Arel Communications and Software (Nasdaq: ARLC)
announced today that its consolidated second quarter revenue was $1.56 million, a decrease of 51.7%, compared with revenue of $3.22 million recorded in the second quarter of 2000.
Second quarter of 2001 pro forma net loss was $2.43 million, or $0.02 per share, compared with pro forma net profits of $629,000, or $0.06 per share, during the same period of 2000.
Net loss for the second quarter of 2001 was $3.42 million (including restructuring expenses and goodwill amortization), or $0.03 per share, compared with net profit of $403,000, or $0.04 per share, during the same period of 2000.
Gross profit for the second quarter of 2001 was $641,000, a decrease of 68.1% versus gross profit of $2,009,000, for the same period last year.
During the second quarter of 2001, the company's Research and Development (R&D) expenses before participation grants from the Chief Scientist Officer (CSO) were $752,000, an increase of 63.81% compared to $461,000 in the second quarter of 2000.
Arel chairman and CEO Izhak Gross said, “As we announced on July 31st, our revenue levels for second quarter were lower than reported in previous quarters due to the slowdown in technology related spendings, primarily in the US market. Nevertheless, we strongly believe that the need for our solutions persists and that this will result in improved performance in the future. With healthy cash reserves, we remain committed to our mission of increasing our market share in North America, developing business opportunities in Europe and the Far East, and cultivating product innovation.''
Gross added, “In June 2001 Arel's management has taken several steps to ensure a lower expense rate, better adjusted to the changing market situation. These measures, which include the layoff of over 20% of the company's workforce and a decrease in inventory levels, have resulted in a restructuring charge of $448,000 in the second quarter.”
“Although we decided to take immediate restructuring steps to adjust ourselves to the changing business environment, we anticipate that these measures will not impact our performance with current customers and our potential to generate significant sales opportunities. By maintaining a strong and stable level of R&D investment we continue to enhance our existing offerings and introduce new products, in line with our worldwide strategy to introduce new narrowband solutions and services,” Gross concluded.
Arel Communications and Software provides live and on-demand e-learning solutions. Its shares closed Monday on Nasdaq at $1.16.
Published by Israel's Business Arena on 14 August, 2001