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Microcap & Penny Stocks : RADIUS RISES FROM THE ASHES (DODV)

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To: R.S. Blum who wrote (1405)1/21/1999 9:38:00 AM
From: PACKRATCAT  Read Replies (1) of 1438
 
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)

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Radius Inc (Nasdaq:RDUS - news)
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