ALPNET Announces 2000 Results and Reports on Strategic
Initiatives
SALT LAKE CITY, Feb. 20 ALPNET, Inc. , a
leading provider of multilingual information management solutions to Global
1000 companies, today announced unaudited results for 2000. Sales of services
for the year ended December 31, 2000 were $50.4 million, compared with sales
for 1999 of $51.5 million. Fourth quarter 2000 sales were $11.5 million,
compared with sales of $12.3 million for the fourth quarter of 1999.
ALPNET reported a net loss for the year ended December 31, 2000 of
$11.0 million, or $0.37 per share, basic and diluted, including restructuring
and related charges of $5.4 million or $0.18 per share. This compares to net
income in 1999 of $716,000 or $0.03 per share, basic and diluted. The net
loss for the fourth quarter of 2000 was $9.1 million, or $0.29 per share basic
and diluted, as compared to a net loss in the fourth quarter of 1999 of
$258,000, or $.01 per share basic and diluted. The restructuring and related
charges recorded in the fourth quarter of 2000 included a charge of
approximately $3 million related to a restructuring and consolidation of the
Company's operations worldwide and $2.4 million related to the write-off of
certain components of the ALPNETXchange(TM) system. Cost of services sold and
operating expenses for the fourth quarter and year ended December 31, 2000
included a charge of approximately $1.0 million related to excess
telecommunications capabilities and other costs that are expected to be
reduced in the future as a result of renegotiation of commitments.
Financial and Other Highlights
ALPNET management has quickly and efficiently implemented a significant
majority of its strategic initiatives announced on November 20, 2000, which
include the retention of global client relationships, centralization and
consolidation of operations, reduction of overhead, increased outsourcing of
production and strengthening the Company's sales organization and service
offerings. It is expected that these actions will return the Company to
positive cash flow from operations and profitability in 2001.
Included in the strategic initiatives implemented are the following:
-- Restructured Corporate management team
-- New sales management in the U.S. and Europe
-- New sales executives in New York City, Charlotte, Detroit, San
Francisco, Santa Clara, Portland and London
-- New executive management in Japan, Ireland and the Netherlands
-- Sale of the Company's Swedish production center
-- Sale of the Company's Spanish production center
-- Initiated closure of other small production operations
-- Strengthened the Company's service offerings and focus on client
service
-- Strengthened the Company's independent production services supply chain
-- Restructured technology development focusing on internal implementation
to increase margins, efficiency and client service capability
The effect of these restructuring activities is expected to reduce the
Company's fixed operating costs and expenses by approximately $3 million on an
annual basis.
The decrease in the reported value of year 2000 sales compared with 1999
reflects the negative impact of weak foreign currency exchange rates,
particularly in Europe, where approximately 55% of the Company's sales were
generated. Applying 1999 currency exchange rates for 2000, total sales would
have been approximately $54 million for the year 2000, a sales increase of
approximately 5%.
In the years ended December 31, 2000 and 1999, the top twenty global
accounts represented approximately 44% and 41% of total sales respectively,
which is an increase of 3% in 2000.
Comments from ALPNET Chairman and interim-CEO Michael F. Eichner
"During 2000, ALPNET continued its strategic repositioning to expand its
InfoCycle(TM) multilingual information services offering for its clients.
Through its consulting, systems integration, and multilingual services
capabilities, ALPNET is able to move up the service chain, assisting its
clients to streamline, optimize and leverage their multilingual information
development and management processes. This innovative offering involves all
aspects of information engineering, content creation, translation,
localization, publishing and information management," said Michael Eichner,
Chairman and interim-CEO of ALPNET. "The globalization of business and the
rapid growth of the Internet has intensified the need for clients to implement
effective multilingual information strategies to support their Internet and
eCommerce business models as well as their traditional business models. With
the initiatives we have implemented, we feel that ALPNET will return to
positive cash flow and profitability during 2001 and we have the capabilities
to meet the market needs of our clients."
Mr. Eichner continued, "We have strengthened our competitive position with
our strategic repositioning, continuing strong global client relationships and
expanded U.S. and European sales teams. We believe ALPNET can deliver a
strong, value-added service offering to the marketplace that will fuel
improved sales growth and increase our market penetration, particularly with
clients in the information technology, automotive, telecommunications,
electronics, and financial industries that we serve. We will continue to
focus on the final development and deployment of our GLOBELIX(TM) and related
ALPNETXchange(TM) technology to support our consulting and service offerings,
thereby providing ALPNET a substantial differentiation from competitors and
improving the efficiency and economics of our business model."
ALPNET, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited, except Year ended
December 31, 1999)
Three Months Ended Year Ended
Thousands of dollars December 31 December 31
(except per share data) 2000 1999 2000 1999
Sales of services $11,459 $12,332 $50,374 $51,452
Cost of services sold 8,340 8,401 34,914 35,633
Gross profit 3,119 3,931 15,460 15,819
Operating expenses:
Sales and marketing
expenses 1,675 1,141 5,351 3,885
General and
administrative 3,532 2,524 12,723 9,504
Development costs 775 4 944 99
Amortization of
goodwill 317 239 997 617
Restructuring and
related charges 5,399 5,399
Total operating expenses 11,698 3,908 25,414 14,105
Operating income
(loss) (8,579) 23 (9,954) 1,714
Interest expense, net 340 94 593 378
Income (loss) before
income taxes (8,919) (71) (10,547) 1,336
Income taxes 155 187 499 620
Net income (loss) $(9,074) $(258) $(11,046) $716
Income (loss) per
share -- basic $(0.29) $(0.01) $(0.37) $0.03
Income (loss) per
share -- assuming
dilution $(0.29) $(0.01) $(0.37) $0.03
ALPNET, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31 December 31
Thousands of dollars 2000 1999
Assets (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $3,377 $1,338
Trade accounts receivable, less allowances
of $724 in 2000 and $489 in 1999 7,909 11,398
Work-in-process 2,775 3,051
Prepaid expenses and other 1,035 538
Total current assets 15,096 16,325
Property, equipment and leasehold improvements:
Office facilities and leasehold improvements 395 370
Equipment 6,818 5,909
Software 4,358 2,812
11,571 9,091
Less accumulated depreciation
and amortization 3,677 3,376
Net property, equipment and leasehold
improvements 7,894 5,715
Other assets:
Goodwill, less accumulated amortization of
$5,597 in 2000 and $4,384 in 1999 8,751 11,250
Other 271 372
Total other assets 9,022 11,622
Total assets $32,012 $33,662
Liabilities and shareholders' equity
Current liabilities:
Credit facilities with banks $3,367 $3,932
Accounts payable 2,981 3,759
Accrued payroll and related benefits 2,853 1,211
Other accrued expenses 4,531 2,021
Income taxes payable 734 962
Current portion of related party debt 0 793
Current portion of long-term debt 841 827
Total current liabilities 15,307 13,505
Related party debt, less current portion 462 623
Long-term debt, less current portion 3,922 1,900
Shareholders' equity:
Convertible Preferred Stock 242 242
Common Stock 56,393 49,175
Accumulated deficit (40,293) (29,247)
Accumulated other comprehensive income (4,021) (2,536)
Total shareholders' equity 12,321 17,634
Total liabilities and shareholders' equity $32,012 $33,662
