(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.
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