Nestor, Inc. reported revenues of $782,000 for the fourth quarter ended December 31, 1997, an increase of 41% compared to revenues of $555,000 for the fourth quarter of 1996. The Company also reported a significantly lower net loss in the fourth quarter ended December 31, 1997 of $324,000, or ($0.05) per share, compared to a net loss of $571,000, or ($0.08) per share, for the fourth quarter of 1996.
For the year ended December 31, 1997, revenues rose 26% to $5,681,000 from $4,508,000 in 1996. The net loss for 1997 was $295,000, ($0.08) per share, compared to a net loss of $199,000, ($0.09) per share, in 1996. Revenue and net income in 1996 include $2,099,000 and $1,127,000, respectively, from product sales and an initial fee related to the exclusive license of Nestor’s intelligent character recognition (ICR) product line to National Computer Systems, Inc. in June 1996. Excluding the ICR product sales and initial license fee, 1997 revenue grew 129% over 1996 ($5,681,000 vs. $2,477,000), and 1996 to 1997 losses were decreased by 77% (from $1,288,000 to $295,000).
“Our two primary goals for 1997 were to replace last year’s ICR income with current-product income, and to achieve overall profitability for the year. We met the first goal and narrowly missed the second as some sales slipped from the fourth quarter into 1998. Revenue growth was fueled by the expansion of our PRISM product line, where 1997 revenues of $5,232,000 represented a growth of 218% over 1996 PRISM revenues of $1,645,000. Incremental PRISM revenues more then replaced ICR revenues, with contributions from both direct sales and from strategic-partners such as Applied Communications, Inc. (ACI), CSK, Europay International and Total System Services (TSYS),” stated David Fox, President and CEO at Nestor, Inc.
Several new PRISM licenses were announced in the fourth quarter. Scotiabank (Bank of Nova Scotia), a leading credit card issuer in Canada, will use PRISM to detect and prevent fraudulent transactions among its credit card portfolios. In addition, Nestor’s relationship with ACI yielded two new PRISM licenses in 1997, including HONOR Technologies and, in 1998, Marshall & Iseley, Inc. (M&I Data Services). The two U.S.-based electronic fund transfer (EFT) organizations will offer PRISM, marketed by ACI under the brand name PRM (Predictive Risk Management), to their financial and banking clients.
“Our net loss for 1997, $295,000, while a considerable improvement over 1996, excluding ICR, was short of our goal. TrafficVision, Nestor’s video traffic-monitoring product, experienced order slippage in late 1997 but realized the orders in early 1998. Our initial traffic-operations center installation in Rhode Island, monitoring Interstate 95, was officially opened in February 1998. Other early 1998 installations are located in Virginia, Connecticut and Texas. These TrafficVision installations should lead to an acceleration of orders both in the U.S. and abroad. InterSite, our Web personalization product, also has begun to show real promise. Two beta sites, Lycos, Inc. and Edward Jones, are scheduled for completion this quarter. Both TrafficVision and InterSite should begin to contribute meaningfully to Nestor’s revenues in 1998,” concluded Mr. Fox.
Certain information in this press release may include forward-looking statements within the meaning of Section 21 E of the Securities Exchange Act of 1934. Although the Company believes that the expectations are based upon reasonable assumptions, it can give no assurance that such expectations will be achieved.
Nestor, Inc. is a leading provider of intelligent-decision-support solutions. Nestor’s client/server products incorporate innovative pattern- recognition technologies ideally suited for data-intensive, mission-critical decision applications in real-time environments. The Company’s principal clients are financial institutions where it supports credit, debit, retail and corporate fraud detection and case management, merchant fraud; database marketing; and Internet customer personalization applications. Nestor’s patented technology is also being applied to intelligent-decision applications for a variety of other markets, including real-time traffic management, and intelligent character recognition. More information can be obtained via the Company’s web site at .
Consolidated Statements of Operations
(in Thousands, except for per share amounts)
Three Months Ended Twelve Months Ended
12/31/97 12/31/96 12/31/97 12/31/96
Revenues $782 $555 $5,681 $4,508
Net (Loss) After Taxes $(324) $(571) $(295) $(199)
Net (Loss) Per Common Share $(0.05) $(0.08) $(0.08) $(0.09)
Average Shares Outstanding 9,336 8,888 9,244 8,376