Struggling Thin-Client Vendor Scraps Hardware

KING OF PRUSSIA, PA. (05/02/2000) - In the wake of flat earnings and another quarterly loss, Neoware Systems Inc. is scrapping its line of thin-client terminals and becoming a software vendor.

Revenue for the fiscal third quarter, ending March 31, was $2.5 million compared with $2.4 million for the quarter ended March 31, 1999. For the fiscal third quarter, the company reported a net loss of $563,495. The loss includes a one-time charge of $165,000 for writing down inventory used to manufacture its hardware products.

For the same quarter last year, the net loss was $364,686.

Last month Neoware shut down its hardware manufacturing lines. Instead, the company will focus on software and services, and reselling other vendors hardware loaded with loaded Neoware's thin-client software.

In terms of year-to-date revenue, the company is treading water. However, its losses are getting smaller. For the fiscal nine months ended March 31, revenue totaled $7.8 million, compared with almost exactly the same number a year ago.

For the same period, the net loss was $1,621,380, compared with a net loss of $2,058,009 reported for 1999.

Neoware reported it had at the close of the first quarter about $9 million in cash, $11 million in equity and no debt.

During the past year, the company has embraced Linux, creating an embedded version of the open operating system for an array of thin-client desktops and other appliances. The software lets the appliances run local applications, as well as access programs running on Linux and multiuser Windows NT servers.

Previously, Neoware was focused largely on building and selling its own line of Windows CE-based terminals.

Neoware: (610) 277-8300 or

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