Chordiant Software Reports Financial Results for the First Quarter Ended March 31, 2003.Business Editors/High-Tech Writers CUPERTINO, Calif.--(BUSINESS WIRE)--April 22, 2003 Chordiant Software, Inc. (Nasdaq:CHRD CHRD Color High Resolution Display ), the provider of the Chordiant Real Time Customer System for global business-to-consumer companies, today announced the financial results for the first quarter ended March 31, 2003. Total revenues for the first quarter of 2003 were $13.8 million, compared to $17.1 million for the fourth quarter of 2002 and $22.8 million reported for the first quarter of 2002. First quarter license revenues were $4.1 million, compared to $6.8 million in the fourth quarter of 2002 and $11.1 million reported for the first quarter of 2002. Service revenues for the first quarter were $9.7 million, compared to $10.2 million in the fourth quarter of 2002 and $11.7 million reported for the first quarter of 2002. Chordiant had $34 million in cash and cash equivalents, restricted cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments at March 31, 2003. On a U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). (Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ) basis, Chordiant's first quarter 2003 net loss was $6.9 million, or 12 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared to a net loss of $8.2 million, or 15 cents per share for the first quarter of 2002. First quarter 2003 non-GAAP net loss, which excludes amortization of deferred stock-based compensation and amortization of acquired 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. , was $4.2 million, or a non-GAAP net loss of 7 cents per share, compared to a non-GAAP net loss, which excludes amortization of deferred stock-based compensation, amortization of acquired intangible assets and one-time 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, of $3.3 million, or 6 cents per share for the first quarter of 2002. Chordiant believes that its non-GAAP results provide useful information to investors because they reveal results excluding non-cash and cash expenses that Chordiant believes are not indicative of its on-going operations. The non-GAAP information is provided as a complement to results provided 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 GAAP, and should not be considered superior to or as a substitute for GAAP measures. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Stephen Kelly Stephen Michael Kelly (born September 6, 1983 in Dublin, Ireland) is a professional footballer who plays at full back (usually right full back) for Birmingham City. He is a full international for the Republic of Ireland. , president and chief executive officer, "We are effective in winning selection decisions at prospective customers, but our challenge is turning those software selections into predictable revenue streams in a timely manner. Because IT spending often represents more than half of all capital expenditures, CIOs and CFOs are required to deliver more comprehensive information and reviews to the executive committee on IT spending and selections. In the first quarter, there were four major transactions, where Chordiant had been selected as the supplier of choice, which were deferred. During the first quarter we completed transactions with customers including 21st Century Insurance, United Parcel Service United Parcel Service, Inc. (NYSE: UPS), commonly referred to as UPS, is the world's largest package delivery company, delivering more than 15 million packages[1] a day to 6.1 million customers in over 200 countries and territories around the world. , Aviva Group Company, T-Mobile International, Mobilkom Austria Mobilkom Austria is a major Austrian mobile network operator. It has been operating commercially since 1994 and in testing since 1992. The mobilkom austria group also owns:
Kelly continued, "We have aligned our worldwide field organization given the business outlook and our revised revenue outlook. We are reducing expenses while maintaining our investments in products, technology and customer service." "As part of our restructuring, Allen Al·len , Edgar 1892-1943. American anatomist who is noted for his studies of hormones and for the discovery (1923) of estrogen. Swann, president of international, has been named president of worldwide sales. Robert Mullen, senior vice president based in Boston, will assume responsibilities for the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. sales organization reporting to Allen," Kelly announced. In addition, Chordiant has announced the reduction of its workforce by approximately 10 percent and expects to end the second quarter with approximately 280 employees worldwide. Second Quarter 2003 Financial Outlook "We anticipate generating revenues of $15 to $16 million for the second quarter 2003," said Steve Vogel, senior vice president and chief financial officer. "We are reducing our second quarter expenses by approximately $3 million and expect to have a 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 less than $1.0 million in the second quarter," he added. Teleconference Web Cast Chordiant management has scheduled a teleconference for 2:00 p.m. (PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT ), 5:00 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 ) and 22:00 (London) today to discuss financial results and business events for the first quarter of 2003, as well as the current outlook for the second quarter of 2003. This teleconference will be Web-cast live for all investors. Industry analysts and media are invited to attend the conference on a listen-only basis. For more information, including this press release and Chordiant's Current Report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. , and non-GAAP financial measures that may be discussed on the Web-cast as well as the most directly comparable GAAP financial measures and a reconciliation of the difference between the GAAP and non-GAAP financial measures contained in the Form 8-K, and any other material financial and other statistical information contained in the Web-cast, please visit the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Chordiant's Web site at http://www.chordiant.com. From this site, you can listen to the teleconference, assuming that your computer system is configured con·fig·ure tr.v. con·fig·ured, con·fig·ur·ing, con·fig·ures To design, arrange, set up, or shape with a view to specific applications or uses: properly. A phone replay will also be available for seven days after the live call at 303-590-3000, code 534057. About Chordiant Software, Inc. Chordiant serves businesses that have millions of consumer relationships where it is critical to balance the cost of servicing with customer value. Chordiant offers the Chordiant Real-Time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. Customer System, delivering transactional customer management solutions for Global 1000 B2C (Business to Consumer) Refers to a business communicating with or selling to an individual rather than a company. See B2B. enterprises. The Chordiant Real-Time Customer System consists of Chordiant Solutions and Chordiant Services that integrate with existing IT infrastructure and leverage current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. . Chordiant Solutions combine straight-through service processing with your business processes for multi-channel applications in marketing, the contact center, and retail channels, including self-service. The solutions provide end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. , process-driven applications, encompassing a single view of the customer, delivered through a role-based desktop. Chordiant Services enable rapid and successful implementations by reducing risk, increasing return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). and lowering total cost of ownership. Headquartered in Cupertino, California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , Chordiant maintains offices in Boston, Chicago, Manchester NH, New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , London, Paris, Amsterdam, Frankfurt, Munich and Madrid. Visit us on the Web at www.chordiant.com. 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. This news release includes "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. " that are subject to risks, uncertainties and other factors that could cause actual results or outcomes to differ materially from those contemplated by the forward-looking statements. Forward-looking statements in this release are generally identified by words, such as "believes," "anticipates," "plans," "expects," "will," "would," "guidance," "projects" and similar expressions which are intended to identify forward-looking statements. There are a number of important factors that could cause the results of Chordiant to differ materially from those indicated by these forward-looking statements, including, among others, potential difficulties in the assimilation Assimilation The absorption of stock by the public from a new issue. Notes: Underwriters hope to sell all of a new issue to the public. See also: Issuer, Underwriting Assimilation of operations, strategies, technologies, personnel and products of acquired companies and technologies, the impact of perceived or actual weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. of economic conditions on customers' and prospective
customers' spending on Chordiant software and services; quarterly
fluctuations in Chordiant's revenues or other operating results;
failure by Chordiant to meet financial expectations of analysts and
investors, including failure resulting from significant reductions in
demand from earlier anticipated levels; risks related to market
acceptance of Chordiant's products; customization and deployment
delays or errors associated with Chordiant products; impact of long
sales and implementation cycles for certain Chordiant products; reliance
by Chordiant on a limited number of customers for a majority of its
revenues; Chordiant's need to retain and enhance business
relationships with systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. and other parties;
Chordiant's use in its products of third-party software; activities
by Chordiant and others regarding protection of intellectual property;
and competitors' release of competitive products and other actions.
Further information on potential factors that could affect the financial
results of Chordiant are included in risks detailed from time to time in
Chordiant's Securities and Exchange Commission filings, including
without limitation Chordiant's Annual Report on Form 10-K Form 10-KA report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Quarterly Reports filed on Form 10-Q Form 10-Q See 10-Q. . These filings are available on a Web site maintained by the Securities and Exchange Commission at http://www.sec.gov. Chordiant does not undertake an obligation to update forward-looking or other statements in this release. Chordiant and the Chordiant logo are registered trademarks of Chordiant Software, Inc. All other trademarks and registered trademarks are the properties of their respective owners.
Chordiant Software, Inc.
Unaudited Condensed Consolidated Income Statements
(in thousands, except per-share amounts)
Three months ended
March 31,
2003 2002
-------- --------
Revenues:
License $ 4,138 $11,085
Service 9,677 11,723
-------- --------
Total revenues 13,815 22,808
Cost of revenues:
License 261 566
Service 5,926 9,554
-------- --------
Total cost of revenues 6,187 10,120
Gross profit 7,628 12,688
-------- --------
Operating expenses:
Sales and marketing 6,016 9,114
Research and development 4,070 4,935
General and administrative 1,560 2,190
Amortization of deferred stock-based compensation 1,839 516
Amortization of acquired intangible assets 890 825
Restructuring costs -- 3,558
-------- --------
Total operating expenses 14,375 21,138
-------- --------
Loss from operations (6,747) (8,450)
Interest expense (47) (4)
Other income, net (152) 245
-------- --------
Net loss $(6,946) $(8,209)
======== ========
Net loss per share:
Basic and diluted $ (0.12) $ (0.15)
======== ========
Weighted average shares 57,219 53,700
======== ========
Supplemental information(1):
Non-GAAP financial measures and reconciliation
Net loss $(6,946) $(8,209)
Less: Amortization of deferred stock-based
compensation 1,839 516
Less: Amortization of acquired intangible assets 890 825
Less: Restructuring costs -- 3,558
-------- --------
Net loss excluding restructuring costs and certain
non-cash items $(4,217) $(3,310)
======== ========
Basic and diluted net loss per share excluding
restructuring costs and certain non-cash items $ (0.07) $ (0.06)
======== ========
Weighted average shares 57,219 53,700
======== ========
(1) The accompanying supplemental financial information is presented
for informational purposes only and should not be considered as
substitute for the historical financial information presented in
accordance with generally accepted accounting principles in the
United States.
Chordiant Software, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
March 31, December 31,
2003 2002
---------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 30,232 $ 30,731
Short-term investments and restricted cash 3,739 9,245
Accounts receivable, net 14,270 15,343
Other current assets 3,566 3,162
---------- ------------
Total current assets 51,807 58,481
Property and equipment, net 4,299 5,069
Goodwill, net 24,874 24,874
Intangible assets, net 4,085 4,975
Other assets 2,883 3,288
---------- ------------
$ 87,948 $ 96,687
========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Borrowings $ 2,358 $ 1,114
Accounts payable 5,124 5,936
Accrued expenses 10,833 14,007
Deferred revenue 13,522 15,990
---------- ------------
Total current liabilities 31,837 37,047
Deferred revenue, non-current 7,129 8,532
Borrowings, non-current 1,594 136
Other liabilities 140 161
---------- ------------
40,700 45,876
---------- ------------
Stockholders' Equity 47,248 50,811
$ 87,948 $ 96,687
========== ============
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