Baltimore Technologies Reports 2001 First Quarter Results.Business Editors BOSTON--(BUSINESS WIRE)--May 15, 2001 Baltimore Technologies Baltimore Technologies was an internet security firm founded in 1976 by Michael Purser. It was acquired in 1996 by a team financed by Dermot Desmond and led by Fran Rooney, who became CEO. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : BALT BALT bronchus-associated lymphoid tissue. BALT Bronchiole-associated lymphoid tissue, see MALT ) - Revenue increases by 150% compared to Q1 2000, down 17% compared to Q4 2000 - Operational review including targeted annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. savings of US$43-50 million (Stg(pound)30-35 million) Baltimore Technologies plc ("the Company") (NASDAQ: BALT; London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. : BLM BLM n abbr (US) (= Bureau of Land Management) → les domaines ), a global leader in e-security, today announced that management is taking strong measures to target annualized savings of US$43-50 million (Stg(pound)30-35 million) as part of the announcement of its results for the first quarter ended March 31, 2001. Total revenues for the first quarter of US$33.7 million (Stg(pound)23.7 million) increased by 150% over Q1 2000 revenues of US$13.4 million (Stg(pound)9.5 million) and decreased by 17% compared to Q4 2000 revenues of US$40.4 million (Stg(pound)28.4 million), largely as a result of six significant deals being deferred. Of these, one has been completed and the Company is in active negotiations with the remainder. Software license revenues of US$18.3 million (Stg(pound)12.9 million) increased by 149% compared to Q1 2000 software license revenues of US$7.3 million (Stg(pound)5.2 million) and decreased by 23% compared to Q4 2000 software license revenues of US$23.9 million (Stg(pound)16.8 million). Software license revenues accounted for 54% of total revenues compared to 55% in Q1 2000 and 59% in Q4 2000. The trend in regional revenue mix continued with EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. accounting for 54% of total revenue, USA accounting for 21% and APAC APAC Australian Partnership for Advanced Computing APAC Agricultural Policy Analysis Center APAC Asia and Pacific APAC Asian Pacific American Coalition APAC Adapted Physical Activity Council (American Alliance for Health) for 25%. Gross margin for the first quarter of 2001 was 61% of total revenue compared to 67% in Q1 2000 and 72% in Q4 2000. Software license revenue gross margin for the first quarter of 2001 was 96% compared to 100% in Q1 2000 and up from 94% in Q4 2000. Sales and marketing expenses for the first quarter of 2001 of US$29.9 million (Stg(pound)21.0 million) represented 89% of total revenue, compared to 75% in Q1 2000 and 70% in Q4 2000. Quarter on quarter, sales and marketing expenditures rose by 5%. Research and development expenses amounted to US$7.7 million (Stg(pound)5.4 million) in the first quarter of 2001 and represented 23% of total revenue, compared to 25% in the same period last year and 16% in the previous quarter. General and administrative expenses of US$9.6 million (Stg(pound)6.8 million) for the first quarter of 2001 accounted for 28% of total revenue, compared to 29% in Q1 2000 and 21% in Q4 2000. This includes an additional charge of US$3.1 million (Stg(pound)2.2 million) representing a provision for doubtful debts to reflect the general economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. . LBITDA for the first quarter of 2001 of US$24.4 million (Stg(pound)17.2 million) increased from US$7.5 million (Stg(pound)5.3 million) in the first quarter last year and US$12.4 million (Stg(pound)8.7 million) in Q4 2000. Amortization of goodwill charged in the first quarter of 2001 totaled US$81.4 million (Stg(pound)57.3 million). This increased from US$64.6 million (Stg(pound)45.4 million) in Q4 2000, due mainly to full quarter charge for goodwill associated with the acquisition of Content Technologies Limited. Loss per share was US$0.21 (14.5p). At March 31, 2001, net cash totaled US$118.8 million (Stg(pound)83.6 million), compared US$153.3 million to (Stg(pound)107.8 million) at the end of 2000. Commenting on the first quarter results, Fran Rooney Fran Rooney (born 1956 in Dublin, Ireland) is one of Ireland's best known businessmen. Fran Rooney grew up in Ringsend and started his career in the Irish Government sector with various roles in the Postal, Telecoms and Civil Aviation sectors. , Chief Executive Officer of Baltimore Technologies said, "We continue to believe strongly in the significant market opportunity for our products and services, and although the first quarter of 2001 has been challenging, we have today announced a series of measures which should accelerate the deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of our solutions and consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. our business to build a stronger company." Q1 Business Highlights Baltimore Baltimore, city (1990 pop. 736,014), N central Md., surrounded by but politically independent of Baltimore co., on the Patapsco River estuary, an arm of Chesapeake Bay; inc. 1745. continues to deliver best of breed e-security solutions. - During the period, Baltimore strengthened its relationship with Identrus by being first to gain interoperability compliance with Identrus Express. Baltimore's new Financial Trust Solution will accelerate the time to market for financial institutions who wish to outsource their e-security requirements. Nordea, the largest bank in the Nordic region, has already licensed this solution. - In the enterprise security market, Baltimore UniCERT 3.5 became the first third party PKI to fully integrate with Windows 2000. Since its launch, Baltimore's PKI Solution for Windows 2000 has received widespread interest and has been chosen by customers such as Dexia. In addition, Baltimore has entered a strategic relationship with Unisys where Baltimore UniCERT forms the core PKI component of their Identrus solution for Windows 2000 users. - Baltimore launched new versions of its MIMEsweeper content security products. Baltimore now has over 8,000 customers worldwide using Baltimore MIMEsweeper with approximately 445 new customers signed in Q1. - In the authorization market, Baltimore confirmed its technological leadership when Baltimore SelectAccess won in eWeek's Access Control Application Review. During the period, Baltimore announced a SelectAccess deal with Clearstream Services, the largest international clearing, custody and settlement provider. - Baltimore continues its commitment to delivering best of breed e-security solutions to the Government and Healthcare sectors. In Q1 2001, Baltimore's e-security was chosen by a number of healthcare and Government customers worldwide, including the Italian Army and Trigon/Blue Cross Blue Shield in the US. The Ministry of Interior in co-operation with Getronics in Italy also licensed Baltimore's e-security to issue and manage digital certificates as part of the Italian Government's plans to issue Electronic Identity cards to all Italian citizens over a five year period. Operational Review The past 18 months has seen Baltimore Technologies grow significantly both organically and by acquisition. The Company, in light of the current economic climate, undertook a complete review of its business and believes that the ongoing rationalization rationalization, in psychology: see defense mechanism. will create and maintain a sustainable and profitable business model. The Company will continue to vigilantly monitor its progress to ensure that the goals of the rationalization program are met. In summary, the main focus of the Operational Review has been and will continue to be: - Core product and e-services An umbrella term for services on the Internet. E-services include e-commerce transaction services for handling online orders, application hosting by application service providers (ASPs) and any processing capability that is obtainable on the Web. See e-speak. strategy - Sales and Marketing Strategy - Cost Management Core Product Areas & E-Services Strategy Baltimore's complete offering now addresses the three core areas of e-security, namely Authentication (1) Verifying the integrity of a transmitted message. See message integrity, e-mail authentication and MAC. (2) Verifying the identity of a user logging into a network. (PKI (Public Key Infrastructure) A framework for creating a secure method for exchanging information based on public key cryptography. The foundation of a PKI is the certificate authority (CA), which issues digital certificates that authenticate the identity of ), Content security and Authorization The right or permission to use a system resource; the process of granting access. See access control. control. Each core area will be organized as a focused business unit within Baltimore. In particular, Baltimore is exploiting two key growth opportunities: - Authorization Management: Baltimore SelectAccess represents a significant growth opportunity with the market (according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Datamonitor Datamonitor is a provider of online database and analysis services. The company is based in the United Kingdom and also has offices in the United States, Japan, and other countries.[1] The Datamonitor team includes analysts and professional researchers. ) for access control and authorization management valued to reach Stg(pound)3.2 billion by 2005. Baltimore is restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). its global sales and marketing teams to take advantage of this opportunity - e-Security Services: As companies are now looking more closely at Return on Investment and Total Cost of Ownership, there is an increasing demand for Managed e-Security Services. Baltimore's extensive hosting capabilities puts the Company in a strong position to provide a comprehensive services package. The Company today entered the e-security services market with the launch of UniCERT The UNIcert is an international system of certification and accreditation for various languages learnt in a university context. The main goal of UNIcert is to support language education for universities and to provide an accepted certificate that proves language knowledge outside Quick Start, a subscription based PKI offering, which will allow smaller organizations to quickly deploy PKI for internal security and e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. applications without having to compromise on technology or flexibility. UniCERT Quick Start is the first of our subscription based e-security services thereby making security available to a wider customer base. This offering follows the recent launch of Baltimore Certificate Distribution Service (CDS), which together with UniCERT Quick Start will bring the additional benefit of building deferred revenues and reducing time to market for e-security deployment. Sales and Marketing Strategy Baltimore is aligning a·lign v. a·ligned, a·lign·ing, a·ligns v.tr. 1. To arrange in a line or so as to be parallel: align the tops of a row of pictures; aligned the car with the curb. the sales and marketing functions globally to reflect the need for a more integrated business development function. Working closely with the regions and engineering, this will enable Baltimore to satisfy customers needs more efficiently and effectively. Baltimore Technologies now has over 11,000 customers worldwide and over 500 TrustedWorld partners, which represents a huge potential audience for new and additional products and services. The Company plans to more aggressively manage and work with its partners to address the increased scale and number of opportunities and in addition, will be embarking on a focused customer cross selling program. Cost Management Baltimore has undertaken a review of its cost base with a view to eliminating duplicative du·pli·cate adj. 1. Identically copied from an original. 2. Existing or growing in two corresponding parts; double. 3. and unproductive expenses. The process has commenced with an immediate headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. reduction of 250 out of a total of 1,401 staff (including contractors). Other areas of saving include the consolidation of facilities and the control of discretionary spending. Baltimore will continue to review its cost base to ensure that it is aligned with its revenue expectations. The Company is currently targeting annualized savings of US$43-50 million (Stg(pound)30-35 million) although for this financial year the benefits will be more heavily weighted towards Q4. Corporate Developments The Company today announced that Paddy Holahan has resigned as Executive Vice President of Marketing. Paddy is pursuing other personal interests, but will continue to be available to the company in an external advisory role. Aidan Aidan is a Gaelic name, a diminutive of Aodh and usually translated into English as "the little fiery one" or similar. Formerly common only in Ireland, the name (together with variants) has become extremely popular in the United Kingdom and United States of America. Gallagher Gallagher may refer to: People
Commenting on Paddy's decision, Fran Rooney, Chief Executive Officer of Baltimore Technologies said, "Over the past five years, Paddy has helped to position Baltimore Technologies as a world leader in global e-security. He indicated his desire to depart several months ago and has worked closely with management to ensure a smooth transition. We will truly miss him and wish him the very best for the future." In addition, the Company has appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. Denis Denis, king of Portugal: see Diniz. Kelly Kel·ly , Ellsworth Born 1923. American abstract painter and sculptor whose works are characterized by flat color areas with sharply defined edges. Kelly, Emmett 1898-1979. to the position of Executive Vice President of Global 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 . Denis has worked with Baltimore for over 2 years and has extensive experience in financial and operational management in international companies. Outlook Whilst confident about the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. opportunities for e-security the Company believes, until such time as the economic conditions improve, that it is appropriate to base its current plans on comparatively modest revenue growth. With this in mind, the Company has begun to take the necessary steps to build a profitable and sustainable business A business is sustainable if it has adapted its practices for the use of renewable resources and holds itself accountable for the environmental and human rights impacts of its activities. model. Baltimore will continue to monitor its revenue expectations and adjust its spend accordingly. Baltimore will be discussing its first quarter results and operational review on a conference call today, beginning at 9.30amEST (2.30pmGMT). A live audio webcast of the conference call will be available on the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Baltimore Technologies' website, located at http://www.baltimore.com/investors/webcast/. A replay of the conference call will be available from 11:30amEST (4.30pmGMT) today. To access the replay, please dial: US: 1-800-625-5288; Access Code: 103 3041 International: +44 (0) 20 8288 4459; Access Code: 682 222 About Baltimore Technologies Baltimore Technologies develops and markets security products and services to enable companies to develop trusted, secure systems for e-business, the 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 and mobile commerce. Its products include a wide range of Public Key Infrastructure (PKI) products and services, access and authorization management solutions, wireless e-security, cryptographic cryp·tog·ra·phy n. 1. The process or skill of communicating in or deciphering secret writings or ciphers. 2. Secret writing. cryp toolkits, content security products, security applications and hardware cryptographic devices. Baltimore's global professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. organization offers a wide variety of consulting, training and deployment support to its customers worldwide. Baltimore Technologies markets and sells its solutions worldwide directly and through the TrustedWorld partner program. TrustedWorld includes many of the world's leading technology companies and a wide variety of global, regional and local business alliance partners. Baltimore Technologies plc is a public company with dual listings on NASDAQ (BALT) and the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. (BLM). For further information and press releases on Baltimore Technologies, please visit www.baltimore.com. This release contains projections and other 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. regarding future events and the future financial performance of Baltimore Technologies plc that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. Readers are referred to the most recent Annual Report and Form 20F which identifies important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including risks associated with business and economic conditions and growth in the e-security industry in various geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. regions; global economic conditions; overall information technology spending; changes in business model; limited operating history; variations in customer demand for products and services; the ability to successfully integrate and manage future acquisitions and growth; changes in customer order patterns; complexity of products; insufficient in·suf·fi·cient adj. 1. Not sufficient. 2. Incapable of proper functioning. , excess or obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. ; dependency dependency In international relations, a weak state dominated by or under the jurisdiction of a more powerful state but not formally annexed by it. Examples include American Samoa (U.S.) and Greenland (Denmark). on widespread adoption of public key cryptograghy; variations in sales channels, product costs or mix of products sold; increased competition in the e-security industry; rapid technological and market changes; successful relationships with strategic partners; restrictions imposed by Government regulation and other requirements; retention of and services of senior management and key personnel; the length of sales and implementation cycle; 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. involving intellectual property, warranty An assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by the other party. Warranties are used in a variety of commercial situations. In many instances a business may voluntarily make a warranty. claims and other matters; stock price volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the , financial risk management; and potential volatility in operating results, among others. The financial information contained in this release should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge and notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. included in Baltimore Technologies plc most recent Annual Report and Form 20F. Baltimore Technologies plc results of operations for the three months ended March 31, 2001 are not necessarily indicative indicative: see mood. of Baltimore Technologies plc operating results for the full fiscal year or any future periods. (pound) translated at rate of(pound)1 = $1.4217 for the convenience of the reader
Unaudited Consolidated Profit and Loss Accounts
US Dollars(A)
3 months to 3 months to
31 March 31 March
2001 2000
$000 $000
------------- -------------
Revenue 33,654 13,435
Cost of sales (13,095) (4,397)
--------- --------
Gross profit 20,559 9,038
Administrative expenses (128,614) (22,186)
--------- -------
Operating loss from
continuing operations (108,055) (13,148)
Interest receivable
and similar income 5,711 2,970
Interest payable and similar charges (1,193) (124)
--------- -------
Loss on ordinary
activities before taxation (103,537) (10,302)
Tax on loss on ordinary activities (577) (368)
-------- -------
Loss for the financial period (104,114) (10,670)
Minority interest 1,949 24
-------- -------
Loss for the period
retained by equity shareholders (102,165) (10,646)
======== =======
Loss per share Cents Cents
Basic and diluted (20.6) (28.6)
======== =======
All activities relate to continuing operations for all periods
(A) Translated at the rate of(pound)1 = $1.4217
Unaudited Consolidated Profit and Loss Accounts
(pound) Sterling
3 months to 3 months to
31 March 31 March
2001 2000
(pound)000 (pound)000
------------- -------------
Revenue 23,672 9,450
Cost of sales (9,211) (3,093)
------- -------
Gross profit 14,461 6,357
Administrative expenses (90,465) (15,605)
------- -------
Operating loss
from continuing operations (76,004) (9,248)
Interest receivable
and similar income 4,017 2,089
Interest payable and similar charges (839) (87)
------- -------
Loss on ordinary
activities before taxation (72,826) (7,246)
Tax on loss on ordinary activities (406) (259)
------- -------
Loss for the financial period (73,232) (7,505)
Minority interest 1,371 17
------- -------
Loss for the period
retained by equity shareholders (71,861) (7,488)
======= =======
Loss per share Pence Pence
Basic and diluted (14.5) (20.1)
======= =======
Unaudited Consolidated Balance Sheets
US Dollars(A)
Audited
31 March 31 December
2001 2000
$000 $000
--------- -----------
Fixed assets
Intangible assets 806,331 887,730
Tangible assets 36,063 26,597
Investments 1,870 1,814
------- -------
844,264 916,141
Current assets
Stocks 708 658
Debtors 99,911 94,890
Cash at bank and in hand 118,790 153,258
------- -------
219,409 248,806
Creditors: amounts
falling due within one year (92,200) (90,332)
------- -------
Net current assets 127,209 158,474
------- -------
Total assets less current liabilities 971,473 1,074,615
Creditors (including convertible
debt): amounts falling due
after more than one year (3,736) (3,937)
Minority interest (18,877) (21,131)
------- -------
Net assets 948,860 1,049,547
======= =========
Capital and reserves
Called up share capital 728 726
Shares to be issued 17,906 18,430
Share premium account 522,158 517,908
Merger reserve 865,113 864,590
Warrant reserve 30,970 32,518
Profit and loss account (488,015) (384,625)
-------- --------
Shareholders' funds
- equity and non-equity 948,860 1,049,547
======== =========
(A) Translated at the rate of(pound)1 = $1.4217
Unaudited Consolidated Balance Sheets
(pound) Sterling
Audited
31 March 31 December
2001 2000
(pound)000 (pound)000
----------- -----------
Fixed assets
Intangible assets 567,160 624,415
Tangible assets 25,366 18,708
Investments 1,315 1,276
-------- --------
593,841 644,399
Current assets
Stocks 498 463
Debtors 70,276 66,744
Cash at bank and in hand 83,555 107,798
-------- --------
154,329 175,005
Creditors: amounts
falling due within one year (64,852) (63,538)
-------- --------
Net current assets 89,477 111,467
-------- --------
Total assets less current liabilities 683,318 755,866
Creditors (including convertible
debt): amounts falling due
after more than one year (2,628) (2,769)
Minority interest (13,278) (14,863)
-------- --------
Net assets 667,412 738,234
======== ========
Capital and reserves
Called up share capital 512 511
Shares to be issued 12,595 12,963
Share premium account 367,277 364,288
Merger reserve 608,506 608,138
Warrant reserve 21,784 22,873
Profit and loss account (343,262) (270,539)
-------- --------
Shareholders' funds
- equity and non-equity 667,412 738,234
======== ========
Unaudited Consolidated Cash Flow Statements
Unaudited interim condensed consolidated cash flow statement
3 months to 3 months to
31 March 31 March
2001 2000
(pound)000 (pound)000
---------------- --------------
Net cash flow from
operating activities (18,757) (6,200)
Returns on investment
and servicing of finance 1,146 1,911
Taxation 15 (3)
Capital expenditure (8,522) (396)
Acquisitions - 654
--------------- --------------
Net cash (outflow)/inflow
before financing (26,118) (4,034)
Financing
Issue of ordinary shares 1,901 61
Capital element of
finance lease repayments (143) (129)
Decrease in debt (76) (1,099)
--------------- --------------
1,682 (1,167)
--------------- ---------------
Decrease in cash
in the period (24,436) (5,201)
================ ==============
Unaudited interim reconciliation of net cash flow to movement in
net funds/(debt)
3 months to 3 months to
31 March 31 March
2001 2000
(pound)000 (pound)000
-------------- ---------------
Decrease in cash in period (24,436) (5,201)
Cash flow from decrease
in debt and lease repayments 219 1,228
-------------- ---------------
Change in net debt
resulting from cash flows (24,217) (3,973)
Exchange differences (488) (349)
New finance leases and loans (2,228)
------------- ----------------
Movement in
net funds in period (24,705) (6,550)
Net funds at
beginning of period 83,582 95,577
------------- ----------------
Net funds at end of period 58,877 89,027
============= ================
Unaudited interim consolidated reconciliation
of movement in shareholders' funds
3 months to
31 March
2001
(pound)000
-------------------
Loss for the period (71,861)
Charge in relation to
share compensation expense 194
Exchange differences (1,056)
Issue of ordinary shares
(net of issue costs) 1,901
-------------------
Net addition to shareholders' funds (70,822)
Opening shareholders' funds 738,234
-------------------
Closing shareholders' funds 667,412
===================
Unaudited reconciliation of operating loss to net cash flow
from operating activities
3 months to 3 months to
31 March 31 March
2001 2000
(pound)000 (pound)000
-------------- -----------------
Operating loss (76,004) (9,248)
Amortisation of goodwill
and intangible assets 57,255 3,433
Depreciation of
tangible fixed assets 1,593 520
Charge in relation to
share related awards 194 249
Loss on disposal of
tangible fixed assets 56 _
Increase/(decrease) in stock (22) 179
Decrease/(increase) in debtors (1,404) (2,213)
Decrease/(increase) in creditors (425) 880
-------------- ---------------
Net cash outflow
from operating activities (18,757) (6,200)
============== ===============
Unaudited analysis of amounts netted on the cash flow statement
3 months to 3 months to
31 March 31 March
2001 2000
(pound)000 (pound)000
Returns on investment
and servicing of finance
Interest received 1,253 2,089
Interest paid on bank loans,
overdrafts and all other loans (107) (178)
-------------- --------------
Net cash flow returns on
investment and
servicing of finance 1,146 1,911
============= ==============
Capital expenditure
Purchase of
tangible fixed assets (8,482) (400)
Sale of
tangible fixed assets - 4
Purchase of own shares and
other financial investments (40) _
-------------- ---------------
Net cash flow
for capital expenditure (8,522) (396)
============== ================
Acquisitions
Purchase of
subsidiary undertakings - (16,175)
Expenses on acquisition
of subsidiary undertaking - (249)
Net cash at bank and in
hand acquired with subsidiary - 17,078
-------------- ----------------
Net cash flow
from acquisitions - 654
============== ================
Unaudited Segmental Information
All amounts are stated after elimination of intercompany balances
and transactions.
(a) An analysis of revenue from external customers by location of
customer for the period was as follows:
3 months to 3 months to
31 March 31 March
2001 2000
(pound)000 (pound)000
------------- ----------------
Europe, Middle East and Africa 12,828 4,968
Asia Pacific 5,800 2,815
North and South America 5,044 1,667
------------- ----------------
23,672 9,450
============= ================
(b) An analysis of revenue from external customers by origin of
sale for the period was as follows:
3 months to 3 months to
31 March 31 March
2001 2000
(pound)000 (pound)000
------------- ---------------
Europe, Middle East and Africa 12,483 5,188
Asia Pacific 5,581 2,687
North and South America 5,608 1,575
------------ ---------------
23,672 9,450
============ ===============
Unaudited Segmental Information (contd).
(c) An analysis of revenue from external customers by type of
revenue for the period was as follows:
3 months to 3 months to
31 March 31 March
2001 2000
(pound)000 (pound)000
-------------- --------------
Licences 12,862 5,163
Hardware products 1,024 790
Services
Systems integration 1,529 1,050
Service and support 3,685 787
Consultancy 2,392 1,013
Hosting 586 152
Other (third party products) 1,594 495
-------------- ----------------
23,672 9,450
============== ================
(d) An analysis of gross profit by type of revenue for the period
was as follows:
3 months to 3 months to
31 March 31 March
2001 2000
(pound)000 (pound)000
------------- --------------
Licences 12,391 5,140
Hardware products 520 391
Services
Systems integration 444 304
Service and support 2,034 217
Consultancy (376) 216
Hosting (991) 28
Other (third party products) 439 61
------------- ---------------
Total gross profit 14,461 6,357
Administrative expenses (90,465) (15,605)
------------- ---------------
Operating loss (76,004) (9,248)
Net interest receivable 3,178 2,002
------------- ---------------
Loss before taxation
and minority interest (72,826) (7,246)
============= ===============
Unaudited Administrative Expenses
An analysis of administrative expenses for the period was as follows:
3 months to 3 months to
31 March 31 March
2001 2000
(pound)000 (pound)000
-------------- ----------------
Research and development 5,406 2,372
Sales and marketing 21,036 7,045
General administrative expenses 6,768 2,755
Amortisation of goodwill
and intangible assets 57,255 3,433
------------- ----------------
Administrative expenses 90,465 15,605
============= ================
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