Braun Consulting Reports Third Quarter Results; Company Announces Share Repurchase Program.Business Editors CHICAGO Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , Ill.--(BUSINESS WIRE)--Nov. 6, 2001 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 leading 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 third quarter ended September September: see month. 30, 2001. Revenue for the third quarter 2001 was $17.8 million, a decrease of 17 percent from revenue of $21.4 million for the same period a year ago. Net loss, excluding non-cash items of $2.4 million and special charges of $14.3 million, was $953 thousand for the quarter or $0.05 loss per share, compared with net income of $2.2 million or $0.10 earnings 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 for the third quarter of 2000. Revenue for the nine months ended September 30, 2001 was $61.4 million, up 5 percent from a year ago, while net loss, excluding non-cash items and special charges, was $383 thousand, or $0.02 loss per share compared to net income of $5.3 million, or $0.26 per diluted share for the same period in 2000. "Our results in the quarter were related to the continued weakness in the market, which was further amplified by the events of September 11. As a result, the stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. trends we were beginning to see in the second quarter did not materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. to the degree we anticipated in the third quarter. Due to continued weakness in the market, clients continued to monitor spending closely which resulted in projects starting in smaller scopes and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. the delay of start dates," said 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. "During the quarter, we took the appropriate steps to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. our cost structure with the realities of the marketplace. By taking costs out of the model to drive increased efficiency in the business, we are well-positioned to respond to a range of potential economic scenarios, while ensuring we have a secure foundation for 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. , profitable growth." On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, the net loss for the third quarter was $15.9 million, or a loss of $0.78 per share, which includes the effect of the special charges of $14.3 million, compared to a net loss of $1.2 million or a loss of $0.06 per share for the third quarter of 2000. Special charges included costs associated with the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of impaired assets Impaired Asset An asset with a market value that is worth less than its book value. Notes: If the sum of all estimated future cash flows is less than the carrying value of the asset, then the asset would be considered impaired and would have to be written down to its fair , primarily goodwill from a prior acquisition. The remaining charges are associated with workforce reductions and office space consolidation. Non-cash items included goodwill amortization and stock compensation. The net loss for the nine months ended September 30, 2001 was $22.0 million, or a $1.08 loss per share compared to a loss of $5.5 million, or a $0.29 loss per share for the same period a year ago. "In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the external factors impacting business performance, we remain confident in the long-term market opportunity for several reasons," commented Braun. "From an operational standpoint The Standpoint is a newspaper published in the British Virgin Islands. It was originally published under the name Pennysaver, largely as a shopping-coupon promotional newspaper, but since emerged as one of the most influential sources of journalism in the , we've we've Contraction of we have. we've have taken the appropriate measures to enable us to run the business efficiently. From a business standpoint, we are very encouraged by some trends we observed during the third quarter - namely around our pipeline, resume expansion, and new business committed during the quarter, including historical clients initiating some long-deferred projects." Other third quarter highlights include: -- Continued to deepen project resume with the addition of 12 important new clients during the quarter. Witnessed continued demand for strategic services and business intelligence solutions, and growing interest in supply chain management and web architecture platform capabilities. -- Increased presence and capability in the healthcare/pharmaceutical sector due to the ability to reference work with current clients and strong focus on expanding project resume. Healthcare/pharmaceuticals continues to increase as a percentage of total business with new engagements at Pfizer, DePuy Orthopedics, Lilly and others. -- Completed the global deployment of Oracle's 11i eBusiness platform for a Fortune 50 manufacturing company. Braun Consulting successfully facilitated the complete migration of the client's global operations to the 11i platform - one of the first and most comprehensive implementations since the release of Oracle 11i. -- Proven success in driving unique solutions that leverage BEA's WebLogic eBusiness platform for clients such as Biogen, Qwest and Heritage Environmental resulted in an enhanced relationship with BEA Systems. Awarded Three Star Partner status, BEA's highest level of partnership. In addition, on November November: see month. 2, 2001, the Company's Board of Directors approved a stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program for up to one million shares of the Company's publicly traded common shares. "The expansion of our client base, the number of project opportunities and the evolution of our offerings provides a positive long-term outlook for Braun Consulting. The uncertainty of the current economic environment and 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. seasonality for IT services, however, requires us to take a near-term near-term adj. Of, for, or involving a short period of time in the near future. conservative approach to our guidance. We expect fourth quarter revenue to be $15.0 million to $16.0 million, with cash loss per share to be $0.06 to $0.08," concluded Braun. Braun Consulting will host a conference call to discuss the results on Wednesday Wednesday: see week. , November 7, 2001 at 10:30 a.m. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). 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. The dial-in number for the conference call is (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, competition, general economic conditions, the number of projects undertaken and completed during a period, attracting and retaining highly skilled employees, timely payment by clients for services rendered, as well as other risks identified in the company's prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. dated April 6, 2000, 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 leading professional services firm delivering customer-focused business solutions to Fortune 1000 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 relationships with their most valuable customers. Founded in 1993, Chicago-based Braun Consulting has 9 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 sap, fluid in plants consisting of water and dissolved substances. Cell sap refers to this fluid present in the large vacuole, or cell cavity, that occupies most of the central portion of mature plant cells. , Siebel For the tech company, see . Siebel, originally Flugzeugbau Halle, was a German aircraft manufacturer in Halle an der Saale. Siebel aircraft included:
Hyperion (hīpēr`ēən), in astronomy, one of the named moons, or natural satellites, of Saturn. , Documentum Documentum is an enterprise content management platform, now delivered by EMC Corporation, as well as the name of the software company that originally developed the technology. EMC acquired Documentum for $1.7 billion in December, 2003. , and others. Additional information about Braun Consulting is available at www.braunconsult.com
BRAUN CONSULTING, INC.
STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- -------------------
2001 2000 2001 2000
-------------------- -------------------
Revenue $17,756 $21,385 $61,433 $58,458
Costs and expenses:
Project personnel
and expenses 11,846 11,320 38,889 31,382
Selling and marketing
expenses 1,551 2,117 5,132 5,353
General and administrative
expenses 5,906 5,744 19,213 15,092
Goodwill amortization 2,231 2,344 6,693 7,095
Stock compensation 201 978 426 3,713
Special charges 14,308 - 17,639 -
-------- -------- -------- --------
Total costs and
expenses 36,043 22,503 87,992 62,635
-------- -------- -------- --------
Operating loss (18,287) (1,118) (26,559) (4,177)
Interest income 378 974 1,584 1,931
Interest expense 4 24 52 69
-------- -------- -------- --------
Loss before provision
(benefit) for income taxes (17,913) (168) (25,027) (2,315)
Provision (benefit) for
income taxes (1,996) 996 (2,994) 3,182
-------- -------- -------- --------
Net loss ($15,917) ($1,164) ($22,033) ($5,497)
======== ======== ======== ========
Loss per share:
Basic ($0.78) ($0.06) ($1.08) ($0.29)
Diluted ($0.78) ($0.06) ($1.08) ($0.29)
Reconciliation of net loss
to net income (loss), excluding
certain non cash items
and special charges:
Net loss ($15,917) ($1,164) ($22,033) ($5,497)
Goodwill amortization 2,231 2,344 6,693 7,095
Stock compensation 201 978 426 3,713
Special charges 14,308 - 17,639 -
-------- -------- -------- --------
Net income before tax
effect of special charges 823 2,158 2,725 5,311
Tax effect of special charges 1,776 - 3,108 -
-------- -------- -------- --------
Net income (loss), excluding
certain non-cash items
and special charges ($953) $2,158 ($383) $5,311
======== ======== ======== ========
Earnings (loss) per share,
excluding certain non-cash
items and special charges:
Basic ($0.05) $0.11 ($0.02) $0.28
Diluted ($0.05) $0.10 ($0.02) $0.26
Weighted average shares:
Basic 20,569,300 20,157,107 20,444,294 19,093,236
Diluted 21,331,382 21,638,575 21,405,039 20,656,147
----------------------------------------------------------------------
Notes: Excluded non cash items consist of goodwill amortization and
stock compensation. Excluded special charges include the costs
associated with closing several offices, employee severances and
the impairment of goodwill and other assets.
BRAUN CONSULTING, INC.
BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
September 30, December 31,
ASSETS 2001 2000
------ ---- ----
Current Assets:
Cash and cash equivalents $2,035 $2,723
Marketable securities 35,000 45,550
Accounts receivable
(net of allowance:
$700 in 2001; $400 in 2000) 20,592 16,805
Accounts receivable - employees 96 819
Income taxes receivable 615 942
Deferred tax asset 6,047 2,988
Prepaid expenses and other
current assets 1,185 1,711
-------- --------
Total current assets 65,570 71,538
Equipment, furniture and software
- net 12,556 11,164
Intangibles (net of accumulated
amortization: $17,194 in 2001;
$10,501 in 2000) 0 16,561
-------- --------
Total assets $78,126 $99,263
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $2,037 $3,668
Accrued offering expenses - 129
Accrued compensation 1,277 1,671
Other accrued liabilities 3,783 1,571
Unearned revenue 764 1,393
-------- --------
Total current liabilities 7,861 8,432
Deferred income taxes 76 304
Stockholders' equity:
Preferred stock, $0.001 par value
at September 30, 2001 and
December 31, 2000; authorized
10,000,000 shares at
September 30, 2001 and
December 31, 2000; no shares
have been issued at
September 30, 2001 and
December 31, 2000 - -
Common stock, $0.001 par value
at September 30, 2001 and
December 31, 2000; authorized
50,000,000 shares at
September 30, 2001 and
December 31, 2000; issued and
outstanding 20,628,619 shares
at September 30, 2001,
20,235,006 shares at
December 31, 2000 21 20
Additional paid-in capital 106,293 106,165
Unearned deferred compensation (89) (1,834)
Accumulated deficit (36,036) (13,824)
-------- --------
Total stockholders' equity 70,189 90,527
-------- --------
Total liabilities and
stockholders' equity $78,126 $99,263
======== ========
BRAUN CONSULTING, INC.
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
------------------------------
2001 2000
---- ----
Cash flows from
operating activities:
Net loss ($22,033) ($5,497)
Adjustments to reconcile
net loss to net cash flows
from operating activities:
Compensation expense related
to stock options 426 3,713
Income tax benefit from
disqualifying stock dispositions 276 1,749
Loss on disposal of assets 2,451 -
Loss on impairments 11,603 -
Deferred income taxes (3,287) 439
Provision for losses on
accounts receivable 2,559 -
Depreciation and amortization 7,667 8,372
Changes in assets and liabilities:
Accounts receivable (5,623) (10,991)
Income taxes receivable 327 609
Income taxes payable - 100
Prepaid expenses and other
current assets 526 (863)
Accounts payable (1,631) 1,186
Accrued liabilities 1,689 (370)
Unearned revenue (629) 267
-------- --------
Net cash flows from
operating activities (5,679) (1,286)
Cash flows from investing activities:
Purchases of marketable securities (3,800) (89,384)
Sales of marketable securities 14,350 43,236
Purchases of equipment, furniture
and software (6,552) (5,793)
Payments for acquisitions - (261)
-------- --------
Net cash flows from investing
activities 3,998 (52,202)
Cash flows from financing activities:
Borrowings 6,000 5,375
Repayments of debt (6,000) (5,929)
Exercise of stock options 651 1,737
Proceeds from issuance of
common stock 592 -
Treasury share purchase (379) -
Proceeds from secondary
public offering 129 47,916
Distributions paid to stockholders - (22)
-------- --------
Net cash flows from financing
activities 993 49,077
Net decrease in cash and
cash equivalents (688) (4,411)
-------- --------
Cash and cash equivalents at
beginning of period 2,723 5,947
Cash and cash equivalents at
end of period $2,035 $1,536
======== ========
Supplemental disclosure of
cash flow information:
Interest Paid $52 $69
======== ========
Income taxes paid $66 $284
======== ========
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