EXHIBIT 99.1
[THE DIALOG CORPORATION PLC LETTERHEAD]
News Announcement
For Immediate Release
The Dialog Corporation Reports 1999 First
Quarter Results; Chairman Mander Retires
LONDON and CARY, N.C.--(BUSINESS WIRE)--May 28, 1999--The Dialog
Corporation plc (Dialog) (NASDAQ:DIAL, LSE:DLG), a leading provider of
Internet-based information, technology, and eCommerce solutions to the
corporate market, today announced operating results for the three-month
period ended March 31, 1999. (All figures are according to U.K. G.A.A.P.
and have been converted from G.B.P. ((pound)) to U.S. dollars ($) for
information purposes at the prevailing exchange rate on March 31, 1999 of
(pound)1=$1.614).
Financial Highlights
- -- Q1 revenues of $68.9 million - 7.8% increase over Q4 1998
- -- Q1 operating costs (before depreciation and amortization) of $25.2
million reflect enhanced sales force and new eCommerce infrastructure
- -- Q1 operating profit of $7.9 million achieved
- -- Information Services division accounted for 97% of total revenues and
demonstrated revenue growth of 7.6% over Q4 1998. The Division had
its first sales of the newly developed Dialog Intranet Toolkit during
the quarter
- -- Web Solutions division sales were $1.6 million from established
contracts with the BBC (British Broadcasting Corporation) and the DTI
(UK Department of Trade and Industry), together with sales of Muscat
search technology and corporate intranet sales
- - eCommerce revenues were approximately $480,000 in the
quarter; corporate customers increased 50% to 150
The first quarter operating results are in line with expectations and
reflect the changes in pricing structure implemented in mid-1998. They also
reflect investment in establishing our eCommerce infrastructure and the
enhancement of our global sales force which commenced in Q4 1998.
Debt Structure
As announced last week, the Board is addressing the current debt
structure of the Group so as to permit more effective use of business cash
flows in the high growth market opportunities of Information Services, Web
Solutions and eCommerce. The Board is currently actively engaged in
discussions which, subject to their outcome, would result in a substantial
alleviation of the current debt burden on the Group, with particular regard
to interest costs and scheduled debt repayments. For the purpose of
providing clarity to shareholders, discussions relating specifically to the
current debt structure are separate from discussions relating to major
strategic initiatives referred to below.
Strategic Initiatives
As previously announced on May 17, 1999 the Board is at an advanced
stage in its discussions pertaining to major strategic initiatives and
currently anticipates being in a position to make a further announcement in
due course.
Board Change
After more than eleven years as Chairman and following recent heart
surgery, Michael Mander is today stepping down as Chairman and has
determined not to offer himself for re-election as a Director at the AGM in
July. Michael became a Director of Dialog (previously M.A.I.D plc) in 1986
and Chairman in 1988. During this time he has played a key role in the
growth and development of the Company. He has agreed to continue to support
the Company as a consultant.
Outlook
Dialog continues to enjoy significant market opportunities which could
deliver enhanced shareholder value were the Group to have a lower debt
burden and be able to release cash funds into its chosen business areas.
The Board continues to pursue relevant opportunities vigorously with the
firm belief of delivering on shareholder expectations. Discussions continue
on a number of fronts. The interest from third parties in these discussions
is very encouraging and underscores the Board's belief in the inherent
value of Dialog, its InfoSort technology and the vision of its management
team in terms of delivering innovative solutions to information end-users.
Allen Thomas, Deputy Chairman of Dialog Corporation Plc, commented:
"1999 has commenced with a strong focus on the growth drivers of the
business and the need to address the Group's current debt position. I am
confident that significant progress is being made in addressing these
issues and expect the Group to be delivering news of progress in the near
future.
"With regard to Michael Mander stepping down, the entire Board joins
me in thanking Michael for his firm, patient leadership and wise counsel,
and wishes him good health and happiness in the future. His experience and
vision in guiding the Group has contributed strongly to its current market
leadership position."
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, which are subject to the "safe harbor"
created by those sections. The forward-looking statements can be identified
by terminology such as "may," "will," "expect," "intend," "estimate,"
"anticipate," "inevitable," "believe" or "continue" or variations thereon,
and include, among others, the launch dates of the Company's products noted
above. The Company's actual results could differ materially from those
discussed in the forward-looking statements as a result of certain factors,
including, among others, those set forth under the caption "Risk Factors"
in the Company's most recent Report on Form 20-F or generally in the
Company's Reports on Form 6-K. The Company disclaims any obligation to
update these forward-looking statements as a result of subsequent events.
The Dialog Corporation plc
Quarter ended March 31, 1999
Profit and loss account (unaudited)
1999 1998
---- ----
$'000 $'000
Turnover 68,902 72,327
Cost of sales (29,327) (31,447)
------- -------
Gross profit 39,575 40,880
Distribution costs (7,931) (8,310)
Administrative expenses (20,260) (19,211)
Amortisation of development
costs/goodwill (3,450) (2,329)
Exceptional restructuring
charges - (1,067)
------- -------
Operating profit 7,934 9,963
Net interest payable (7,248) (6,980)
Profit on ordinary activities
before taxation 686 2,983
Taxation on profit on
ordinary activities (77) (333)
-------- -------
Profit on ordinary activities
after taxation 609 2,650
Minority equity interests 218 (187)
-------- -------
Retained profit 827 2,463
======== =======
Earnings per ADS (cents) 2.2 6.6
ADSs used in computing earnings
per ADS (thousands) 37,885 37,562
The financial results set forth above represent the company's
financial results under UK GAAP translated for convenience into US Dollars
at the rate of US$:(pound) 1.6143 being the rate of exchange on March 31,
1999, the last trading day of the period.
The Dialog Corporation plc
March 31, 1999
Balance sheet (unaudited)
March 31 December 31
1999 1998
$'000 $'000
FIXED ASSETS
Intangible assets 40,796 37,377
Goodwill 12,299 12,391
Tangible assets 27,814 28,848
Investments 20,937 19,943
------- -------
101,846 98,559
------- -------
CURRENT ASSETS
Stocks 312 357
Debtors 75,838 69,061
Cash at bank and in hand 9,118 7,255
Assets held for resale - 1,601
------- -------
85,268 78,274
CREDITORS (amounts falling
due within one year) (106,103) (94,993)
------- --------
NET CURRENT LIABILITIES (20,835) (16,719)
------- --------
TOTAL ASSETS LESS CURRENT
LIABILITIES 81,011 81,840
CREDITORS (amounts falling due
after more than one year) (230,892) (225,584)
Provisions for liabilities
and charges (6,012) (7,582)
-------- --------
(155,893) (151,326)
======== ========
CAPITAL AND RESERVES
Called up share capital 2,446 2,444
Share premium account 245,724 245,580
Shares to be issued 1,561 1,561
Profit and loss account (407,185) (402,650)
-------- --------
Ordinary shareholders' funds (157,454) (153,065)
Minority interest 1,561 1,739
-------- --------
Total shareholders' funds (155,893) (151,326)
======== ========
The financial results set forth above represent the Company's
financial results under UK GAAP translated for convenience into US Dollars
at the rate of US$:(pound) 1.6143 being the rate of exchange on March 31,
1999, the last trading day of the period.
General
These results are unaudited and do not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985. The financial
statements for the year ended December 31, 1998 have not been audited by
the Company's auditors, PricewaterhouseCoopers (formerly Price Waterhouse).
The financial statements for the year ended December 31,1997 have been
reported on by Price Waterhouse and delivered to the Registrar of
Companies. The audit report was not qualified and neither did it contain
any statements under Section 237 (2) or (3) of the Companies Act 1985. The
unaudited results for the three months ended March 31, 1999 have been
prepared in accordance with the accounting policies stated in the 1997
Annual Report and Accounts.
CONTACT: The Dialog Corporation plc
David Mattey, Chief Financial Officer
011 44 171 930 6900
or
Kristian Talvitie, U.S. Investor Relations
kristian_talvitie@dialog.com
212/381-1824
or
Jaffoni & Collins Incorporated
David C. Collins/Robert L. Rinderman
dial@jcir.com
212/835-8500