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Topic: (NASDAQ:OMGA) ,
Headline: Omega Research Announces Record Revenues and Earnings For the Year
Ended December 31, 1997
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Fourth Quarter Earnings in Line With Previous Earnings Outlook Announcement
MIAMI, Feb. 17 /PRNewswire/ -- Omega Research, Inc. (NASDAQ:OMGA) today
reported revenues and earnings for the fourth quarter and the year ended
December 31, 1997.
Net revenues for the year ended December 31, 1997 were a record
$29.2 million, a 64% increase over the $17.8 million in net revenues reported
for the prior year.
Proforma net income for the year ended December 31, 1997, reflecting
proforma income taxes as if the Company had been a C corporation subject to
federal and state corporate income taxes for all periods presented and
exclusive of a non-recurring tax credit of $1.2 million recorded during the
third quarter of 1997, increased by 27% to a record $5.5 million compared to
the $4.3 million reported for fiscal 1996. Proforma net earnings per share
(on a fully diluted basis) in 1997 increased to $0.26 as compared to $0.21 for
the year ended December 31, 1996.
Commenting on fourth quarter performance, Salomon Sredni, Omega Research's
Chief Financial Officer said, "As explained in our January 6, 1998 press
release, slower than anticipated demand led to lower than anticipated fourth
quarter revenues and net income. We believe that slower demand was due, in
part to customer delays in decision making (in anticipation of new product
releases during the second quarter of 1998) as well as greater than expected
lost sales as a result of December's curtailed business days. We expect that
the major upgrade releases scheduled for the second quarter of this year will
expand our revenues, income and overall growth rate."
Net revenues for the fourth quarter of 1997 were $6.4 million, a 34%
increase over the $4.7 million in net revenues for the same period in the
prior year. Proforma net income was $465,000 in the fourth quarter of 1997
compared to $1.0 million in the same period of the prior year. Proforma
earnings per share (on a fully diluted basis) was $0.02 in the 1997 fourth
quarter compared to $0.05 in the prior year quarter.
During the third quarter of 1997, the Company recognized a non-recurring
tax credit of $1.2 million as a result of a deferred income tax credit (the
"FAS 109 Credit") of approximately $3.0 million which was partially offset by
a $1.8 million provision for income taxes payable. Since 1988, and until
September 1997, the Company elected for its earnings to be taxed directly to
the Company's shareholders as an S corporation under the Internal Revenue Code
of 1986, as amended. On September 30, 1997, the Company terminated its S
corporation election, and, as a result, recognized the FAS 109 Credit to
record net deferred tax assets arising from book and tax basis differences
that arose primarily as a result of accounts receivable reserves. The
$1.8 million income tax provision relates to federal and state income taxes
owed by the Company as a result of S corporation taxable earnings, a portion
of which was recognized by the Company, for tax purposes, in 1997 and the
balance of which will be recognized during 1998.
Ralph L. Cruz, Omega Research's Co-Chairman and Co-CEO commented, "With
the major upgrade releases planned for our premium products in the second
quarter of the year, we expect record revenues and profits in 1998. Last week
we previewed the next generation of TradeStation and OptionStation to our
Solution Providers at Omega Research Developers Conference '98. The
conference was attended by numerous Omega Research Solution Providers from
throughout the United States and Europe. Their reaction to the new
capabilities and improvements in our products was extremely enthusiastic. We
believe that the years of work devoted to produce these major upgrades will
result in both meaningful upgrade revenue and new sales as our target market
becomes familiar with the many exciting new functionalities in the products.
Additionally, in 1998, we plan to continue to increase our research and
development capabilities with the resources necessary to further enhance and
expand our award-winning product lines."
Founded in 1982, and headquartered in Miami, Florida, Omega Research, Inc.
is a leading provider of real-time investment analysis software for the
Windows operating system. With the 1991 release of its flagship product,
TradeStation, the Company pioneered the concept of utilizing the power of the
personal computer to enable investors to historically test the profitability
of their own investment strategies and then computer-automate those strategies
to generate real-time buy and sell signals. Omega Research's other principal
products are OptionStation and SuperCharts.
This press release contains statements that are forward-looking and are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. When used in this press release, the words
"believes," "estimates, " plans," "expects," "intends," "anticipates," "may,"
"prospect" and similar expressions as they relate to the Company or its
management are intended to identify forward-looking statements. The
statements in this press release regarding expected performance and product
releases during 1998 are based on current expectations and beliefs concerning
future events that are subject to risks and uncertainties. Actual results may
differ materially from the results suggested herein and from the results
historically experienced. Factors that may cause or contribute to such
differences and impact future events include, but are not limited to, the
Company meeting its timetable for the anticipated second quarter upgrade
release of its premium products, customer acceptance of such upgraded
products, the Company's ability to market effectively such upgraded products,
the introduction of competitive products in the market or increased customer
acceptance of recently introduced competitive products, changes in conditions
in the financial markets, and the Company's ability to attract and retain
high-quality product development personnel, as well as those discussed in the
Company's filings with the Securities and Exchange Commission including the
risk factors set forth in the Company's Prospectus dated September 30, 1997.
OMEGA RESEARCH, INC.
Statements of Income
Three Months Ended Year Ended
December 31, December 31,
1997 1996 1997 1996
NET REVENUES:
Licensing fees $ 5,254,663 $ 3,750,877 $24,364,990 $13,943,234
Other revenues 1,100,054 992,260 4,861,284 3,876,928
Total net
revenues 6,354,717 4,743,137 29,226,274 17,820,162
OPERATING EXPENSES:
Cost of licensing
fees 446,059 373,961 1,848,993 1,716,884
Product development 540,076 342,474 1,890,392 1,041,131
Sales and marketing 3,291,973 1,472,205 11,272,290 5,617,931
General and
administrative 1,507,283 855,389 5,420,760 2,421,638
Total operating
expenses 5,785,391 3,044,029 20,432,435 10,797,584
Income from
operations 569,326 1,699,108 8,793,839 7,022,578
OTHER INCOME, net 128,629 12,185 146,474 59,436
Income before
income taxes 697,955 1,711,293 8,940,313 7,082,014
PROVISION (BENEFIT) FOR
INCOME TAXES 233,000 -- (934,000) --
Income before
proforma income
taxes 464,955 1,711,293 9,874,313 7,082,014
PROFORMA INCOME TAXES:
Proforma income
taxes(a) -- 675,961 3,255,732 2,797,396
Nonrecurring tax credit -- -- 1,167,000 --
Proforma net
income $ 464,955 $ 1,035,332 $ 5,451,581 $ 4,284,618
PROFORMA NET EARNINGS
PER SHARE $ 0.02 $ 0.05 $ 0.26 $ 0.21
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING 22,877,000 20,541,000 20,885,000 20,541,000
(a) The Company was treated as an S corporation for federal and state
income tax purposes prior to September 30, 1997. Proforma income
taxes have been provided as if the Company had been a C corporation
for all periods prior to September 30, 1997.
OMEGA RESEARCH, INC.
Balance Sheets
December 31, December 31,
1997 1996
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $12,323,515 $ 141,633
Marketable securities 1,014,590 --
Accounts receivable, net 9,438,218 4,357,048
Inventories 146,821 92,188
Other current assets 520,537 5,690
Deferred income taxes 2,963,O00 --
Total current assets 26,406,681 4,596,559
PROPERTY AND EQUIPMENT, net 971,511 1,085,112
OTHER ASSETS 91,626 121,657
Total Assets $27,469,818 $ 5,803,328
LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable $ 1,119,202 $ 482,662
Accrued expenses 608,947 485,189
Income taxes payable 509,000 --
Total current liabilities 2,237,149 967,851
SHAREHOLDERS' EQUITY:
Common stock 222,461 194,800
Additional paid-in capital 23,745,251 2,517
Retained earnings 1,264,957 4,638,160
Total shareholders' equity 25,232,669 4,835,477
Total liabilities and
shareholders' equity $27,469,818 $ 5,803,328
SOURCE Omega Research, Inc.
-0- 02/17/98
/CONTACT: Salomon Sredni, Vice President of Operations and Chief
Financial Officer of Omega Research, 305-551-9991/
/Web site: http://www.omegaresearch.com/
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