Press Release

Wednesday, July 16, 1997 < Prev Next >

Visio Corporation Announces Third Quarter 1997 Results

SEATTLE, July 16 /PRNewswire/ — Visio Corporation (Nasdaq: VSIO) today reported results for the third quarter of fiscal 1997. Revenues for the quarter ended June 30, 1997, were $25.8 million, a 69 percent increase over third quarter fiscal 1996 revenues of $15.2 million. Net income for the third quarter, excluding a one-time pretax charge of $3.6 million resulting from the acquisition of technology from SysDraw Software Company, increased 108 percent to $5.9 million, compared to net income of $2.8 million for the third quarter of fiscal 1996. Earnings per share for the third quarter, excluding the one-time charge resulting from the acquisition of the Sysdraw technology, were $.39 compared to $.19 for the third quarter of fiscal 1996, an increase of 105 percent. The company achieved an operating margin of 27 percent prior to the one-time charge related to the acquisition, compared to 25 percent for the same period last year.

For the nine months ended June 30, 1997, revenues were $68.4 million, a 58 percent increase from revenues of $43.2 million for the comparable period last year. Net income for the nine-month period, excluding the one-time charge resulting from the acquisition of the Sysdraw technology and the one-time charge of $6.7 million resulting from the acquisition of the Boomerang technology in the second fiscal quarter of 1997, was $15.7 million or $1.04 per share compared to $7.2 million, or $.50 per share reported during the same period in the prior year.

Net income for the third quarter of fiscal 1997, including the one-time charge resulting from the acquisition of the Sysdraw technology, was $3.3 million or $.22 per share. For the nine month period ending June 30, 1997, including the one-time charges resulting from the acquisitions of both the Sysdraw technology and the Boomerang technology, net income was $8.2 million or $.54 per share.

During the third quarter of fiscal 1997, Visio® Professional generated $7.4 million in revenue, representing 29% of total revenue. Visio, at $11.0 million in revenue, represented 43% of total revenue, while Visio Technical, at $7.3 million in revenue, represented 28% of total revenue. The impact of Visio Professional drove domestic revenue to $17.0 million, representing 66% of total revenue.

"Visio Professional closed another strong quarter with revenues increasing 37% sequentially," said Jeremy Jaech, president and CEO of Visio Corp. "Our product revenue mix continues to evolve as we help both new and existing customers select the Visio product with the best functionality to meet their needs."

During the third quarter of fiscal 1997, Visio acquired technology including the world's largest library of network diagramming shapes from SysDraw Software Company. Under the terms of the agreement, Visio acquired certain assets for a committed consideration totaling $6.5 million with $3.6 million of the purchase price expensed as in-process R&D in the June quarter.

"The addition of the SysDraw network equipment shapes library combined with Visio Professional will provide an unparalleled solution for network design and documentation," said Jaech. "SysDraw's relationships with network equipment vendors as well as its organization to efficiently create and deliver new shapes are proving to be important assets for Visio."

Visio Corporation, 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 nine languages and in more than 35 countries, with more than 1 million users throughout the world.

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, 1996, and, from time to time, in other reports filed by the company with the Securities and Exchange Commission.

NOTE: Visio is a registered trademark of Visio Corporation. 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)
                                   (Unaudited)
                                           Three Months Ended
                                                 June 30,
                                     1997                        1996
    Revenues               $25,805          100%      $15,231          100%
    Cost of revenues         2,731            11        2,125            14
    Gross Profit            23,074            89       13,106            86
    Operating expenses:

      Research and
       development           4,175            16        2,138            14
      Sales and marketing    9,988            39        5,929            39
      General and
       administrative        1,899             7        1,181             8
      Acquired technology    3,558            14            0             0
    Total operating
     expenses               19,620            76        9,248            61
    Operating income         3,454            13        3,858            25
    Interest and other
     income, net               987             4          388             3
    Income before
     income taxes            4,441            17        4,246            28
    Provision for
     income taxes            1,155             4        1,401             9
    Net Income              $3,286           13%       $2,845           19%
      Earnings per share     $0.22                      $0.19
      Shares used in
       computing earnings
       per share            15,270                     14,944

                                            Nine Months Ended
                                                 June 30,
                                     1997                        1996
    Revenues               $68,351          100%      $43,175          100%
    Cost of revenues         7,099            10        6,854            16
    Gross Profit            61,252            90       36,321            84
    Operating expenses:

      Research and
       development          10,339            15        6,522            14
      Sales and marketing   26,791            39       16,707            39
      General and
       administrative        5,081             8        3,300             7
      Acquired technology   10,255            15            0             1
    Total operating
     expenses               52,466            77       26,529            61
    Operating income         8,786            13        9,792            23
    Interest and other
     income, net             2,229             3        1,021             2
    Income before
     income taxes           11,015            16       10,813            25
    Provision for
     income taxes            2,864             4        3,568             8
    Net Income              $8,151           12%       $7,245           17%
    Earnings per share       $0.54                      $0.50
    Shares used in
     computing earnings
     per share              15,134                     14,447

                              Visio Corporation
                                Balance Sheets
                                (in thousands)
                                               Jun. 30,          Sep. 30,
                                                 1997              1996
    Assets

    Current assets:

      Cash and short-term investments          $67,369           $61,107
      Accounts receivable                        5,410             2,242
      Inventories                                  433               604
      Prepaid expenses                           5,000             2,431
      Deferred income taxes                      5,335             1,779
        Total current assets                    83,547            68,163
    Equipment and leasehold improvements         5,614             3,445
    Other assets                                 3,047                 0
         Total  assets                         $92,208           $71,608
    Liabilities and shareholders' equity

    Current liabilites:

      Accounts payable                          $3,946            $3,525
      Accrued compensation and benefits          3,098             2,002
      Other accrued liabilities                 14,198             8,798
      Income taxes payable                       1,288             1,584
      Current portion of long-term obligations     448               326
        Total current liabilities               22,978            16,235
    Long-term obligations                          709               148
    Shareholders' equity:

      Common stock                              50,877            45,688
      Retained earnings                         17,644             9,537
       Total shareholders' equity               68,521            55,225
         Total liabilities and

          shareholders' equity                 $92,208           $71,608
SOURCE  Visio Corp.

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

/Visio Corp. press releases available through Company News On-Call by fax, 800-758-5804, ext. 107036, or at http://www.prnewswire.com/

(VSIO)

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

CS-CL — SFW056 — 7833 07/16/97 16:22 EDT http://www.prnewswire.com

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