Level 8 Systems paid the price in its end of year fiscal 1998 figures for trying to become the latest software house to reinvent itself as an enterprise applications integration (EAI) player.
The former manufacturing applications supplier saw revenues drop to $10.7 million from $14.7 million the year before, while net losses from continuing operations grew to $11.7 million or $1.55 per share from $1 million or $0.14 per share the previous year.
During early 1998, Level 8 sold off its Profitkey, Bizware and ASW applications businesses, but acquired Momentum Software in the middle of the year and Seer Technologies on 31 December. This led to $1.5 million in restructuring charges connected with Seer and write offs of $5.9 million for purchased research and development related to both acquisitions.
The company also had to take a goodwill write off of $4.6 million on purchasing Momentum because of a change in product plans that impaired its value and made a $1.4 million loss related to the sale of Profitkey.
Steven Dmiszewicki, Level 8?s chief operating officer, said: "Our revenues dropped due to our divestitures - we made some revenues from consulting this year and some from sales of Momentum?s messaging product, but we acquired Seer too late in the year to make an impact on sales. However, our total first quarter revenues for next year will be better than the total for 1998."
He said that the firm?s EAI strategy comprised three strands - low level messaging in the form of its reworked Momentum product, dubbed Falcon, EAI and workflow, and finally repository management, which would be based around Seer?s offering.
The EAI and workflow portion would be covered, he explained, when the firm released its Geneva ecommerce and interapplication offering in April, followed in June by a family of socalled Seer*HPS adaptor products to hook applications together.
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