CORRECTING and REPLACING ePresence Announces Agreement to Sell Its Services Business and Plan of Liquidation.Business Editors/High-Tech Writers CORRECTION...by ePresence (ePresence, Westboro, MA) A well-established consulting company specializing in systems integration and secure identity management that was acquired in 2004 by Unisys. Its history dates back to 1983 when it was founded as Banyan Systems, Inc., named after the Banyan tree. WESTBORO Westboro can refer to: Places
In BW5222 issued Oct. 23, 2003: Sixth graph, fifth sentence of release should read: ePresence intends to distribute to its shareholders the proceeds of any sales of Switchboard common stock 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. any remaining shares of Switchboard not sold (sted ePresence intends to distribute to its shareholders the proceeds of any sales of Switchboard common stock and/or any remaining shares of Switchboard in the offering). The corrected release reads: EPRESENCE ANNOUNCES AGREEMENT TO SELL ITS SERVICES BUSINESS AND PLAN OF LIQUIDATION The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy Company Also Reports Third-Quarter 2003 Financial Results ePresence, Inc. (Nasdaq:EPRE EPRE ePresence, Inc. (stock symbol) EPRE Ente Provincial Regulador de la Electricidad ) today announced that it has signed a definitive agreement to sell the assets of its services business to Unisys Corporation (company) Unisys Corporation - The company formed in 1984-5 when Burroughs Corporation merged with Sperry Corporation. This was when the phrase "dinosaurs mating" was coined. (NYSE NYSE See: New York Stock Exchange :UIS (graphics, programming) UIS - A VMS graphics programming interface package for VAXstations. ). ePresence also announced that its Board of Directors has approved a plan of liquidation of the Company. ePresence will file a proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. seeking shareholder approval on these matters. Sale of Services Business Assets ePresence has entered into an agreement to sell its security and identity management (SIM) services business assets to Unisys Corporation for approximately $11.5 million in cash. These assets include ePresence's customer relationships and industry partnerships, and a majority of ePresence's employees are expected to become employees of Unisys. The transaction is subject to the approval of ePresence shareholders and other closing conditions, and is expected to be completed as early as December December: see month. 2003. "The sale of our services business to Unisys is positive news for our clients, employees and shareholders," stated Bill Ferry, chairman and chief executive officer of ePresence. "Identity management is a growing field and Unisys is a strong player, offering a broad portfolio of security solutions and expertise across a number of industries. For our employees, we believe Unisys is an ideal cultural fit and provides an opportunity for them to advance their careers in security and identity management." Plan of Liquidation ePresence's Board of Directors has unanimously agreed to recommend to shareholders that the Company be liquidated DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v. . The Company and SG Cowen Cowen is the name of: Places:
Net amount that could be realized by selling the assets of a firm after paying the debt. of ePresence. After considering all options, the Board of Directors determined that the sale of the services business assets to Unisys followed by the liquidation of the remaining portion of ePresence's assets was in the best interest of its shareholders. As of September September: see month. 30, 2003, the Company's services business had cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has totaling $44.2 million, exclusive of its holdings of the Company's majority-owned subsidiary majority-owned subsidiary A firm in which more than 50% of outstanding voting stock is owned by the parent company. , Switchboard Incorporated (Nasdaq:SWBD SWBD Switchboard SWBD SRTM (Shuttle Radar Topography Mission) Water Body Dataset ). Liabilities for the Company's services business on September 30, 2003 totaled $6.5 million. In addition to the cash and marketable securities noted above, the liquidation proceeds would include approximately $11.5 million in cash from the proposed sale of the services business assets to Unisys. ePresence also currently holds approximately 9.8 million shares of Switchboard common stock and currently plans to sell, subject to shareholder approval, all of these shares in an underwritten public offering in order to facilitate an orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. distribution of the shares. A registration statement for this offering is expected to be filed by Switchboard today with the SEC. Alternatively, ePresence may sell a portion of its Switchboard shares in such offering, either prior to or following its meeting of shareholders. ePresence intends to distribute to its shareholders the proceeds of any sales of Switchboard common stock and/or any remaining shares of Switchboard not sold. Any distribution to shareholders will be net of any tax liability resulting from such sale or distribution that is not offset by ePresence's net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and tax credit carry-forwards. Based upon the $7.42 market price of Switchboard as of the market's closing yesterday, this tax liability of ePresence would be approximately $1.0 million, and any increase in the price of Switchboard at the time of such sale or distribution would be taxable at approximately a 34% marginal rate. In addition to converting its remaining assets to cash and satisfying the liabilities currently on its balance sheet, the Company anticipates using cash in the next several months for a number of items, including but not limited to: (i) ongoing operating costs operating costs npl → gastos mpl operacionales , including transaction fees, of at least $3.3 million, (ii) employee 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 and related costs of at least $6.9 million and (iii) other costs, including costs to terminate a vendor relationship, insurance costs, costs to terminate leases and wind down costs of at least $6.7 million. In addition, ePresence expects to initially withhold with·hold v. with·held , with·hold·ing, with·holds v.tr. 1. To keep in check; restrain. 2. To refrain from giving, granting, or permitting. See Synonyms at keep. 3. a portion of its cash for any unknown liabilities that may arise. As a result, excluding the value of the Company's Switchboard holdings, the Company currently estimates that it will be able to distribute to its shareholders, in one or more cash distributions over time, approximately $1.10 - $1.40 per share in a liquidation. The amount that ePresence will be able to distribute to its shareholders with respect to its shares of Switchboard common stock will depend, in the case of shares that it sells, on the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). after taxes and sales commissions that it realizes from such sales and, in the case of any shares not sold, on the after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. value of such shares at the time they are distributed to ePresence shareholders. If the shareholders approve the plan of liquidation, the Company intends to dissolve A Web site design technique borrowed from the film and video industry in which the transition between two Web pages is represented visually by one page fading into another. Also known as a "soft cut," the result is achieved in the HTML coding of the images to gradual pre-determined by filing articles of dissolution Act or process of dissolving; termination; winding up. In this sense it is frequently used in the phrase dissolution of a partnership. The dissolution of a contract is its Rescission by the parties themselves or by a court that nullifies its binding force and reinstates each , liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the its remaining assets, satisfy its remaining obligations and make one or more distributions to its shareholders of cash or assets available for distribution. The Company currently anticipates that the articles of dissolution would be filed within approximately 10 days following shareholder approval of the plan of liquidation. Upon filing of the articles of dissolution, the Company expects to delist delist To drop a security from trading on an organized exchange. Delisting may occur for a number of reasons including failure to meet an exchange's standards or placement of a new listing on another exchange. Compare list. its shares from NASDAQ and close its stock transfer books, which would generally prohibit pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. any further transfers of record of its shares following dissolution. The Company anticipates making an initial distribution to shareholders within approximately 20 days following the filing of the articles of dissolution. The precise timing of these events, however, cannot be predicted. "After a thorough review of all potential strategic alternatives with SG Cowen, our Board of Directors determined this was the most appropriate action for ePresence to take," Ferry said. "The Company's size was limiting its ability to fully 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>. emerging opportunities in the security and identity management market. We thoroughly considered various initiatives to grow the business, including the acquisition of other businesses and technologies. Ultimately, after carefully evaluating all strategic alternatives, we determined that the sale of ePresence's services business and the subsequent liquidation of the Company was in the best interest of our shareholders." Third-Quarter Results Consolidated revenues for the third quarter of 2003 were $8.2 million, with $4.1 million generated by ePresence's services business and $4.1 million generated by Switchboard. This compares with consolidated revenues of $10.7 million in the third quarter of 2002, with $7.4 million generated by ePresence's services business and $3.4 million generated by Switchboard. For the third quarter of 2003, the Company's consolidated net loss was $(1.3) million, or $(0.06) per share. This compares with a consolidated net loss of $(3.3) million, or $(0.15) per share, for the third quarter of 2002. As of September 30, 2003, ePresence had a balance of $97.1 million in cash and marketable securities on a consolidated basis, of which $44.2 million was held by ePresence and $52.9 million was held by Switchboard. This compares with a consolidated balance of $96.5 million on June June: see month. 30, 2003. Information regarding Switchboard's third-quarter financial results and fourth-quarter 2003 guidance is available in a separate news release issued on October October: see month. 23, 2003, which can be accessed in the "Investors" section of Switchboard's Web site, www.switchboard.com. Conference Call Information In conjunction with this release, ePresence will host its quarterly conference call for investors at 9:00 a.m. ET today. Investors interested in listening to the call should either log onto the "Investors" section of ePresence's Web site, located at www.epresence.com, at least 15 minutes prior to the broadcast or dial 877-388-6672 and use confirmation code 3500042. For those unable to listen to the live conference call, there will be a continuous playback Playback could mean:
Important Additional Information Will Be Filed With The SEC ePresence plans to file with the SEC and mail to its shareholders a Proxy Statement in connection with the proposed sale of its services business to Unisys, sale of Switchboard shares and the proposed liquidation and dissolution. The Proxy Statement will contain important information about ePresence and the matters submitted for shareholder approval. Investors and shareholders are urged to read the Proxy Statement carefully when it is available. Investors and shareholders will be able to obtain free copies of the Proxy Statement under Schedule 14A and other documents filed with the SEC by ePresence, Inc. through the Web site maintained by the SEC at www.sec.gov. In addition, investors and shareholders will be able to obtain free copies of the Proxy Statement from ePresence by contacting the corporate secretary of ePresence at 508-898-1000. ePresence and its directors and executive officers may be deemed to be participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of proxies in respect of the proposed sale of the service business assets, sale of Switchboard shares and liquidation and dissolution. Information regarding ePresence's directors and executive officers is contained in ePresence's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2002, Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2003 and Proxy Statement dated April 21, 2003 in connection with ePresence's 2003 Annual Meeting of Shareholders, which are filed with the SEC. As of September 30, 2003, ePresence's directors and executive officers beneficially owned approximately 7,297,731 shares (assuming the exercise of all vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) options), or approximately 27.44 percent, of ePresence's common stock. A more complete description will be available in the Proxy Statement. A registration statement relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Switchboard shares included in the proposed offering has not yet been filed with the Securities and Exchange Commission. The Company expects Switchboard to file its registration statement with the Securities and Exchange Commission today. These securities may not be sold nor may any offers to buy be accepted prior to the time the registration statement is filed and becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state. Note Concerning Non-GAAP Financial Measures Certain of the information set forth herein, including off-balance sheet contractual obligations, may be considered non-GAAP financial measures. ePresence believes this information is useful to investors because it provides a basis for measuring the Company's available resources. The Company's management uses these non-GAAP financial measures along with the most directly comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measures in evaluating the Company's capital resources. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies. About ePresence ePresence, Inc. (Nasdaq:EPRE) is a market leader in delivering Security and Identity Management (SIM) solutions that help companies reduce cost, enhance security, improve customer service and increase revenues. Our highly focused solutions leverage technologies such as enterprise directories, metadirectories, single sign-on An identification system that lets users log into multiple Web sites on the Internet with one username and password. Single sign-on systems are also used within an enterprise, enabling users to access all authorized resources in the local network using the same username and password. and provisioning systems, and have enabled numerous Fortune 1000-class companies to efficiently and securely provide personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. access to digital resources, thus maximizing the 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). of their IT-based initiatives. ePresence is headquartered in Westboro, Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. and can be reached
at 800-222-6926 or online at www.epresence.com.Note to Editors: ePresence and the ePresence logo are servicemarks of ePresence, Inc. in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . All other servicemarks, trademarks or logos are marks and logos of their respective owners. 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. The Company noted that each of the above statements about the Company's business and financial outlook, plan to liquidate and estimated timing and proceeds thereof, operations and performance, and any other statements using the terms "expect," "anticipate," "target," "plan," "believe," "will," and other similar terms and any other statements in this press release which are not historical facts are forward-looking statements, within the meaning of 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. These statements are based on current expectations and could differ materially from actual results or events based on various important factors, including, without limitation, any failure to satisfy the closing conditions to the sale of the Company's services business to Unisys; the market value of the Switchboard common stock; failure of Switchboard to file and have declared effective by the Securities and Exchange Commission a registration statement relating to the proposed offering of shares of Switchboard common stock; costs and liabilities in excess of, or lower than, those currently anticipated by the Company; and any delays or difficulties in implementing the plan of liquidation. For further information on these and other risks, uncertainties, and factors, please review the Company's Form 10-K for 2002 filed with the SEC on March 28, 2003, as well as the Company's subsequent filings with the SEC. The forward-looking statements made in this press release relate only to events as of the date on which the statements are made and the Company undertakes no obligation to update these forward-looking statements.
ePresence, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
----------------------------------------
2003 2002 2003 2002
----------------------------------------
Revenues:
Services $4,072 $7,360 $12,557 $26,605
Switchboard 4,108 3,374 11,423 8,362
----------------------------------------
Total revenues 8,180 10,734 23,980 34,967
Gross profit
Services 1,329 2,611 3,693 9,128
Switchboard 3,446 2,423 9,240 5,381
----------------------------------------
Total gross profit 4,775 5,034 12,933 14,509
% 58% 47% 54% 41%
Operating expenses:
Sales and marketing 2,145 3,680 7,271 11,980
Product development 1,180 1,378 3,415 4,200
General and administrative 2,731 4,511 9,123 12,086
Restructuring - - (35) 4,000
----------------------------------------
Total operating expenses 6,056 9,569 19,774 32,266
----------------------------------------
Loss from operations (1,281) (4,535) (6,841) (17,757)
Other (loss)/income, net (35) 1,269 522 4,913
----------------------------------------
Loss before income taxes (1,316) (3,266) (6,319) (12,844)
Provision for income taxes 16 - 38 95
----------------------------------------
Net loss ($1,332) ($3,266) ($6,357) ($12,939)
========================================
Basic and diluted net loss per
common share ($0.06) ($0.15) ($0.29) ($0.58)
========================================
Basic and diluted weighted
average number of common
shares 22,258 22,224 22,238 22,315
========================================
Condensed Consolidated Balance
Sheets
(in thousands)
September December
30, 31,
2003 2002
--------------------
ASSETS
Cash and marketable
securities $97,110 $105,270
Accounts receivable, net 5,294 4,872
Other current assets 2,092 1,875
Property, equipment and
other assets 2,872 4,402
--------------------
Total assets $107,368 $116,419
====================
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities $9,294 $13,596
Deferred revenue 1,410 1,608
Other liabilities - 1,124
Minority interests in
consolidated subsidiaries 26,147 24,522
Stockholders' equity 70,517 75,569
--------------------
Total liabilities and
stockholders' equity $107,368 $116,419
====================
ePresence, Inc.
Services Business Statements of Operations
(in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
----------------------------------------
2003 2002 2003 2002
----------------------------------------
(a) (a) (a) (a)
Revenues $4,072 $7,360 $12,557 $26,605
Gross profit 1,329 2,611 3,693 9,128
% 33% 35% 29% 34%
Operating expenses:
Sales and marketing 1,232 2,553 4,831 8,281
General and administrative 1,988 2,905 6,554 9,050
Restructuring - - - 4,000
----------------------------------------
Total operating expenses 3,220 5,458 11,385 21,331
----------------------------------------
Loss from operations (1,891) (2,847) (7,692) (12,203)
Other income, net 166 300 650 1,349
----------------------------------------
Loss before income taxes (1,725) (2,547) (7,042) (10,854)
Provision for income taxes - - 10 95
----------------------------------------
Net loss ($1,725) ($2,547) ($7,052) ($10,949)
========================================
Basic and diluted net loss per
common share ($0.08) ($0.11) ($0.32) ($0.49)
========================================
Basic and diluted weighted
average number of common
shares
22,258 22,224 22,238 22,315
========================================
Services Business Condensed
Balance Sheets
(in thousands)
September December
30, 31,
2003 2002
--------------------
(a) (a)
ASSETS
Cash and marketable
securities $44,188 $51,407
Accounts receivable, net 2,751 3,314
Other current assets 1,318 1,385
Property, equipment and
other assets 1,865 2,525
--------------------
Total assets $50,122 $58,631
====================
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities $6,647 $8,494
Deferred revenue 878 1,133
Stockholders' equity 42,597 49,004
--------------------
Total liabilities and
stockholders' equity $50,122 $58,631
====================
(a) ePresence Services Business presentation, excludes Switchboard
Incorporated.
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