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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): August 4, 1998
QUARTERDECK CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 0-19207 95-4320650
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or Organization) Identification No.)
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13160 MINDANAO WAY
MARINA DEL REY, CALIFORNIA 90292
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 309-3700
NONE
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On July 31, 1998, Quarterdeck Corporation announced third quarter
results. A copy of the press release dated July 31, 1998 with respect to the
announcement is filed herewith as Exhibit 99.1.
Item 7. Financial Statements and Exhibits.
The following is filed as an exhibit to this Current Report on Form
8-K:
99.1 Press Release dated July 31, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on behalf of the
undersigned hereunto duly authorized.
Dated: August 4, 1998 QUARTERDECK CORPORATION
By: /s/ King R. Lee
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King R. Lee
Interim President
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
JULY 31, 1998
CONTACTS:
Frank Greico
Quarterdeck Corporation
310-309-4232
[email protected]
Ana Thorne
Quarterdeck Corporation
310-309-3767
[email protected]
QUARTERDECK ANNOUNCES THIRD QUARTER RESULTS
MARINA DEL REY, CALIF. - JULY 31, 1998 -- Quarterdeck Corporation (Nasdaq: QDEK)
today announced its operating results for the third quarter of fiscal 1998 ended
June 30, 1998. The Company had previously announced that results for the quarter
ended June 30, 1998 would include a significant restructuring charge and a
substantial operating loss. Gross revenues and net revenues for the quarter were
$13.8 million and $8.0 million respectively, compared to $24.8 million and $21.1
million reported for the same period in 1997. Quarterdeck reported a net loss of
$14.7 million, or $0.27 per share, versus net income of $1.1 million, or $0.02
per share for the same quarter last year. The 1998 third quarter end cash
balance was approximately $15.2 million.
For the nine months ended June 30, 1998, the Company reported net revenues of
$42.0 million, compared to $68.5 million for the nine-month period ending June
30, 1997. The net loss for the nine-month period was $21.4 million or $0.45 per
share compared to net income of $241,000 or $0.01 per share, reported for the
nine months ended June 30, 1997.
The Company attributed the significant decline in gross and net revenues during
the third quarter to several factors, including, among others, the industry-wide
slowdown in software sales related to the market's anticipation of the Windows
98 launch and recent weakness in personal computer retail sales. Quarterdeck
recorded a provision of approximately $5.8 million or 42% of gross quarterly
revenue to
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QUARTERDECK ANNOUNCES THIRD QUARTER RESULTS
account for possible sales returns and allowances, versus a typical 15%
provision. This increased provision was taken to reserve for the previously
noted slowdown in software sales and for new products and product bundles that
assist users upgrading to Windows 98 for which high sell-through rates to
end-users have not yet been established. Gross and net revenues from Europe were
also depressed for similar reasons. In addition, the third quarter 1998 results
included $2.7 million in restructuring and other charges and $2 million in
acquisition related goodwill deemed impaired by the Company.
"In spite of market conditions - decreased store traffic leading up to the
launch of Windows 98 and normal summer sales slowdown - retail software sales
started to pick up in June. We continue to expand our electronic distribution
channels and are rapidly moving toward our strategy to re-focus on the less
volatile corporate segment with an emphasis on small to medium-sized
businesses," said King R. Lee, interim president of Quarterdeck. "We have taken
steps to significantly lower the Company's break-even point by scaling down to
the core business, replacing five vice presidents and lowering head count by
over 25%. With these expense reductions and the re-focus of the business, we
expect Quarterdeck to become profitable within two quarters. We are pleased that
CleanSweep, our flagship product, was first in corporate sales in every month of
the quarter in the uninstaller category."
QUARTERLY HIGHLIGHTS
- - Quarterdeck announced two new corporate solutions products in the third
quarter: DiskClone Corporate, a fast, easy method for deploying new
operating systems over a network, ideal for businesses and organizations
migrating from Windows 3.x or 95 to Windows 98, Windows NT 4.0 or 5.0; and
CleanSweep for Administrators, a powerful administration tool for creating
customized versions of the Company's award-winning uninstaller solution,
CleanSweep, to be distributed throughout an enterprise.
- - Quarterdeck's CleanSweep product line led the PC uninstaller category in
the corporate market for the entire June quarter according to sales figures
from PC Data, the computer industry's comprehensive source for software and
hardware sales information. CleanSweep outsold the leading competitors,
CyberMedia's Uninstaller and Symantec's Norton Uninstaller, by as much as
six to one and three to one, respectively.
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QUARTERDECK ANNOUNCES THIRD QUARTER RESULTS
- - The PC Data June business category retail report shows that Quarterdeck
increased its dollar market share for June by 37% over May, and increased
its unit market share by 61% over May.
- - Quarterdeck launched its Enterprise Partner Program (QEPP), a new
initiative to bring helpware solutions to small and medium-sized enterprises
through channel partners. The QEPP program provides value-added resellers
(VARs), corporate resellers, consultants, integrators and support providers
with the sales, marketing and technical support needed to design, sell and
support the Company's enterprise helpware and communication solutions that
help manage the cost of ownership for desktop PCs. The number of VARs
currently signed up for QEPP exceeds, by more than double, the Company's
target.
- - Quarterdeck expanded its distribution of PC helpware solutions through a
comprehensive electronic sales distribution network via the Internet that
includes the Company's online store (http://store.quarterdeck.com), and
other electronic sales distributor partners such as Digital River, CNET Buy
Direct, eWarehouse, TestDrive, TechWave and NetSales. Customers can save a
trip to the store and shipping and handling charges by downloading
Quarterdeck's helpware solutions directly to their PCs.
- - Internationally, Quarterdeck announced a strategic alliance with TECO
Business Software to distribute the Company's REALHELP Extra Strength
software throughout Australia. Under the agreement, TECO Business Software,
a subsidiary of Taiwan-based TECO Information Systems Co., Ltd., will
distribute Quarterdeck's REALHELP Extra Strength exclusively on an OEM basis
to end users via its network of Australian computer retail outlets. In
addition, the following products were launched: a Dutch version of
CleanSweep; a Japanese version of Zip-It; and French and German versions of
ViruSweep, Partition-It and Disk Clone.
- - Quarterdeck's products received several awards in the third quarter:
CleanSweep Deluxe received Windows Magazine's prestigious Win 100 award and
the FreshSite Network's Fresh Award. REALHELP Extra Strength won the C/NET
Editor's Choice award for best crash protection; and Remove-It 98 also won
C/NET Editor's Choice award in the uninstaller category.
ABOUT QUARTERDECK
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QUARTERDECK ANNOUNCES THIRD QUARTER RESULTS
Quarterdeck Corporation is a global leader in the development and marketing of
PC helpware - software designed to prevent and solve PC performance problems,
especially those encountered in networked - Internet and Intranet -
environments. The Company's goal is to make personal computing trouble-free for
users and network administrators alike, while reducing the need for live
technical support. Quarterdeck's current product line, which addresses storage
management, system conflict resolution, virus protection, system updating, and
enhanced access to networked information and communications resources, is
marketed to both end-users and businesses via retail distribution, corporate
resellers and OEM's, direct marketing channels, and the Internet. Quarterdeck's
products are available in over 14,000 outlets throughout the United States and
Canada, as well as in over 29 countries worldwide. Incorporated in 1982 and
traded on Nasdaq under the symbol QDEK, Quarterdeck's worldwide headquarters are
in Marina del Rey, California, with its European operations based in Dublin,
Ireland. Further information may be obtained by calling 800-683-6696 toll-free,
or 573-443-3282, by accessing Quarterdeck's Web site at
http://www.quarterdeck.com/, or by sending e-mail requests to
[email protected].
# # #
NOTE TO EDITORS: If you would like more information on Quarterdeck Corporation
and its products, please view the Quarterdeck Press Center at
(http://www.quarterdeck.com/qdeck/press).
Quarterdeck, CleanSweep and Remove-It are registered trademarks of Quarterdeck
Corporation or its subsidiaries. DiskClone, Partition-It, REALHELP, ViruSweep
and Zip-It are trademarks of Quarterdeck Corporation or its subsidiaries. All
other brand and product names are trademarks or registered trademarks of their
respective holders.
This press release contains forward-looking statements that are made pursuant to
the safe-harbor provisions of the Private Securities Litigation Reform Act of
1995. Expressions of future goals and similar expressions reflecting something
other than historical fact are intended to identify forward-looking statements,
but are not the exclusive means of identifying such statements. These
forward-looking statements involve a number of risks and uncertainties,
including the timely development and market acceptance of products and
technologies, successful integration of acquisitions and divestitures of
non-core assets, the ability to secure additional sources of financing, the
ability to reduce operating expenses and other factors described in the
Company's filings with the Securities and Exchange Commission. The actual
results that the Company achieves may differ materially from any forward-looking
statements due to such risks and uncertainties. The Company undertakes no
obligations to revise or update any forward-looking statements in order to
reflect events or circumstances that may arise after the date of this release.
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QUARTERDECK ANNOUNCES THIRD QUARTER RESULTS
QUARTERDECK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
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THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
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Gross revenues $ 13,841 $ 24,796 $ 57,817 $ 79,402
Returns allowances 5,806 3,740 15,808 10,864
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Net revenues 8,035 21,056 42,009 68,538
Cost of revenues 3,560 5,153 12,344 17,505
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Gross profit 4,475 15,903 29,665 51,033
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Operating expenses:
Research and development 5,785 3,760 14,805 11,480
Sales and marketing 8,109 7,169 26,177 23,015
General and administrative 2,441 3,689 7,959 13,403
Acquisition, restructuring and other charges 2,726 -- 2,583 --
-------- -------- -------- --------
Total operating expenses 19,061 14,618 51,524 47,898
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Operating income (loss) (14,586) 1,285 (21,859) 3,135
Interest expense, net (219) (498) (655) (1,491)
Other income (expense), net 59 266 1,116 (1,400)
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Income (loss) before income taxes (14,746) 1,053 (21,398) 244
Provision for income taxes -- -- 16 3
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Net income (loss) $(14,746) $ 1,053 $(21,414) $ 241
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Net income (loss) per share:
Basic $ (0.27) $ 0.02 $ (0.45) $ 0.01
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Diluted $ (0.27) $ 0.02 $ (0.45) $ 0.01
-------- -------- -------- --------
Shares used to compute net income (loss) per share:
Basic 55,609 47,130 47,490 47,644
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Diluted 55,609 47,130 47,490 47,644
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QUARTERDECK CORPORATION
COMPARATIVE BALANCE SHEET
(Amounts in thousands)
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JUNE 30, SEPTEMBER 30,
1998 1997
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(Unaudited)
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ASSETS
Current assets:
Cash & cash equivalents $ 15,197 $ 23,651
Trade accounts receivable 1,429 7,028
Inventories 895 1,177
Other current assets 2,850 4,655
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Total current assets 20,371 36,511
Equipment and leasehold improvements, net 4,739 14,153
Capitalized software costs, net 803 1,790
Other assets 919 3,427
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$ 26,832 $ 55,881
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,586 $ 3,792
Accrued liabilities 8,339 14,196
Accrued acquisition, restructuring and other charges 4,574 5,385
Income tax payable 308 627
Notes payable to bank 1,500 5,579
Current portion of long-term obligations 14 15
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Total current liabilities 17,321 29,594
Convertible notes 25,000 25,000
Other long-term obligations, less current portion 57 114
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Total liabilities 42,378 54,708
Stockholders' equity:
Series C Preferred stock 6,992 24,594
Common stock 60 43
Additional paid-in capital 97,562 75,630
Accumulated deficit (119,578) (98,164)
Foreign currency translation adjustment (29) (281)
Notes receivable from directors for sale of stock (18) (18)
Net unrealized gain (loss) on marketable securities 24 (72)
Treasury stock (559) (559)
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Total stockholders' equity (15,546) 1,173
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$ 26,832 $ 55,881
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