Press Release

Wednesday, April 21, 1999 < Prev Next >

Visio Corporation Reports Strong Second Quarter 1999 Results

Total Installed Base Surpasses 3.0 Million Users

SEATTLE, April 21 /PRNewswire/ — Visio Corporation (Nasdaq: VSIO) today reported results for the second quarter of fiscal 1999. Revenues for the quarter ended March 31, 1999 were $51.4 million, a 28 percent increase over second quarter fiscal 1998 revenues of $40.1 million. Net income for the second quarter of fiscal 1999 increased 24 percent to $10.7 million compared to net income for the second quarter of fiscal 1998 of $8.6 million, excluding a charge for acquired technology, net of taxes, in the fiscal 1998 quarter. Diluted earnings per share for the second quarter of fiscal 1999 were $0.34 compared to diluted earnings per share for the second quarter of fiscal 1998 of $0.27, excluding a charge for acquired technology, net of taxes, in the fiscal 1998 quarter, and represented an increase of 26 percent.

For the six months ended March 31, 1999, revenues were $99.5 million, a 28 percent increase from revenues of $77.6 million for the comparable period in fiscal 1998. Net income for the six-month period was $20.7 million, or $0.66 per diluted share, compared to net income of $16.0 million, or $0.51 per diluted share, excluding a charge for acquired technology, net of taxes, reported during the same period in fiscal 1998.

Net income during the quarter and six months ended March 31, 1998 including the charge for acquired technology was $3.3 million and $10.7 million respectively. Diluted earnings per share during the quarter and six months ended March 31, 1998 including the charge for acquired technology was $0.11 and $0.34.

"During the March quarter we surpassed a new installed base milestone of three million users," said Jeremy Jaech, president and CEO of Visio Corporation. "This achievement offers continued evidence of the broad acceptance of Visio® technology as the desk top standard for business drawing and diagramming."

In the March 1999 quarter, volume licensing revenue of $17.5 million increased 99% over the prior year quarter, and represented 34% of total revenue. Revenue for the distribution channel was $31.7 million, representing a 13 percent increase over the March 1998 quarter.

"We are successfully delivering product to our customers however they want to purchase," said Jaech. "Sales of packaged product through the traditional distribution channel for individual end users remains our largest channel at 62% of total revenues, our corporate customers continue to drive growth in the sale of volume licenses through purchases at the department and enterprise level, and the launch of our eVisio™ site in the March quarter for purchase of customized software on the internet is off to a promising start."

International revenue of $21.3 million represented 42 percent of total revenue in the March 1999 quarter. Strength of sales in Japan resulted in revenue for rest-of-world region of $7.9 million or 15 percent of total revenue.

During the quarter, the Company repurchased 383,000 shares of its common stock for approximately $10 million under the Company's stock repurchase program. Announced during the March quarter, the repurchase program allows for a total of up to 2 million shares to be repurchased over a two-year period.

About Visio Corp.

Visio Corp. is the leading supplier of enterprise-wide business diagramming and technical drawing software, with an installed base of over 3 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.

A replay of the Company's conference call with financial analysts will be available for replay beginning today at 5:00 p.m. PDT by dialing 719-457-0820. The replay will be available until 6:00 p.m. PDT on Friday, April 23, 1999.

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 http://www.visio.com.

NOTE: Visio is a registered trademark 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                Six Months Ended
                          March  31,                     March  31,
                    1999            1998            1999           1998

    Revenues       $51,352  100%  $40,089  100%   $99,542  100%  $77,586  100%
    Cost of
     revenues        5,048   10     3,637    9      9,344    9     7,029    9
    Gross profit    46,304   90    36,452   91     90,198   91    70,557   91
    Operating
     expenses:
      Research
       and
       development   8,898   17     6,646   16     16,678   17    12,768   16
      Sales and
       marketing    20,639   40    16,538   41     41,004   41    32,597   42
      General and
       admini-
       strative      3,608    7     3,113    8      6,917    7     6,258    8
      Acquired
       Technology —  — 7,090   18 —  — 7,090    9
    Total operating
     expenses       33,145   64    33,387   83     64,599   65    58,713   75

    Operating
     income         13,159   26     3,065    8     25,599   26    11,844   16

    Interest and
     other income,
     net             1,260    2     1,359    3      2,345    2     2,472    3
    Income before
     income taxes   14,419   28     4,424   11     27,944   28    14,316   19
    Provision for
     income taxes    3,749    7     1,098    3      7,265    7     3,612    5
    Net income     $10,670   21%   $3,326    8%   $20,679   21%  $10,704   14%

    Basic earnings
     per share       $0.35          $0.11           $0.68          $0.37
    Shares used in
     computing basic
     earnings per
     share          30,224          29,243         30,241         28,925

    Diluted earnings
     per share       $0.34           $0.11          $0.66          $0.34
    Shares used in
     computing
     diluted
     earnings per
     share          31,443          31,659          31,506        31,527


                              Visio Corporation
                                Balance Sheets
                                (in thousands)

                                                         Mar. 31,    Sept. 30,
                                                          1999         1998
    Assets
    Current assets:
      Cash                                               $49,254     $67,088
      Short-term investments                              65,615      41,930
      Accounts receivable                                 25,012      15,934
      Inventories                                          1,255       1,228
      Prepaid expenses                                     7,383       6,662
      Deferred income taxes                                6,260       4,709


        Total current assets                             154,779     137,551
    Equipment and leasehold improvements                  16,217      10,191
    Capitalized technology                                 4,267       4,609
    Other assets                                           3,402         380
    Deferred income taxes                                  6,578       6,646


        Total assets                                    $185,243    $159,377

    Liabilities and shareholders' equity
    Current liabilities:
      Accounts payable                                    $7,455      $5,223
      Accrued compensation and benefits                    5,164       4,464
      Deferred revenue                                     9,740       7,830
      Other accrued liabilities                           16,884      13,717
      Income taxes payable                                 5,570         936


        Total current liabilities                         44,813      32,170

    Long-term notes payable —  — Shareholders' equity:
      Common stock                                        70,189      75,434
      Retained earnings                                   70,241      51,773
        Total shareholders' equity                       140,430     127,207


          Total liabilities and shareholders' equity    $185,243    $159,377

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