Ultradata Systems, Inc. Reports Second Quarter and Six Months Results; Backlog Surges to Three-year High of $4.1 Million
21 August 2000
Ultradata Systems, Inc. Reports Second Quarter and Six Months Results; Backlog Surges to Three-year High of $4.1 Million
ST. LOUIS - Ultradata Systems, Inc. (NASDAQ NMS: ULTR), the leading supplier of hand-held travel computers, announced financial results for the second quarter and six months ended June 30, 2000.Net sales for the three-month and six-month periods ended June 30, 2000 were $818,895 and $1,108,582, respectively, compared to $1,170,931 and $2,254,722 for the three-month and six-month periods ended June 30, 1999. These decreases amounted to $352,036, or 30.1%, for the three-month period ended June 30, 2000, and $1,146,140, or 50.8%, for the six-month period ended June 30, 2000. The sales decreases for the three-month period ended June 30, 2000, as compared to the three-month period ended June 30, 1999, resulted from the Spring promotions at Kmart and the introduction of the new AAA Trip Wizard during 1999. Similar programs are planned for 2000 but will occur in the second half of the year. The order backlog for delivery in calendar 2000 as of June 30, 2000 was $4.1 million compared to $1.9 million at June 30, 1999. For the six-month period ended June 30, 2000, sales reductions were due to the elimination of credit card and direct mail insert programs utilized in the first half of 1999. Delivery of the record backlog, mostly in the fourth quarter of this year, should enable profitable operations in the second half of the year.
Operating loss of $529,852 for the three-month period ended June 30, 2000, compared to an operating loss of $607,173 .for the three-month period ended June 30, 1999. The company's operating loss of $1,033,965 for the six month period ended June 30, 2000 compared to an operating loss of $1,413,363 for the six-month period ended June 30, 1999.
The completion of the offering of redeemable convertible preferred stock amounting to $1.6 million was reported as mezzanine financing. This offering, together with an exchange of stock options with Influence, LLC, majority owner of DriveThere.com, resulted in an imputed preferred-stock dividend of $1,059,747 that has no effect on the net loss, but is reflected in the loss per share calculation. The Company's net loss during the quarter represented $0.20 per common share. However when the effect of the imputed dividend is included, the loss per share for the three months ended June 30, 2000, is $0.53, compared to $0.17 for the period ended June 30, 1999. The Company lost $0.37 per share for six months ended June 30, 2000, compared to $0.39 for six months ended June 30, 1999. As discussed above, once the imputed dividend is recorded, the net loss per share increases to $0.71 per share for the six-month period ended June 30, 2000.
Monte Ross, chairman and CEO said, "Although first half results were unsatisfactory, our record backlog, which as of August 15 now exceeds $5 million, puts us in a much more encouraging position for the end of the year, and we should achieve significantly better sales and operational earnings results for 2000 than in 1999." Ross added, "As a result of the previously mentioned $1.6 million financing, the Company has approximately $3 million cash in hand, with essentially no debt, enabling the Company to take advantage of expanding market opportunities. The Company is in the process of expanding into the wireless Internet e-commerce market through its new products and new strategic partners. We believe we have significant intellectual property in databases, software, and patents that can be applied in innovative systems involving the Internet and wireless applications."
Ross also added, "We are also completing development of an advanced portable auto navigation product for the auto aftermarket, Travel*Star 24(TM). Advanced versions of this unit will be able through wireless channels to the Internet to offer very unique services." With regards to Talon Research & Development, LTD in which Ultradata is a 24.9% owner, Ross adds, "Talon's growth in supplying GPS receivers and their growth in international marine electronics is now complemented by another growth area, mobile data terminals, which is related to the wireless expansion marketplace. Talon's sales in 2000 will greatly exceed 1999 sales as they continue to grow rapidly, and have already reached 1999 sales figures. Also we are one-third owner of DriveThere.com, an on-line motor club for the new economy. DriveThere.com, with Lucent Technologies, developed a system for obtaining directions on the highway using a cell phone and the use of the Phone Browser(TM) voice recognition capability."
Additionally, Ross speaks to the company's progress in the mass marketing of its baseline products, the handheld travel computers: "We have a maturing presence in the mass markets, now, with everyday planogram distribution at Kmart, with the more premium AAA Trip Wizard soon to be added into Target Stores, and with programs underway in a number of other mass-market retailers. We are poised for vital growth and development in these areas and in the mass markets for our new products, too." Ross continued, "We will soon be in a test market program for our handhelds in one of the worlds largest retail chains, and our custom-branding programs continue to grow as well."
Ultradata Systems, Inc.
Condensed Statement of Operations
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
Sales $818,895 $1,170,931 $1,108,582 $2,254,722
Cost of Sales 547,428 701,736 722,544 1,238,490
-------- --------- --------- ----------
Gross Margin 271,467 469,195 386,038 1,016,232
Research and
development expenses 75,857 121,487 172,090 220,713
Selling, general,
administrative expenses
and other expenses 725,162 954,881 1,247,913 2,208,882
Losses from operations
before interest, taxes
and amortization -------- ------- ---------- ---------
(EBITDA) (529,552) (607,173) (1,033,965) (1,413,363)
Other income (expense)
Interest income 12,407 17,325 31,340 35,233
Equity in (loss)
earnings of affiliated
companies (59,773) 43,019 (125,088) 97,103
Other, net (60,114) 467 (29,254) 35,843
-------- ------- ---------- ---------
Losses before income
tax expense (637,032) (546,362) (1,156,967) (1,245,184)
Income tax expense
(benefit) - - - -
-------- ------- ---------- ----------
Net Loss $(637,032) $(546,362) $(1,156,967) $(1,245,184)
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Less deemed dividends
on preferred
shares $(1,059,747) - $(1,059,747) -
--------- ------- ---------- ----------
Net loss available
to common
shareholders $(1,696,779) $(546,362) $(2,216,714) $(1,245,184)
========= ======== ========== ==========
Loss per share,
basic and diluted $(0.53) $(0.17) $(0.71) $(0.39)
========= ======== ========== ==========
Weighted average
shares used for
basic and diluted
loss per share 3,182,867 3,167,577 3,144,051 3,161,130
CONDENSED BALANCE SHEET
(in thousands)
As of
June 30, December 31,
2000 1999
--------- ------------
Assets
Cash and cash equivalents $2,929 $1,631
Accounts receivable, net of reserves 977 1,482
Inventories 1,396 1,655
Other current assets 49 106
--------- ------------
Total current assets 5,351 4,874
Property Plant and Equipment (net) 662 684
Investments in affiliates 1,214 1,084
Other assets 527 667
--------- ------------
Total assets $7,754 $7,309
========= ============
Liabilities and Shareholders' Equity
Total current liabilities $419 $419
Total long-tern liabilities 130 130
Redeemable convertible preferred stock 1,616 -
Total shareholders' equity 5,589 6,760
--------- ------------
Total liabilities and shareholders' equity $7,754 $7,309
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