Neoware and NCD to Partner to Grow Thin Client Appliance Market
Neoware to Purchase NCD's ThinSTAR Product Line; NCD to Receive
Cash to Strengthen its European Operations, Worldwide Software and
NC Businesses
KING OF PRUSSIA, Pa./MOUNTAIN VIEW, Ca., March 22, 2002 - Neoware
Systems (NASDAQ:NWRE) and Network Computing Devices (OTCBB: NCDI)
today announced that the two companies have entered into a Definitive
Agreement under which Neoware will purchase NCD's ThinSTAR thin client
appliance product line and the two companies have entered into an
alliance to grow the worldwide thin client appliance market. NCD will
retain and remains committed to its European operations, its NC900
line of network computers and NCD's ThinPath software businesses.
The ThinSTAR product line that Neoware is acquiring generated revenue
of approximately $17.8 million in 2001 and approximately $3.8 million
in the quarter ended December 31, 2001.
As consideration for the sale, NCD will receive up to $4.25 million
in cash, $550,000 of which will be subject to certain conditions.
NCD will be retaining all of its existing liabilities. The transaction
is expected to close before the end of March 2002. Thereafter, the
two companies intend to partner on the development and marketing of
current and future software products to grow the overall thin client
market.
After the conclusion of the transaction, the ThinSTAR product line
will continue to be available from NCD in Europe, the Middle East
and Africa under an OEM agreement with Neoware. In the Americas, Asia-Pacific
and the rest of the world, the ThinSTAR product will be re-branded
as ThinSTAR by Neoware and will continue to be available through the
existing channel of ThinSTAR authorized distributors and resellers
without disruption. NCD will continue to provide worldwide service
and support for the ThinSTAR product line.
Neoware intends to continue to sell, develop, support and enhance
the ThinSTAR products after closing this transaction. Under the terms
of the agreements between the companies, Neoware will supply ThinSTAR
products and software upgrades to ThinSTAR customers, providing investment
protection by allowing them to continue to receive new product features
without replacing their hardware, reflecting the benefits of Neoware's
software-powered business model.
The sale of the ThinSTAR product line and the alliance with Neoware
will allow NCD to focus on its worldwide ThinPATH software and NC900
businesses, and supporting its European customer base while providing
additional cash resources to strengthen NCD's financial position.
In connection with acquisition, Neoware has received an option to
acquire NCD's European operations
Neoware believes that its purchase of the ThinSTAR product line further
expands the Company's thin client market share, and will drive additional
revenue and profit growth. This announcement builds upon Neoware's
growth strategy in the appliance and server-based computing market,
coming on the heels of the Company's alliance with IBM, and its acquisitions
of ACTIV-e Solutions and the Capio product line. With these corporate
developments, Neoware believes that it has significantly expanded
its market share, market presence and its access and commitment to
customers.
"This acquisition of the ThinSTAR products and our new alliance with
NCD continues and accelerates Neoware's strategy of growing our business
profitably, both organically and through carefully targeted acquisitions,"
stated Michael Kantrowitz, president and CEO of Neoware. "Neoware's
core business grew by 60% in the last fiscal year, and since then
we have acquired the Capio product line and the business of ACTIV-e
Solutions in order to expand our distribution and service offerings.
In January we formed an important alliance with IBM under which we
are now the preferred provider of thin client appliance software and
products to IBM and its customers."
"Now, we are forming an alliance with NCD and acquiring the ThinSTAR
product line to further increase our access to customers and our market
share. For ThinSTAR customers, this transaction means that they can
continue to receive high-quality products and services from a company
that is committed to leadership in the thin client appliance market.
Our new strategic relationship with NCD will allow Neoware to further
enhance our growth strategy by providing us with access to additional
software technologies that will enhance our overall product offerings."
"The sale of the ThinSTAR product line will permit us to focus our
attention on our European customers as well as our NC900 family of
Network Computers which we will continue to sell worldwide", stated
Dr. Guenther Pfaff, CEO of NCD. "In addition, our new partnership
with Neoware will allow us to extend the popularity and continued
success of our ThinPATH software to Neoware's product range including
the ThinStars. The proceeds of this transaction will help us extend
the features and functionality of our ThinPATH software."
For more information concerning Neoware's acquisition of NCD's thin
client business, consult Neoware's FAQ concerning
this news
About NCD
Founded in 1988, Network Computing Devices, Inc., supplies information
access and management products that extend server-based computing
to give customers a competitive edge and a better bottom line. Over
one million NCD thin clients are installed with over 3 billion hours
of operation. The company can be reached on the Internet at: www.ncd.com
About Neoware
Neoware provides software, services, and solutions to enable Appliance
Computing, a new Internet-based computing architecture targeted at
business customers that are designed to be simpler and easier than
traditional PC-based computing. Neoware's software and management
tools power and manage a new generation of smart computing appliances
that utilize the benefits of open, industry-standard technologies
to create new alternatives to personal computers used in business
and a wide variety of proprietary business devices. Neoware's products
are designed to run local applications for specific vertical markets,
plus allow access across a network to multi-user Windows servers,
Linux servers, mainframes, minicomputers, and the Internet. Computing
appliances that run and are managed by Neoware's software offer the
cost benefits of industry-standard hardware and software, easier installation,
and have lower up-front and administrative costs than proprietary
or PC-based alternatives. More information about Neoware can be found
on the Web at www.neoware.com or via email at info@neoware.com Neoware
is based in King of Prussia, PA.
###
Neoware is a registered trademark of Neoware Systems
Inc. NCD is a trademark of Network Computing Devices, Inc. All other
names products and services are trademarks or registered trademarks
of their respective holders.
This press release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements include statements regarding the consummation
of the acquisition of the NCD thin client product line, the partnership
of Neoware and NCD, continued development, support and enhancement
of the ThinSTAR products, the ability of ThinSTAR customers to continue
to receive upgrades, revenue and profit growth, the seamless transition
for ThinSTAR customers, increased market share, increased distribution
channels, broader product offerings, improved products and services,
the addition of knowledgeable employees, acceleration and enhancement
of Neoware's growth strategy, increased focus on Neoware's competitive
advantages, the reduction in product costs, Neoware's development
of key relationships and continued investment in sales and marketing.
These forward-looking statements involve risks and uncertainties.
Such statements also include statements regarding NCD's receipt of
the contingent portion of the sale consideration, Neoware's purchase
of NCD's European operations and future partnership between NCD and
Neoware. Factors that could cause actual results to differ materially
from those predicted in any such forward-looking statement include
Neoware's ability to successfully integrate the NCD thin client business
and to lower its costs, Neoware's timely development and customers'
acceptance of Neoware's appliance computing products, including the
former NCD thin client products, pricing pressures, rapid technological
changes in the industry, growth of the appliance computing market,
increased competition, Neoware's ability to attract and retain qualified
personnel, including the former NCD employees, Neoware's ability to
identify and consummate future acquisitions, adverse changes in general
economic conditions in the U.S. and internationally, and risks associated
with foreign operations and political and economic uncertainties associated
with current world events. These and other risks are detailed from
time to time in Neoware's periodic reports filed with the Securities
and Exchange Commission, including, but not limited to, its report
on Form 10-K for its fiscal year ended June 30, 2001
