| January 13, 1999, San Francisco, California: Forecross®
Corporation (OTCBB - FRXX) announced today results for the year ended September 30, 1998.
Revenues increased to $7,168,752, up 24% from $5,775,038 reported in 1997. However, the
Company's net loss amounted to $2,328,652 (or $.20 per share) in 1998, versus the loss of
$1,045,511 (or $.09 per share) it incurred for the year ended September 30, 1997. Operating results for the periods ended September 30, include:
| |
Three Months Ended
Sept 30, 1998 |
Three Months Ended
Sept 30, 1997 |
Year Ended
Sept 30, 1998 |
Year Ended
Sept 30, 1997 |
Revenues |
$1,512,658 |
$1,368,442 |
$7,168,752 |
$5,775,038 |
Cost of Revenues |
1,077,198 |
1,292,646 |
4,419,347 |
3,366,608 |
Operating Expenses |
1,017,708 |
981,631 |
4,772,147 |
3,384,286 |
Loss from Operations
|
(582,248) |
(905,835) |
(2,022,742) |
(975,856) |
Other (Expense) |
(87,241) |
(6,006) |
(305,910) |
(69,655) |
Net Loss |
(669,489) |
(911,841) |
(2,328,652) |
(1,045,511) |
Net Loss per share
|
(0.06) |
(0.08) |
(0.20) |
(0.09) |
Weighted Average Number of Shares Outstanding
|
11,763,612 |
11,750,862 |
11,761,920 |
11,681,035 |
The increase in revenues for the period reflected several
factors: first, revenue of $4,364,000 from year 2000 assessment and renovation contracts
and the amortization of Assess/2000 software licenses in 1998, as compared to $1,788,000
in 1997; second, the decrease in revenue from the amortization of exclusive
distributorship agreements of $110,000 in 1998, compared to $660,000 in 1997; and, third,
the decrease in Migration services revenue to $2,695,000 in 1998, as compared to
$3,326,000 in 1997. Revenues for the three months ended September 30, 1998, were
$1,512,658 as compared to $1,368,442 for the same period in 1997, and $2,270,675 for the
three months ended June 30, 1998.
"Although our revenues continue to demonstrate strong
growth compared to the prior year, our loss is a direct result of the year 2000 business
not developing to the level anticipated by the Company and the industry in general"
commented Mr. Kim O. Jones, President. "The Company had added significant resources,
in terms of both personnel and facilities, to address the anticipated requirements to
support the year 2000 business, and these costs adversely impacted our operating results
for 1998. While we continue to expect to benefit from the enhanced infrastructure and
products that are in place as the year 2000 market materializes during this 1999 fiscal
year, we have taken some steps to reduce our expenses in 1999."
The backlog at September 30, 1998, which was $531,000, was
significantly below our historical levels for several reasons. First, the Company
substantially completed one major Migration/renovation project during fiscal 1998. Second,
year 2000 projects are typically of much shorter duration than Migration projects and may
even be completed within the same quarter as they are booked, thus not appearing in the
quarter end backlog. Third, the year 2000 problem has had the effect of temporarily
diverting customer resources away from Migration projects to year 2000 efforts, as well as
the efforts of some prospective customers to either attempt to perform the year 2000
renovation internally or to evaluate other alternatives to renovation. While both of these
developments appear to be temporary, they have had the effect of slowing the rate at which
the Company has been able to obtain contracts for such work, especially during the second
half of the Company's fiscal year.
During the first quarter of fiscal 1999, the Company's
working capital was reduced to levels that were lower than customary. This was due to the
slowdown in the Company's application Migration business and the slower than anticipated
level of new year 2000 contracts. As discussed above, the Company has taken steps to
reduce its expenses. In addition, the Company anticipates completing in January 1999, a
private placement of securities from which it expects to receive net proceeds of $250,000
to $330,000. Beyond these actions already taken to address liquidity concerns, the Company
expects additional revenue during January and February from some of the year 2000
contracts currently under negotiation.
Founded in 1982 as a high-technology software development
laboratory, Forecross Corporation is dedicated to the design and development of innovative
conversion software. 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 for its Complete/2000® offerings
include AASKI Technologies, Ltd., TRW, Inc. (BDM International), CIBER, Inc., Information
Sciences Group, Inc., NCR Corporation, Quality Systems Inc. (formerly known as Tracor,
Inc., now a subsidiary of Marconi North America, a subsidiary of General Electric Company,
p.l.c.), SCB Computer Technology, Inc., and Sapiens Americas (a subsidiary of Sapiens
International). |
