Braun Consulting Reports Sequential Revenue Growth in the First Quarter.Business Editors CHICAGO--(BUSINESS WIRE)--May 8, 2002 Braun Braun , Eva 1912-1945. German lover and later wife of Adolf Hitler. They began living together in 1936, but the liaison was kept secret, and she was never seen in public with him. They were married hours before their double suicide on April 30, 1945. Consulting (Nasdaq: BRNC BRNC Britannia Royal Naval College (Dartmouth, England) ), a professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. firm delivering customer-focused business solutions, today reported financial results for the first quarter ended March 31, 2002. First quarter highlights include: -- increasing revenue from both historic and new clients, -- reducing costs - notably, EBITDA, excluding non-cash items and special items, increased from a loss of $1.4 million in the fourth quarter to a gain of $686 thousand in the first quarter, -- achieving profitable results, prior to non-cash items and special charges, -- improving operating metrics, as utilization improved from 56% in the fourth quarter to 63% in the first quarter, and -- improving DSO's, including reimbursements, as DSO's improved from 97 days in the fourth quarter to 78 days in the first quarter. Revenue prior to project expense reimbursements for the first quarter of 2002 was $15.9 million, an increase of 4.0 percent from the $15.3 million recorded in the fourth quarter of 2001, and a decrease of 26.4 percent from revenue of $21.6 million for the same period a year ago. Total revenue for the first quarter of 2002, including reimbursable re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. project expenses, was $17.5 million, an increase of 3.3 percent from the $16.9 million recorded in the fourth quarter of 2001, and a decrease of 26.0 percent from total revenue of $23.6 million for the same period a year ago. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). (FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). ) Topic D-103, effective January January: see month. 1, 2002, Braun Consulting includes reimbursable project expenses as a component of total revenue. 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 income, excluding non-cash items and special charges of $609 thousand, was $47 thousand for the quarter or $0.00 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. , excluding non-cash items, of $116 thousand or $0.01 per diluted share for the first quarter of 2001. Non-cash items included goodwill amortization prior to January 1, 2002, and stock compensation. Special charges included severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs associated with the previously announced management changes. On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, the net loss for the first quarter was $326 thousand, or $0.02 per share, compared to a net loss of $2.3 million or $0.11 per share for the first quarter of 2001. "We feel very good about our performance in the first quarter," commented Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Braun, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Braun Consulting. "Even in an economy where corporate and IT spending continues to be soft, our value proposition and commitment to delivery excellence drove a sequential One after the other in some consecutive order such as by name or number. increase in revenue. In addition, we continued to make solid progress on our strategic priorities, including: -- increasing revenue from both historic and new clients, -- reducing costs - notably, EBITDA, excluding non-cash items and special items, increased from a loss of $1.4 million in the fourth quarter to a gain of $686 thousand in the first quarter, -- achieving profitable results, prior to non-cash items and special charges, -- improving operating metrics, as utilization improved from 56% in the fourth quarter to 63% in the first quarter, and -- improving DSO's, including reimbursements, as DSO's improved from 97 days in the fourth quarter to 78 days in the first quarter. Our ability to expand our existing relationships and compete effectively in winning new business against the larger consulting firms Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , despite the marketplace conditions, clearly indicates that Braun Consulting is executing on its strategy and playing to its key strengths." "Moving forward, a key driver of our ability to create enhanced business value and 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). for clients will be a continued investment in our solution-oriented, account driven approach to the marketplace. This focused approach not only provides Braun with a competitive advantage against the undifferentiated undifferentiated /un·dif·fer·en·ti·at·ed/ (un-dif?er-en´she-at-ed) anaplastic. un·dif·fer·en·ti·at·ed adj. Having no special structure or function; primitive; embryonic. strategy offerings and commoditized technology solutions of some of our more established competitors, but serves to strengthen both Braun's market positioning and operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. 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>. an economic recovery," commented Braun. "Our guidance will continue to be conservative. For the second quarter, we expect revenue prior to project expense reimbursements to be approximately $15 million, with pro forma cash earnings per share to be breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations to slightly positive, before estimated special charges of $1.5 million to $2.5 million. These charges are a continuation of our previously announced year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 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). , and are primarily due to severance costs associated with a reduction in workforce and office space consolidation." Braun Consulting will host a conference call for investors today at 5:00 PM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to further discuss the earnings results for the first quarter and future outlook. Steve Braun, President and Chief Executive Officer, and Tom Schuler Tom Schuler is a retired American professional road bicycle racer and founder of Team Sports Inc., a sports management company that focuses on cycling, mountain biking, triathlon, and roller blading. , Senior Vice President of Corporate Development and Investor Relations Investor relations The process by which the corporation communicates with its investors. , will lead the call. To participate, please dial (800) 240-4186. The conference call will also be broadcast live on 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 . To hear the Webcast, please go to www.braunconsult.com, then click on Investor Relations. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 Statements in this press release that are not strictly historical are "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " statements that involve risks or uncertainties, many of which are not under the control of the Company. The risks and uncertainties could cause actual results to differ materially from those described in the forward-looking statement 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. . Such risks and uncertainties include, but are not limited to, the nature of the market and demand for our service offerings, competition, overall general business and economic conditions, the nature of our clients and project engagements, attracting and retaining highly skilled employees, the ability of our clients to pay for our services, timely payment by clients for services rendered, and our ability to effectively manage growth and client relationships, as well as other risks identified in the Company's Annual Report 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 December: see month. 31, 2001, and other filings with the Securities and Exchange Commission. The Company is under no duty to update any of the forward-looking statements after the date of this report or to conform these statements to actual results or changes in its expectations. About Braun Consulting Braun Consulting, Inc. (Nasdaq: BRNC) is a professional services firm delivering customer-focused business solutions to Fortune 1000 and middle market companies. Braun Consulting combines cutting-edge business intelligence and CRM/eCRM technologies with business strategy to help clients build customer loyalty. By creating the necessary connection between technology and strategy, Braun builds effective business solutions that help clients drive business performance and cultivate cul·ti·vate tr.v. cul·ti·vat·ed, cul·ti·vat·ing, cul·ti·vates 1. a. To improve and prepare (land), as by plowing or fertilizing, for raising crops; till. b. 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. relationships with their most valuable customers. Founded in 1993, Chicago-based Braun Consulting has 7 offices throughout the U.S. Braun Consulting maintains strategic alliances with top developers of enterprise applications, including BEA Systems BEA Systems, Inc. (NASDAQ: BEAS) is one of the major companies developing enterprise infrastructure software. BEA makes middleware, products that help software run on top of databases. , Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. , Oracle, SAP, Siebel For the tech company, see . Siebel, originally Flugzeugbau Halle, was a German aircraft manufacturer in Halle an der Saale. Siebel aircraft included:
BRAUN CONSULTING, INC.
STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Three Months Ended
---------------- -----------------
March 31, March 31,
---------------- -----------------
2002 2001
---------------- -----------------
Revenues:
Revenues before reimbursements $15,914 $21,632
Reimbursements 1,540 1,962
---------------- -----------------
Total revenues 17,454 23,594
Costs and expenses:
Project personnel and expenses 10,486 13,929
Reimbursable expenses 1,540 1,962
Selling and marketing expenses 814 1,743
General and administrative
expenses 4,664 6,614
Goodwill amortization - 2,231
Stock compensation 18 170
Special charges 591 -
---------------- -----------------
Total costs and expenses 18,113 26,649
---------------- -----------------
Operating loss (659) (3,055)
Interest income 204 706
Interest expense - 15
---------------- -----------------
Loss before benefit for
income taxes (455) (2,364)
Benefit for income taxes (129) (79)
---------------- -----------------
Net loss ($326) ($2,285)
================ =================
Loss per share:
Basic ($0.02) ($0.11)
Diluted ($0.02) ($0.11)
Reconciliation of net loss to net income,
excluding certain non-cash items and
special charges:
Net loss ($326) ($2,285)
Goodwill amortization - 2,231
Stock compensation 18 170
Special charges 591 -
---------------- -----------------
Net income before tax effect
of special charges 283 116
Tax effect of special charges (236) -
---------------- -----------------
Net income, excluding certain non-cash
items and special charges $47 $116
================ =================
Earnings per share, excluding certain
non-cash items and special charges:
Basic $0.00 $0.01
Diluted $0.00 $0.01
Weighted average shares:
Basic 20,619,396 20,327,232
Diluted 20,950,308 21,323,353
----------------------------------------------------------------------
Notes -- Excluded non-cash items consist of goodwill amortization and
stock compensation.
-- Excluded special charges include the costsassociated with
employee severances.
BRAUN CONSULTING, INC.
BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
March 31, December 31,
ASSETS 2002 2001
------ ---- ----
Current Assets:
Cash and cash equivalents $2,613 $2,673
Marketable securities 36,100 38,150
Accounts receivable (net of allowance:
$250 in 2002; $500 in 2001) 15,276 15,090
Accounts receivable - employees 2 5
Income taxes receivable 140 140
Deferred tax asset 173 252
Prepaid expenses and other
current assets 463 625
------ ------
Total current assets 54,767 56,935
Equipment, furniture and software - net 10,981 11,527
Deferred tax asset (net of allowance:
$115 in 2002; $97 in 2001) 8,063 7,829
------ ------
Total assets $73,811 $76,291
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,498 $1,753
Accrued compensation 699 841
Other accrued liabilities 1,554 1,540
Accrued restructuring 1,147 2,223
Unearned revenue 475 1,638
------ ------
Total current liabilities 5,373 7,995
Accrued restructuring 1,239 1,342
------ ------
Total liabilities 6,612 9,337
Stockholders' equity:
Preferred stock, $0.001 par value at March 31,
2002 and December 31, 2001; authorized
10,000,000 shares at March 31, 2002 and
December 31, 2001; no shares have been
issued at March 31, 2002 and December 31,
2001 - -
Common stock, $0.001 par value at March 31,
2002 and December 31, 2001; authorized
50,000,000 shares at March 31, 2002 and
December 31, 2001; issued and outstanding
20,722,337 shares at March 31, 2002 and
20,516,727 shares at December 31, 2001 21 21
Additional paid-in capital 106,566 106,040
Unearned deferred compensation (16) (61)
Accumulated deficit (39,372) (39,046)
------- -------
Total stockholders' equity 67,199 66,954
------- -------
Total liabilities and
stockholders' equity $73,811 $76,291
======== ========
BRAUN CONSULTING, INC.
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
--------------------------
2002 2001
---- ----
Cash flows from operating activities:
Net loss $ (326) $ (2,285)
Adjustments to reconcile net loss to net
cash flows from operating activities:
Compensation expense related to
stock options 18 170
Income tax benefit from disqualifying
stock dispositions 12 214
Deferred income taxes (155) (294)
Provision for losses on accounts
receivable 16 702
Depreciation and amortization 736 3,048
Changes in assets and liabilities:
Accounts receivable (199) (3,112)
Income taxes receivable - (6)
Prepaid expenses and other
current assets 162 (169)
Accounts payable (255) (416)
Accrued liabilities (128) 93
Accrued restructuring (1,179) -
Unearned revenue (1,163) 222
------------ ------------
Net cash flows from operating
activities (2,461) (1,833)
Cash flows from investing activities:
Purchases of marketable securities (1,500) (1,800)
Sales of marketable securities 3,550 3,350
Purchases of equipment, furniture
and software (190) (2,492)
------------ ------------
Net cash flows from investing
activities 1,860 (942)
Cash flows from financing activities:
Borrowings - 3,500
Repayments of debt - (1,450)
Exercise of stock options 476 136
Employee stock purchase plan 176 -
Treasury stock purchase and retirement (111) -
------------ ------------
Net cash flows from financing
activities 541 2,186
------------ ------------
Net decrease in cash and cash equivalents (60) (589)
------------ ------------
Cash and cash equivalents at
beginning of period 2,673 2,723
------------ ------------
Cash and cash equivalents at
end of period $ 2,613 $ 2,134
============ ============
Supplemental disclosure of cash
flow information:
Interest paid $ - $ 15
============ ============
Income taxes paid $ 10 $ 7
============ ============
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