Revenues Up 75 Percent; Net Income Up Almost Ten-fold; EPS 6 Cents
LOS GATOS, Calif., Oct. 21 /PRNewswire/ -- Red Brick(TM) Systems, Inc.
(Nasdaq: REDB), The Data Warehouse Company(TM), today reported record
operating results for the third quarter and nine months ended Sept. 30, 1996.
Total revenues were $9.0 million for the quarter ended Sept. 30, 1996, an
increase of 75.5 percent from $5.1 million in the third quarter of 1995.
Total revenues for the first nine months of 1996 were $23.6 million, an
increase of 64.1 percent from $14.4 million in the year-earlier period.
Net income for the third quarter of 1996 increased almost ten-fold to
$0.8 million, or 6 cents per share, compared to $83,112, or 1 cent per share,
in the same period last year. Nine-month net income was $1.4 million, or
11 cents per share, compared to $0.2 million, or 2 cents per share, in the
year-earlier period. Operating income was $0.5 million for the third quarter
of 1996, up from $0.1 million for the year-earlier quarter. Nine-month
operating income was $0.6 million, up from $0.4 million for the same period in
1995. (Nine-month net income, operating income and earnings per share figures
include a one-time engineering charge in the second quarter of 1996 of
$500,000, or 4 cents per share, for licensing selected technology.)
Total weighted shares of common and common equivalent stock were
12.8 million in the third quarter of 1996 versus 10.5 million in the same
period of 1995.
"We are pleased with our performance in the third quarter, which is
traditionally our most challenging. Revenue growth continued to be strong and
was balanced between new and repeat customers," said Christopher G. Erickson,
chairman of the board, president and chief executive officer of Red Brick.
"We believe this demonstrates the growing recognition that successful data
warehouses require a relational database specialized for the unique
requirements of data warehousing.
"We executed well on our major directives to expand our international
distribution capabilities and our North American network of value-added
resellers, systems integrators and consulting partners," said Erickson. "At
the same time, we remained focused on delivering innovative new products and
service, highlighted by the shipment of our newest release, Red Brick
Warehouse 5.0, on Oct. 14."
Continued Revenue Growth; Strong Balance Sheet
In the third quarter of 1996, Red Brick's software license revenues were
$7.3 million, or 81.2 percent of total revenues, up 89.0 percent from
$3.9 million, or 75.4 percent of total revenues, in the same period of 1995.
Maintenance and services revenues were $1.7 million, or 18.8 percent of total
revenues, compared with $1.3 million, or 24.6 percent of total revenues, in
the year-earlier quarter.
Red Brick's gross margin in the third quarter of 1996 was essentially
unchanged at 87.0 percent, compared with 87.7 percent in third-quarter 1995.
Operating expenses in the third quarter of 1996 were 81.4 percent of total
revenues, down from 84.9 percent in third-quarter 1995. Sales and marketing
expenses were $5.2 million, or 57.2 percent of total revenues, compared with
$2.7 million, or 52.3 percent of total revenues, in the prior-year quarter.
This increase was primarily due to sales force expansion. Research and
development expenses were $1.5 million, or 16.3 percent of total revenues,
compared with $1.3 million, or 25.2 percent of total revenues, in the
prior-year quarter. General and administrative expenses were $0.7 million, or
8.0 percent of total revenues, compared with $0.4 million, or 7.5 percent of
total revenues, in third-quarter 1995.
On Red Brick's balance sheet, cash, cash equivalents and short-term
investments were $36.0 million at Sept. 30, 1996, compared with $3.0 million
at December 31, 1995, which was prior to the company's initial public
offering. At Sept. 30, 1996, working capital was $38.4 million, and total
stockholders' equity, or net book value, was $40.5 million, or $3.60 per
share.
Quarterly Developments
In addition to its financial performance, Red Brick achieved a number of
important milestones in third-quarter 1996:
* Announced a major expansion of the indirect sales channels through which
Red Brick markets, sells and supports its relational database (RDBMS) products
and service for data warehouse applications in the United States and Canada.
* Announced solutions-oriented reseller agreements with Acxiom, ALTA
Analytics, james martin + co and Vento Software.
* Announced a major expansion of its operations and distribution channels
outside the U.S. to meet the growing demand for Red Brick data warehouse
products in Europe, Asia/Pacific and the Americas.
* Established its second international operation -- Red Brick Systems
Australasia Pty. Ltd. -- to serve Australia and New Zealand. Red Brick's
European headquarters located in the United Kingdom -- Red Brick Systems U.K.
Ltd. -- grew significantly with the addition of specialists in retail and
financial services.
About the Company
Red Brick Systems, Inc. is the leading provider of data warehouse products
and service. The company, based in Los Gatos, Calif., specializes in software
products used for fast, accurate and confident business decision-making on
large client/server databases.
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). In particular, see "Risk
Factors" in the Registration Statement on Form S-1 effective Jan. 22, 1996 and
in the most recent Quarterly Report on Form 10-Q filed with the SEC in August
1996.
NOTE: Red Brick and logo is a registered trademark, and Red Brick and The
Data Warehouse Company are trademarks, of Red Brick Systems, Inc. All other
trademarks and registered trademarks are the property of their respective
holders.
RED BRICK SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data; unaudited)
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
Revenues:
Software license $ 7,319 $ 3,873 $19,065 $10,716
Maintenance and service 1,694 1,264 4,492 3,640
Total revenues 9,013 5,137 23,557 14,356
Cost of revenues:
Software license 317 141 779 444
Maintenance and service 851 490 1,911 1,130
Total cost of revenues 1,168 631 2,690 1,574
Gross margin 7,845 4,506 20,867 12,782
Operating expenses:
Sales and marketing 5,153 2,686 13,361 7,536
Research and development 1,465 1,292 4,393 3,685
General and administrative 717 384 2,018 1,173
In-process technology license -- -- 500 --
Total operating expenses 7,335 4,362 20,272 12,394
Income from operations 510 144 595 388
Interest and other income 459 45 1,223 76
Interest expense (86) (56) (239) (168)
Income before provision for income
taxes and minority interest 883 133 1,579 296
Provision for income taxes 102 50 172 116
Income before minority interest 781 83 1,407 180
Minority interest 37 -- 37 --
Net income $ 818 $ 83 $ 1,444 $ 180
Net income per share $ 0.06 $ 0.01 $ 0.11 $ 0.02
Shares used to compute
net income per share 12,770 10,468 12,635 9,704
RED BRICK SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
1996 1995
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $15,338 $ 2,998
Short-term investments 20,613 --
Total cash, cash equivalents, and
short-term investments 35,951 2,998
Accounts receivable, net of allowance
of $858 and $670 8,931 5,511
Prepaid expenses and other current assets 733 293
Total current assets 45,615 8,802
Property and equipment, net 2,711 1,980
Other assets 246 195
Total assets $48,572 $10,977
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to stockholder due
within one year $ -- $ 33
Accounts payable 245 658
Accrued expenses 2,096 1,251
Accrued compensation 1,535 1,258
Deferred revenue 2,452 2,015
Capital lease obligations due within
one year 887 974
Total current liabilities 7,215 6,189
Capital lease obligations 774 1,068
Minority interest 84 --
Stockholders' equity 40,499 3,720
Total liabilities and stockholders'
equity $48,572 $10,977
SOURCE Red Brick Systems Inc.
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CONTACT:
investors, Robert C. Hausmann, Vice President
''&'' Chief Financial Officer, 408-399-3204, or media, Mark L.
Olson, Director, Corporate Marketing, 408-399-7140, or
marko@redbrick.com, both of Red Brick Systems, Inc.
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