Growth With Higher Margins in Software Lines and Houseplans(TM)
Business NOVATO, Calif., Sept. 29 /PRNewswire-FirstCall/ -- IMSI(R)
(OTC:IMSI) (BULLETIN BOARD: IMSI) , a leading provider of house
plans online and a leading developer and publisher of precision
design, and consumer and business software solutions, today
announced its financial results for the fiscal year ended June 30,
2005. For the twelve months ended June 30, 2005, IMSI reported a
net loss of $1.8 million, or ($0.06) per share on net revenues of
$13.9 million. Pro forma revenue including discontinued operations
was $23.3 million versus $12.0 million reported the prior year. Net
revenues increased by thirty nine percent (39%) in our core
Houseplans(TM) and software businesses, as compared to the previous
fiscal year, reflecting the continued growth in the Houseplans(TM)
business and in software product sales led by our flagship
application TurboCAD(R). The following are highlights for the
fiscal year ended June 30, 2005: -- Sales from the more profitable
direct marketing channel accounted for 67% of total revenues for
fiscal year 2005 as compared to 51% in fiscal year 2004. -- Gross
margins improved to 65% from 64% during fiscal 2005, as compared to
the previous fiscal year. -- Operating loss narrowed to 29% of net
revenue as compared to an operating loss of 38% of net revenue in
the prior fiscal year. Non GAAP Information -- GAAP net income
(loss) when adjusted for certain non-cash activity and taxes to
"EBITDA" was a negative $328,000 for the fiscal year. "The
Houseplans(TM) business continued to grow both organically and with
the acquisition of homeplanfinder.com, and we are extremely pleased
with the business' 266% annualized growth rate. In July we acquired
globalhouseplans.com and expect this business to help us achieve
additional significant revenue growth during 2006 in the sale of
stock house plans," said Martin Wade III, Chief Executive Officer.
"Our balance sheet is newly strengthened with certain discontinued
operations converting to cash as a result of a sale closed in the
September quarter," continued Mr. Wade. "We had approximately $4.3
million cash or cash equivalents as of June 30, 2005. This does not
include the $11 million in cash and escrow from the sale of Allume
subsequent to fiscal year end, which provides us with additional
cash to fund our net working capital needs and planned acquisition
activity. Our resulting current cash and cash equivalents balance
represents a significant opportunity to invest in high-return
operations during fiscal 2006." "With the annual launch of new
versions of our flagship product TurboCAD(R) and with our other
award winning products, we are continuing to deliver excellent
products in our software business," stated Gordon Landies, IMSI
President. "We continue to utilize our strengths in acquiring,
developing and distributing products and services directly to
consumers and businesses to generate sales momentum. Our
productivity tools and precision design products, as well as our
house plans business, all had solid results during fiscal 2005. In
addition, we are pleased by the growth of our Houseplans(TM)
network of websites which now have an online library of over 21,000
stock house plans, the largest collection of exceptional house
plans online. We plan additional investments in our Houseplans(TM)
business, adding properties to our network while including more
features and functionality to our existing sites to increase sales
and profits." In addition to disclosing results determined in
accordance with generally accepted accounting principles (GAAP),
IMSI also discloses non-GAAP results of operations that exclude
certain items. By disclosing this non-GAAP information, management
intends to provide investors with additional information to further
analyze the company's performance, core results and underlying
trends. Management utilizes a measure of net income on a non-GAAP
basis that excludes certain charges to better assess operating
performance. Non-GAAP information is not determined using GAAP;
therefore, the information is not necessarily comparable to other
companies and should not be used to compare the company's
performance over different periods. Non-GAAP information should not
be viewed as a substitute for, or superior to, net income or other
data prepared in accordance with GAAP as measures of our
profitability or liquidity. Users of this financial information
should consider the types of events and transactions for which
adjustments have been made. See the following table for a
reconciliation of this non-GAAP amount to amounts reported under
GAAP. EBITDA Analysis Q1 Q2 Q3 Q4 FY 2005 Net (Loss) Income - the
GAAP measure ($275) $129 ($386) ($1,222) ($1,754) Interest paid 45
55 64 61 225 Taxes 5 3 2 15 25 Depreciation & Amortization 263
303 302 308 1,176 EBITDA - non-GAAP $38 $490 ($18) ($838) ($328)
Notes on components of Net (Loss) Income related to transactions
Income From Discontinued Operations (Allume) (68) (199) 77 564 374
Income From Discontinued Operations (Keynomics) (5) (28) (33) Total
Income From Discontinued Operations ($73) ($227) $77 $564 $341 Gain
from Sale of Discontinued Operations (Keynomics & Other) 52 52
Gain from Sale of Discontinued Operations (ArtToday) 1,983 1,983
Total Gain from Sale of Discontinued Operations $52 $0 $0 $1,983
$2,035 INTERNATIONAL MICROCOMPUTER SOFTWARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (In thousands, except share amounts)
June 30, 2005 ASSETS Current assets: Cash and cash equivalents
$4,347 Investment in marketable securities 714 Receivables, less
allowances for doubtful accounts, discounts and returns of $626 773
Inventories 758 Receivables, other (related to discontinued
operations) 2,000 Receivables, other 30 Other current assets 530
Assets related to discontinued operations 12,231 Total current
assets 21,383 Fixed assets, net 377 Intangible Assets Capitalized
software, net 494 Domain names, net 1,574 Distribution rights, net
170 Capitalized customer lists 326 Goodwill 2,090 Trademarks 1
Total intangible assets 4,655 Total assets $26,415 LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Short term debt 2,764
Trade accounts payable 2,245 Accrued and other liabilities 1,871
Liabilities related to discontinued operations 1,037 Deferred
revenues 38 Total current liabilities 7,955 Long-term debt and
other obligations 230 Total liabilities 8,185 Shareholders' Equity
Common stock, no par value; 300,000,000 authorized; 28,796,886
issued and outstanding 43,663 Accumulated deficit (25,331)
Accumulated other comprehensive loss (102) Total shareholders'
equity 18,230 Total liabilities and shareholders' equity $26,415
INTERNATIONAL MICROCOMPUTER SOFTWARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE (LOSS)
INCOME (In thousands, except per share amounts) Fiscal Year ended
June 30, 2005 2004 Net revenues $13,874 $10,017 Product costs 4,881
3,650 Gross margin 8,993 6,367 Costs and expenses Sales and
marketing 6,465 4,428 General and administrative 4,857 3,677
Research and development 1,696 2,039 Total operating expenses
13,018 10,144 Operating loss (4,025) (3,777) Other income and
(expense) Interest and other, net (91) 65 Realized / unrealized
gain (loss) on marketable securities (42) 2,567 Loss on disposal of
fixed assets -- (13) Gain on sale of product line 53 59 Gain on
extinguishment of debt -- 76 Loss before income tax (4,105) (1,023)
Income tax provision 25 38 Loss from continuing operations (4,130)
(1,061) (Loss) income from discontinued operations, net of income
tax 341 (293) Gain from the sale of discontinued operations, net of
income tax 2,035 2,000 Net (loss) income ($1,754) $646 Other
comprehensive loss Foreign currency translation adjustments (32)
(8) Comprehensive (loss) income ($1,786) $638 Basic earnings (loss)
per share Loss from continuing operations ($0.15) ($0.04) (Loss)
income from discontinued operations, net of income tax $0.01
($0.01) Gain from the sale of discontinued operations, net of
income tax $0.08 $0.08 Net (loss) income ($0.06) $0.03 Diluted
earnings (loss) per share Net (loss) income from continuing
operations ($0.15) ($0.04) (Loss) income from discontinued
operations, net of income tax $0.01 ($0.01) Gain from the sale of
discontinued operations, net of income tax $0.08 $0.08 Net (loss)
income ($0.06) $0.03 Shares used in computing basic earnings (loss)
per share 27,694 23,838 Shares used in computing diluted earnings
(loss) per share 27,694 23,838 INTERNATIONAL MICROCOMPUTER
SOFTWARE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS (In thousands) Fiscal Year ended June 30, 2005 2004 Cash
flows from operating activities: Net (loss) income ($1,754) $646
Adjustments to reconcile net income to net cash used by operating
activities: Depreciation and amortization 1,176 717 Net provision
for bad debt 172 -- Net provision for returns and price discounts
(390) 400 Net provision for inventory obsolescence (39) 3
Extinguishment of debt -- (76) Loss (income) from discontinued
operations (341) 293 Gain on the sale of discontinued operations
(2,035) (2,000) Loss on disposal of assets -- 13 Gain on sale of
product line (53) -- Stock based compensation charges 30 523 Gain
on the sale of Design 3D -- (59) Changes in assets and liabilities:
Marketable securities 3,210 (2,925) Receivables 1,027 (1,348)
Receivables Other 987 (1,000) Inventories (136) (245) Other current
assets (98) (185) Long term receivables -- 650 Trade accounts
payable 760 872 Accrued and other liabilities 517 (643) Deferred
revenue (34) (45) Operating cash provided by (used in) discontinued
operations 1, 344 (288) Net cash provided by (used in) operating
activities $4,343 ($4,697) Cash flows from investing activities:
Proceeds from sale of discontinued operations 258 2,000 Acquisition
of product lines (43) (1,290) Acquisition of subsidiary (1,328)
(1,982) Purchases of equipment (120) (419) Software development
costs and in-process technologies (64) (80) Purchase of domain
names (9) (2) Purchase of trademark (1) -- Note to related party
371 (350) Cash provided by (used in) by discontinued operations in
investing activities 471 (539) Net cash used in investing
activities ($465) ($2,662) Cash flows from financing activities:
Proceeds from borrowings 400 350 Repayments of notes (2,349) (536)
Proceeds from warrants and options exercised 214 253 Settlement of
note payable (Imageline) -- (160) Cash used in discontinued
operations in financing activities (504) (150) Net cash used in
financing activities ($2,239) ($243) Effect of exchange rate change
on cash and cash equivalents (32) (8) Net increase (decrease) in
cash and cash equivalents 1,607 (7,610) Cash and cash equivalents
at beginning of year 2,740 10,350 Cash and cash equivalents at end
of the year $4,347 $2,740 About IMSI Founded in 1982, IMSI has
established a tradition of providing the professional and home user
with innovative technology and easy-to-use, high- quality software
products at affordable prices. Anchored by IMSI's flagship product,
TurboCAD(R) (http://www.turbocad.com/), the company continues to be
a leading developer and distributor of precision design and
consumer software solutions. IMSI also owns and operates
Houseplans(TM) (http://www.houseplans.com/), focused on expanding
its network of Web properties to serve the rapidly growing market
for the sale of stock house plans on-line and related home building
services. More information about IMSI can be found at
http://www.imsisoft.com/. When will a Proxy on the proposed IMSI -
AccessMedia Transaction be available? In connection with the merger
of International Microcomputer Software, Inc. ("IMSI") and
AccessMedia Networks, Inc. ("AccessMedia"), IMSI will file a proxy
statement for IMSI's special stockholder meeting with the
Securities and Exchange Commission. Investors and security holders
are advised to read the proxy statement when it becomes available
because it will contain important information about the proposed
merger. Investors and security holders may obtain a free copy of
the proxy statement (when available) and other documents filed by
IMSI with the Securities and Exchange Commission at the Securities
and Exchange Commission's web site at http://www.sec.gov/. Free
copies of the proxy statement (when available) and other documents
filed by IMSI with the Securities and Exchange Commission may also
be obtained from IMSI by directing a request to Investor Relations
at IMSI (telephone (415) 878-4000). IMSI and its directors and its
executive officers may be deemed, under SEC rules, to be soliciting
proxies from IMSI's stockholders in favor of the proposed merger.
Information regarding the identity of these persons, and their
interests in the solicitation, will be set forth in a Schedule 14A
to be filed with the SEC, and will be available free of charge at
the SEC website and public reference rooms, and from the IMSI
corporate secretary. Safe Harbor Statement This announcement
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, Section 21E of the Securities
Exchange Act of 1934, and within the meaning of the Private
Securities Litigation Reform Act of 1995. Actual results could
differ materially from those projected in the forward-looking
statements as a result of various factors including the ability of
the company to successfully commercialize its new technologies as
well as risk factors set forth from time to time in the Form 10-KSB
for the period ended June 30, 2005 and other company's reports
filed with the Securities and Exchange Commission. The company
undertakes no obligation to publicly release the result of any
revisions to these forward- looking statements, which may be made
to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. DATASOURCE:
International Microcomputer Software, Inc. CONTACT: Robert
O'Callahan, Chief Financial Officer of International Microcomputer
Software, Inc., +1-415-878-4020, or Web site:
http://www.imsisoft.com/
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