Centra Reports First Quarter 2002 Results.Business and Technology Editors LEXINGTON, Mass.--(BUSINESS WIRE)--April 11, 2002 Centra Software, Inc. (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 : CTRA CTRA Canadian Therapeutic Recreation Association CTRA College Terrace Residents' Association CTRA Canadian Telecommunications Resellers Alliance CTRA Committee To Restore America ), the world's leading provider of business software solutions for eLearning and collaboration, today announced results for the first quarter ended March 31, 2002. Revenue for the quarter ended March 31, 2002 was $7.5 million, compared to $9.1 million in the first quarter of 2001. As previously reported by the Company, the lower-than-expected revenue was primarily due to a shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. in North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. license sales. Several other factors also contributed to the decrease, including a difficult economic environment resulting in longer sales cycles, reduced productivity of the Company's sales force and the temporary diversion A turning aside or altering of the natural course or route of a thing. The term is chiefly applied to the unauthorized change or alteration of a water course to the prejudice of a lower riparian, or to the unauthorized use of funds. of resources and management attention associated with the Company's proposed merger with SmartForce. On a 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 basis, excluding compensation charge for issuance of stock options, amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and costs related to the merger, net loss for the first quarter of 2002 was $4.3 million, or $0.17 per share compared to $2.8 million, or $0.12 per share for the first quarter of 2001. The 2002 first quarter net loss on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis was $5.9 million, or $0.23 per share, which includes approximately $1.2 million, or $0.05 per share related to costs associated with the prospective merger with SmartForce. On April 2, 2002, the Company's planned acquisition by SmartForce was terminated by mutual consent of Centra and SmartForce. Software license revenue, which accounted for 51% of total revenue for the quarter, was $3.8 million. Services revenue for the first quarter, driven by demand for the Company's products delivered on a hosted or subscription basis (ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). ), increased to $3.7 million. Compared to the 2001 fourth quarter, services revenue increased 7% in the first quarter of 2002. "As we reported earlier, these results are not reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of what Centra can do," commented Leon Navickas, 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. . "To ensure future success, we have implemented several initiatives to strengthen the Company and put us back on a path to profitability. Specifically, these include a 10% workforce reduction, a decrease in operating costs operating costs npl → gastos mpl operacionales , and a focus on strengthening and diversifying our sales channels." "Centra is a great organization of passionate and committed people," added Navickas. "Together, we developed the most advanced technology and deliver the best products and services to a customer base of over 850 corporate accounts - equipping e·quip tr.v. e·quipped, e·quip·ping, e·quips 1. a. To supply with necessities such as tools or provisions. b. over 2 million end-users with our software. We intend to leverage our brand and market-leading position in eLearning and collaboration to gain a larger share of the opportunity by giving everyone across an extended enterprise the capabilities to communicate, collaborate, and learn over the Internet. Focusing on our core competency A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
The Company also announced that Alan May Alan Randy May (born January 14, 1965 in Barrhead, Alberta) is a retired Canadian ice hockey player. May began his NHL career when he was signed as a free agent by the Boston Bruins, although he would spend most of his time in the minors. , Vice President of Strategic Alliances, who conceived Centra's partner ecosystem and manages the Company's alliances, is taking on additional responsibilities to open new and expand existing channels of distribution. The Company expects to see increased revenue streams from these distribution channels by the end of this year. First Quarter Highlights - Centra Symposium(TM) became the first live eLearning application to earn certification according to Aviation Industry CBT Committee (AICC) guidelines. Through this process, the AICC independently confirmed that Centra's virtual classroom solution is interoperable with other eLearning technologies that are in the AICC format. Through AICC compliance, Centra currently is able to integrate with 11 of the leading enterprise portal and learning management providers and can rapidly integrate with new systems that support this key industry standard. - Centra announced the addition of 10 new partners to its industry alliances program, giving customers access to the most expansive ecosystem of eLearning solution providers, including a community of leading content, training, technology, and consulting partners. The expertise of these new partners further extends the capabilities and effectiveness of Centra's eLearning platform with best-of-breed learning management capabilities, consulting, technology, and custom content development services. - On April 7, 2002, Centra's Chairman and CEO, Leon Navickas, was recognized as a laureate of the Computerworld Honors Program and a recipient of the Computerworld Honors 21st Century Achievement Award. Mr. Navickas was honored for his vision and achievement in building a company and technology that stands at the forefront of the information technology revolution changing the way we live and work. As part of this recognition, a case study on Centra will be permanently placed in the Computerworld Honors Archive on Information Technology as part of the 2002 Collection. Balance Sheet Strength At March 31, 2002, the Company's cash and cash equivalents and short term investments totaled $45.4 million. Deferred revenue at the end of the second quarter was $8.5 million, a slight increase compared to $8.2 million in the 2001 fourth quarter. DSOs were 82 days, an increase of 3 days over the 2001 fourth quarter. Financial Outlook For the second quarter ending June 30, 2002, the Company expects to report revenue in the range of $8.0 to $8.3 million. The Company anticipates a pro forma net loss, excluding non-cash stock-based compensation expense, amortization of intangible assets and 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). costs, for the second quarter of 2002 to be in the range of $0.14 to $0.15 per share and on GAAP basis to be in the range of $0.17 to $0.20 per share. As a result of the lower-than-expected revenue, the Company has recently taken steps including reductions in the workforce to balance operating costs with demand. A one-time restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of approximately $500,000 to $750,000 will be taken in the second quarter. This restructuring is aimed at enabling the Company to achieve its business objectives to grow revenues and market share, reduce cash consumption, and become profitable. Additionally, the Company expects to have more than $35 million in cash and cash equivalents and short-term investments at the end of the year. The above targets represent the Company's current revenue and earnings goals as of the date of this release, and are based on current conditions. The Company does not undertake to update these targets in any way or for any reason. In conjunction with this release, Centra will host a conference call today at 5:30 p.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 . The call will be simultaneously Webcast over the Internet. To access the Webcast, go to the Company's Website at www.centra.com/investorrelations. About Centra Leading with an undisputed track record of helping millions of users to increase revenue and improve overall business performance, Centra provides Web collaboration solutions that enable the delivery of information in a variety of live and self-service formats, and add value through unmatched capabilities to capture interactions and content, personalize 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. and manage this information, and instantly re-use it across the enterprise. Today hundreds of global organizations across every industry and market sector choose Centra, including ExxonMobil, Cadbury Schweppes Cadbury Schweppes plc is a confectionery and beverage company with its headquarters in Berkeley Square, London, England, UK. Cadbury Schweppes is currently the only major international confectionery manufacturer to produce Fairtrade or organic products, which it sells through its , Citigroup, AT&T, Procter & Gamble, McKesson, Merck, Nationwide Insurance, Sysco, and Stanford University Stanford University, at Stanford, Calif.; coeducational; chartered 1885, opened 1891 as Leland Stanford Junior Univ. (still the legal name). The original campus was designed by Frederick Law Olmsted. David Starr Jordan was its first president. . Centra's products are bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. by a vital ecosystem of strategic partners, including PwC Consulting, Deloitte Consulting, EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. , KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen iLS, Microsoft, Siebel, Cisco, Oracle, and SmartForce. Headquartered in Boston's technology corridor, Centra has sales offices throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe and Asia. 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 With the exception of the historical information contained in this release, the matters described herein contain 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. , and our comments in our Webcast/teleconference today may contain, including but not limited to, statements concerning management's expectations regarding future results of operations, statements that involve risk and uncertainties that may individually or mutually impact the matters herein, and cause actual results, events and performance to differ materially. These risk factors include, but are not limited to, technological difficulties, the results of future research, lack of product demand and market acceptance for current and future products, the effect of economic conditions, the impact of competitive products and pricing, the Company's ability to manage and integrate the operation of the business of MindLever.com, Inc., acquired on April 30, 2001, the Company's ability to manage its operations and achieved growth with a reduced workforce and/or other factors outside the control of the Company, which are detailed from time to time in the Company's SEC reports, which are available at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof or to reflect the occurrence of unanticipated events.
CENTRA SOFTWARE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31, March 31,
2001 2002
------------ ------------
Assets
Current assets:
Cash and cash equivalents $25,424 $ 22,144
Short term investments 22,759 23,271
Restricted cash 100 100
Accounts receivable, net 9,654 6,854
Prepaid expenses
and other current assets 1,250 1,864
Total current assets 59,187 54,233
Property and equipment, net 4,182 4,145
Restricted cash 549 551
Other assets 104 104
Goodwill and other
intangible assets, net 6,955 6,862
Total assets $ 70,977 $ 65,895
Liabilities and stockholders' equity
Current liabilities:
Current maturities of long term debt $ 1,563 $ 1,544
Accounts payable 1,463 2,313
Accrued expenses 5,808 5,434
Deferred revenue 8,165 8,468
Total current liabilities 16,999 17,759
Long term debt,
net of current maturities 2,631 2,255
Total stockholders' equity 51,347 45,881
Total liabilities
and stockholders' equity $ 70,977 $ 65,895
CENTRA SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2001 and 2002 (Amounts in
thousands, except per share data)
(Unaudited)
Three months
ended March, 31
2001 2002
Revenues
License $ 7,219 $ 3,833
Service 1,853 3,677
Total revenues 9,072 7,510
Cost of Revenues
License 147 89
Service 1,565 1,712
Total cost of revenues 1,712 1,801
Gross profit 7,360 5,709
Operating Expenses
Sales and marketing 6,336 5,147
Product development 2,635 3,123
General and administrative 1,917 1,884
Compensation charge for issuance
of stock options 223 218
Amortization of intangible assets - 175
Merger transaction costs - 1,187
Total operating expenses 11,111 11,734
Operating loss (3,751) (6,025)
Other income, net 725 169
Loss on investment (772) -
Net loss $ (3,798) $(5,856)
Basic and diluted net loss per share $ (0.16) $ (0.23)
Weighted average shares outstanding:
Basic and diluted 23,771 25,174
Pro forma net loss (1) $ (2,803) $(4,276)
Pro forma net loss per share $ (0.12) $ (0.17)
Pro forma basic and diluted weighted
average common
shares outstanding 23,771 25,174
(1) The pro forma net loss excludes non-cash compensation charge for
issuance of stock options, loss on investment, amortization of
intangible assets and acquisition costs.
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