ALPNET Announces Results for Second Quarter 2001; Sales Increase 18% Over First Quarter
ALPNET Announces Results for Second Quarter 2001; Sales Increase 18% Over First Quarter
SALT LAKE CITY, Aug. 14 ALPNET, Inc. , a
leading provider of multilingual information management solutions to Global
1000 companies, today announced unaudited results for the quarter ended
June 30, 2001. Sales of services for the quarter were $13.1 million with a
net loss of ($950,000) or ($.03) per share (basic and diluted), compared with
sales of services of $13.5 million with a net loss of ($565,000) or ($.02) per
share (basic and diluted) for the second quarter of 2000. For the six months
ended June 30, 2001, sales of services were $24.2 million with a net loss of
($1.9 million) or ($.061) per share (basic and diluted) compared to sales of
services of $25.7 million with a net loss of ($1.3 million) or ($.046) per
share (basic and diluted) for the six months ended June 30, 2000.
Sales for the first six months of 2001 compared with 2000 have been
negatively impacted by three key factors:
1) General difficult economic conditions and market changes particularly
affecting key US, Europe and Japan-based industries served by the
Company. These conditions have resulted in delays of orders and
cancellation of some projects mainly from clients in the computer
hardware and software industries and in the financial services
industry;
2) Foreign currency exchange rates in the approximate amount of
$1.3 million; and
3) Operations disposed of or closed in connection with the Company's
November 2000 restructuring plan in the approximate amount of
$1.4 million.
However, even with the general difficult economic conditions in 2001,
sales of services for the second quarter of 2001 of $13.1 million increased
18% from the $11.1 million in sales for the first quarter of 2001.
Gross margins in the first half of 2001 were approximately 3% lower than
in the first half of 2000 primarily because of the underutilization of fixed
costs the Company maintained in 2001 to enable it to service expected
increasing levels of sales and due to the costs of producing certain projects
during this period.
Highlights for the quarter:
-- Sales for Q2 2001 increased 18% over Q1 2001.
-- Retained and strengthened global customer base -- top 20 clients
represent 46% of total sales for the six months ended June 30, 2001,
compared with 43% for the three months ended March 31, 2001.
-- Completed debt financing transactions with two major shareholders and
with a Netherlands financial institution - providing approximately
$2 million of funding for the operations of the Company.
-- Subsequent to the second quarter, in July 2001 ALPNET implemented an
additional restructuring, which is expected to result in approximately
$2 million of additional annual savings in fixed costs.
Comments from ALPNET Executives:
"Even though market conditions remain tough, we have been able to win some
important new clients and projects," commented Mike Eichner, Chairman and
Acting CEO of ALPNET. "The main barrier to winning business is indecision
from clients to purchase. Consequently, in July we have implemented an
additional restructuring of our organization, which is expected to result in
an additional annual fixed cost savings of approximately $2 million. We are
continuing our management focus on customer relationships and conservative
cost control with the objective of bringing ALPNET back to profitability."
Comments from Charles Noall, COO of ALPNET: "The additional restructuring
we have now implemented is fully in line with our strategy to consolidate our
operations and improve our efficiency and effectiveness. The measures taken
included the consolidation of the production functions and the sales functions
for most of our European operations; the combining of our technology
development team with our consulting group; the restructuring of our Asian
operations; and significant reduction in corporate staff."
Comments from Jaap van der Meer, President of ALPNET: "In the past quarter
we have made significant progress with our technology. GLOBELIX(TM) and the
Java Translation Editor, our distinctive translation management system, are
now being tested in pilot projects by some of our key customers. We have
experienced an increased interest from major global companies for an
end-to-end solution for globalization and localization services. This will
result in a growing number of opportunities for our consulting group."
Mr. Van der Meer continued, "Many of our clients are under pressure on the
one hand to reduce their cost levels and on the other hand to globalize their
operations and sell their products to a broader range of foreign markets.
This pressure leads to a focus on leaner processes and better systems for
localization. The combination of our technology development and consulting
groups puts ALPNET in a good position to design and implement state-of-the-art
systems and processes for globalization and localization management. To
complement our technology, we have established partnerships with specialist
technology suppliers including IBM for machine translation technology,
Chrystal Software for authoring and XML content management technology, and
Tridion for web content management software."
About ALPNET Inc.
ALPNET is one of the world's largest, publicly-owned, dedicated providers
of complete multilingual information management solutions, with a worldwide
network of offices and resources. A pioneer in its industry, ALPNET helps
corporations deploy into international markets faster and more efficiently,
through intelligent use and reuse of multilingual informational assets.
ALPNET offers an extensive range of services, based on innovative, proven
technologies, including strategic InfoCycle(TM) consulting, as well as Web,
software and document localization and publishing, in all business languages
and formats. Additional information about ALPNET is available at
http://www.alpnet.com, and an investor package can be obtained by contacting John
Wittwer, Chief Financial Officer, at +1 800-327-9634 or +1 801-273-6631, or by
e-mailing us at investors@alpnet.com.
Statements in this press release that present information that is not
historical are forward-looking. Forward-looking statements involve numerous
risks and uncertainties that could cause actual results to be materially
different from estimated or expected results. Such risks and uncertainties
include, among others, adequate funding for and effective implementation of
the Company's current business plan, fluctuating foreign currency exchange
rates, changing levels of demand for the Company's services, constantly
changing general economic and political conditions in all of the various
countries in which the Company has operations, the impact of competitive
services and pricing, uncertainties caused by clients (including the awarding
and timing of projects and changes in the scope of services requested), and
other risks and uncertainties that may be disclosed from time to time in
future public statements or in documents filed with the U.S. Securities and
Exchange Commission. As a result, no assurance can be given as to future
results.
ALPNET, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
Three Months Ended Six Months Ended
Thousands of dollars June 30 June 30
(except per share data) 2001 2000 2001 2000
Sales of services $13,072 $13,508 $24,160 $25,724
Cost of services
sold 9,529 9,232 17,311 17,618
Gross profit 3,543 4,276 6,849 8,106
Operating expenses:
Sales and marketing
expenses 1,391 1,297 2,466 2,289
General and
administrative 2,512 3,074 5,059 6,131
Development costs 208 56 518 103
Amortization of
goodwill 206 228 420 462
Total operating
expenses 4,317 4,655 8,463 8,985
Operating loss (774) (379) (1,614) (879)
Interest expense,
net 101 76 207 221
Loss before income
taxes (875) (455) (1,821) (1,100)
Income taxes 75 110 125 185
Net loss $(950) $(565) $(1,946) $(1,285)
Net loss per
share - basic $(.030) $(.020) $(.061) $(.046)
Net loss per share
- assuming dilution $(.030) $(.020) $(.061) $(.046)
ALPNET, Inc. and Subsidiaries
Consolidated Balance Sheets
June 30 December 31
Thousands of dollars 2001 2000
Assets
Current assets:
Cash and cash equivalents $771 $3,377
Trade accounts receivable, less
allowances of $267 in 2001 and
$724 in 2000 9,259 7,909
Work-in-process 2,698 2,775
Prepaid expenses and other 1,457 1,035
Total current assets 14,185 15,096
Property, equipment and leasehold
improvements:
Office facilities and leasehold
improvements 413 395
Equipment 6,943 6,818
Software 4,859 4,358
12,215 11,571
Less accumulated depreciation and
amortization 4,065 3,677
Net property, equipment and leasehold
improvements 8,150 7,894
Other assets:
Goodwill, less accumulated amortization
of $5,081 in 2001 and $5,597 in 2000 7,590 8,751
Other 373 271
Total other assets 7,963 9,022
Total assets $30,298 $32,012
Liabilities and shareholders' equity
Current liabilities:
Credit facilities with banks $4,126 $3,367
Accounts payable 5,978 4,595
Accrued payroll and related benefits 1,415 1,743
Accrued restructuring and related
activities 1,128 1,820
Other accrued expenses 1,665 2,207
Income taxes payable 828 734
Current portion of related party debt 500
Current portion of capital lease obligations 760 770
Current portion of long-term debt 46 71
Total current liabilities 16,446 15,307
Related party debt, less current portion 414 462
Capital lease obligations, less current
portion 801 514
Long-term debt, less current portion 3,468 3,408
Commitments and contingencies
Shareholders' equity:
Convertible Preferred Stock 242 242
Common Stock 56,429 56,393
Accumulated deficit (42,240) (40,294)
Accumulated other comprehensive income (5,262) (4,020)
Total shareholders' equity 9,169 12,321
Total liabilities and shareholders' equity $30,298 $32,012
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