Accrue Reports Fourth Quarter 2002 Results.Business Editors/High-Tech Writers FREMONT Fremont (frē`mŏnt). 1 City (1990 pop. 173,339), Alameda co., W Calif., on San Francisco Bay; inc. 1956. Long an agricultural center, with champagne vineyards founded (1870) by Leland Stanford, it still ships fruits and vegetables. , Calif.--(BUSINESS WIRE)--May 21, 2002 Accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. (TM) Software, Inc. (Nasdaq:ACRU ACRU American Civil Rights Union ACRU Active Confirmed Registered User (eBay) ), announced today that its revenue and pro-forma operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. results for the fiscal fourth quarter ended March 30, 2002 were in line with preliminary estimates reported in a news release on April 16th. Under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting Accrue reported, for the fiscal fourth quarter, net revenue of $3.0 million, compared with $3.9 million in the prior quarter and $3.3 million in the comparable fourth quarter of fiscal 2001. For the fiscal year ended March 30, 2002, the Company reported revenue of $14.3 million compared to $25.6 million in the prior fiscal year. Total expenses, including cost of revenues, for the fiscal fourth quarter were $8.0 million, compared with $48.9 million in the same quarter last fiscal year. Net loss for the fiscal fourth quarter was $(5.1) million, or $(0.17) per share, compared with $(45.3) million, or $(1.52) per share, in the same quarter last fiscal year. For the fiscal year ended March 30, 2002, total expenses were $30.9 million, compared with $238.0 million in the prior year. Net loss for the fiscal year was $(12.1) million, or $(0.41) per share, compared with $(211.2) million, or $(7.55) per share, in the prior year. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, which excludes non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for amortization of intangibles, impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of goodwill and other intangibles, in-process research and development, stock-based compensation expense and gain on sale of technology asset, total expenses for the fiscal fourth quarter were $5.7 million, down 5 percent from the prior quarter and down 60 percent from $14.0 million in the same quarter last fiscal year. The pro forma net loss for the fiscal fourth quarter was $(2.7) million, or $(0.09) per share, compared with $(10.5) million, or $(0.35) per share, for the same quarter last fiscal year. For the fiscal year ended March 30, 2002, total expenses were $25.4 million, down 40 percent from $42.1 million in the prior year. The pro forma net loss was $(10.9) million, or $(0.37) per share, for the fiscal year ended March 30, 2002 compared with $(15.3) million, or $(0.55) per share, in the prior year. The Company's cash burn in the fiscal fourth quarter was $(1.9) million, down slightly from the $(2.0) million in the third quarter and 78 percent below the $(8.8) million in the comparable quarter a year ago, despite lower revenues in the current period versus those comparable periods. Cash as of March 30, 2002 was $2.6 million. Jonathan Jonathan (jŏn`əthən) [short for Jehonathan, Heb.,=Yahweh has given]. 1 In the Bible, Saul's son and David's friend, both killed at the battle of Mt. Gilboa. David showed kindness to his son Mephibosheth. D. Becher, who was appointed Interim President and Chief Executive Officer last month, said, "Accrue was negatively affected by the capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. restraints that most technology companies have reported over the last few months. This slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. resulted in customer's delaying purchases and a shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. in bookings during the quarter. However, we continue to see significant interest in Accrue G2, our next-generation Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the analytics solution, and now have 14 companies using Accrue G2 for analyzing their customers' Internet behavior. Collectively, these companies' Internet activities comprise more than a billion Web events each day." Accrue also announced a realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of its business strategy which will increase its focus on the Accrue G2 Internet analytics solution. The Company recorded in the fourth quarter a non-recurring impairment charge of $1.2 million on intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. associated with its non-G2 product lines. The Company previously announced it would reduce expenses to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. them with its current revenues. "We have reduced our workforce by 25 percent since the end of March, implemented a 10 percent reduction in executive management salaries, and are prudently but aggressively reducing non-payroll operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . These actions have already reduced our expense base by 20 percent in the current quarter and we expect to achieve a similar further reduction in the September quarter as the effect of our recent actions become fully realized," said Becher. He added that "Accrue will be focusing the Company's growth strategy around its Accrue G2 solution, which is already demonstrating traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. in the marketplace. We believe the opportunity to establish G2 as the leading Internet analytics solution is stronger than ever, and we intend to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. this opportunity. This new focus will not reduce the level of support and service for customers of Accrue's other product lines, and will enhance the resources supporting the G2 line. "Accrue is currently engaged in various initiatives to provide additional capital resources for the Company, which management believes are required to ensure a level of working capital necessary for the continuing operation of the Company's business. These initiatives include certain asset divestitures, acquisitions that provide incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. cash, and the sale of equity securities. However, we must caution that there can be no assurance that these initiatives will be successful," he said. While the Company typically holds conference calls to review quarterly results, Becher indicated that the Company will not hold a conference call today, but plans to schedule a call in the near future to discuss progress towards achievement of Accrue's capital initiatives. About Accrue Software Accrue Software is a leading provider of enterprise-level analytic an·a·lyt·ic or an·a·lyt·i·cal adj. 1. Of or relating to analysis or analytics. 2. Expert in or using analysis, especially one who thinks in a logical manner. 3. Psychoanalytic. solutions that help companies understand, predict, and respond to Internet customer behavior. Accrue's products enable companies to increase the effectiveness of Internet marketing See Internet advertising. and merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. initiatives, better manage customer interactions across multiple channels, and streamline business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . With Accrue's solutions, companies transform volumes of complex Internet data into actionable Giving sufficient legal grounds for a lawsuit; giving rise to a Cause of Action. An act, event, or occurrence is said to be actionable when there are legal grounds for basing a lawsuit on it. information that executives and managers use to drive key business decisions and improve the return on their Internet investment. Accrue has more than 600 customers, including industry leaders such as Citigroup, Dow Jones Dow Jones the best known of several U.S. indexes of movements in price on Wall Street. [Am. Hist.: Payton, 202] See : Finance & Company, Eastman Kodak, Lands' End
LYCOS Europe is a pan-European network of websites, offering a broad variety of content channels and online services, e.g. communication tools & communities, websearch, e-commerce, webhosting, homepagebuilding and Internet access. , and Deutsche Telekom Deutsche Telekom AG (ISIN: DE0005557508, FWB: DTE, NYSE: DT, LSE: DEU, TYO: 9496 ) (abbreviated DTAG) is a telecommunications company headquartered in Bonn, Germany. It is the largest telecommunications company in Germany and in the EU. . Accrue Software was founded in 1996 and is headquartered in Fremont, Calif., with international headquarters in Cologne Cologne (kəlōn`), Ger. Köln, city (1994 pop. 962,500), North Rhine–Westphalia, W Germany, on the Rhine River. It is a commercial, financial, and industrial center, a rail and road junction, and a river port. , Germany. Accrue Software can be reached at 1-888-4ACCRUE or 510-580-4500, and at www.accrue.com. Accrue is a trademark of Accrue Software, Inc. All other trademarks are the sole property of their respective owners. Except for the historical information contained herein, the matters discussed in the news release, including projections of future revenues, expenses, earnings and financial results, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties that could cause actual results, future revenues, expenses or earnings to differ materially from those in such forward-looking statements. These forward-looking statements are made only as of the date of this press release, and Accrue undertakes no obligation to update or revise the projections of revenue and earnings, or the other forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, you should not place undue reliance on these projections of future revenue, expenses and earnings, and other forward-looking statements. Potential risks and uncertainties include, without limitation, the Company's limited operating history, history of losses, fluctuations in operating results, ability to cut expenses, ability to achieve revenue increases, competition in the e-business analysis market, reliance on sales from a limited number of products for its revenue, customer adoption of new products (particularly the Company's new G2 second-generation platform), reliance on expanding sales operations and distribution channels, ability to satisfy the continued listing requirements Listing requirements Requirements, including minimum shares outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading. for its common stock on the Nasdaq SmallCap Market or to accomplish a return to listing as a Nasdaq National Market security. Furthermore, the Company's revenues have been lower than expected. The Company will not have sufficient working capital to continue operations if the Company is unable to achieve not only increases in projected revenues and additional decreases in expenses over the ensuing en·sue intr.v. en·sued, en·su·ing, en·sues 1. To follow as a consequence or result. See Synonyms at follow. 2. To take place subsequently. fiscal quarters, but also completing additional measures to increase the Company's cash balances. The Company is currently pursuing a number of initiatives to provide additional capital resources, including raising capital through the sale of Company securities, the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of certain Company assets, and various acquisitions which would contribute cash resources. There can be no certainty that the Company will be able to take these actions in the time needed to provide working capital to continue operations. These and other risk factors are described in detail in the Company's Registration Statement on Form S-1, and in the Company's other filings, which are on file with the Securities and Exchange Commission.
Accrue Software, Inc.
Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
Three Three Twelve Twelve
Months Months Months Months
Ended Ended Ended Ended
March 30 March 31 March 30 March 31
2002 2001 2002 2001
Net revenue:
Software license $ 740 $ 480 $ 4,297 $ 14,592
Maintenance and service 2,285 2,869 10,011 11,042
-------- -------- -------- ---------
Total revenue 3,025 3,349 14,308 25,634
-------- -------- -------- ---------
Cost of revenue:
Software license 15 220 300 871
Maintenance and service 1,367 2,468 6,605 8,043
-------- -------- -------- ---------
Total cost of revenue 1,382 2,688 6,905 8,914
-------- -------- -------- ---------
Gross profit 1,643 661 7,403 16,720
-------- -------- -------- ---------
Operating expenses:
Research and development 1,435 2,762 6,915 9,454
Sales and marketing 1,614 3,003 6,267 14,193
General and administrative 1,302 5,549 5,371 9,569
Amortization of intangibles 1,145 4,804 4,580 49,559
In-process research
& development -- -- -- 4,503
Impairment of
goodwill and other
intangibles 1,200 29,665 1,200 139,665
Stock-based
compensation expense 11 420 (276) 2,190
-------- -------- -------- ---------
Total operating expenses 6,707 46,203 24,057 229,133
-------- -------- -------- ---------
Loss from operations (5,064) (45,542) (16,654) (212,413)
Other income 14 201 241 1,194
Gain on sale of
technology asset -- -- 4,306 --
-------- -------- -------- ---------
Net loss $ (5,050) $(45,341) $(12,107) $(211,219)
======== ======== ======== =========
Net loss per share,
basic and diluted $ (0.17) $ (1.52) $ (0.41) $ (7.55)
======== ======== ======== =========
Shares used in
computing net loss per
share, basic and diluted 29,873 29,776 29,820 27,958
======== ======== ======== =========
Reconciliation of GAAP net loss to pro forma net loss
GAAP net loss $ (5,050) $(45,341) $(12,107) $(211,219)
Amortization of intangibles 1,145 4,804 4,580 49,559
In-process research
and development -- -- -- 4,503
Impairment of goodwill
and other intangibles 1,200 29,665 1,200 139,665
Stock-based
compensation expense 11 420 (276) 2,190
Gain on sale of
technology asset -- -- (4,306) --
-------- -------- -------- ---------
Pro forma net loss $ (2,694) $(10,452) $(10,909) $ (15,302)
======== ======== ======== =========
Pro forma net loss
per share, basic
and diluted $ (0.09) $ (0.35) $ (0.37) $ (0.55)
======== ======== ======== =========
Shares used in computing net
loss per share,
basic and diluted 29,873 29,776 29,820 27,958
======== ======== ======== =========
Pro forma operating loss excludes non-cash charges for stock based
compensation, amortization of intangibles, impairment of goodwill and
other intangibles, in-process research and development and gain on
sale of technology asset.
Accrue Software, Inc.
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
March 30, March 31,
2002 2001
Current assets:
Cash and cash equivalents $ 2,646 $11,951
Accounts receivable, net 1,952 1,868
Prepaid expenses and other current assets 676 2,782
------- -------
Total current assets 5,274 16,601
Property and equipment, net 1,894 2,923
Other assets, net 4,604 10,745
------- -------
$11,772 $30,269
======= =======
Current liabilities:
Accounts payable $ 633 $ 1,026
Accrued liabilities 2,363 4,406
Accrued liabilities, merger -- 80
Deferred revenue 3,146 4,897
Short term borrowings -- 2,000
------- -------
Total current liabilities 6,142 12,409
------- -------
Total stockholders' equity 5,630 17,860
------- -------
$11,772 $30,269
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