Artisoft, Inc. Announces Financial Results for Fiscal 1996


(TUCSON, AZ. — August 1, 1996) — Artisoft, Inc. (Nasdaq: ASFT) today reported net sales of $61.0 million, and net earnings per share of $.16, before giving effect to acquisition-related charges, for the fiscal year ended June 30, 1996. This compares to net sales of $84.2 million and a net loss per share of $.29, before giving effect to non-recurring charges, for the fiscal year ended June 30, 1995.

For the fourth quarter of fiscal 1996, net sales were $16.5 million and net earnings per share $.07, compared to net sales of $14.5 million and a net loss per share of $.17, before giving effect to non-recurring charges, for the fourth quarter of fiscal 1995. Net sales for the fourth quarter increased sequentially by 9%, from third quarter net sales of $15.2 million.

Before the effect of acquisition-related charges, operating income for fiscal 1996 was $1.9 million. This compares to an operating loss of $6.7 million for fiscal 1995, before giving effect to non-recurring charges. One of the key factors driving the improvement in operating income was a year-over-year increase in gross margin from 49% to 67%. Software sales as a percentage of total sales increased to 67% in fiscal 1996 from 46% in fiscal 1995. Another key factor driving improvement in operating income was management's continued focus on cost containment and operating efficiency.

“Our strategic decision to transform Artisoft into a growth-oriented software company with award-winning, market-leading products and technologies is yielding results,” stated William C. Keiper, chairman and chief executive officer. “The recent acquisitions of Synergy Solutions, Triton Technologies and Stylus Innovation have enhanced the company's technology base and product offerings and have uniquely positioned Artisoft as a leading provider of small business networking, PC communications and computer telephony solutions.

“Our financial results for the fourth quarter were the best in six quarters. These results reflect our company's transition to a software-centric model. We are continuing to hone our strategy to deliver solutions for the convergence of computing and communications, and have directed our internal product development, and external business development resources, to move as rapidly as possible toward that objective.”

Artisoft leads the industry in providing easy-to-use, affordable networking, communications and computer telephony solutions for business.

Chosen by nearly five million users worldwide to connect and share computer resources, Artisoft solutions include the award-winning LANtastic® family of networking products, and the INSYNC® family of remote communication products, including CoSession Remote™ and ModemShare™. Dedicated to the development of easy-to-use tools and applications for Windows® telephony, Artisoft's computer telephony solutions include Visual Voice® and Visual Fax®. The company maintains nine offices outside the United States, and distributes its products in more than 100 countries.

For more information, contact Artisoft, Inc., 2202 N. Forbes Blvd., Tucson, AZ 85745. Sales 800/233-5564. Corporate 520/670-7100. Fax 520/670-7101. World Wide Web home page http://www.artisoft.com. Recent Artisoft press releases are available at no charge through PR Newswire's Company News On-Call fax-on-demand system; call 800/758-5804 and enter company number 107158.

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“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

This release may contain forward-looking statements that involve risks and uncertainties, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance risks, the presence of competitors with greater financial resources, product development and commercialization risks, costs associated with integration and administration of acquired operations, capacity and supply constraints or difficulties, the results of financing efforts and other risks detailed from time to time in the Company's Securities and Exchange Commission filings.

CONSOLIDATED BALANCE SHEETS

At June 30, 1996 and 1995

(in thousands, except share amounts)







ASSETS                                            1996            1995       



Current assets:

   Cash and cash equivalents                    $15,325          $16,551 

   Short-term investments                             -           19,312 

   Receivables:

     Trade accounts, less allowances of

     $3,261 and $2,800 in 1996 and

     1995, respectively                           16,768          15,508

   Income taxes                                    1,635           3,500        

   Notes and other                                 1,405           3,424

   Inventories                                     2,998           2,665 

   Prepaid expenses                                  906           2,046 

   Deferred income taxes                           7,567           2,880

   Total current assets                           46,604          65,886



Long-term investments                                  -           1,930



Property and equipment                            13,690          15,302

   Less accumulated depreciation

   and amortization                               (6,166)         (5,738)

Net property and equipment                         7,524           9,564



Other assets                                       3,584             427

                                                 $57,712         $77,807





LIABILITIES AND SHAREHOLDERS' EQUITY



Current liabilities:

   Accounts payable                              $ 3,333         $ 5,248 

   Accrued and other liabilities                   3,217           4,314 

   Current portion of capital

   lease obligations                                  85               -

      Total current liabilities                    6,635           9,562



Capital lease obligations, net

   of current portion                                 96               -



Shareholders' equity

   Common stock, $.01 par value.

      Authorized 50,000,000 shares;

      issued  27,807,890 shares at 

      June 30, 1996 and 27,671,680 shares at

      June 30, 1995                                  278             277

   Additional paid-in capital                     96,075          95,012 

   Retained earnings                              24,308          42,636 

   Less treasury stock, at cost, 

        13,287,500 shares                        (69,680)        (69,680)

      Total shareholders' equity                  50,981          68,245

                                                 $57,712         $77,807











Artisoft, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months and Year Ended June 30, 1996 and 1995

(in thousands, except per share amounts)



                                    Three Months Ended             Year Ended

                                         June 30,                   June 30,         

                                    1996          1995          1996       1995





Net sales                        $16,496      $ 14,509      $ 60,972    $ 84,243 

Cost of sales                      4,949         6,465        19,846      42,796

      Gross margin                11,547         8,044        41,126      41,447



Operating expenses:

   Sales and marketing             6,322         7,844        26,178      33,010 

   Product development             2,494         1,730         7,092       7,655 

   G & A                           1,717         1,727         5,950       7,495 

   Costs to exit

   hardware business, net

      of gain on disposition           -         1,901             -       3,119

   Purchased in-process

   technology and

   related costs                       -             -        26,744           -

      Total operating expenses    10,533        13,202        65,964      51,279



      Income (loss) from

      operations                   1,014        (5,158)      (24,838)     (9,832)



Other income (expenses), net         279          (653)        1,517          (3)

   Income (loss) before

      income taxes                 1,293        (5,811)      (23,321)     (9,835)



Income tax benefit(expense)      $   344      $ (2,176)     $ (4,993)    $ 3,987



   Net income (loss)             $   949      $ (3,635)     $(18,328)    $(5,848)



Net income (loss) per common

   and equivalent share          $   .07      $   (.25)     $  (1.27)    $  (.41)



Shares used in per

   share calculation              14,498        14,367        14,463       14,315


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