AvantGo Reports First Quarter 2002 Financial Results; Mobile Applications Strategy Progresses with Major Wins from Fortune 1000 Customers.Business Editors and High Tech Writers HAYWARD, Calif.--(BUSINESS WIRE)--April 24, 2002 AvantGo, Inc. (Nasdaq:AVGO), the leading provider of mobile enterprise software, today reported financial results for the first quarter ended March 31, 2002. For the first quarter of 2002, the Company posted revenues of $4.8 million and 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 net loss of $5.0 million, or a loss of $0.14 per share. This compares to revenues of $5.3 million and a pro forma net loss of $4.7 million, or a loss of $0.14 per share, reported in the fourth quarter of 2001. The Company reported an actual net loss of $5.7 million, or a loss of $0.16 per share, for the first quarter of 2002, which compares to an actual net loss of $8.2 million, or a loss of $0.24 per share, for the fourth quarter of 2001. The Company sequentially reduced 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. by 6% from $9.2 million in the fourth quarter of 2001 to $8.6 million in the first quarter of 2002, and by 45%, or $7.0 million, from $15.6 million in the first quarter 2001, excluding pro forma charges. At March 31, 2002, the Company had $42.1 million of cash and cash equivalents, reflecting the sixth consecutive quarter of reduced cash burn. "Although the overall market for enterprise software continues to be soft, we won major deals for Mobile Sales(TM)and a mission-critical supply chain automation solution, adding to our growing list of Fortune 1000 customers and supporting our focus on high-value, high ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). mobile applications. In April, we have already concluded a major contract, and based on our pipeline, we anticipate modest revenue growth in the second quarter," commented Richard Owen Sir Richard Owen KCB (July 20 1804–December 18 1892) was an English biologist, comparative anatomist and palaeontologist. He was widely regarded as malicious and dishonest but he was also one of the most brilliant and influential biologists of his time. , chief executive officer, of AvantGo. "Our strategy of building upon our best-of-breed infrastructure software to quickly bring high-value mobile applications to market has yielded early success, and we believe positions us well for the long term. "Corporations are increasingly realizing that our solutions deliver high ROI, minimize technology obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. , minimize their reliance on costly wireless services and deliver always-available access to critical information whether or not a network is available," Owen added. Pro forma charges excluded from the first quarter of 2002 results included the amortization of deferred compensation of $0.7 million. Pro forma charges excluded from the fourth quarter of 2001 results totaled $3.5 million and included the amortization of goodwill, 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. and deferred compensation and other acquisition-related costs of $1.0 million, restructuring and other impairment charges related to the disposal of excess office space of $1.7 million, and employee termination costs of $0.8 million. AvantGo Introduces Two New Applications AvantGo has expanded its suite of mobile applications with the introduction of two new applications, AvantGo Mobile Pharma(TM)and AvantGo Mobile Inspection(TM)targeting the pharmaceutical and government markets. In March, the Company introduced AvantGo Mobile Pharma, a packaged mobile application specifically designed to support the unique requirements of pharmaceutical sales representatives pharmaceutical sales representative Detailer, Drug rep Drug industry A drug company employee who regularly visits physicians and office practices, providing information on the company's products–usually putting a negative 'spin' on competitors' products. See Detailing. . AvantGo Mobile Pharma is a powerful mobile application designed to help pharmaceutical companies gain market share by significantly improving the quality of their interactions with physicians and increasing the productivity of sales representatives. The mobile application provides sales representatives with immediate access to the information most relevant to them, including their sales force automation Automating the sales activities within an organization. A comprehensive SFA package provides such functions as contact management, note and information sharing, quick proposal and presentation generation, product configurators, calendars and to-do lists. (SFA See sales force automation. SFA - Sales Force Automation ) system, product and clinical data, market share data, corporate data and web-based content and services from mobile devices. AvantGo also recently unveiled AvantGo Mobile Inspection, a packaged mobile application designed to improve business inefficiencies in performing inspection, asset tracking, loss prevention, safety and environmental audit tasks. The solution eliminates transcription errors A transcription error is a specific type of data entry error that is commonly made by human operators or by optical character recognition programs (OCR). Human transcription errors are commonly the result of typographical mistakes, putting fingers in the wrong place during touch and improves the timeliness and quality of data collection. It also streamlines workflow by electronically transmitting results directly from the field and providing managers with the information they need to make timely, more informed operational decisions. With these new applications, AvantGo further expands its broad suite of mobile solutions. AvantGo today provides server-based synchronization (1) See synchronous and synchronous transmission. (2) Ensuring that two sets of data are always the same. See data synchronization. (3) Keeping time-of-day clocks in two devices set to the same time. See NTP. and online access to Microsoft Exchange Messaging and groupware software for Windows from Microsoft. Exchange Server is an Internet-compliant e-mail system that runs under Windows NT/2000 and Windows Server 2003. It can be accessed by Web browsers, the Exchange client, versions of Outlook and the earlier Windows Inbox. and Lotus Notes Messaging and groupware software from IBM Lotus that was introduced in 1989 for OS/2 and later expanded to Windows, Mac, Unix, NetWare, AS/400 and S/390. Notes provides e-mail, document sharing, workflow, group discussions and calendaring and scheduling. schedules, contacts, tasks and e-mail, mission-critical custom applications written using Lotus Notes or other web-based development tools. In addition, AvantGo infrastructure now provides the foundation for packaged business applications including Mobile Sales, Mobile Delivery, Mobile Pharma and Mobile Inspection, enabling global organizations to standardize on a single infrastructure solution for both packaged and custom mobile applications. AvantGo Investor Call AvantGo's first quarter financial results will be discussed on April 24, 2002 at 2:00 p.m. PT/5:00 p.m. ET, and will be available via a live webcast on the Company's website, under the navigation bar A set of buttons or graphic images typically in a row or column used as a central point that link you to major topic sections on a Web site. If the navigation bar is a single graphic image with multiple selections, it is known as an imagemap. See imagemap. "investor relations Investor relations The process by which the corporation communicates with its investors. ," or at www.streetevents.com. A replay also will be available from the Company's website through May 8, 2002. About AvantGo AvantGo, Inc. (Nasdaq:AVGO) is the leading provider of mobile enterprise software. AvantGo solutions automate business processes and improve the exchange of information between companies and their employees and customers, resulting in improved business efficiencies and more effective customer interactions. AvantGo solutions include the best-of-breed mobile software platform for creating and deploying enterprise applications, proven customer relationship management (CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. ), supply chain management (SCM (1) (Software Configuration Management, Source Code Management) See configuration management. (2) See supply chain management. ), field force automation (FFA FFA free fatty acids. ) and personal information management (PIM (1) (Protocol Independent Multicast) A multicast routing protocol endorsed by the IETF. Used in conjunction with an existing unicast routing protocol, it comes in two flavors: Dense Mode (PIM-DM) is used when recipients in the target group are in a concentrated ) mobile business applications, and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. to assist in the strategy, design and delivery of end-to-end mobile solutions. AvantGo's customers, which include 28 of the Fortune 100 and over 2500 companies in 50 countries, include McKesson Corporation, Ford Motor Company, Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. , FedEx, Scottish Power Scottish Power Limited is a vertically integrated energy company with its headquarters in Glasgow, Scotland, and a subsidiary of the Spanish utility Iberdrola. It is the Distribution Network Operator (DNO) for the central and southern Scotland (voltage , The US Senate, Tyco, Harvard Medical School Harvard Medical School (HMS) is one of the graduate schools of Harvard University. It is a prestigious American medical school located in the Longwood Medical Area of the Mission Hill neighborhood of Boston, Massachusetts. , American Express American Express (NYSE: AXP), sometimes known as "AmEx" or "Amex", is a diversified global financial services company, headquartered in New York City. The company is best known for its credit card, charge card and traveler's cheque businesses. , The World Economic Forum, BG Group, plc., Genencor and Alcatel. For more information, please visit www.avantgo.com. Cautionary Statement This news release regarding first quarter financial results includes 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. , including, but not limited to, revenue projections for next quarter and AvantGo's ability to maintain sufficient cash balances to cover future operations until reaching profitability. These forward looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially. Such factors include, but are not limited to, the following: the growth in the adoption of mobile infrastructure technology; the Company's ability to fund its operations with existing cash or by raising additional capital; risks related to market acceptance of AvantGo's products and services, and the products and services of AvantGo's customers and partners which integrate or interoperate with AvantGo technologies; the rates at which advertisers invest in mobile advertising; possible disruption in commercial activities occasioned by terrorist activity and armed conflict, such as changes in logistics and security arrangements, and reduced end-user purchases relative to expectations; quarterly fluctuations in AvantGo's revenues or other operating results; pricing pressures, including the pricing that content providers and advertisers are willing to pay us in connection with our AvantGo mobile Internet Refers to gaining access to the Internet using a lightweight, handheld device. See Mobile IP, PDA, smartphone and mobile TV. service; the pricing of AvantGo enterprise products and the rates that we are able to charge for AvantGo professional services; errors in forecasting or inability to meet sales goals; inability to control costs; customer dissatisfaction; failure to close anticipated key enterprise agreements; slowdown in the adoption of mobile devices for which the market for AvantGo's software and services is dependent; changes in customer order patterns; the impact of long sales and implementation cycles for AvantGo's enterprise products; AvantGo's failure to meet financial expectations of analysts and investors; unanticipated costs or other adverse effects associated with software bugs A problem that causes a program to produce invalid output or to crash (lock up). The problem is either insufficient logic or erroneous logic. For example, a program can crash if there are not enough validity checks performed on the input or on the calculations themselves, and the computer ; continued success in technological advances, including development and implementation of new products and services that are interoperable with those of its customers and partners; delays in the development or introduction of such products and services; AvantGo's ability to manage growth and successfully integrate and operate any acquired businesses; AvantGo's ability to further its brand awareness and market effectively the functionality of its software; the risk of a significant monetary judgment against AvantGo in the current shareholder lawsuit or in any future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. in which AvantGo may be named as a defendant; competitive factors, such as the release of competitive products and services; marketing programs and other actions by competitors; technical difficulties with networks or operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. on which we rely to deliver some of AvantGo services; AvantGo's need to maintain and enhance business relationships with leading hardware and software manufacturers, important partners, content providers and other parties; the ability of AvantGo partners and customers to timely develop and deliver to market viable products and services; AvantGo's ability to attract new employees, particularly in the sales and engineering groups; retention of key personnel; AvantGo's activities and those of others regarding protection of intellectual property; vulnerability of the AvantGo Mobile Internet Service to events which may result in the inability of our sole bandwidth vendor to provide bandwidth services, such as loss of power, facility shutdown, break-ins, vandalism, terrorist acts, fire, floods, or earthquakes; the risk of AvantGo's failure to meet 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. of the Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. which may result in delisting Delisting When the stock of a company is removed from a stock exchange. Notes: Reasons for delisting include violating regulations and/or failure to meet financial specifications set out by the stock exchange. of AvantGo stock; other factors which increase operating costs operating costs npl → gastos mpl operacionales ; rapid inflation; general economic downturns; general business and economic conditions; and the impact of events outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. such as the business impact of fluctuating currency rates or unrest or political instability in a locale (programming) locale - A geopolitical place or area, especially in the context of configuring an operating system or application program with its character sets, date and time formats, currency formats etc. Locales are significant for internationalisation and localisation. . Further details on these risks are set forth in the AvantGo Inc. filings with the Securities and Exchange Commission, including the annual report filed on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2001 and the quarterly report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 2001. These filings are available on a website maintained by the Securities and Exchange Commission at http://www.sec.gov. Forward-looking statements in this release are generally identified by words such as "forecast," "project," "expect," "anticipate,"' "intend," "believe," "assume," "estimate," "goal," "plan" and other similar words and expressions. AvantGo does not undertake an obligation to update forward-looking statements. AvantGo, AvantGo Enterprise, AvantGo Mobile Engine, AvantGo Mobile Sales, AvantGo Mobile Delivery, Dynamic Mobility Model and the AvantGo logo are either registered trademarks or trademarks of AvantGo in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.
AvantGo, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Quarter Ended
March 31,
2002 2001
-------- --------
Revenues:
License fees $ 2,588 $ 4,063
Services 2,194 3,244
-------- --------
Total revenues 4,782 7,307
Costs and expenses:
Cost of license fees 82 25
Cost of services 1,137 1,488
Product development 2,216 4,265
Sales and marketing 5,222 8,814
General and administrative 1,173 2,523
Amortization of goodwill, intangible
assets and deferred stock compensation 706 3,774
-------- --------
Total costs and expenses 10,536 20,889
-------- --------
Loss from operations (5,754) (13,582)
Interest and other income, net 74 774
-------- --------
Net loss $ (5,680) $(12,808)
======== ========
Basic and diluted net loss
per share $ (0.16) $ (0.41)
======== ========
Shares used in computing basic
and diluted net loss per share 34,946 31,339
======== ========
Proforma net loss:
Net loss from above $ (5,680) $(12,808)
Add back amortization of goodwill,
intangible assets and deferred
stock compensation 706 3,774
-------- --------
Proforma net loss $ (4,974) $ (9,034)
======== ========
Proforma basic and diluted
net loss per share $ (0.14) $ (0.29)
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Shares used in computing
proforma basic and diluted
net loss per share 34,946 31,339
======== ========
AvantGo, Inc.
Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2002 2001
----- ----
ASSETS
Current assets:
Cash and cash equivalents $ 42,106 $ 43,091
Accounts receivable,
net of allowance 3,250 3,236
Prepaid expenses and
other current assets 683 480
--------- ---------
Total current assets 46,039 46,807
Restricted investments 3,438 3,438
Property and equipment, net 6,472 6,890
Other assets 260 344
--------- ---------
Total assets $ 56,209 $ 57,479
========= =========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 1,059 $ 1,243
Accrued liabilities 3,122 3,855
Accrued compensation
and related benefits 1,225 1,693
Deferred revenue 6,456 1,813
--------- ---------
Total current liabilities 11,862 8,604
Accrued restructuring charges,
net of current portion 2,022 2,127
Stockholders' equity:
Common stock 168,864 168,603
Notes receivable from
stockholders (502) (502)
Deferred stock compensation (1,999) (2,752)
Revenue offset relating
to warrant agreements (465) (592)
Accumulated deficit (123,802) (118,122)
Accumulated other
comprehensive income 229 113
--------- ---------
Total stockholders' equity 42,325 46,748
--------- ---------
Total liabilities and
stockholders' equity $ 56,209 $ 57,479
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