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CustomTracks Corporation Announces First-Quarter 1999 Results

Preview of Internet transaction payment and Digital Signature systems set for June

DALLAS, May 10 /PRNewswire/ -- CustomTracks Corporation (Nasdaq: CUST) announced today financial results for the first quarter, ended March 31, 1999. The company reported a first-quarter net loss of $2,415,000, or $0.16 per share, which included a non-cash charge of $746,000 for amortization of the fair value of stock options granted to a third-party software development firm. There are no comparable quarterly results for 1998, as the company completed the sale of all its previous revenue-generating businesses in November 1998.

As previously announced, the company expects to invest $20,000,000 to $30,000,000 during 1999 on its new Internet transaction payment system. The payment system, which uses the company's Digital Signature technology, will allow consumers to purchase items over the Internet without divulging personal information to Web merchants. The transaction payment system is on track to be operational by the end of the third quarter.

David P. Cook, chairman and chief executive officer of CustomTracks, also announced the steps being taken to prepare for the launch of the company's new system. "We are in the process of filing various patent applications, and as soon as they are filed, we plan to preview the new system on an informational Web site. This site should be operational by the end of June.

"The new Digital Signature system will be released for commercial usage before the end of August. We expect this Digital Signature system to participate in markets consistent with those described in pending Congressional bills, such as H.R. 1572 (Digital Signature Act of 1999) and H.R. 1714 (Electronic Signatures in Global and National Commerce Act), which specify both federal and commercial usage of digital signatures." CustomTracks Corporation is developing an Internet transaction payment system and a Digital Signature system and is exploring additional Internet- related businesses. For further investor information about CustomTracks, visit the company's Web site at www.customtracks.com or contact investor relations at 972-702-7057.

"Safe Harbor Statement"
The following is a "Safe Harbor Statement," made under the Private Securities Litigation Reform Act of 1995: This press release includes forward-looking statements. These statements involve management assumptions, risks, and uncertainties, including, but not limited to, the following: (1) the ability of the company to successfully develop its Internet transaction payment system and Digital Signature system and to marshal the resources to complete the development of these products in a timely fashion; and (2) the ability of the company to gain market acceptance for its products. Consequently, if such management assumptions prove to be incorrect or such risks or uncertainties materialize, the company's actual results could differ materially from the results, if any, forecast in the forward-looking statements.


                          CUSTOMTRACKS  CORPORATION

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share data)
                                 (Unaudited)

                                                         Three Months Ended
                                                        March 31,    March 31,
                                                          1999         1998

    Research and development expenses (A)             $  (2,731)    $   ---
    Corporate expenses                                     (775)     (1,644)
    Investment income                                     1,061         262
    Loss from continuing operations before income taxes  (2,445)     (1,382)
    Income tax benefit                                       30         436
    Loss from continuing operations                      (2,415)       (946)
    Income from discontinued operations,
     net of income taxes                                    ---       1,305

    Net income (loss)                                 $  (2,415)    $   359

    Basic and diluted earnings
     (loss) per common share:
      Continuing operations                           $   (0.16)    $ (0.06)
      Discontinued operations                               ---        0.08
      Net income (loss)                               $   (0.16)    $  0.02

    Weighted average shares outstanding                  15,124      16,949

    Note (A) Includes a non-cash charge of $746,000 for amortization of the
             fair value of stock options granted to a third-party software
             development firm.

                           CUSTOMTRACKS CORPORATION

                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In thousands)
                                  (Unaudited)

                                                       March 31,  December 31,
                                                          1999       1998

    ASSETS
      Cash and short-term marketable
       securities                                    $  77,373   $  81,221
      Due from sale of discontinued operations             ---       5,304
      Other current assets                                 242         215
      Long-term marketable securities                    5,001         ---
      Property and equipment, net                        1,113         158
                                                     $  83,729   $  86,898

    LIABILITIES AND STOCKHOLDERS' EQUITY
      Accounts payable and accrued expenses          $   1,826   $  1,574
      Liabilities related to discontinued operations     1,710      3,875
      Stockholders' equity                              80,193     81,449
                                                     $  83,729   $ 86,898

SOURCE  CustomTracks Corporation