ScanSoft Reports Second Quarter 1999 Results
PEABODY, MA - July 27,
1999 - ScanSoft, Inc. (NASDAQ:SSFT) today reported revenue of $10,268,000
and net income of $1,298,000 (before goodwill amortization), or $0.04 per
share on a diluted basis, for its second quarter ended June 30, 1999. Including
the effects of goodwill amortization, the Company reported net income of
$823,000 or $0.03 per diluted share for its second quarter, the highest
earnings achieved in a single quarter in the Company's history. For the
six months ended June 30, 1999, ScanSoft reported revenue of $14,776,000
and net income (before unusual items and goodwill amortization) of $1,403,000,
or $0.05 per diluted share. Including the effects of unusual items and goodwill
amortization, the Company reported a net loss of $3,201,000 or $0.13 per
share, for the six months ended June 30, 1999.
"Near the end of the first quarter we completed the acquisition transaction
between Visioneer's software business and ScanSoft. The resulting integration
effort has been successful, and I am pleased to report we achieved record
earnings and record software revenue during the first full quarter of
the combined companies," said Michael Tivnan, ScanSoft's president and
chief executive officer.
"The increase in second quarter revenue was driven by a succession of
new product releases, an increase in Internet sales, and growth in OEM
license agreement royalties" continued Mr. Tivnan. "We shipped TextBridge
Pro 9.0, our most advanced optical character recognition software to date,
in April; Pagis Pro 3.0, our scanning and desktop management suite, in
May; and the business edition of TextBridge Pro 9.0 in June. I am pleased
with the early results of these product releases. The 9.0 release of TextBridge
helped to improve our market share in the OCR segment during the second
quarter, and we received our first enterprise level orders for TextBridge
as well.
"In combination with the impact of new product introductions, online
sales of our products grew dramatically within the quarter in response
to aggressive e-mail marketing campaigns. ScanSoft is continuing to develop
relationships with a growing number of e-resellers and was one of Digital
River's top ten software vendors in the quarter. In addition, revenue
contribution from our European operation was particularly strong in the
quarter, with revenue more than doubling that of the first quarter of
1999."
The company also completed the acquisition of photo imaging software
products and technology from MetaCreations Corporation on June 30, 1999.
Image editing is the leading application for digital camera users and,
with OCR, is one of the most used applications for scanning. The addition
of Kai's Super GOO, Kai's Photo Soap, and Kai's Power Show broadens ScanSoft's
product offerings for the Company's current markets and provides new opportunities
to partner with premier companies in the field of digital imaging.
"I am delighted by what we have achieved during the second quarter,"
stated Mr. Tivnan. "The market for scanners and multi-function devices
continues to grow and our breadth of products continues to expand. I look
forward to continued growth in the second half of 1999, but should note
that third quarter revenue historically has not exceeded revenue of the
second quarter due to seasonal sales trends."
About ScanSoft, Inc.
On March 2, 1999, Visioneer, a hardware and software company, acquired
the ScanSoft subsidiary of Xerox. The Company subsequently changed its
name to ScanSoft. Prior to the acquisition, on January 6, 1999, Visioneer
sold its hardware business to Primax Electronics, Ltd. Revenue and costs
for 1998 include these divested hardware products.
Headquartered in Peabody, MA, ScanSoft, Inc. is a leading developer of
digital imaging and optical character recognition (OCR) software. The
company's award-winning products allow small office/home office (SOHO)
and corporate users to leverage the power of their desktop scanners, digital
cameras, and other electronic input devices, to accurately capture and
convert paper documents and photos into digital files that can be easily
edited, organized and shared via e-mail and the Internet. There are approximately
2.0 million registered users of ScanSoft software worldwide.
ScanSoft's digital imaging software is marketed through retail distributors
and the Internet and ships with the desktop imaging and networkable multi-function
devices of leading manufacturers; including Apple, Brother, Epson, Canon,
Compaq, IBM, Mustek, Primax, Visioneer, and Xerox. For more information,
please visit us on the Internet at www.nuance.com.
Except for the historical information contained herein, the matters set
forth in this press release are forward-looking statements. These statements
are based on the company's current expectations and estimates as to prospective
events and circumstances which may or may not be in the company's control
and as to which there can be no firm assurances given. These forward-looking
statements are subject to risks and uncertainties that may cause actual
results to differ materially. These risks and uncertainties include, but
are not limited to, market acceptance of the company's products, competitive
products, pricing, maintenance of distribution channels, and other risks
detailed from time to time in ScanSoft's SEC reports. ScanSoft disclaims
any intent or obligation to update these forward-looking statements.
ScanSoft, Pagis, TextBridge, Kai's Super GOO, Kai's Photo Soap, and Kai's
Power Show are registered trademarks or trademarks of ScanSoft, Inc. All
other trademarks are the property of their respective holders.
|
Balance Sheet Highlights | June 30, 1999
(unaudited) | March 31, 1999(unaudited) | December 31, 1998
(unaudited) |
| Cash and Investments | $ 5,185 | $ 6,834 | $ 8,123 |
| Receivables | 8,232 | 3,789 | 13,512 |
| Working Capital | 5,912 | 8,377 | 6,569 |
| Total Assets | 30,167 | 24,137 | 28,445 |
| Stockholders' Equity | 21,301 | 20,424 | 7,582 |
Note: The financial results of 1998 represent the activity of Visioneer, Inc., which was both a hardware and software company in 1998. Visioneer sold its hardware business to Primax Electronics, Ltd., on 1/6/99. Visioneer acquired Xerox Corporation's ScanSoft subsidiary on 3/2/99, and subsequently changed its name to ScanSoft, Inc.
Note: The financial results of 1998 represent the activity of Visioneer, Inc., which was both a hardware and software company in 1998. Visioneer sold its hardware business to Primax Electronics, Ltd., on 1/6/99. Visioneer acquired Xerox Corporation's ScanSoft subsidiary on 3/2/99, and subsequently changed its name to ScanSoft, Inc.
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