Press Release

Wednesday, January 20, 1999 < Prev Next >

Visio Corporation Announces First Quarter 1999 Results

Company Reports Its 15th Consecutive Growth Quarter; Record Number of New Seats in a Single Quarter

SEATTLE, Jan. 20 /PRNewswire/ — Visio Corporation (Nasdaq: VSIO) today reported results for the first quarter of fiscal 1999. Revenues for the quarter ended December 31, 1998 were $48.2 million, a 29 percent increase over first quarter fiscal 1998 revenues of $37.5 million. Net income for the first quarter increased 36 percent to $10.0 million compared to net income for the first quarter of fiscal 1998 of $7.4 million. Diluted earnings per share for the first quarter of fiscal 1999 were $0.32 compared to diluted earnings per share of $0.24 for the first quarter of fiscal 1998, and represented an increase of 33 percent.

The company sold a record 272,000 new seats during the quarter, a 44 percent increase over the prior year quarter, bringing the total installed base to nearly 2.8 million users. In the December 1998 quarter the volume licensing channel grew 150 percent over the December 1997 quarter to $17.2 million, representing a record 36 percent of total revenue. "The continued strength of our volume licensing channel, and strong product line spanning across the enterprise, contributed to the increase in new users," stated Jeremy Jaech, president and CEO of Visio Corporation. "We will continue to invest in growing our worldwide corporate sales organization to further tap into the great potential within large organizations. This team will focus on further penetrating our existing accounts and bringing new users to Visio® technology."

The introduction of Visio Enterprise in November 1998, a new product for the IT market segment, also drove revenue growth in the quarter. The IT design and documentation product group contributed $25.7 million in revenue, or 53 percent of total revenue. "We're very pleased with the initial acceptance of Visio Enterprise and recognize that we are just at the front end of the cycle for upgrades and new user purchases," said Steve Gordon, chief financial officer for Visio Corp. "Research that we've gathered shows that the market for our IT products in the U.S. alone represents approximately 2.7 million IT professionals."

For the December 1998 quarter international revenues were $18.7 million, representing 39 percent of total revenue. European revenue for the quarter increased 33 percent over the prior year quarter to $13.6 million.

About Visio Corp.

Visio Corp. is the leading supplier of enterprise-wide business diagramming and technical drawing software, with an installed base of nearly 2.8 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 12 language versions and are sold in more than 45 countries.

This press release (including the quoted language above and the reference to Visio becoming a worldwide 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, 1998, 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

NOTE: Visio is a 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

Balance Sheets

(in thousands)

                                                    Dec. 31,      Sept. 30,                                                      1998           1998     Assets     Current assets:       Cash                                           $76,427        $67,088       Short-term investments                          44,570         41,930       Accounts receivable                             20,704         15,934       Inventories                                      1,363          1,228       Prepaid expenses                                 6,369          6,662       Deferred income taxes                            4,978          4,709         Total current assets                         154,411        137,551     Equipment and leasehold improvements              12,680         10,191     Capitalized technology                             4,317          4,609     Other assets                                         441            380     Deferred income taxes                              6,612          6,646         Total assets                                $178,461       $159,377     Liabilities and shareholders' equity     Current liabilities:       Accounts payable                                $6,452         $5,223       Accrued compensation and benefits                5,456          4,464       Deferred revenue                                 8,220          7,830       Other accrued liabilities                       15,290         13,717       Income taxes payable                             3,603            936         Total current liabilities                     39,021         32,170     Shareholders' equity:       Common stock                                    77,820         75,434       Retained earnings                               61,620         51,773         Total shareholders' equity                   139,440        127,207           Total liabilities            and shareholders' equity                 $178,461       $159,377                                 Visio Corporation   Statements of Income   (In thousands, except per share data)   Three Months Ended   December 31,                                                 1998              1997     Revenues                            $48,191     100%    $37,497     100%     Cost of revenues                      4,297       9       3,392       9     Gross profit                         43,894      91      34,105      91     Operating expenses:       Research and development            7,779      16       6,122      16       Sales and marketing                20,365      42      16,059      43       General and administrative          3,309       7       3,145       9     Total operating expenses             31,453      65      25,326      68     Operating income                     12,441      26       8,779      23     Interest and other income, net        1,085       2       1,113       3     Income before income taxes           13,526      28       9,892      26     Provision for income taxes            3,517       7       2,514       6     Net income                          $10,009      21%     $7,378      20%       Basic earnings per share            $0.33               $0.26       Shares used in computing basic        earnings per share                30,257              28,607       Diluted earnings per share          $0.32               $0.24       Shares used in computing diluted        earnings per share                31,570              31,395