UNITED STATES
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): 7 May 1997
ALPNET, INC.
(Exact name of registrant as specified in its charter)
UTAH 0-15512 87-0356708
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
4460 South Highland Drive #100
Salt Lake City, Utah 84124-3543
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 273-6600
Former name or former address, if changed since last report: Not applicable
Item 5. Other Events --- Press Release: "ALPNET Announces First Quarter
Results"
7 May 1997 -- Salt Lake City, Utah. ALPNET, Inc. (NASDAQ: AILP), the largest
independent dedicated commercial provider of language translation, product
localization, and language-related services to international businesses, today
announced results for the quarter ended 31 March 1997. Sales grew to $8.8
million, compared to sales of $6.5 million for the first quarter of 1996, which
represents a 35% increase year over year. A net loss of $576,000, or $.03 per
share, was sustained in the quarter, compared with net income of $29,000 (less
than $.01 per share) for the same quarter in 1996.
Thomas F. Seal, ALPNET President & CEO, made the announcement and issued the
following statement:
Delays in significant new projects, coupled with a strategic increase in
capacity and seasonal fluctuations in client demand, impacted first quarter
results as expected and stated in our press release of 13 March 1997. Our focus
is on large-scale projects produced into multiple languages worldwide. Due to
the size of these projects, delays will shift large portions of revenues from
one quarter to subsequent quarters. We have historically seen that the first
quarter is the slowest quarter of the year, as clients push to finish projects
in December, and then experience delays getting projects started in the new
year. Also, as our industry continues to expand, we have increased our capacity
and fixed costs and strategically positioned ourselves to meet customer
expectations and grow proportionally with the industry.
In terms of orders received for projects starting in the second quarter and
beyond, the overall sales trend continues upward. As we stated in March, based
upon our current orders and projects, we believe the second quarter will be
strong. Barring unforeseen client delays, we believe revenue will exceed $10
million for the quarter, and that the quarter will be profitable.
A significant portion of the first quarter loss was caused by our
underutilization of capacity in Asia. However, the investment ALPNET has made in
Asia, setting up the broadest Asian production capability available today, with
modern well-equipped offices in Tokyo, Seoul, Shenzhen, and Singapore, is
starting to produce results as clients and potential clients see the difference
that can be obtained with the personnel in these sites using ALPNET's WinJoust
translation technology. Based on our current backlog, we will produce
approximately $1.5 million in translation and localization in Asia in the second
quarter, up from $874,000 in the first quarter of 1997. The majority of this
increase will come from increased sales of Asian language work in Europe and the
USA, but also includes increases in sales to local clients in Asia. With these
sales, ALPNET-Asia is expected to become a net contributor to operating profit
in the second quarter.
It is important in looking at the first quarter results to understand that
these results include approximately $150,000 in office closure and restructuring
costs, as we also announced in March. With a view to restructure or eliminate
marginally performing offices, or offices that are non-strategic for our future,
we decided to close our offices in Switzerland and Hong Kong. First quarter
results include provisions related to both of these closures as well as an
additional amount related to a legal matter associated with the restructuring of
our Paris office.
Finally, it is important to note that there is an opportunity for ALPNET to
grow due to the confusion in the translation and localization markets. A
consolidation of suppliers is occurring, as two smaller competitors, with
significant capital injections, have each purchased several other smaller
competitors, with the announced intention of creating worldwide translation and
localization service suppliers. These competitors are investing large amounts of
capital to create what ALPNET already has in place. This has amplified some of
the delays in client projects, as potential clients re-evaluate their
translation and localization strategies in light of these new developments. We
believe that this consolidation will benefit ALPNET, as potential clients
recognize that ALPNET already provides worldwide service with a single point of
coordination, local country contact to ensure linguistic quality and acceptance,
and complete international project management.
ALPNET is the largest publicly-owned dedicated supplier of worldwide translation
and product localization services, with more than 375 employees working in 33
wholly-owned offices in 13 countries throughout Europe, North America and Asia.
ALPNET supplies its clients with language translation, product localization,
language interpreting, language training, and multilingual desktop publishing
and printing services. Additional information about ALPNET is available on the
World Wide Web at http://www.alpnet.com or you can call or E-mail to receive a
copy of ALPNET Review.
Statements in this press release that present information which is not
historical are forward looking. There are many factors which could cause actual
results to differ materially from those which may be anticipated from these
forward-looking statements. These factors include uncertainties caused by
clients (including the timing of projects and changes in the scope of services
requested), changes in overall competitive and economic conditions, changes in
currency exchange rates, or other risks and uncertainties that may be disclosed
from time to time in future public statements or in documents filed with the
Securities and Exchange Commission. As a result, no assurance can be given as
to future results.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALPNET, Inc.
(Registrant)
Date: 7 May 1997 \s\ Thomas F. Seal
Thomas F. Seal
President and Chief Executive Officer
Date: 7 May 1997 \s\ D. Kerry Stubbs
D. Kerry Stubbs
Chief Financial Officer
