insci-statements.com Reports 2001 Results, Sales $10 Million, Loss of $17.8 Million
Press release from the issuing company
WESTBOROUGH, MA (July 16, 2001) - insci-statements.com Corp. (OTCBB:INSI - news), doing business as INSCI, a provider of scalable digital document repository solutions that provide high- volume document capture, warehousing and delivery functions, today announced results for its 2001 fiscal year and fourth quarter ended March 31, 2001.
Revenues for fiscal 2001 were $10 million with a net loss applicable to common shareholders of $17.8 million, or a $1.16 loss per share. This compares with fiscal year 2000 revenues of $11 million with a net loss applicable to common shareholders of $11 million, or a loss per share of $1.11.
The year-to-year decline in fiscal year 2001 revenues was primarily the result of the diversion of selling efforts during the first two quarters of the year to the start-up of the company's now-closed InfiniteSpace.com subsidiary. The consolidated net loss for fiscal 2001 includes the effects of $8.9 million in non-recurring restructuring and other charges associated with the closing of the company's InfiniteSpace.com subsidiary at the end of the second quarter, as well as $3 million of losses before non-recurring charges from the operations of its discontinued Internet Broadcasting Company Inc. ("IBC"), InfiniteSpace.com and United Kingdom subsidiaries.
The net loss for fiscal 2000 included non-cash charges of $3.9 million, $1.2 million for losses incurred by IBC prior to its acquisition by INSCI and $1.3 million of start-up expenses for the company's then newly formed subsidiary, InfiniteSpace.com. The non-cash charges were comprised of $1.1 million for the valuation of options and warrants issued for services and $2.8 million related to the write-down of capitalized software.
Revenues in the fiscal 2001 fourth quarter were $1.9 million with a net loss applicable to common shareholders of $2.7 million, or a $0.17 loss per share. This compares with revenues in the fourth quarter of fiscal 2000 of $1.6 million and a net loss applicable to common shareholders of $6.1 million, or a loss per share of $0.50. Gross margin as a percentage of sales for the fiscal 2001 fourth quarter improved to 54.7 percent from 26.9 percent in the prior year's fourth quarter.
INSCI President and CEO Henry F. Nelson commented: "This has been an especially challenging year for the company, our employees and our shareholders. While the changes made in strategy, direction and personnel at all levels have been very difficult and far-reaching, they have been required due to the significant changes in the capital markets and slowdown in technology procurements. Over the past several months, the company has monetized a valuable non strategic asset with the sale of Lognet, reduced its operating expenses, raised additional financing and put the company on a course of seeking a strategic business alliance or business combination."
INSCI recently closed a convertible debt facility of up to $700,000, receiving gross proceeds of $250,000 from the financing at the closing with an additional $100,000 scheduled to be received upon completion of several post- closing items. INSCI can draw on the remainder of the facility at the discretion of the lender and upon attaining certain operating milestones.
General and administrative expenses in fiscal year 2001 rose 1.7 percent from the prior fiscal year's levels and sales and marketing expenses for fiscal year 2001 declined by approximately 19 percent from the prior year. This decline was primarily due to reduced commission costs associated with lower revenues, a reduction in trade show and promotional expense and a decrease in sales personnel. The year-to-year decline in sales and marketing expense was partially offset by start-up staffing and marketing expenses in the first half of fiscal year 2001 related to establishing the now discontinued InfiniteSpace.com subsidiary.
Fiscal year 2001 product development expenses increased by about 72 percent from fiscal year 2000 levels due principally to $1.4 million in product development expenses for InfiniteSpace.com and Lognet and a reduction in expenses in fiscal year 2000 of approximately $1.2 million for the capitalization of software development expenses. No software development expenses were eligible for capitalization in fiscal year 2001.
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