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Hummingbird Communications Ltd. reported strong sales growth for its fourth quarter ended Sept. 30, but increased operating expenses and acquisition-related amortization costs cut into the vendor's profitability. In an earnings report issued yesterday, the company posted sales of $58.4 million for the quarter, up 74% over $33.5 million in the same period a year earlier, while net income declined 48% to $4.4 million from $8.5 million last year.
Hummingbird also disclosed that Jim Tobin, who was named Hummingbird's president and chief operating officer in June, has left the company. In a conference call, CEO Fred Sorkin did not provide specific reasons for Tobin's departure, saying only that the former Bell Canada executive VP wanted to pursue other "venture situation" interests. Co-founder and executive VP Barry Litwin has taken over the position.
Hummingbird has been transforming itself from a connectivity software vendor into a supplier of a broad range of decision-support and knowledge-management technologies. In its most recent fiscal quarter, the company completed its acquisition of PC Docs Group, a vendor of knowledge-management and document-management software. Early next month, the company is expected to introduce its enterprise information portal product, which Litwin called "an important test of the complementary nature of our technologies and our ability to integrate them."
For fiscal 1999, which closed Sept. 30, sales reached $165.9 million, a 28% increase over $130.0 million in sales in fiscal 1998. Net income declined to $279,000 from $26.6 million due to increased operating expenses, combined with merger and restructuring costs, and amortization and write-off of intangible assets. Those costs and write-offs stem from a number of acquisitions Hummingbird has made in recent years.
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