Fourth Quarter Revenues Doubled; Net Income Up Sharply; EPS 11 Cents Excluding
Tax Benefit
LOS GATOS, Calif., Jan. 15 /PRNewswire/ -- Red Brick(TM) Systems, Inc.
(Nasdaq: REDB), The Data Warehouse Company(TM), today reported record
operating results for the fourth quarter and the year ended Dec. 31, 1996.
Total revenues were $12.5 million for the quarter ended Dec. 31, 1996, an
increase of 100 percent from $6.2 million in the fourth quarter of 1995.
Total revenues for 1996 were $36.0 million, an increase of 75 percent from
$20.6 million in the previous year.
Red Brick recognized a one-time tax benefit for deferred taxes of
$1.0 million, or 8 cents per share, in fourth quarter 1996.
Excluding the tax benefit, fourth quarter net income was $1.4 million, or
11 cents per share, compared to $0.1 million, or 1 cent per share, in the same
period last year, and 1996 net income was $2.8 million, or 22 cents per share,
compared to $0.3 million, or 3 cents per share, in the previous year.
Including the tax benefit, net income for the quarter ended Dec. 31, 1996 was
$2.4 million, or 19 cents per share, and net income for the year ended
Dec. 31, 1996 was $3.8 million, or 30 cents per share.
Operating income was $0.9 million for the fourth quarter of 1996, up from
$0.2 million for the same period in 1995. Operating income for 1996 was
$1.5 million, up from $0.6 million for fiscal year 1995. (Fiscal year net
income, operating income and earnings per share figures include a one-time
engineering charge in the second quarter of 1996 of $0.5 million, or 4 cents
per share, for in-process technology.)
Total weighted shares of common and common equivalent stock were
12.8 million at Dec. 31, 1996 versus 10.0 million at Dec. 31, 1995.
"We capped our first year as a public company with the best sales quarter
in company history, and our 12th consecutive quarter of sales growth. We
believe the fourth quarter demonstrated the strength and consistency of our
business," said Christopher G. Erickson, chairman of the board, president and
chief executive officer of Red Brick. "Our top-line revenue growth in turn
drove earnings growth. The fourth quarter was the most profitable in company
history and our eighth consecutive quarter of net income growth.
"The introduction in October of the newest version of our flagship
product, Red Brick Warehouse 5.0, was the result of the largest single
engineering effort in company history. It culminated a year in which we
experienced record demand for our data warehouse database, particularly from
new customers," said Erickson.
Strong Revenue Growth; Consistency Across Balance Sheet
In the fourth quarter of 1996, Red Brick's software license revenues were
$10.2 million, or 81.6 percent of total revenues, up 102.5 percent from
$5.0 million, or 80.4 percent of total revenues, in the same period of 1995.
Maintenance and services revenues were $2.3 million, or 18.4 percent of total
revenues, compared with $1.2 million, or 19.6 percent of total revenues, in
the year-earlier quarter.
Red Brick's gross margin in the fourth quarter of 1996 was 85.6 percent,
compared with 88.4 percent in fourth quarter 1995.
Operating expenses in the fourth quarter of 1996 were 78.0 percent of
total revenues, down from 85.3 percent in fourth quarter 1995. Sales and
marketing expenses were $7.0 million, or 56.5 percent of total revenues,
compared with $3.5 million, or 55.6 percent of total revenues, in the
prior-year quarter. Research and development expenses were $1.9 million, or
14.9 percent of total revenues, compared with $1.3 million, or 21.6 percent of
total revenues, in the prior-year quarter. General and administrative
expenses were $0.8 million, or 6.6 percent of total revenues, compared with
$0.5 million, or 8.1 percent of total revenues, in fourth-quarter 1995.
On Red Brick's balance sheet, cash, cash equivalents and short-term
investments were $35.2 million at Dec. 31, 1996, compared with $3.0 million at
Dec. 31, 1995, which was prior to the company's initial public offering. At
Dec. 31, 1996, working capital was $40.3 million, and total stockholders'
equity, or net book value, was $42.9 million, or $3.48 per share.
Quarterly Developments
Several organizational changes occurred in the fourth quarter. Alec
Wilson recently was promoted to vice president of worldwide sales from vice
president of North American sales, replacing Thomas Henn who will remain with
the company in a transitional role while he prepares to pursue new career
interests.
In addition, Chris Grejtak left the company as vice president of marketing
on Dec. 27 to take a similar position at Brio Technologies, a privately-held
company and Red Brick PaVER Gold partner. Erickson has assumed responsibility
for day-to-day management of marketing while a search is underway to fill this
position.
In addition to its financial performance, Red Brick achieved a number of
important recent milestones:
* Launched and shipped Red Brick Warehouse 5.0, the newest version of its
industry-leading relational database designed specifically for data warehouse,
data mart, data mining and on-line analytical processing (OLAP) applications.
* Debuted the PaVER (Partner and Value Extended Reseller) Gold(TM)
Program, a technical certification initiative designed to provide Red Brick
Warehouse users with a choice of leading software products that exploit the
specialized decision support capabilities of Red Brick Warehouse.
* Signed four distributor agreements in Japan and plan to open Red Brick
Systems Japan K.K. on Jan. 16, 1997.
About the Company
Red Brick Systems, Inc., based in Los Gatos, Calif., is the leading
provider of relational database products and service for data warehouse
applications.
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 of Form 10-Q filed with the SEC on
November 1, 1996.
NOTE: Red Brick and logo is a registered trademark, and Red Brick, PaVER
Gold 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 Twelve months ended
December 31, December 31,
1996 1995 1996 1995
Revenues:
Software license $10,177 $ 5,026 $29,242 $15,742
Maintenance and service 2,301 1,223 6,793 4,863
Total revenues 12,478 6,249 36,035 20,605
Cost of revenues:
Software license 357 241 1,136 685
Maintenance and service 1,446 485 3,357 1,615
Total cost of revenues 1,803 726 4,493 2,300
Gross margin 10,675 5,523 31,542 18,305
Operating expenses:
Sales and marketing 7,049 3,475 20,410 11,011
Research and development 1,863 1,348 6,256 5,033
General and administrative 821 509 2,839 1,682
In-process technology - - 500 -
Total operating expenses 9,733 5,332 30,005 17,726
Income from operations 942 191 1,537 579
Interest income and expense 525 (36) 1,509 (128)
Income before provision
for income taxes and
minority interest 1,467 155 3,046 451
Provision for income taxes (859) 27 (687) 143
Income before minority
interest 2,326 128 3,733 308
Minority interest 48 - 85 -
Net income $ 2,374 $ 128 $ 3,818 $ 308
Net income per share $ 0.19 $ 0.01 $ 0.30 $ 0.03
Shares used to compute
net income per share 12,770 10,749 12,668 9,965
RED BRICK SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Dec. 31, Dec. 31,
1996 1995
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $14,552 $ 2,998
Short-term investments 20,599 -
Total cash, cash equivalents,
and short-term investments 35,151 2,998
Accounts receivable,
net of allowance of $858 and $670 13,106 5,511
Prepaid expenses and other current assets 1,213 293
Deferred tax asset 850 -
Total current assets 50,320 8,802
Property and equipment, net 2,693 1,980
Other assets 205 195
Deferred tax asset 150 -
Total assets $53,368 $10,977
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to stockholder $ - $ 33
Accounts payable 325 658
Accrued expenses 2,858 1,251
Accrued compensation 1,889 1,258
Deferred revenue 4,180 2,015
Capital lease obligations due within one year 760 974
Total current liabilities 10,012 6,189
Capital lease obligations 396 1,068
Minority interest 36 -
Stockholders' equity 42,924 3,720
Total liabilities and stockholders' equity $53,368 $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
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