News release |
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Zi Corporation doubles revenue in 2000
Calgary, AB (March 22, 2001) - Zi Corporation (NASDAQ: ZICA) (TSE: ZIC) completed the year 2000 with $5.2 million in revenues, more than double the amount of revenue realized in 1999. Recurring royalty payments have grown from $1.7 million in 1999 to $3.9 million in 2000, comprising 75 per cent of Zi's overall revenues for 2000. Revenue and interest income totaled $8.5 million an increase of 224 per cent over 1999.
Revenues for the fourth quarter of 2000 were $1.9 million, a 74 per cent increase over the fourth quarter of 1999 and a 23 per cent increase over the third quarter of 2000. In the fourth quarter Zi also realized an increase in engineering revenues from the Zi Services division.
"The year 2000 was an excellent year for Zi Corporation, transitioning from a research and development company to a revenue generating business," says Michael Lobsinger, chairman and chief executive officer, Zi Corporation. "Zi is focused on maintaining our leadership with eZiText™, developing intelligent interface solutions from our Zi Services division and developing the e-learning market with our Oztime investment. Zi is well positioned to monetize each of these opportunities."
2000 highlights
- Revenue increase of 113 per cent over 1999
- Cash and cash equivalents of $46.9 million - no debt
- Over 40 global licensees for eZiText™
- Acquisition and integration of Telecom Technology Centre (TTC) to expand engineering capabilities in Bluetooth™ and Voice over Internet Protocol (VoIP)
- Oztime investment began commercial operation with the launch of its education portal in August
Operating costs in 2000 amounted to $12.8 million, up $8.2 million over 1999. Zi increased spending to expand the global sales and marketing operations, add engineering capabilities and offerings and invest in Oztime, a leading online education service provider in China. This overall expansion and investment in future opportunities resulted in a net loss of $0.33 per share compared to $0.18 per share in 1999. General and administrative costs increased $1.5 million over 1999. The acquisitions of TTC and EnglishPractice contributed to an increase in depreciation and amortization. In 2000, depreciation and amortization totaled $3.9 million compared to $1.2 million in 1999.
Zi realized a significant increase in interest income in 2000. Interest income increased to $3.3 million from the $0.2 million recorded in 1999 as a result of the interest earned on cash received on private placements and the exercise of stock options that occurred in late 1999 and during 2000.
At year-end Zi Corporation had a cash position of $46.9 million, no debt and working capital of $48.4 million. This cash offers Zi the opportunity to strengthen sales channels and pursue acquisitions complementing the company's focus on developing intelligent interface solutions for the global market.
All figures presented are quoted in Canadian dollars.
Zi Corporation is a market-driven technology company delivering intelligent interface solutions to enhance the user experience of wireless and consumer technologies. The company's core technology product, eZiText™ connects people to short messaging, e-mail, e-commerce, Web browsing and similar applications in almost any written language. The company's service division provides market-leading engineering design in Bluetooth, VoIP and man-machine interface. Zi supports its strategic partners from offices in Calgary, Beijing, Hong Kong, San Francisco, Shenzhen, Stockholm and Tokyo. A publicly traded company, Zi Corporation is listed on the NASDAQ National Market (ZICA) and the Toronto Stock Exchange (ZIC).
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For more information:
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David Hunt Zi Corporation Vice President, Finance 403 231 4580 investor@zicorp.com www.zicorp.com |
ZI CORPORATION
CONSOLIDATED BALANCE SHEETS
| As at December 31 | 2000 | 1999 | 1998 |
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | $46,891,866 | $21,519,737 | $1,049,847 |
| Short-term investments | - | 6,111,987 | - |
| Accounts receivable | 3,265,301 | 2,226,004 | 598,291 |
| Prepayments and deposits | 1,244,111 | 530,985 | 132,179 |
| 51,401,278 | 30,388,713 | 1,780,317 | |
| Capital assets - net | 2,984,978 | 650,245 | 500,958 |
| Intangible assets - net | 8,467,096 | 2,964,516 | 1,476,760 |
| $62,853,352 | $34,003,474 | $3,758,035 | |
| Liabilities and shareholders' equity | |||
| Current liabilities | |||
| Accounts payable and accrued liabilities | $2,658,223 | $1,031,410 | $632,830 |
| Deferred revenue | 140,975 | - | - |
| Current portion of capital lease obligations | 152,948 | - | 1,331 |
| 2,952,146 | 1,031,410 | 634,161 | |
| Convertible notes payable | - | - | 500,000 |
| Capital lease obligations | 238,066 | - | - |
| 3,190,212 | 1,031,410 | 1,134,161 | |
| Shareholders' equity | |||
| Share capital | 91,975,823 | 53,326,681 | 17,475,274 |
| Deficit | (32,312,683) | (20,354,617) | (14,851,400) |
| 59,663,140 | 32,972,064 | 2,623,874 | |
| $62,853,352 | $34,003,474 | $3,758,035 | |
ZI CORPORATION
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
| Years ended December 31 | 2000 | 1999 | 1998 |
| Revenue | $5,239,766 | $2,455,249 | $1,621,202 |
| Operating costs and expenses | |||
| Operating costs | 12,781,640 | 4,610,827 | 2,577,587 |
| General and administrative | 3,816,436 | 2,295,628 | 889,599 |
| Depreciation and amortization | 3,867,596 | 1,185,761 | 598,230 |
| 20,465,672 | 8,092,216 | 4,065,416 | |
| Operating loss before the undernoted | (15,225,906) | (5,636,967) | (2,444,214) |
| Interest and other income | 3,276,399 | 173,750 | 195,584 |
| Interest expense | (8,559) | (40,000) | (33,753) |
| Net loss | (11,958,066) | (5,503,217) | (2,282,383) |
| Deficit, beginning of year | (20,354,617) | (14,851,400) | (12,569,017) |
| Deficit, end of year | $(32,312,683) | $(20,354,617) | $(14,851,400) |
| Loss per share | $(0.33) | $(0.18) | $(0.08) |
| Weighted average common shares | 36,690,256 | 30,876,262 | 28,175,696 |
ZI CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
| Years ended December 31 | 2000 | 1999 | 1998 |
| Operating activities: | |||
| Net loss | $(11,958,066) | $(5,503,217) | $(2,282,383) |
| Add: items not affecting cash: | |||
| Loss on dispositions of capital assets | (6,744) | 21,428 | 41,764 |
| Depreciation and amortization | 3,867,596 | 1,185,761 | 598,230 |
| (8,097,214) | (4,296,028) | (1,642,389) | |
| Decrease (increase) in non-cash working capital | 457,417 | (1,627,938) | (2,597,042) |
| (7,639,797) | (5,923,966) | (4,239,431) | |
| Financing activities: | |||
| Proceeds from issuance of common shares | 36,836,643 | 34,280,404 | 3,797,744 |
| Cancellation of common shares | - | - | (47,500) |
| Proceeds from issuance of convertible notes | - | - | 500,000 |
| Payment of capital lease obligations | (53,973) | (1,331) | (9,944) |
| 36,782,670 | 34,279,073 | 4,240,300 | |
| Investing activities: | |||
| Short-term investments converted to cash | 6,111,987 | (6,111,987) | - |
| Purchase of capital assets | (1,989,220) | (351,909) | (78,818) |
| Acquisition of subsidiaries, net of cash acquired | (3,163,645) | 21,360 | - |
| Proceeds from capital dispositions | 15,787 | 8,119 | 19,257 |
| Deferred development costs | (4,626,451) | (1,282,699) | (1,045,714) |
| Other deferred costs | (119,202) | (168,101) | - |
| (3,770,744) | (7,885,217) | (1,105,275) | |
| Net cash inflow (outflow) | 25,372,129 | 20,469,890 | (1,104,406) |
| Cash and cash equivalents, at the beginning of year | 21,519,737 | 1,049,847 | 2,154,253 |
| Cash and cash equivalents, at the end of the period | $46,891,866 | $21,519,737 | $1,049,847 |
| Non cash investing and financing activities: | |||
| Conversion of note payable | - | $500,000 | - |
| Equipment acquired under capital lease | $433,090 | - | - |
| Supplemental cash flow information: | |||
| Cash paid for interest | $9,107 | $40,000 | $33,753 |
| Cash paid for income taxes | - | - | - |