SunRiver Corp. reports first quarter earnings
AUSTIN, Texas–(BUSINESS WIRE)–May 15, 1997–SunRiver Corp. (NASDAQ:SRVC), a leading supplier of text terminals and network computers, reported that for the first quarter ended March 31, 1997, the company returned to profitability and positive cash flow after the significant losses posted during 1996, which were primarily a result of its write off of its investment in TradeWave.
Revenue for the quarter was $23.9 million with net income of $396,000, or $0.01 per share, compared with year-earlier revenue of $37.7 million with net income of $237,000, or $0.00 per share.
The year-earlier period has been restated to reflect the discontinuance of certain operations during the fourth quarter of 1996. On April 9 of this year, the company divested certain assets of its former software subsidiary, TradeWave, in a sale that includes the potential for SunRiver to receive royalties on software sales in the future, which are not expected to be material.
Chairman and Chief Executive Officer J. Gerald Combs commented: “We have taken the first steps to put the company back on the path to solid growth and predictable profitability. The new management team at Boundless Technologies and the combination of budget controls and cost reductions that we implemented during the fourth quarter, together with the discontinuance of a money-losing subsidiary, have allowed us to move back into the black with the continuing strong performance of our Boundless Technologies subsidiary.
“The company’s financial position and its cash flow are improving, and we anticipate that during the current year we will be able to report strong revenues, continuing paydowns of long-term debt and more decisive profitability as the quarters progress.”
Boundless Technologies President and CEO Bob James said that the company’s introduction of a new generation of network computers is on schedule, and that the company plans to begin shipping the new TC2 model to major national accounts during the second quarter ending June 30, 1997.
He said: “During the first quarter we beat our internal sales plan by more than $1 million, which we credit to the hard work of our employees and the excellence of our product offering and customer service. Our customer list continues to include many of the world’s largest and most prestigious information technology companies. We continue to be one of the top manufacturers of terminals worldwide, and we plan to capture a similarly strong position in the network computer market as well.”
Chief Financial Officer Wayne Schroeder said that the company’s balance sheet is strengthening. The company reduced inventories by $3 million and payables and debt by $10.5 million, when compared with the Dec. 31, 1996 balance sheet.
Boundless Technologies, a subsidiary of SunRiver Corp., is a world leader in the design, manufacture and marketing of terminals and network computers for the Windows environment and the Internet/intranet, legacy and UNIX applications markets.
The company’s family of network computers provides “thin-client” computing solutions with PC capabilities where applications reside on a server and are accessed by users on demand. Without the need for large disk and memory capacities, all models offer significant administrative and total-cost-of-ownership advantages over networked PCs.
The company’s products are distributed worldwide through a network of OEMs, distributors and value-added resellers. -0-
SUNRIVER CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
Revenue $ 23,924 $ 37,671
Cost of revenue: 18,467 29,663
Gross margin 5,457 8,008
Sales and marketing 1,782 2,178
General and administrative 1,629 1,743
Research and development 724 1,299
Total operating expenses 4,135 5,220
Operating income 1,322 2,788
Other (income) expense:
Interest expense, net 807 1,045
Other (5) 210
Total other expense 802 1,255
Income before income taxes and
discontinued operations 520 1,533
Income tax expense — 410
Income before discontinued operations 520 1,123
Loss from discontinued operations — (762)
Net income 520 361
Dividend on preferred stock of subsidiary 124 124
Earnings available for common
shareholders $ 396 $ 237
Weighted average common shares
outstanding 48,625 45,872
Earnings per common share:
Continuing operations $ 0.01 $ 0.02
Discontinued operations $ — $ (0.02)
Earnings per common share $ 0.01 $ —
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