| Forecross Ceases Migration Project
June 26, 2002
Contact: Pat Dittmar (Pat@forecross.com)
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| SAN FRANCISCO, CA: Forecross® Corporation (OTCBB: FRXX), a
legacy to web and XML implementation solution company, announced today that it has ceased
work on a contract that had been under way since March 2001 for an IDMS to DB2 legacy
migration. The previously announced total value of the contract through a future
completion date was $3,500,000. Of this sum, approximately $1.2 million has been received
by Forecross, and the Company is seeking an additional payment for work performed prior to
termination. "Fortunately, we commenced work on two new projects in this quarter
which almost entirely offset the effect on our backlog of the termination of the contract
noted above," said Bernadette C. Castello, Chief Financial Officer. Before giving effect to the termination of this contract,
revenue for the quarter ended June 30, 2002 is expected to be substantially similar to
that of the March 31, 2002 quarter, but significantly less than the $1.7 million reported
for the same period last year. "Although we commenced two new projects in this
quarter, under the Company’s revenue recognition policy, revenue in excess of costs
is not recognized until a project is at least 25% complete. Unfortunately, this means that
the two new contracts will not make a significant contribution to revenue in this
quarter," said Castello. "In addition, we expect to recognize a charge against
earnings of approximately $300,000 in this quarter as a result of terminating the contract
mentioned above. We do not anticipate recognizing any other charges in connection with the
termination of that contract."
Management anticipates that the Company will report a net loss for
the current quarter that will be similar to the net loss reported for the quarter ended
March 31, 2002. This compares with a nearly break-even performance for the quarter ended
June 30, 2001, before giving effect to that quarter’s extraordinary revenue based on
accelerated recognition of over $500,000 of Year 2000 revenue.
Management presently anticipates increasing revenues in the coming
quarter based on the progress of the two new contracts as well as contribution from other
contracts that management hopes to sign and commence work on during that quarter. "We
are disappointed that we felt compelled to stop work on a contract, a step we have never
before taken in our 20 year history," commented Castello. "We are achieving
additional process efficiencies and otherwise seeking to manage costs to improve results
while we continue to pursue additional contracts."
About Forecross - Founded in 1982 as a high-technology
software development laboratory, Forecross Corporation is dedicated to the design and
development of innovative conversion software to re-deploy and integrate legacy
applications using Internet technologies. Clients have included such leading
corporations as Aetna Life Insurance Company, Brown Brothers Harriman & Company,
Charles Schwab & Co., BDM Technologies, Inc., IBM Corporation and Bank of America NTSA
for its migration software services. Teaming partners of Forecross Corporation include
Allen Systems Group, Inc., CIBER, Inc., U.S. Technology Resources and SCB Computer
Technology. |
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On Behalf of the Board of Directors,
Bernadette C. Castello
Senior Vice President and CFO
Forecross Corporation
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Except for historical information contained herein, the matters set
forth in this release are forward-looking statements that are dependent on certain risks
and uncertainties, including such factors, among others, as market acceptance, market
demand, pricing, changing regulatory environment, changing economic conditions, risks in
new product and service development, the effect of the company’s accounting policies
and other risk factors detailed in the Company’s SEC and BCSC filings.
The U.S. Securities and Exchange Commission has not reviewed and does
not accept responsibility for the adequacy or accuracy of this News Release, which has
been prepared by the Company.
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