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News Alert from PR Newswire via Quote.com
Topic: (NASDAQ:OMGA) ,
Quote.com News Item #8033429
Headline: Omega Research Announces Revenues And Earnings For The Third Quarter
Of 1998
======================================================================
Third Quarter Earnings In Line With Previous Earnings Outlook Announcement
MIAMI, Oct. 28 /PRNewswire/ -- Omega Research, Inc. (NASDAQ:OMGA) today
reported revenues and earnings for the third quarter ended September 30, 1998.
Net revenues for the third quarter of 1998 were $6.5 million, compared to
$8.3 million in net revenues for the same period in the prior year. Net
income for the third quarter of 1998 was $216,000, compared to proforma net
income of $1.7 million for the third quarter of 1997. Net earnings per share
(on a fully diluted basis) for the 1998 third quarter were $0.01 compared to
proforma net earnings per share (on a fully diluted basis) of $0.09 in the
prior year's third quarter. Net income and net earnings per share for 1997
have been adjusted on a proforma basis to reflect proforma income taxes as if
the Company had been a C corporation subject to federal and state corporate
income taxes during all of 1997 and excludes the benefit for income taxes in
the statement of income (which includes items that are non-recurring in
nature).
Net revenues for the first nine months of 1998 were $21.2 million compared
to net revenues of $22.9 million for the same period in the prior year. Net
income was $1.8 million for the first nine months of 1998 compared to proforma
net income of $5.0 million for the same period in 1997. Net earnings per
share (on a fully diluted basis) were $0.08 for the first nine months of 1998
compared to proforma net earnings per share (on a fully diluted basis) of
$0.25 for the same period of the prior year.
The benefit for income taxes in the third quarter of 1997 reflects a non-
recurring 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 during the first nine months of 1998, and the balance of
which will be recognized by the Company during the remainder of 1998.
Commenting on the Company's third quarter performance, Salomon Sredni,
Omega Research's Vice President of Operations and Chief Financial Officer,
said, "1998 has turned out to be a transition year for the Company, but one
which we believe well positions us for future success in the individual,
institutional and international markets. I also believe it is worth noting
that, despite the Company's lower-than-expected sales performance, and even
though the Company was required to pay so far this year more than $650,000 in
prior-year S corporation taxes, the Company has generated more than $1.0
million in cash flow from operations in the first nine months of the year."
Founded in 1982, and headquartered in Miami, Florida, Omega Research is a
leading provider of real-time investment analysis software for the Windows
operating system. With the 1991 release of its flagship product,
TradeStation(R), 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(R) and SuperCharts(R).
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,"
"should," "prospect," "looking forward" and similar expressions as they relate
to Omega Research or its management are intended to identify forward-looking
statements. The statements in this press release regarding expected future
Company success 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, Omega
Research meeting its timetable for the anticipated upgrade releases of its
premium products, the extent to which potential customers will delay
purchasing the Company's products pending release of the upgrades, customer
acceptance of such upgraded products, technical difficulties or errors in the
upgraded products, unfavorable critical reviews of such upgraded products,
Omega Research'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, failure of the Company
to achieve anticipated sales volumes relating to its principal products in
future periods and to achieve anticipated sales volumes relating to additional
products and services intended to be marketed in future periods, delays in the
development and/or marketing of such additional products and services, the
Company's ability to market effectively such additional products and services,
customer acceptance of such additional products and services, the ability of
Omega Research and various data vendors to develop the requisite technical
compatibility between Omega Research's software and the respective data
services in a timely fashion, if at all (and the quality and customer
acceptance of such combined offerings), the execution of a definitive
agreement with FutureSource Information Systems, Inc. regarding technical
compatibility and payment to Omega Research of commissions and royalties,
unanticipated higher variable expenses (such as bad debt), increases in
product returns, decisions by Omega Research to enter into new markets or
expand into related businesses (and the various possible effects and
consequences thereof), the Company's ability to effectively manage growth (if,
as and when it occurs), volatility or other adverse conditions in the
securities markets, and Omega Research's ability to attract and retain high-
quality product development personnel, as well as those discussed in Omega
Research's press releases and its filings with the Securities and Exchange
Commission including, but not limited to, Omega Research's December 31, 1997
Annual Report on Form 10-K.
For more information contact: Salomon Sredni, Vice President of Operations
and Chief Financial Officer, Omega Research, Inc., 305-485-7000.
Visit the Omega Research web site at www.omegaresearch.com.
OMEGA RESEARCH, INC.
STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
NET REVENUES:
Licensing fees $4,980,272 $7,017,901 $16,341,669 $19,110,327
Other revenues 1,489,201 1,234,670 4,810,194 3,761,230
Total net revenues 6,469,473 8,252,571 21,151,863 22,871,557
OPERATING EXPENSES:
Cost of licensing fees 312,564 547,351 1,282,650 1,402,934
Product development 854,512 507,399 2,405,400 1,350,316
Sales and marketing 3,632,281 3,034,349 10,791,122 7,980,317
General and
administrative 1,523,555 1,317,972 4,196,995 3,913,477
Total operating
expenses 6,322,912 5,407,071 18,676,167 14,647,044
Income from
operations 146,561 2,845,500 2,475,696 8,224,513
OTHER INCOME, net 129,042 181 349,875 17,845
Income before
income taxes 275,603 2,845,681 2,825,571 8,242,358
PROVISION (BENEFIT) FOR
INCOME TAXES 59,500 (1,167,000) 990,500 (1,167,000)
Income before
proforma income taxes 216,103 4,012,681 1,835,071 9,409,358
PROFORMA INCOME TAXES:
Proforma income taxes (A) --- 1,124,044 --- 3,255,731
Nonrecurring tax credit --- 1,167,000 --- 1,167,000
Proforma net income $216,103 $1,721,637 $1,835,071 $4,986,627
PROFORMA NET EARNINGS
PER SHARE (fully diluted) $0.01 $0.09 $0.08 $0.25
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
(fully diluted) 22,664,941 20,220,670 22,847,193 20,220,670
(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
September 30, December 31,
1998 1997
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $8,482,056 $12,323,515
Marketable securities 5,032,409 1,014,590
Accounts receivable, net 8,928,459 9,438,218
Inventories 164,738 146,821
Other current assets 966,213 520,537
Deferred income taxes 3,647,500 2,963,000
Total current assets 27,221,375 26,406,681
PROPERTY AND EQUIPMENT, net 1,736,810 971,511
OTHER ASSETS 308,970 91,626
Total assets $29,267,155 $27,469,818
LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable $1,031,339 $1,119,202
Accrued expenses 908,334 561,552
Deferred revenue --- 47,395
Income taxes payable --- 509,000
Total current liabilities 1,939,673 2,237,149
SHAREHOLDERS' EQUITY:
Common stock 222,621 222,461
Additional paid-in capital 23,869,811 23,745,251
Retained earnings 3,235,050 1,264,957
Total shareholders' equity 27,327,482 25,232,669
Total liabilities and shareholders' equity $29,267,155 $27,469,818
SOURCE Omega Research, Inc.
-0- 10/28/98
/CONTACT: Salomon Sredni, Vice President of Operations and Chief
Financial Officer, Omega Research, Inc., 305-485-7000/
/Web site: http://www.omegaresearch.com/
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