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The Kurzweil Applied Intelligence Alumni Newsletter
Kurzweil Applied Intelligence releases unaudited financial results for the quarter ended July 31, 1996
August 20, 1996, 8:20 AM EDT
WALTHAM, Mass.--(BUSINESS WIRE)--Aug. 20, 1996--Kurzweil
Applied Intelligence Inc. (NASDAQ: KURZ) today released its
unaudited financial results for the second quarter ended July 31,
1996.
The company reported revenue of $2,197,000 and a net loss of
$738,000 or ($0.09) per share, for the quarter ended July 31, 1996,
as compared to revenue of $2,516,000 and a net loss of $298,000 or
($0.04) per share, for the same period of the prior year.
Thomas E. Brew, Jr., the company's president and CEO, said, "We
are disappointed with the results of the second quarter of fiscal
year 1997. However, we did introduce two significant products during
the quarter: Kurzweil Clinical Reporter, our new Windows-based
clinical reporting system; and, Kurzweil VoicePad for Windows 95
Resease 1.0, a full-featured, voice-enabled word processing
application that users can now download from our web site."
The company has attached the financial statements for the three
and six month periods of fiscal year 1997, and fiscal year 1996.
Kurzweil Applied Intelligence Inc., headquartered in Waltham,
Mass., was founded in 1982. The company develops, markets, and
supports automated voice recognition systems used to create documents
and interact with personal computers by voice. Kurzweil VOICE is an
easy-to-use voice recognition system for Windows-based PCs; and, the
company's medical reporting systems, VoiceMED and Clinical Reporter,
are used in over 500 healthcare institutions nationwide.
Kurzweil AI 10-Q
The following 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
The Company's total revenues consist of revenue from the sale
and licensing of Company products and revenue from maintenance contracts.
- Three months
- Revenue for the three months ended July 31, 1996 totaled
$2,197,000, 13% lower than the $2,516,000 of revenue in the same period of
the prior year. The decrease in revenue was a result of lower license fees
for the Kurzweil Voice for Windows product for the quarter ended July 31,
1996 of $62,000 as compared to $635,000 for the same period of the prior
year. Included in the revenue for the quarter ended July 31, 1995 was
$600,000 in license fees from one customer of the Kurzweil Voice for
Windows product.
On July 30, 1996, the Company released for shipment the new Kurzweil
Clinical Reporter system, the Company's Windows based medical reporting
product. This release was responsible for the increase in medical product
revenues to $1,066,000 for the second quarter ended July 31, 1996 as
compared to $1,040,000 for the same period of the prior year.
Maintenance revenue for the three month period ended July 31, 1996
increased to $462,000 from $415,000 in the same period of the prior year.
This increase was a result of the larger installed base of medical systems
as compared to the same period of the prior year.
- Six Months
- Revenue for the six months ended July 31, 1996 totaled
$3,907,000, 25% lower than the $5,224,000 of revenue in the same period of
the prior year. Lower shipments of the Company's VoiceMED products and
lower license fees for the Kurzweil Voice for Windows product was
responsible for the decline in sales for the six month period.
Maintenance revenue for the six month period ended July 31, 1996 increased
to $934,000 from $797,000 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 receiving
revenue from maintenance contracts.
Cost of Sales
Cost of product, license and
maintenance revenue includes hardware costs, manufacturing overhead, system
replacement parts associated with maintenance contracts, third party software
royalties and license fees, and amortization of capitalized software.
- Three months
- Cost of product, license and maintenance revenue for the
three months ended July 31, 1996 totaled $860,000 or 39% of total
revenues, compared to $961,000 or 38% of total revenues in the same period
of the prior year.
- Six Months
- Cost of product, license and maintenance revenue for the six
months ended July 31, 1996 totaled $1,741,000 or 44% of total revenues,
compared to $2,256,000 or 43% of total revenues in the same period of the
prior year.
Sales and Marketing Expenses
Sales and marketing expenses include the costs
for marketing, selling and supporting the Company's products.
- Three Months
- Sales and marketing expenses increased to $989,000 for the
three months ended July 31, 1996 from $873,000 in the same period of the
prior year, representing 45% and 35% of total revenues, respectively. The
increase in expenses was primarily the result of the increased spending to
launch and promote the new Kurzweil Clinical Reporter product line during
the quarter ended July 31, 1996. Those higher expenses included increased
sales force, trade shows, promotion and collateral marketing materials.
- Six Months
- Sales and marketing expenses increased to $1,939,000 for the
six months ended July 31, 1996 from $1,803,000 in the same period of the
prior year, representing 49% and 35% of total revenues, respectively. The
higher expenses were primarily the result of the increased spending to
launch and promote the new Kurzweil Clinical Reporter product line in the
six months ended July 31, 1996.
Research and Development Expenses
Research and development expenditures consist
principally of personnel costs, allocated facility costs, and associated
equipment amortization and depreciation. A portion of the total research and
development expenditures are capitalized in accordance with Financial Accounting
Standards No. 86, "Accounting for the Costs of Computer Software to be Sold,
Leased or Otherwise Marketed," the amortization of which is included in cost of
product and maintenance revenue.
- Three Months
- Total research and development expenses, net of
capitalization, for the three month period ended July 31, 1996 increased
to $753,000 or 32% of total revenues, compared to $638,000 or 25% of total
revenues in the same period of the prior year. The increase was primarily
the result of the Company's continued commitment to the development and
enhancement of new products and technology. The research and development
group including technical documentation had 67 people at July 31, 1996 as
compared to 52 at the end of July of the prior year.
- Six Months
- Total research and development expenses, net of
capitalization, increased to $1,431,000 for the six months ended July 31,
1996 from $1,116,000 in the same period of the prior year, representing
35% and 21% of total revenues, respectively. The increased staffing and
applicable expenses were responsible for the increase in expenses for the
comparable periods.
General and Administrative Expenses
General and administrative expenses include
those costs associated with general corporate needs and administrative
functions.
- Three months
- General and administrative expenses decreased to $364,000
for the three months ended July 31, 1996 from $404,000 in the same period
of the prior year, representing 15% and 16% of total revenues,
respectively. The decrease was attributable to the Company's continuing
efforts to reduce overhead expenses.
- Six months
- General and administrative expenses increased to $896,000 for
the six months ended July 31, 1996 from $740,000 in the same period of the
prior year, representing 22% and 14% of total revenues, respectively. The
increase was primarily a result of reserves taken during the first
quarter of fiscal 1997 for litigation expenses.
Kurzweil AI Q2 FY 1997 Statement of Operations
Kurzweil AI Q2 FY 1997 Balance Sheet
Kurzweil AI Q2 FY 1997 Cash Flow
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August 21, 1996