TMSSequoia posts encouraging results

TMSSequoia (OTC: TMSS) reports Q3 '98 financial results. Revenue of $1.7 million compares with Q3 '97 revenue of $1.45 million. A net income of $24,211 is up 55% from Q3 '97. For the first three quarters, TMSSequoia reports revenue of $5.8 million, a 40% from the first three quarters of 1997, and more than the company reported in all of 1997. Over the same period, net income rocketed from $27,975 to $380,309. Licensing and royalties revenue was flat from Q3 '97 to Q3 '98; revenue from intranet-based products comprised one-fourth of all revenue, as compared to 15% of revenue in Q3 '98.

Despite this quarter's performance over Q3 '97, TMSSequoia CEO Art Crotzer acknowledges that the company didn't quite live up to expectations. "Heavy, seasonal marketing expenses and continued marginal performance by the service groups did impact this quarter's results," he said. To compensate, the company will stop pursuing backfile conversion projects for its Document Conversion Services group. "Elimination of this lower-margin work will impact future revenue expectations, but will also reduce our costs significantly," said Crotzer. "We will focus now on our strengths and pursue more value-added projects that provide higher margins and better return."

During the quarter, TMSSequoia announced the FormFix, Scan 'n Store, and Prizm products, which will be released next quarter after a short delay. Crotzer believes the extra time and marketing investment will pay off, and is "encouraged by the strong market anticipation for the products." TMSSequoia also significantly grew its professional services backlog