Ultradata Systems Reports Improved Earnings for Q4
25 April 2000
Ultradata Systems Reports Improved Earnings for the Fourth Quarter and Reduced Losses for the Year
ST. LOUIS, April 25 Ultradata Systems (Nasdaq: ULTR),
Sales for the fourth quarter of fiscal 1999 were $2,719,917 compared to
$3,410,600 for the quarter ended December 31, 1998. Fourth quarter income
before taxes was $239,265 compared to a loss of $1,631,003 for the quarter
ending December 31, 1998, for an improvement of $1,870,268. This improvement
resulted from the Company's higher gross margins, from the elimination of
unprofitable direct-mail programs, and from significantly reduced inventory
write-offs necessary in 1999 versus 1998. The Company recorded a net loss
after taxes for the fourth quarter of $130,971, or $0.04 per share, due to the
elimination of a deferred tax asset from 1998 resulting in a $370,236 tax
expense, which is recoverable upon future profitability. The net loss for the
fourth quarter 1999 compares to $1,421,497, or $0.43 per share, for the fourth
quarter of 1998.
Although the year as a whole was disappointing, fourth quarter operating
results were positive as gross margins increased and operating costs
decreased. Further inroads into the mass market were made with sales at
Kmart, Target, and Kohl's. "Continued penetration of the mass market is
expected in 2000," Monte Ross, CEO, said. "We expect to have several new
major chain customers for the 4th quarter of 2000, while Kmart and others are
carrying our products on a daily basis throughout the year." Mr. Ross
continued, "We have been stabilizing our handheld travel computer business so
that it can form a profitable base from which we can use our intellectual
property of original content databases, patents and proprietary software to
move into GPS auto navigation and the wireless/Internet markets. Our
one-third interest in DriveThere.com, a web portal auto club for the new
economy, and our twenty five percent interest in Talon, a GPS receiver
supplier, enables us to participate in these growth areas in synergistic
ways."
Fiscal 1999 Results
Sales for fiscal 1999 were $5,566,626 compared to $7,234,075, representing
a decrease of $1,667,449, or 23%. During fiscal 1998, the Company's direct
mail programs were unprofitable, so these programs were eliminated early in
1999, resulting in lower sales and higher margins. Gross margins were also
improved when product built at lower cost reached the market in the fourth
quarter. Net loss for fiscal 1999 totaled $1,997,250, or $0.64 per share
compared to net loss of $2,330,793, or $0.71 per share, in 1998.
Ultradata increased its 18.9% interest in Talon to 24.9% during 1999. For
the year ended December 31, 1999. Talon reported increased sales of 33% over
1999 and was profitable according to New Zealand accounting standards.
However, according to U.S. Generally Accepted Accounting Principles (GAAP),
Talon's substantial R&D costs could not be capitalized and were expensed. As
a result, the Company's share of Talon's earnings became a net loss of $9,585
for 1999. Talon's investment in R&D has resulted in the development of new
products for the global markets in which it competes. As a result Talon
currently has a record backlog. Talon management expects record sales and
increased growth in 2000 compared with 1999.
Management's Outlook For 2000
Management believes that while fiscal 1999 results were disappointing, the
successful 4th quarter enhances the outlook for the future. Monte Ross, CEO,
noted: "Our prospects for the future are improved by increased ownership in
Talon to 24.9%, as well as our one-third interest in Influence Data, LLC -- a
joint venture with Influence Content, LLC to develop a web portal,
DriveThere.com. DriveThere.com has the potential to be an auto club for the
new economy. We are supplying our database for a cell phone interactive
application with a major telecom company using the web portal. In addition,
we are confident that when our portable auto navigation product, TravelStar
24, reaches the market, it will find substantial customer acceptance due to
its many features, such as voice turn-by-turn directions, that are only
available today at much greater cost to the consumer. The core business
requires substantially less sales to carry us to a break-even point due to the
higher margins and the reduction of operating costs. Meanwhile, we remain
financially solvent and essentially debt-free, and in position for a much
better year in 2000. We have significant intellectual property in original
content travel databases, patents and proprietary software, which can be
applied to a myriad of travel information applications feasible with the new
economy."
General
Management's Outlook and other sections of this release contain
forward-looking statements concerning: (1) expectations regarding future
product introductions, distribution, sales and applications; (2) future
expectations regarding sales and royalties from license agreements; (3)
expectations regarding future efficiencies resulting from new marketing
strategies that shift more of the capital risks to our market partners and;
(4) performance by our affiliates. Such statements involve risks and
uncertainties that could, if not satisfied positively for the Company, cause
actual results to differ from those anticipated in the Company's
forward-looking statements.
Ultradata Systems, Inc.
Condensed Statement of Operations
Twelve Months Ended
December 31, 1999 December 31, 1998
Sales $5,566,626 $7,234,075
Cost of Sales 3,151,046 4,172,201
Gross Margin 2,415,580 3,061,874
Research and development expenses 358,357 672,090
Selling, general, administrative
expenses and other expenses 3,875,539 5,749,351
Losses from operations before interest,
taxes and amortization (EBITDA) (1,818,316) (3,359,567)
Other income (expense)
Interest expense -- (3,790)
Interest income 93,848 161,612
Equity in (loss) earnings of affiliated
companies (81,118) 118,733
Royalty income 127,473 --
Other, net 51,099 27,195
Losses before income tax expense (1,627,014) (3,055,817)
Income tax expense (benefit) 370,236 (725,024)
Net Loss $(1,997,250) $(2,330,793)
Loss per share, basic and diluted $(0.64) $(0.71)
Weighted average shares used for basic
and diluted earnings per share 3,122,138 3,299,636
CONDENSED BALANCE SHEET
(in thousands)
As of December 31,
1999 1998
Assets
Cash and cash equivalents $1,631 $1,267
Accounts receivable, net of reserves 1,482 3,035
Inventories 1,655 3,121
Other current assets 106 1,621
Total current assets 4,874 9,044
Property Plant and Equipment (net) 684 835
Investments in affiliates 1,084 820
Other assets 667 453
Total assets $7,309 $11,152
Liabilities and Shareholders' Equity
Total current liabilities $419 $2,492
Other liabilities 130 173
Total liabilities 549 2,665
Total shareholders' equity 6,760 8,487
Total liabilities and shareholders' equity $7,309 $11,152