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Information Management
Associates Inc. (NASDAQ: IMAA)
One Corporate Drive, Suite 414
Shelton 06484
President and CEO:
Albert R. Subbloie, Jr.
Revenues FY 1997 (ended
Dec. 31, 1997): $36.7 million
Net income FY 1997: $2.7 million
Employees: 250 worldwide
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Business New Haven
11/2/1998
By: BNH
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Do you remember creating your childhood telephone system with some string and a couple of tin cans? It worked - sort of - but there were problems. You were limited to “telephoning” only one of your friends at a time. There was no capacity to hook up with several friends at a time, and of course long-distance calling was impossible. (Let's not even discuss the quality of the call.)
Since then, telephone technology has advanced light years, and today businesses have options which can be tailored to their specific communications needs.
Information Management Associates Inc. (IMA) offers telemarketing phone-system solutions to its clients. This company, established in 1984, has furnished call-center options to businesses and recently moved into providing support for telephone, fax, e-mail and internet communications. IMA products include EDGE, AdvantEDGE and CyberEDGE.
The company completed an initial public offering in mid-1997, selling 3.9 million shares of common stock, resulting in proceeds of $32.4 million. A portion of the proceeds was used to repay indebtedness, cutting those obligations to less than half. Total shareholder equity increased from minus $10.9 million at year-end 1996 to $37.0 million at the end of 1997.
Fiscal year 1997 proved an eventful year for the company. Revenues were $36.7 million, a 40 percent increase over the 1996 figure of $26.3 million. Operating profits logged in at $3.4 million for the year compared to just $62,000 for 1996. Net income of $2.7 million (38 cents per share diluted) compared to a net loss of $1.9 million (minus 44 cents diluted) for 1996. However, the company, although able to maintain a positive working capital, continued to generate negative cash flow from operations.
But don't hang up yet. Last month the company announced it has agreed to a settlement of claims made by Rockwell International with regard to proprietary Rockwell information furnished to United States Cellular. The claim stated that IMA used this information relative to a call-center project that it was performing for USCC.
IMA decided to settle the matter in order to proceed with its business without interruption from legal proceedings. The company has agreed to a payment of $1,750,000 to Rockwell International in four installments over 12 months.
As a result of this settlement IMA has restated its second quarter 1998 results to revenues of $13.1 million and net income of $1.3 million. Earnings per share are now reported at eight cents per share compare to 12 cents prior to these adjustments.
On October 6 the company announced that it expects revenues for the third quarter to reach above $15.5 million and EPS to come in at three to five cents per share. This would include a one-time charge of 14 cents per share.
Hold the phone. The company has been developing an enviable client base and has received several technology awards. Its EDGE technology was named Product of the Year for 1997 by Call Center magazine, and its CyberEDGE earned Product of the Year for 1997 plaudits from CTI Magazine. The company's AdvantEDGE product was “Best of Show” at Computer Telephony '98.
Thus the company appears to be moving in the right direction with growth in revenues and solidification of a positive bottom line. The stock trades in the $5-$6 range, closing at 5 7/8, up 3/8, on October 7 with a 52-week high of 15 3/8 and low of 3 1/4. There is a long distance until IMA reaches its previous highs, and the current volatility in the stock market is not helping the situation. It may be call waiting until improved stock performance rings in.
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