[LETTERHEAD OF NETWORK SIX]
Exhibit 99.1
FOR IMMEDIATE RELEASE
NETWORK SIX, INC.
475 Kilvert Street
Warwick, Rhode Island 02886
401.732.9000 fax 401.732.9009
info@networksix.com
www.networksix.com
NETWORK SIX REPORTS INCREASED REVENUES
AND EARNINGS FOR ITS SECOND QUARTER
CONTACT:
Kenneth C. Kirsch, President and CEO
or
James J. Ferry, Vice President of Finance &
Administration, CFO and Treasurer
July 19, 2001
WARWICK, RI: Network Six, Inc. (NASDAQ: NWSS) reported contract revenue earned
for the quarter ending June 30, 2001 of $3,112,898, up 4%, or $108,525 from
$3,004,373 for the same period a year ago. Net income for the period was
$149,248, or $0.08 per share, up 9%, or $12,174, from the same period a year ago
when it reported net income of $137,074 or $0.06 per share.
The Company today is filing a Definitive Proxy Statement for a Special Meeting
of the Shareholders to be held on August 16, 2001 to vote on the previously
announced merger agreement with TRW Inc.
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Network Six is a full service provider of information technology services and
solutions to government and industry that enables its customers to operate more
efficiently and effectively. Network Six's services include applications
development and implementation, e-commerce planning and technology consulting.
Network Six's stock is traded on the NASDAQ SmallCap Market under the symbol
NWSS. Its website is http://www.networksix.com.
This report contains forward-looking statements reflecting the Company's
expectations or beliefs concerning future events that could materially affect
Company performance in the future. All forward-looking statements are subject to
the risks and uncertainties inherent with predictions and forecasts. They are
necessarily speculative statements, and unforeseen factors and unpredictable
variables, such as competitive pressures, litigation, and regulatory changes and
state funding changes, could cause results to differ materially from any that
may be expected. Please refer to the Company's Form 10-K for December 31, 2000
and its Form 10-Qs for March 31, 2001 and June 30, 2001 for more discussion and
information.
The following is a recap of Network Six's balance sheet and operating results:
NETWORK SIX, INC.
CONDENSED BALANCE SHEETS
ASSETS June 30, 2001 Dec. 31, 2000
---------------------- ---------------------
Current assets: (unaudited)
Cash and cash equivalents $1,121,322 $1,650,959
Short term investments 859,387 1,803,387
Contract receivables, less allowance for
doubtful accounts of $49,000 at June 30, 2001
and December 31, 2000 1,344,970 1,094,142
Costs and estimated earnings in excess of
billings on contract 676,455 843,021
Deferred taxes 135,479 268,177
Other current assets 94,391 46,127
---------------------- ---------------------
Total current assets 4,232,004 5,705,813
---------------------- ---------------------
Property and equipment:
Computers and equipment 649,309 639,258
Furniture and fixtures 162,526 162,606
Leasehold improvements 20,191 20,190
---------------------- ---------------------
832,026 822,054
Less: accumulated depreciation and amortization 695,399 659,097
---------------------- ---------------------
Net property and equipment 136,627 162,957
Deferred taxes 59,555 79,701
Other assets 27,451 47,007
---------------------- ---------------------
Total assets $4,455,637 $5,995,478
====================== =====================
June 30, 2001 Dec. 31, 2000
---------------------- ---------------------
LIABILITIES AND STOCKHOLDERS' EQUITY (unaudited)
Current liabilities:
Current portion of long-term debt:
Vendors $100,000 $100,000
Others 231,635 354,018
Accounts payable 83,993 31,023
Accrued salaries and benefits 302,088 389,158
Other accrued expenses 99,078 93,021
Billings in excess of costs and
estimated earnings on contracts - 19,048
Preferred stock dividends payable 81,027 1,473,612
---------------------- ---------------------
Total current liabilities 897,821 2,459,880
---------------------- ---------------------
Long-term debt, less current portion:
Vendors 442,239 442,239
Others 237,630 416,618
---------------------- ---------------------
Total Liabilities 1,577,690 3,318,737
---------------------- ---------------------
Stockholders' equity:
Series A convertible preferred stock,
$3.50 par value. Authorized 857,142.85
shares; issued and outstanding 714,285.71
shares at June 30, 2001 and December 31,
2000; liquidation of $3.50 per share
plus unpaid and accumulated dividends 2,235,674 2,235,674
Common stock, $.10 par value. Authorized
4,000,000 shares; issued 825,684 shares
at June 30, 2001 and December 31, 2000 82,568 82,568
Additional paid-in capital 1,941,318 1,947,767
Treasury stock recorded at cost, 8,093 shares
at June 30, 2001 and 8,693 shares at
December 31, 2000 (32,511) (44,360)
Retained earnings (accumulated deficit) (1,349,102) (1,544,908)
---------------------- ---------------------
Total stockholders' equity 2,877,947 2,676,741
---------------------- ---------------------
Total Liabilities & Stockholders' Equity $4,455,637 $5,995,478
====================== =====================
NETWORK SIX, INC.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED 6/30/01 ENDED 6/30/00 ENDED 6/30/01 ENDED 6/30/00
------------- ------------- ------------- -------------
Contract revenue earned $3,112,898 $3,004,373 $6,059,851 $5,860,411
Cost of revenue earned 2,000,294 1,959,713 3,893,202 3,743,242
------------- ------------- ------------- -------------
Gross profit 1,112,604 1,044,660 2,166,649 2,117,169
Selling, general & administrative
expenses 875,982 804,998 1,584,548 1,535,820
------------- ------------- ------------- -------------
Income from operations 236,622 239,662 582,101 581,349
Other deductions (income)
Interest expense 21,723 42,217 47,954 79,603
Interest earned (38,103) (34,882) (86,649) (70,216)
------------- ------------- ------------- -------------
Income before income taxes 253,002 232,327 620,796 571,962
Provision for income taxes 103,754 95,253 254,579 234,504
------------- ------------- ------------- -------------
Net income $149,248 $137,074 $366,217 $337,458
------------- ------------- ------------- -------------
Net income per share:
Basic $0.08 $0.06 $0.24 $0.21
------------- ------------- ------------- -------------
Diluted $0.08 $0.06 $0.24 $0.21
------------- ------------- ------------- -------------
Shares used in computing net income per share:
Basic 817,191 819,284 816,041 807,621
------------- ------------- ------------- -------------
Diluted 817,191 819,284 816,041 807,621
------------- ------------- ------------- -------------
Preferred dividends $81,027 $87,260 $170,411 $171,404
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