Braun Consulting Reports Third Quarter Results.Business Editors CHICAGO--(BUSINESS WIRE)--Nov. 4, 2003 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 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 :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 third quarter ended September September: see month. 30, 2003. Revenue prior to project expense reimbursements for the third quarter of 2003 was $7.5 million, an increase of 2.3 percent from the $7.3 million recorded in the second quarter of 2003, and a decrease of 14.2 percent from revenue of $8.8 million for the same period a year ago. Total revenue for the third quarter of 2003, 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. expenses, was $8.4 million, an increase of 2.2 percent from the $8.2 million recorded in the second quarter of 2003, and a decrease of 12.7 percent from total revenue of $9.6 million for the same period a year ago. The net loss for the third quarter of 2003 was $2.8 million, or $0.17 per share, compared to a net loss of $3.2 million or $0.15 per share for the same period a year ago. 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, excluding certain non-cash items of $2.0 million, for the third quarter of 2003 was $857 thousand or $0.05 per share, compared with a net loss for the same period a year ago, of $3.2 million or $0.15 per share. Non-cash items for the third quarter of 2003 consisted of changes in the valuation allowance for all deferred tax assets related to net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. incurred during the third quarter. "Sustained client relationships, several important new client wins and extensions, a solutions portfolio with strong market relevance, and the early stages of an economic recovery contributed to our improved results during the quarter," commented Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Braun, Chairman 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, Inc. "We continued to see positive trending on several fronts, including: a sequential One after the other in some consecutive order such as by name or number. increase in quarterly revenue; an increase in utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be ; an improvement in rates on new engagements; and, we were able to restructure some internal costs and lease obligations that will lead to future savings. This sequential revenue growth combined with additional cost improvements continues to drive us towards our stated goals of cash flow neutrality and profitability." "Bringing together our vertical experience with our deep business intelligence and analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. expertise, we have continued to steadily evolve Evolve may refer to several terms:
A practice of medicine that focuses on the whole patient, and addresses the social, emotional, and spiritual needs of a patient as well as their physical treatment. Mentioned in: Aromatherapy, Stress Reduction, Traditional Chinese Medicine , integrated manner to support our clients' customer initiatives and ultimately, enable them to drive value from their customer and information assets," continued Braun. "Our ability to deliver tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. , impactful business results has Braun positioned to own client relationships at the most senior levels of an organization, and has protected us from being negatively impacted by commoditized offerings. We believe our emphasis on customer value management has staying power, even in a difficult marketplace." Revenue before project expense reimbursements for the nine months ended September 30, 2003, was $22.3 million, down 41.1 percent from revenue of $37.9 million for the same period a year ago. Total revenue for the nine months ended September 30, 2003, was $24.9 million, a decrease of 40.3 percent from total revenue of $41.7 million for the same period a year ago. The net loss for the nine months ended September 30, 2002, was $10.4 million, or $0.60 per share, compared to a net loss of $6.4 million or $0.31 per share for the same period a year ago. Pro forma net loss, excluding certain non-cash items of $4.9 million, for the nine months ended September 30, 2003, was $5.5 million or $0.32 per share, compared with pro forma net loss, excluding special charges of $3.6 million, of $4.3 million or $0.21 per share, for the same period a year ago. Non-cash items for the first nine months of 2003 consisted of changes in the valuation allowance for all deferred tax assets related to net operating losses. Special charges for the nine months ended September 30, 2002, 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 and expenses associated with the consolidation of office space. "The business environment for our services steadily improved during the quarter, a trend which has continued into the fourth quarter. Looking ahead, we are encouraged by what we see," commented Braun. "Despite the traditional 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. seasonal pressures, for the fourth quarter, we are expecting sequential revenue growth of up to 10% over the third quarter results, prior to expense reimbursements." 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 financial results for the third 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 888.497.4618. 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, and 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, 2002, 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 5 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:
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,
----------------------- -----------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Revenue:
Revenue before
expense
reimbursements $7,517 $8,766 $22,349 $37,936
Expense
reimbursements 897 873 2,575 3,813
----------- ----------- ----------- -----------
Total revenue 8,414 9,639 24,924 41,749
Costs and expenses:
Project personnel and
expenses 5,840 7,987 19,008 28,874
Reimbursable expenses 897 873 2,575 3,813
Selling and marketing
expenses 642 1,268 2,452 3,372
General and
administrative
expenses 3,895 4,834 11,332 16,627
Stock compensation 1 2 2 28
----------- ----------- ----------- -----------
Total costs and
expenses 11,275 14,964 35,369 52,714
----------- ----------- ----------- -----------
Operating loss (2,861) (5,325) (10,445) (10,965)
Interest income 47 192 216 606
----------- ----------- ----------- -----------
Loss before provision
(benefit) for income
taxes (2,814) (5,133) (10,229) (10,359)
Provision (benefit)
for income taxes 12 (1,971) 155 (3,922)
----------- ----------- ----------- -----------
Net loss ($2,826) ($3,162) ($10,384) ($6,437)
=========== =========== =========== ===========
Loss per share:
Basic ($0.17) ($0.15) ($0.60) ($0.31)
Diluted ($0.17) ($0.15) ($0.60) ($0.31)
Reconciliation of net loss to pro forma net loss,
excluding certain non-cash items and special charges:
Change in valuation
allowance of deferred
tax assets 1,969 - 4,929 -
Special charges - - - 3,624
----------- ----------- ----------- -----------
Pro forma net loss
before tax effect of
special charges (857) (3,162) (5,455) (2,813)
Tax effect of special
charges - - - (1,450)
----------- ----------- ----------- -----------
Pro forma net loss,
excluding certain
non-cash items and
special charges ($857) ($3,162) ($5,455) ($4,263)
=========== =========== =========== ===========
Pro forma loss per share, excluding certain
non-cash items and special charges:
Basic ($0.05) ($0.15) ($0.32) ($0.21)
Diluted ($0.05) ($0.15) ($0.32) ($0.21)
Weighted average shares:
Basic 17,082,522 20,451,802 17,230,132 20,623,095
Diluted 17,082,522 20,451,802 17,230,132 20,623,095
Notes:
The Company provides pro forma earnings results (which exclude costs
associated with employee severances and include a normalized tax rate)
as a complement to results provided in accordance with Generally
Accepted Accounting Principles. To supplement its financial statements
presented in accordance with GAAP, Braun Consulting uses non-GAAP
measures of pro forma results of operations. These non-GAAP results
are provided to enhance the user's overall understanding of the
Company's current financial performance and its prospects for the
future. The Company believes the non-GAAP results provide useful
information to both management and investors by excluding certain
expenses that it believes are not indicative of its core operating
results. The non-GAAP measures are included to provide investors and
management with an alternative method for assessing operating results
in a manner that is focused on the performance of ongoing operations
and to provide a more consistent basis for comparison between
quarters. Further, these non-GAAP results are one of the primary
indicators management uses for planning and forecasting in future
periods. In addition, since the Company has historically reported
non-GAAP results to the investment community, it believes the
inclusion of non-GAAP numbers provides consistency in its financial
reporting. The presentation of this additional information should not
be considered in isolation or as a substitute for results prepared in
accordance with accounting principles generally accepted in the United
States of America.
Potentially dilutive securities of 375,559 and 13,445, respectively,
were excluded from the diluted loss per share calculation for the
quarters ended September 30, 2003 and 2002, and 229,676 and 285,568
for the nine months ended September 30, 2003 and 2002, respectively,
as their effects would have been anti-dilutive to the loss incurred by
the Company.
BRAUN CONSULTING, INC.
BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
September 30, December 31,
ASSETS 2003 2002
------ -------------- ---------------
Current assets:
Cash and cash equivalents $5,098 $1,803
Restricted cash 3,500 3,500
Marketable securities 8,575 26,800
Accounts receivable (net of allowance:
$280 in 2003; $290 in 2002) 6,976 6,504
Prepaid expenses and other current
assets 983 714
--------------- ---------------
Total current assets 25,132 39,321
Equipment, furniture and software - net 6,460 8,015
Deferred tax asset (net of allowance:
$20,695 in 2003; $15,766 in 2002) - -
--------------- ---------------
Total assets $31,592 $47,336
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $635 $900
Accrued compensation 640 331
Other accrued liabilities 640 861
Accrued restructuring 1,121 2,571
Unearned revenue 371 1,837
--------------- ---------------
Total current liabilities 3,407 6,500
Deferred rent 1,177 1,134
Accrued restructuring 1,728 2,800
--------------- ---------------
Total liabilities 6,312 10,434
Stockholders' equity:
Preferred stock, $0.001 par value at
September 30, 2003 and December 31,
2002; authorized 10,000,000 shares
at September 30, 2003 and December
31, 2002; no shares have been issued
at September 30, 2003 and December
31, 2002 - -
Common stock, $0.001 par value at
September 30, 2003 and December 31,
2002; authorized 50,000,000 shares at
September 30, 2003 and December 31,
2002; issued and outstanding
17,082,522 shares at September 30,
2003 and 18,279,765 shares at
December 31, 2002 17 18
Additional paid-in capital 102,831 104,070
Unearned deferred compensation - (2)
Accumulated deficit (77,568) (67,184)
--------------- ---------------
Total stockholders' equity 25,280 36,902
--------------- ---------------
Total liabilities and
stockholders' equity $31,592 $47,336
=============== ===============
BRAUN CONSULTING, INC.
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
-------------------
2003 2002
-------- --------
Cash flows from operating activities:
Net loss $(10,384) $ (6,437)
Adjustments to reconcile net loss to net cash
flows from operating activities:
Compensation expense related to stock options 2 28
Income tax benefit from disqualifying stock
dispositions 72 12
Loss on disposal of assets - 561
Deferred income taxes - (3,998)
Provision for losses on accounts receivable 100 175
Depreciation and amortization 1,650 2,181
Non-cash restructuring costs 452 -
Changes in assets and liabilities:
Accounts receivable (572) 5,077
Income taxes receivable - 15
Prepaid expenses and other current assets (269) (276)
Accounts payable (265) (604)
Accrued liabilities 88 (221)
Deferred rent 43 -
Accrued restructuring (2,974) (797)
Unearned revenue (1,466) (696)
--------- ---------
Net cash flows from operating activities (13,523) (4,980)
Cash flows from investing activities:
Purchases of marketable securities (1,625) (11,500)
Sales of marketable securities 19,850 15,350
Purchases of equipment, furniture and software (95) (388)
--------- ---------
Net cash flows from investing activities 18,130 3,462
Cash flows from financing activities:
Exercise of stock options 7 719
Employee stock purchase plan 27 225
Treasury stock purchase and retirement (1,346) (984)
--------- ---------
Net cash flows from financing activities (1,312) (40)
--------- ---------
Net decrease in cash and cash equivalents 3,295 (1,558)
--------- ---------
Cash and cash equivalents at beginning of period 1,803 2,673
--------- ---------
Cash and cash equivalents at end of period $ 5,098 $ 1,115
========= =========
Supplemental disclosure of cash flow information:
Interest paid $ - $ -
========= =========
Income taxes paid $ 83 $ 61
========= =========
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