Press Release

Wednesday, July 17, 1996 < Prev Next >

Visio Corporation Announces Third Quarter 1996 Results

SEATTLE, July 17 /PRNewswire/ — Visio Corporation (Nasdaq: VSIO) today reported results for the third quarter of fiscal 1996. Revenues for the quarter were $15.2 million, an 89 percent increase over third quarter fiscal 1995 revenues of $8.1 million. Net income was $2.8 million and earnings per share were $0.19, compared to net income of $0.7 million and earnings per share of $0.06 for the third quarter of fiscal 1995, an increase of 309 percent and 217 percent, respectively. The Company achieved an operating margin of 25 percent, compared to 11 percent for the same period last year.

For the nine months ended June 30, 1996, revenues were $43.2 million, an 80 percent increase from $23.9 million for the comparable period last year. Net income was $7.2 million and earnings per share were $0.50, compared to $1.4 million and earnings per share of $0.12, for the comparable period of fiscal 1995, representing percentage gains of 418 percent and 317 percent, respectively.

During the third quarter, Visio® Technical generated $4.8 million in revenue, a 304% increase over the prior year's comparable quarter and representing 31% of total revenue. Volume licensing revenue of $1.7 million increased 298% over the prior year's comparable quarter and increased to 11% of total revenue. International revenue of $6.1 million continued to show strong growth, increasing 124% over the prior year's comparable quarter and representing 40% of total revenue.

"Our business model is working," said Jeremy Jaech, President and CEO of Visio. "On the revenue side Visio Technical is succeeding in the marketplace, our volume licensing strategy is gaining momentum and continues to broaden and deepen penetration within enterprises. We also continue to make headway growing our international business, particularly in the Pacific Rim region. At the same time we are balancing investment in the business with good expense control resulting in improvements in both gross and operating margins."

During the third quarter Visio introduced the Visio Business Modeler, a solution designed to expedite implementations of the SAP® R/3™ system. Other products introduced during the quarter were Visio Technical 4.1, Visio Technical French and German and the Visio Solutions Library™ product line which includes 18 SmartShapes® solutions and can be viewed on the Visio web page.

Visio Corp., a leading supplier of enterprisewide business diagramming and technical drawing software, was founded in September 1990. The Seattle-based company pioneered the drawing and diagramming market with the release of Visio 1.0 in November 1992, and has since released additional Windows-based products for the creation and exchange of drawings and diagrams in business. Visio's powerful product architecture, combined with partner programs and third-party relationships in key market segments, is establishing Visio as a desktop platform standard for the creation of graphical solutions. The company markets the Visio product line in more than 26 countries throughout the world.

This press release contains forward-looking statements. There are certain important factors that could cause results to differ materially from those anticipated by some of the statements made above. Among these are fluctations 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, and changes in general economic conditions. Additional information concerning these and other risks is described in the "Risk Factors" section of the prospectus contained in the Registration Statement on Form S-I filed by the Company on September 15, 1995, and, from time to time, in the Company's Securities and Exchange Commission reports, which include the Report on Form 10-Q for the quarter ended March 31, 1996. Actual results may differ materially.

Additional information about Visio Corporation is available on the Internet at http://www.visio.com. Details about Visio Corporation are also available on CompuServe and MSN, The Microsoft Network.

NOTE: Visio, Visio Solutions Library and SmartShapes are either trademarks or registered trademarks of Visio Corporation in the United States and/or other countries. SAP and R/3 are either trademarks or registered trademarks of SAP AG. Microsoft, Windows, Windows NT and MSN are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries. All other trademarks are held by their respective companies.


                            Visio Corporation
                          Statements of Income
                  (In thousands, except per share data)
                               (Unaudited)
                     Three Months Ended        Nine Months Ended
                          June 30,                  June 30,
                     1996          1995       1996          1995
    Revenues       $15,231 100%  $8,059 100% $43,175 100%  $23,939 100%
Cost of
     revenues        2,125  14    1,257  16    6,854  16     3,972  17
    Gross Margin    13,106  86    6,802  84   36,321  84    19,967  83
Operating

expenses:

Research and
      development    2,138  14    1,346  17    6,522  15     3,613  15
Sales and
      marketing      5,929  39    3,910  48   16,707  39    12,802  53
General and
     administrative  1,181   8      651   8    3,300   7     1,796   8
Total operating
     expenses        9,248  61    5,907  73   26,529  61    18,211  76
Income from
     operations      3,858  25      895  11    9,792  23     1,756   7
Other income,
     net               388   3      176   2    1,021   2       396   2
Income before
     income taxes    4,246  28    1,071  13   10,813  25     2,152   9
Provision for
     income taxes    1,401   9      375   4    3,568   8       754   3
    Net Income      $2,845  19%   $ 696   9%  $7,245  17%   $1,398   6%
Pro forma:

Net income
      per share     $ 0.19        $0.06       $ 0.50        $ 0.12
Shares used

in computing

net income
      per share     14,944       12,051       14,447        11,713

                            Visio Corporation
                             Balance Sheets
                             (in thousands)
                                  Jun. 30,              Sept. 30,
                                   1996                   1995
                                (unaudited)
ASSETS

CURRENT ASSETS:

      Cash and cash equivalents   $56,520                $7,063
Trade accounts
       receivable, net              2,149                 4,462
       Inventories                    698                 1,431
       Prepaid expenses             1,682                 1,662
       Deferred income taxes        1,795                 2,136
    Total current assets           62,844                16,754
Equipment and leasehold
     improvements, net              2,840                 2,308
    Other assets                        6                   185
    Total  assets                 $65,690               $19,247
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:

      Accounts payable             $2,905               $4,176
Accrued compensation
       and benefits                 1,815                1,025
      Other accrued liabilities     8,360                5,041
      Income taxes payable          1,106                2,653
Current portion of
      long-term obligations           359                  394
    Total current liabilities      14,545               13,289
    Long-term obligations             247                  453
Convertible & redeemable
     preferred stock                    0                6,545
SHAREHOLDERS' EQUITY (DEFICIT):

      Common stock                    136                   56
      Additional paid-in capital   45,080                  487
      Translation adjustments         (54)                 (74)
Retained earnings 

      (accumulated deficit)         5,736               (1,509)
Total shareholders'
     equity (deficit)              50,898               (1,040)
Total liabilities and

shareholders'
     equity (deficit)             $65,690              $19,247

/CONTACT: Leslie Deitz of Visio Corporation, 206-521-4546/

(VSIO)

CO: Visio Corp. ST: Washington IN: CPR SU: ERN

MS — SFW031 — 1128 07/17/96 16:15 EDT

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