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News Alert from EDGAR Online via Quote.com
Topic: (NASDAQ:OMGA) ,
Quote.com News Item #10974809
Headline: OMEGA RESEARCH INC (NASDAQ:OMGA) files SEC Form 10-Q
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QUARTERS ENDED JUNE 30, 1999 AND 1998
NET REVENUES
TOTAL NET REVENUES. The Company's total net revenues increased 43% from
$7.7 million in the three months ended June 30, 1998 to $11.0 million in the
comparable period of 1999.
LICENSING FEES. Licensing fees increased 50% from $5.7 million
in the three
months ended June 30, 1998 to $8.6 million in the comparable period of 1999,
primarily due to an increase in gross sales resulting from the release, on
February 22, 1999, of the Company's 2000I software products. No assurances can
be given that such increases will continue or that a trend of any kind has been
established. The Company has provided what it believes are appropriate
provisions for returns, in light of its 30-day right of return policy, but no
assurance can be given that the rate of returns will not increase beyond the
reserved levels.
OTHER REVENUES. Other revenues increased 25% from $1.9 million
in the three
months ended June 30, 1998 to $2.4 million in the comparable period of 1999,
primarily due to an increase in revenues generated from OmegaWorld, the
Company's annual conference, and an increase in minimum royalties under the
Company's license agreement with Telerate, Inc. ("Bridge Telerate"), a
subsidiary of Bridge Information Systems, Inc.
8
OPERATING EXPENSES
COST OF LICENSING FEES. Cost of licensing fees consists primarily of
product media, packaging and storage and inventory costs. Cost of
licensing fees
was approximately $455,000 in the three months ended June 30, 1999 and $519,000
in the comparable period of 1998. Cost of licensing fees as a percentage of
licensing fees decreased from 9% in the three months ended June 30, 1998 to 5%
in the comparable period of 1999, primarily due to a shift in product mix to
higher-priced products during 1999.
PRODUCT DEVELOPMENT. Product development expenses include expenses
associated with the development of new products, enhancements to existing
products, testing of products and the creation of documentation, and consist
primarily of salaries, other personnel costs and depreciation of computer and
related equipment. Product development expenses increased 34% from $836,000 in
the three months ended June 30, 1998 to $1.1 million in the
comparable period of
1999, primarily due to an increase in the number of individuals employed in
product development. Product development expenses as a percentage of licensing
fees decreased from 15% in the three months ended June 30, 1998 to 13% in the
comparable period of 1999 primarily as a result of increased license fees
partially offset by increased expenses. The Company anticipates that the
absolute dollar amount of product development expense will increase for the
foreseeable future as the Company seeks to develop new products and enhance
existing products.
SALES AND MARKETING. Sales and marketing expenses consist primarily of
marketing programs, including advertising, brochures, direct mail programs and
seminars to promote the Company's products to investors, sales commissions,
salaries for the customer support center and marketing personnel, other
personnel costs, web site design and administration costs, and shipping
expenses. Sales and marketing expenses increased from $3.8 million in the three
months ended June 30, 1998 to $4.5 million in the comparable period of 1999,
primarily due to increased personnel expenses related to increased sales and
marketing personnel and increased commissions as well as increased
costs related
to OmegaWorld, partially offset by decreased advertising (including print
advertising, television advertising and direct mailers). Sales and marketing
expenses as a percentage of licensing fees decreased from 67% in the three
months ended June 30, 1998 to 53% in the comparable period of 1999,
primarily as
a result of increased licensing fees partially offset by increased
expenses. The
Company expects the level of sales and marketing expenses, including
advertising
and promotional costs, to vary with the level of sales; however, in the near
term, sales and marketing expenses are expected to increase as the Company
continues to promote its 2000I product line.
GENERAL AND ADMINISTRATIVE. General and administrative expenses consist
primarily of provision for bad debt, employee-related costs for administrative
personnel such as executive, human resources, finance and information
technology
employees, as well as professional fees, rent and other facility expenses.
General and administrative expenses increased from $1.3 million in the three
months ended June 30, 1998 to $2.3 million in the comparable period of 1999,
primarily due to increased bad debt expense and increased personnel and related
costs. General and administrative expenses as a percentage of licensing fees
increased from 22% in the three months ended June 30, 1998 to 27% in the
comparable period of 1999, primarily as a result of the increase in the
above-described expenses partially offset by increased licensing fees. The
Company believes that the absolute dollar amount of its general and
administrative expenses in the future will depend, to a large extent, on the
level of provision required for bad debt, the level of hiring of additional
personnel to support the expected growth of the Company, and the
extent, if any,
to which the Company enters new markets or related businesses.
OTHER INCOME, NET
Other income, net consists primarily of investment income from cash and
cash equivalents and marketable securities. The Company generally invests in
overnight investments, tax exempt commercial paper and investment grade
short-term municipal bonds. The amount of interest income fluctuates based on
the amount of funds available for investment and the prevailing interest rates.
Other income, net increased from $116,000 in the three months ended June 30,
1998 to $128,000 in the comparable period of 1999.
<Big Snip>
To view the full document, go to:
http://www.edgar-online.com/quotecom/full/?doc=0001042814-0000950170-99-001208
For other Edgar reports on OMEGA RESEARCH INC (OMGA), go to:
http://www.edgar-online.com/quotecom/search/?sym=OMGA
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