Press Release

Wednesday, October 28, 1998 < Prev Next >

Visio Corporation Announces Fourth Quarter and Fiscal 1998 Results

SEATTLE, Oct. 28 /PRNewswire/ — Visio Corporation (Nasdaq: VSIO) today reported results for the fourth quarter and fiscal year ended September 30, 1998. Revenues for the quarter ended September 30, 1998 were $44.2 million, a 41 percent increase over fourth quarter fiscal 1997 revenues of $31.4 million. Net income for the fourth quarter, excluding a pre-tax acquisition related charge of $1.2 million resulting from the acquisition of Kaspia Systems, Inc., increased 54 percent to $9.8 million compared to net income for the fourth quarter of fiscal 1997 of $6.4 million. Diluted earnings per share, excluding the pre-tax acquisition related charge, for the fourth quarter of fiscal 1998 were $0.31 compared to diluted earnings per share of $0.20 for the fourth quarter of fiscal 1997, and represented an increase of 55 percent.

Revenues for fiscal year 1998 were $166.0 million, a 65 percent increase over fiscal year 1997 revenues of $100.8 million. Net income for the year, excluding pre-tax acquisition related charges of $9.3 million, was $35.0 million and diluted earnings per share were $1.10 compared to net income of $21.3 million and diluted earnings per share of $0.69 for fiscal 1997, excluding pre-tax acquisition related charges of $10.3 million.

Net income for the fourth quarter of fiscal 1998, including the pre-tax acquisition related charge, was $9.0 million and diluted earnings per share were $0.28. Net income for fiscal year 1998, including the pre-tax acquisition related charges, was $28.1 million and diluted earnings per share were $0.89.

The company sold a record 248,000 new seats during the quarter, reaching an installed base of nearly 2.5 million users. "Third party data validates that Visio products represent the number one selling business drawing and diagramming tools in the world as measured by new unit shipments," stated Jeremy Jaech, president and CEO of Visio Corporation. "Our products deliver compelling value to companies all over the world by allowing people in business to create all types of drawings with their PCs."

September quarter revenues were driven by sales from the IT market segment in which Visio products enjoy broad market acceptance. Revenues in this segment increased an impressive 99% in the September 1998 quarter as compared to the same quarter in 1997. In addition, the Visio product family continued to be widely deployed through the volume licensing channel which grew 155% in the September 1998 quarter to $12.5 million, representing 28% of total revenue.

For the September 1998 quarter, international revenues increased 72 percent as compared to the September 1997 quarter to $17.2 million, representing 39 percent of total revenue. International revenues for fiscal 1998 were $67.3 million and represented 41 percent of total revenues, an 89 percent increase over fiscal 1997 revenues.

"In the September quarter we completed the acquisition of Kaspia Systems, Inc. and have since successfully incorporated Kaspia's AutoDiscovery™ technology into our recently announced product, Visio® Enterprise, which will be available in November," said Jaech. "We're very excited about the expanded depth and value that this product will offer to network administrators, database designers and software engineers. As such, Visio Enterprise is expected to further solidify the company's position as the standard for creating, storing and exchanging graphical information in business."

About Visio Corp.

Visio Corp. is the leading supplier of enterprise-wide business diagramming and technical drawing software, with an installed base of nearly 2.5 million users worldwide. Founded in September 1990, the Seattle-based company pioneered the drawing and diagramming software market with the release of Visio 1.0 in November 1992 and has since released additional Windows-based graphics applications that offer users a unique and effective way to communicate and work. Visio's powerful product line is becoming a worldwide standard for graphical solutions in business, with the support of partner programs and third-party relationships in key market segments. Visio products are available in as many as eleven language versions and are sold in more than 40 countries.

This press release (including the quoted language above and the reference to establishment of Visio as a desktop platform standard) contains forward-looking statements. There are certain important factors that could cause actual results to differ materially from those anticipated by some of the statements made above. Among these are fluctuations in quarterly performance, dependence on other products including Microsoft Windows, competition in the business drawing and diagramming software market, timing and customer acceptance of new products, the company's ability to manage growth and integrate acquired technology, potential changes in licensing and marketing methods, and changes in general economic conditions. Additional information concerning these and other risks is described in the section entitled "Certain Risk Factors That May Impact Future Results of Operations" contained in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 1997, and, from time to time, in other reports filed by the company with the Securities and Exchange Commission.

Additional information about Visio Corporation is available on the Internet at http://www.visio.com.

NOTE: Visio and AutoDiscovery are registered trademarks of Visio Corporation in the United States and/or other countries. All other trademarks, trade names or company names referenced herein are used for identification only and are the property of their respective owners.


                                  Visio Corporation
                                 Statements of Income
                        (In thousands, except per share data)
                             Including Acquired Technology

                                                  Three Months Ended
                                                     September 30,
                                               1998                 1997

    Revenues                           $44,223     100%     $31,389     100%
    Cost of revenues                     3,963        9       3,525       11
    Gross profit                        40,260       91      27,864       89
    Operating expenses:
      Research and development           7,538       17       5,337       17
      Sales and marketing               17,375       39      12,595       40
      General and administrative         3,279        7       2,504        8
      Acquired technology                1,185        3           —        —
    Total operating expenses            29,377       66      20,436       65

    Operating income                    10,883       25       7,428       24

    Interest and other income, net       1,219        3       1,141        4
    Income before income taxes          12,102       27       8,569       27
    Provision for income taxes           3,147        7       2,184        7

    Net income                          $8,955      20%      $6,385      20%
      Basic earnings per share           $0.30                $0.23
      Shares used in computing basic
       earnings per share               29,987               28,369

    Diluted earnings per share           $0.28                $0.20
    Shares used in computing diluted
     earnings per share                 31,604               31,300


                                Visio Corporation
                              Statements of Income
                       (In thousands, except per share data)
                           Including Acquired Technology

                                                  Twelve Months Ended
                                                     September 30,
                                               1998                 1997

    Revenues                          $165,995     100%    $100,775     100%
    Cost of revenues                    15,132        9      10,682       11
    Gross profit                       150,863       91      90,093       89
    Operating expenses:
      Research and development          27,257       16      16,073       16
      Sales and marketing               68,596       41      40,576       40
      General and administrative        12,973        8       8,353        8
      Acquired technology                9,251        6      10,255       10
    Total operating expenses           118,077       71      75,257       75

    Operating income                    32,786       20      14,836       15

    Interest and other income, net       4,894        3       3,466        3
    Income before income taxes          37,680       23      18,302       18
    Provision for income taxes           9,572        6       4,602        5

    Net income                         $28,108      17%     $13,700      14%

      Basic earnings per share           $0.96                $0.49
      Shares used in computing basic
       earnings per share               29,406               27,872

    Diluted earnings per share           $0.89                $0.44
    Shares used in computing diluted
     earnings per share                 31,669               30,792


                               Visio Corporation
                                Balance Sheets
                                (in thousands)

                                                   Sept. 30,      Sept. 30,
                                                      1998           1997
    Assets
    Current assets:
     Cash and short-term investments                $109,018        $81,212
     Accounts receivable                              15,934          6,587
     Inventories                                       1,228          1,079
     Prepaid expenses                                  6,662          4,231
     Deferred income taxes                             4,709          4,873
      Total current assets                           137,551         97,982

    Equipment and leasehold improvements              10,191          8,254
    Capitalized technology and other assets            4,989          2,861
    Deferred income taxes                              6,646          3,604
     Total assets                                   $159,377       $112,701

    Liabilities and shareholders' equity
    Current liabilities:
     Accounts payable                                 $5,223         $6,019
     Accrued compensation and benefits                 4,464          2,706
     Deferred revenue                                  7,830          9,082
     Other accrued liabilities                        13,717         11,751
     Income taxes payable                                936          2,988
     Current portion of notes payable — 1,000
      Total current liabilities                       32,170         33,546

    Long-term notes payable — 387

    Shareholders' equity:
     Common stock                                     75,434         56,367
     Retained earnings                                51,773         22,401
      Total shareholders' equity                     127,207         78,768
       Total liabilities and shareholders' equity   $159,377       $112,701

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