| | | | | | Listen to Me | | | | | |
The Kurzweil Applied Intelligence Alumni Newsletter
Kurzweil AI Quarterly Results
This report is excerpted from the Kurzweil AI 10-Q filing with the SEC, as
posted in the Edgar database. If you wish to see the complete report, go
to the Table of Contents and select the SEC Edgar database
item.
Revenue
Revenues for the three months ended April 30, 1996 totaled $1,710,000,
37% lower than the $2,707,000 in the same period of the prior year.
The decrease was due to the lower volume of VoiceMED(R) units sold.
The decrease in VoiceMED(R) product shipments was due to the lower
acceptance of the older DOS operating platform technology and the
continued slowdown of orders from the government sector. Maintenance
revenue for the three months ended April 30, 1996 increased to
$472,000 from $382,000 in the same period of the prior year. The
increase is a result of the larger installed base of customers as well
as the increased emphasis by the Company on programs to promote
recurring revenue from maintenance contracts. Included in the revenue
for the period ending April 30, 1996 was $400,000 in licensing fees
from one customer for the Kurzweil VOICE(TM) for Windows product.
Cost of Sales
Cost of product and maintenance revenue for the three months ended
April 30, 1996 totaled $880,000 or 51% of total revenues, compared to
$1,295,000 or 48% of total revenues in the same period of the prior
year. The decrease in cost of product and maintenance revenues, in
dollars, relates to the $400,000 in licensing fees for the Kurzweil
VOICE for Windows product. On a percentage basis the cost of product
and maintenance revenues increased during the three months ended April
30, 1996 as compared to the same period of the prior year due to the
decrease in revenue and the recurring costs associated with the
amortization of the Dragon license and capitalized software
development costs. The Company also increased its reserve against
capitalized software $100,000 for the quarter ended April 30, 1996 due
to the uncertainty relating to recoverability of those software
development costs.
Sales and Marketing Expenses
Sales and marketing expenses increased to $950,000 for the three
months ended April 30, 1996 from $929,000 in the same period of the
prior year, representing 55% and 34% of total revenues, respectively.
This increase is attributable to having a fully staffed direct sales
force of 8 people at April 30, 1996 compared to 4 direct sales people
at April 30, 1995
Research and Development Expenses
Total research and development expenses, net of capitalization,
increased to $678,000 for the three month period ended April 30, 1996
from $478,000 in the same period of the prior year, representing 40%
and 18% of total revenues, respectively. The increase in research and
development expenses is associated with the Company's continued
commitment to enhance and develop the Company's technology and
products. This commitment included the increase in the research and
development staff to 57 people as of April 30, 1996 as compared to 46
in the same period of the prior year. In April 1996, the Company
successfully released Kurzweil VOICE(TM) for Windows 2.0 and is
scheduled to begin shipping Clinical Reporter(TM), the new Windows(TM)
based product for the Medical Applications Group, in the second
quarter of fiscal 1997.
General and Administrative Expenses
General and administration expenses increased to $532,000 for the
three months ended April 30, 1996 from $329,000 in the same period of
the prior year, representing 31% and 11% of total revenues,
respectively. The difference is due to a $200,000 reserve relating to
the Company's potential obligation under its corporate indemnification
agreement with a former officer of the Company. Pursuant to the
Company's Certificate of Incorporation, and certain of its contractual
obligations, the Company may be obligated to indemnify its current and
former officers, directors and certain other persons under claims
arising from the Company's class action litigation, and to reimburse
certain costs incurred by such persons as a result of the lawsuits,
investigations and proceedings. On May 17, 1996 the Company received a
claim from a former officer for indemnification for certain legal
expenses, as a result of his acquittal on May 14, 1996 in a recent
criminal trial. As a result of receiving this claim for
indemnification, the Company is currently able to estimate the amount
of costs associated with an unfavorable outcome related to these
indemnification matters and has therefore accrued for such
possibility. Management believes this claim is without merit and
intends to defend its position vigorously.
Kurzweil AI Q1 FY 1997 Statement of Operations
Kurzweil AI Q1 FY 1997 Balance Sheet
Kurzweil AI Q1 FY 1997 Cash Flow
| | | | | | Kurzweil AI Alumni News | | | | | |
Questions or Problems? Send
e-mail
June 21, 1996