrum spent $3.2 million on
research and development, all of which was expensed in the quarter. This
compares with expenditures of $2.7 million in the first quarter of 1996, of
which $800,000 was capitalized. The decision to expense research and
development costs as incurred is in keeping with the application of
conservative criteria for treatment of these expenses and consistent with the
change in Fulcrum's accounting practices implemented in the last quarter of
1996.
Eric Goodwin, Fulcrum's Chairman and CEO, stated: ``Our revenue growth
expectations were modest because of the fundamental shifts underway in
computing infrastructures in large and medium-sized organizations. These
companies are considering the use of the Intranet for serious business
applications where Fulcrum's software can play a significant role. In
announcing our 1996 year-end results we identified the impact that these
shifts will continue to have on our business; we still expect to see only
modest improvements in revenue over the balance of 1997. In spite of this
situation, we saw a 16-percent increase in license revenue in this quarter
over the first quarter of 1996.
``To ensure our future success, we will continue our investment in product
and market development, to respond to the emerging markets for Intranet-based
knowledge management solutions.
``We achieved a significant milestone in the first quarter with formal
announcement of Fulcrum(R) Knowledge Network(TM), a product that will leverage
the shift as core business applications move to Web-based architectures. The
Fulcrum Knowledge Network is a ready-to-deploy solution built on a
three-tiered Web-based architecture. It provides a single user interface to
get at information across the organization, no matter what repository it is
in.
``The Fulcrum Knowledge Network has already been shipped to over 250 beta
sites. In addition to positive feedback from the beta customers, the product
has earned positive coverage by industry analysts and the trade press, and was
described as a product that `makes finding information a pleasure,' in a
recent product review in InfoWorld. The first customer shipments will begin
later this month,'' Goodwin concluded.
For 14 years, Fulcrum Technologies Inc. has led the way in building
innovative and effective knowledge management solutions for some of the
world's most important companies. Fulcrum counts major corporations and
industry leaders such as Fujitsu, Microsoft, Nabisco, and Novell among its
customers. Headquartered in Ottawa, Canada, Fulcrum achieves global reach
with offices in the United States, Europe, Australia and Japan, and through a
network of partners worldwide. Fulcrum is publicly traded on the Nasdaq
National Market (``FULCF'') and on the Toronto Stock Exchange (``FUL''). For
more information on Fulcrum and Fulcrum products, visit Fulcrum's Web site:
http://www.fulcrum.com.
Any forward-looking statements in this release are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Investors are cautioned that all forward-looking statements involve
risk and uncertainties, including without limitation, risks of intellectual
property litigation, risks in technology development and commercialization,
risks in product development and market acceptance of and demand for the
Company's products, risks of downturns in economic conditions generally, and
in the software application development tools and information retrieval
software tools markets specifically, risks associated with competition and
competitive pricing pressures, risks associated with foreign sales and higher
customer concentration and other risks detailed in the Company's filings with
the Securities and Exchange Commission.
Visit Fulcrum's Web site: http://www.fulcrum.com.
Fulcrum is a registered trademark of Fulcrum Technologies Inc. and the
Fulcrum Knowledge Network is a trademark of Fulcrum. Other trademarks used
throughout this document are trademarks of their respective owners.
Fulcrum Technologies Inc.
Consolidated Statements of Operations Data
(Canadian dollars in thousands, except per share data)
Three Months Ended
March 31
-----------------------------
1997 1996
(unaudited) (unaudited)
CANADIAN GAAP
Revenue:
License fees $9,776 $8,453
Services 1,850 3,107
-------------- --------------
Total revenue 11,626 11,560
Cost of revenue:
License fees 606 1,017
Services 1,070 1,568
-------------- --------------
Total cost of revenue 1,676 2,585
-------------- --------------
Gross profit 9,950 8,975
Operating expenses (income)
Sales and marketing 9,720 6,322
Research and development 3,167 1,892
Investment tax credits &
government grants - (1,301)
General and administrative 1,847 1,203
Foreign exchange 429 59
-------------- --------------
Total operating expenses 15,163 8,175
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Income (loss) from operations (5,213) 800
Other income (expense) (113) 135
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Income (loss) before
income taxes (5,326) 935
Income tax recovery (expense) 1,648 (356)
-------------- --------------
Income (loss) before
minority interest (3,678) 579
Minority interest (168) -
-------------- --------------
Net income (loss) ($3,846) $579
-------------- --------------
-------------- --------------
Net income (loss) per share
Basic ($0.25) $0.04
Fully diluted ($0.25) $0.04
Weighted average number of
Common shares outstanding
(000's):
Basic 15,188 14,930
Fully diluted 15,188 16,492
US GAAP
Income (loss) from operations ($5,213) $800
Net income (loss) ($3,846) $579
Net income (loss) per
share - primary ($0.25) $0.04
Common shares outstanding
(000's)
primary 15,188 15,900
Fulcrum Technologies Inc.
Condensed Balance Sheets
(Canadian dollars in thousands)
March 31, December 31,
1997 1996
-------------- ---------------
(unaudited)
ASSETS
Cash and cash equivalents $3,463 $3,435
Accounts receivable 27,956 22,692
Other current assets 5,800 4,833
Capital assets 8,944 8,951
Goodwill 6,591 6,874
Deferred development &
acquired software 328 491
Long-term investments 1,004 1,004
Other non-current assets 5,191 3,699
Deferred income taxes 6,825 4,402
-------------- ---------------
$66,102 $56,381
-------------- ---------------
-------------- ---------------
LIABILITIES AND EQUITY
Bank indebtedness $11,160 $ -
Accounts payable and accruals 16,298 14,270
Deferred service revenue 2,267 1,796
Other current liabilities 77 152
Minority interest 569 401
Shareholders' equity 35,731 39,762
-------------- ---------------
$66,102 $56,381
-------------- ---------------
-------------- ---------------
SOURCE: Fulcrum Technologies Inc.
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CONTACT:
Investor relations, Fulcrum, (613) 238-1761
ext.230, e-mail: investors(at)fulcrum.com. Media may contact:
Gillian Brouse, Fulcrum, (613) 238-1761 ext.251, e-mail:
pr(at)fulcrum.com
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