Thursday January 21, 7:50 am Eastern Time
Company Press Release
Radius Reports Q1 Results
Digital Video Products Show Substantial Growth
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Jan. 21, 1999--Radius Inc. (Nasdaq:RDUS - news), now doing business as Digital Origin, today announced financial results for the first quarter ended Jan. 2, 1999.
For the first quarter of fiscal 1999, Digital Origin reported net revenues of $2.5M and a net profit of $2.8M or $0.50 per share. These results compare to the fourth quarter of fiscal 1998 ended Sept. 30, 1998 of revenues of $1.2M, and a net profit of $1.3M or $0.24 per share.
For the first quarter of the prior fiscal year the company reported revenues of $5.5M and a net profit of $0.3M or $0.05 share. The first quarter of fiscal 1999 results include $3.6M in non-operating income reflecting the termination of an escrow related to the 1996 ivestiture of the Color Server Group of $2.2 million, $1.0M in income from Korea Data Systems America, Inc., and $0.4M for the license of intellectual property unrelated to the digital video business.
Mark Housley, chairman and CEO of Digital Origin, said: ''I'm really pleased to start our new fiscal year by meeting the first quarter goals of substantial revenue and margin growth that we set for ourselves last quarter. Total shipments of digital video products were $2.4M, a 233% increase from the previous quarter and now represent approximately 93% of our net revenue.''
''Gross margins continue to improve,'' said Housley, ''increasing from 48.6% in the fourth quarter of fiscal 1998 to 60.8% this quarter, reflecting the continuing impact of our transformation into a software company. We maintained our spending discipline, holding expenses flat relative to the fourth quarter of 1998. Our balance sheet also continued to improve with cash increasing $1.0M, short term borrowings decreasing by $1.1M, and shareholders equity improving by $2.8M.''
''Most importantly,'' Housley continued, ''our confidence in the future of this market continues to be justified, as evidenced by two recent developments. First, the IEEE 1394 connectivity standard, also known as FireWire and iLink, continues to spread and is now standard on all new G3 PowerMacs from Apple in addition to being offered on many models of Windows based PCs.
''Second, the digital video format continues to gain wider and wider acceptance, highlighted by the introduction of a new, low-end, digital video format for camcorders, Digital 8, from Sony. This new format merges lower cost analog technology with digital video technology, greatly expanding the number of customers that can now afford digital video technology camcorders. Our goal at Digital Origin is to take advantage of these developments, through our retail sales efforts, our OEM customers, and our camcorder manufacturer marketing alliances.''
Housley said: ''Our improved results also reflect both the success of our new European distribution strategy as well as increased emphasis on our on-line and direct sales efforts. Direct and on-line sales grew by over 80% this quarter and now represent a material portion of our revenue. The only region of our business that did not show substantial growth was Japan and Asia.
''Revenue in the region was flat quarter to quarter and we remain unsure as to the short-term prospects for our products in these markets. Since digital video is well on its way to becoming the dominant format in this market, we will continue to invest for the future in this region.''
Quarterly Highlights
The following highlights were announced or occurred after the year ended September 1998 Digital Origin earnings release:
-- Shipped EditDV release 1.5, providing significant enhancements and up to a 3X performance improvement over the previous release. Shipped MotoDV Studio 2.0, providing batch capture, improved DV integration with Adobe Premiere, and Windows NT support.
-- Continued our sweep of industry award categories, with EditDV 1.5 winning the Hyper Award for Non Linear Editing systems from NewMedia magazine, the Vanguard award for most innovative technology from Video Systems magazine, and Best Video Hardware for MotoDV from Maximum PC Magazine.
-- Improved our distribution significantly, consummating a long-term distribution agreement with Canon USA, as well as appointing new distributors in the major countries of Europe.
-- Continued to solidify our position as a supplier of cross-platform software applications. In the fourth quarter of fiscal 1998, 27% of unit sales were made to Macintosh-only users; 43% were made to Windows-only users; and 30% were made to cross-platform users. This compares to 23% of unit sales to Macintosh-only users, 20% of unit sales to Windows-only users and 46% of unit sales to cross-platform users in the first quarter of fiscal 1999.
Recent Development
On Jan. 15, 1999, the company and one of its directors were named as defendants in a shareholder class action lawsuit against Splash Technology Holdings, Inc. and others. The company is currently investigating these claims and expects to present a vigorous defense.
About Digital Origin
Founded in 1986, Digital Origin products include leading-edge digital video software solutions. Its products are available through a worldwide network of Digital Origin authorized resellers, system integrators and distributors. Digital Origin may be reached at 650/404-6000 or at their Web site www.digitalorigin.com.
Special Note
This press release contains forward-looking statements that are subject to risks and uncertainties including, among others, the ability of the company to successfully market its digital video products, continued growth of the digital video market, continued market acceptance of the company's digital video products, the ability of the company to compete in the digital video business, the ability of the company to increase revenues and achieve profitability, general economic conditions, and the other factors described in the company's filings with the Securities and Exchange Commission. Actual results may differ materially from those described herein due to such risks and uncertainties.
Radius Inc., CONSOLIDATED BALANCE SHEETS (in thousands)
Dec. 31, Sept. 30, 1998 1998 (1) (unaudited)
ASSETS: Current assets: Cash $ 1,636 $ 600 Accounts receivable, net 887 364 Note receivable from Korea Data Systems America, Inc. 3,450 4,500 Inventories 592 803 Prepaid expenses and other current assets 83 156 -------- --------- Total current assets 6,648 6,423
Property and equipment, net 98 133 Other assets 150 -- -------- --------- $ 6,896 $ 6,556
LIABILITIES AND SHAREHOLDERS' EQUITY (Net capital deficiency): Current liabilities: Accounts payable $ 1,860 $ 1,971 Accrued payroll and related expenses 284 324 Other accrued liabilities 2,028 2,069 Deferred income 3,608 4,833 Accrued income taxes 1,098 1,102 Short-term borrowings 236 1,340 -------- --------- Total current liabilities 9,114 11,639
Shareholders' equity: (Net capital deficiency) Common stock 169,175 169,102 Accumulated deficit (171,393) (174,185) --------- --------- Total shareholders' equity (Net capital deficiency) (2,218) (5,083) --------- --------- $ 6,896 $ 6,556
(1) The balance sheet at Sept. 30, 1998 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
Radius Inc., CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data; unaudited)
Three Months Ended Three Months Ended Dec. 31, Sept. 30, 1998 1997 1998 --------- --------- ---------
Sales $ 2,498 $ 5,107 $ 1,050 Commissions and royalties 40 433 193 --------- --------- --------- Total net sales 2,538 5,540 1,243
Cost of sales 994 3,597 638 --------- --------- --------- Gross profit 1,544 1,943 605 --------- --------- ---------
Operating expenses: Research and development 676 494 750 Selling, general and administrative 1,642 2,094 1,633 --------- --------- --------- Total operating expenses 2,318 2,588 2,383 --------- --------- ---------
Loss from operations (774) (645) (1,778)
Other income (expense), net 3,620 1,079 2,142 Interest expense (54) (173) (43) ---------- ---------- ---------- Income before income taxes 2,792 261 321
Provision for income taxes -- -- (1,000) --------- --------- ----------
Net income $ 2,792 $ 261 $ 1,321
Net income per share:
Basic net income per share $ 0.50 $ 0.05 $ 0.24
Diluted net income per share $ 0.50 $ 0.05 $ 0.24
Shares used in per share computations:
Shares used in computing basic net income per share 5,524 5,513 5,524
Shares used in computing diluted net income per share 5,563 5,617 5,524
Prior year per share data has been restated to reflect the 1:10 reverse split of outstanding shares on March 9, 1998.
Contact:
Radius Inc. Ed Silliman, 650/404-6323 (Acting CFO)
More Quotes and News: Radius Inc (Nasdaq:RDUS - news) Related News Categories: computer peripheral, computers, earnings
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