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October 15, 1997updated 03 Sep 2016 9:09pm

NCD BLAMES EUROPE AND MULTI-USER NT LULL FOR FLAT Q3

By CBR Staff Writer

Network Computer maker Network Computing Devices Inc was slightly disappointed with its third quarter numbers announced yesterday. It said revenues were about 10% shy of its target, which in turn hurt profits. It blamed its performance on poor European sales, in particular the UK where sales were very off target according to chairman and chief executive Bob Gilbertson. A new VP Europe has been appointed to rectify the situation. The other reason for the flat performance was the lack of a multi-user version of Windows NT 4.0. NCD has its own version – for which it will announce further licensees in the next 90 days – but the markets need to see it from Microsoft. NCD believes Microsoft’s product, codenamed Hydra, will ship in the second quarter next year. The problem is timing, says Gilbertson. In the end NCD recorded reported third quarter net income up 155% at $51,000, or nil per share, after a $147,000 litigation charge, on revenues that rose 24.0% to $34.6m. Wall Street was looking for $0.05 per share, so is likely to be disappointed when the market opens today. Mountain View, California-based NCD said its principal OEM customer IBM Corp accounted for one third of its revenues this quarter, at $11.5m, up from $8m last quarter. But NCD’s own box revenue fell by about the same amount, and that has bigger margins than the OEM business. The company has a contract with IBM until 2000 to build its network computers, which IBM calls Network Stations. In the short term, NCD is looking set for some good news as it believes it is one of two finalists in a bid to Federal Express for a share of between 40,000 and 75,000 NCs. It makes its final pitch October 28 and expects a decision before the start of December for delivery in January. FedEx will give two-thirds to one company and one-third to the other, so NCD is pretty happy with that. Gilbertson said that deal is not dependent on Hydra as FedEx wants to access legacy applications. NCD announced a new range of NCs, the Explora 400, 450 and 700 that will begin shipping next month.

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