NOVATO, Calif.--(BUSINESS WIRE)--Jan. 28, 2000--IMSIŽ (OTCBB:IMSI - news) today announced that it is closing its international divisions and consolidating its domestic offices into its California and Arizona locations. The company also announced it has notified Nasdaq that it will not be able to comply with its listing requirements before next week's extension expires, due in part to an adverse arbitration decision described below.
``To continue to maintain a worldwide network and support the retail business, does not make economic sense at this point. We are focusing all our resources on our strongest assets -- graphics design with ArtToday.com and precision design with FloorPlan,'' stated Costa John, IMSI's CEO. ``On Monday, IMSI will be exclusively an Internet company.''
IMSI is consolidating offices and will close its international locations and its office in Albuquerque. The company is reducing staff at all levels and will retain approximately 50 people, the core of the Internet design and marketing team. As part of the staff reductions, Martin Sacks, Chairman, has tendered his resignation from the management team and the Board of Directors. ``All of the people who have helped us build this company have my gratitude and respect. We will continue fighting to turn the company around and transform IMSI into a great Internet competitor,'' John said.
IMSI's restructuring plan to transform itself into a pure Internet play called for selling its retail software assets and focusing on its core competencies in the graphic and precision design areas. The execution of this plan began well, with the quick sale of the Easy Language program for $1.7 million. ``We had a number of other strong prospects for sale of retail assets, however, our weak negotiating position has prevented consummation any of those deals at this time,'' John said.
IMSI received an adverse arbitration decision regarding a previously disclosed copyright infringement and will accrue approximately $2.2 million in its third fiscal quarter, which ends March 31. The company is considering whether to appeal the arbitration decision. No other restructuring charges, beyond those accrued in prior quarters for the completion of the restructuring program, are anticipated at this time. ``The timing of the arbitration decision further weakens our asset base, and made it that much harder for us to maintain minimum Nasdaq listing requirements,'' John continued. ``As a result, our stock will no longer be listed on the NASDAQ, and it is immediately eligible for trading on the OTC Bulletin Board under the ticker symbol IMSI.''
``In spite of the difficulties of the last year, we have made solid progress in our go-forward plan,'' John said. On the graphics design side, ArtToday.com continues to be the number one subscription site for graphics content on the web and is growing in popularity. ArtToday currently has over one million members, and according to PC Data Online it is generating approximately 1.3 million visitors per month.
On the precision design side, FloorPlan v5 received PC Magazine's Editor's Choice award in November 1999, shortly after it was launched. This new program was released on schedule and within a very tight budget, and offers superior 3-D modeling and design capabilities. In addition, the program incorporates many professional level design tools and project management capabilities, forming a very powerful suite of online tools for home remodeling and design for consumers and professionals. ``We believe the precision design category has even stronger potential than the graphics side for generating e-commerce revenues and gaining webshare,'' says John.
The company is currently in discussions with potential investors and commercial bankers to review financing strategies for the forward plan, and will be meeting with its creditors to discuss short and long-term financing options. IMSI will continue selling many of its popular software titles via download on its Internet sites including FloorPlan, TurboCad, VisualCad, TurboProject, TurboProject Pro, NetAccelerator 3.0, Form Tool v4 OrgPlus, Flow, Hijaak and HijaakPro. Technical support for IMSI products will be provided on IMSI's website through the FAQ section.
About IMSI
Headquartered in Novato, IMSI produces and sells visual content, design, and graphics software over the Internet. The company operates several popular websites including ArtToday.com. For more information, contact IMSI public relations at 415/878-4000, or visit our website at www.imsisoft.com. or http://www.arttoday.com
Forward Looking Statement: To the extent that any of the statements contained herein relating to IMSI's financial health are forward-looking, such statements are based on current expectations that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, the completion negotiations with financial stakeholders, Internet sales and pricing model effectiveness, the company's ability to attract visitors to its websites, competitive pricing pressures, product volume and mix, timing of orders received and the introduction of competitive products having technological and/or pricing advantages. As a result, the Company's operating results may fluctuate, especially when measured on a quarterly basis. For further information, refer to the risk factors included on the Company's Annual Report and Form 10-K for the fiscal year ended June 30, 1999 as filed with the Securities and Exchange Commission.
IMSI is a registered trademark of International Microcomputer Software, Inc. All other products are the trademarks or registered trademarks of their respective owners.
IMSI (Analyst Contacts)
Costa John, CEO and CFO, 415/878-4000
or
Len Cereghino & Company (Investor Contact)
Becky Pendleton Reid, 206/448-1996
beckyr@stockvalues.com
or
S&S Public Relations (Media Contact)
Bev Scott
Rachelle Marquez, 650/340-0299
rachelle@sspr.com