EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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Contact: Thomas B. Doherty
Chief Financial Officer
Kurzweil Applied Intelligence, Inc.
Tel.: (617) 893-5151
KURZWEIL APPLIED INTELLIGENCE, INC. ANNOUNCES MERGER AGREEMENT
WITH LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.
AND UNAUDITED FINANCIAL RESULTS FOR THE FISCAL
YEAR ENDED JANUARY 31, 1997
WALTHAM, Mass., April 14, 1997 --- Kurzweil Applied Intelligence, Inc. (NASDAQ:
KURZ) today announced the signing of a definitive merger agreement which
provides for a merger with Lernout & Hauspie Speech Products N.V., a Belgian
corporation listed on the Nasdaq National Market (NASDAQ: LHSPF) and a developer
of advanced speech technology for various commercial applications and products.
Under the terms of the merger agreement, which has been approved by the Boards
of Directors of both companies, Kurzweil AI shareholders will receive $4.20 in
cash and $1.05 in Lernout & Hauspie stock for each share of Kurzweil AI common
stock, subject to adjustment under certain circumstances. As a result of the
transaction, Kurzweil AI will become a wholly-owned subsidiary of Lernout &
Hauspie. The acquisition will be accounted for using purchase accounting, and
the closing is subject to certain conditions and approvals, including the
approval of Kurzweil AI's shareholders. The parties currently anticipate that
the transaction will be consummated in June 1997. In addition, to finance
Kurzweil AI's working capital needs prior to the closing of the acquisition,
Lernout & Hauspie has agreed to make available to Kurzweil AI a line of credit
of up to $1,500,000.
Thomas E. Brew, Jr., the Company's President and Chief Executive Officer, said:
"Kurzweil AI is pleased to be joining forces with internationally-recognized
Lernout & Hauspie. We expect the combined companies' strengths will lead to the
introduction of innovative speech products and increased market share in the
speech recognition technology arena. Our recent entry into the PC retail channel
is now starting to significantly increase revenues for our PC applications
products which I believe will result in increased revenues in the succeeding
quarters in fiscal 1998. In addition, our medical software and PC applications
research and development teams will add an extra dimension to Lernout &
Hauspie's increasing focus on the growing voice-enabled PC market."
Kurzweil AI also released its unaudited financial results for the fiscal year
ended January 31, 1997. The Company reported revenue of $8,547,000 and a net
loss of $4,140,000 or ($.50) per share, for the fiscal year ended January 31,
1997 as compared to revenue of $9,360,000 and a net loss of $2,586,000 or ($.38)
per share for the fiscal year ended January 31, 1996. The Company reported
revenue of $2,193,000 for the fourth quarter ended January 31, 1997, a 5%
increase over the $2,096,000 of revenue reported for the same period in the
prior fiscal year. The net loss in the fourth quarter of fiscal 1997 was
$1,425,000 or ($.16) per share, as compared to a net loss of $1,282,000 or
($.19) per share for the fourth quarter of fiscal 1996. The Company has attached
unaudited balance sheets and statements of operations for the fiscal years ended
January 31, 1997 and January 31, 1996.
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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.
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All product names referenced herein are trademarks of their respective
companies.
This release and other information related to Kurzweil Applied Intelligence,
Inc. can be referenced on the Company's home page on the World Wide Web at
http://www.kurzweil.com, or by calling (671) 893-5151.
###
This press release contains forward-looking statements as that term is defined
in the Private Securities Litigation Reform Act of 1995. Such statements are
based on management's current expectations and are subject to a number of risks,
factors and uncertainties, including but not limited to economic, competitive,
governmental and technological factors affecting the Company's operations,
markets, products, services and prices, which could cause the actual results or
performance of the Company to differ materially from those described herein. For
a more detailed description of the risks, factors and uncertainties affecting
the Company, refer to the discussions under the headings "Certain Factors That
May Affect Future Results" and "Cautionary Statement" in the Company's Annual
Report on Form 10-KSB and other of the Company's publicly available filings with
the Securities and Exchange Commission
###
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KURZWEIL APPLIED INTELLIGENCE, INC.
BALANCE SHEETS
(unaudited)
(in thousands, except for per share data)
January 31, 1997 January 31, 1996
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ASSETS
Current assets:
Cash and cash equivalents $456 $2,084
Marketable securities available for sale 982 501
Trade accounts receivable, net 2,158 1,221
Inventory 354 398
Other current assets 188 262
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Total current assets 4,138 4,466
Property and equipment, net 721 924
Intangible assets 678 1,745
Capitalized software development costs, net 2,532 1,593
Other assets 104 136
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Total assets $8,173 $8,864
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LIABILITIES
Current liabilities:
Accounts payable $1,115 $665
Accrued expenses 2,100 2,211
Capital lease obligations 29
Current portion of other long-term liabilities 1,019 902
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Total current liabilities 4,234 3,807
Capital lease obligations
Other long-term liabilities 1,152 2,169
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, 1,000,000 shares
authorized; none issued and outstanding
Common stock, $.01 par value, 15,000,000 shares authorized;
9,061,880 and 5,773,387 shares issued and outstanding respectively 91 57
Additional paid-in capital 66,727 57,647
Common stock to be issued 5,075
Accumulated deficit (64,031) (59,891)
Total stockholders' equity 2,787 2,888
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Total liabilities and stockholders' equity $8,173 $8,864
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KURZWEIL APPLIED INTELLIGENCE, INC.
STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except for per share data)
Three Months Ended January 31, Twelve Months Ended January 31,
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1997 1996 1997 1996
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Revenues $2,193 $2,096 $8,547 $9,360
Operating costs and expenses:
Cost of product and maintenance revenue 1,158 1,521 3,937 4,777
Sales and marketing 1,168 878 4,057 3,582
Research and development 818 578 3,066 2,340
General and administrative 512 454 1,752 1,503
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Total operating costs and expenses 3,656 3,431 12,812 12,202
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Operating loss (1,463) (1,335) (4,265) (2,842)
Interest expense 2 3 12
Interest income 38 46 115 196
Other (expense) income, net 9 13 72
Net loss ($1,425) ($1,282) ($4,140) ($2,586)
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Net loss per common share ($0.16) ($0.19) ($0.50) ($0.38)
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Weighted average number of common
shares outstanding 9,060,555 6,766,466 8,342,157 6,755,779
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