Click2learn Announces First Quarter 2003 Results; Revenue and Earnings Exceed Expectations; Positive Cash Flow Increases Platform Revenue up 21%; Backlog Grows to $12 Million.Business Editors BELLEVUE Bellevue (bĕl`vy  ).1 City (1990 pop. 30,982), Sarpy co., E Nebr., a suburb of Omaha, on the Missouri River; inc. 1855. , Wash.--(BUSINESS WIRE)--April 24, 2003 Click2learn (Nasdaq:CLKS) today announced its results for the quarter ended March 31, 2003. For the first quarter of 2003, Click2learn reported revenues of $8.0 million, up 9% from $7.3 million in the first quarter of 2002. Revenue growth was primarily the result of the continued positive market reaction to the company's award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" Aspen aspen, in botany aspen: see willow. Aspen, city, United States Aspen (ăs`pən), city (1990 pop. 5,049), alt. 7,850 ft (2,390 m), seat of Pitkin co., S central Colo. Enterprise Productivity Suite(TM), which fueled a revenue increase of 21% in platform revenue over the first quarter of 2002. "We finished the second half of 2002 strongly and continued that momentum through the first quarter of 2003 with combined new business bookings over the last three quarters of approximately $30 million," said Kevin KEVIN Keepers of the Eternal Vigilance of the Islamic Nation (fictional, from White Teeth by Zadie Smith) Oakes Oakes rancher, remembered for his untrustworthy court testimony. [Australian Hist.: Brewer Dictionary, 771] See : Perjury , Click2learn 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. . "During the first quarter we booked 18 Aspen platform solutions at an average deal size in excess of $400,000 and ended the quarter with a backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of more than $12 million. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , we continued to have positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , generating approximately $500,000 of positive cash flow in the quarter, while at the same time increasing our deferred revenues and reducing our days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). . In a difficult business environment I am extremely pleased that we continue to improve our execution around these and other important metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. ." Net loss for the first quarter was $855,000 or ($0.03) per share as compared to a net loss of $5.7 million or ($0.23) per share for the same period 2002. The results were better than the company's guidance of ($0.04) to ($0.05) per share. The first quarter of 2003 marked the release of the latest version of the Aspen Suite, version 2.1. Aspen has already been recognized as the industry's most comprehensive platform offering, uniquely integrating a Learning Management System (LMS (Learning Management System) An information system that administers instructor-led and e-learning courses and keeps track of student progress. Used internally by large enterprises for their employees, an LMS can be used to monitor the effectiveness of the ), a Learning Content Management System (LCMS LCMS Lutheran Church--Missouri Synod LCMS Learning Content Management System (Docent, Inc.) LCMS Living Conditions Monitoring Survey LCMS Louisiana Center for Manufacturing Sciences LCMS Lindero Canyon Middle School ) and a Virtual Classroom (VC) in a single, robust architecture. The latest version added many new features and functions, as well as adding several foreign languages to the product. With the release of Aspen 2.1 individual users can now seamlessly choose from eight different languages through the user interface. "We continue to expand Aspen within our current customer base, which now numbers nearly 400 platform customers," Oakes added. "This customer base represents a significant upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside opportunity, and a clear advantage for us in the market, as we move from departmental to enterprise-wide engagements and introduce additional components and language versions for the Aspen suite." In the first quarter of 2003, many new and current customers purchased Aspen including Allfirst Bank, BAE Systems BAE Systems British manufacturer of aircraft, missiles, avionics, naval vessels, and other aerospace and defense products. BAE Systems was formed (1999) from the merger of British Aerospace (BAe) with Marconi Electronic Systems. , Blue Cross Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. , Burlington Burlington, town, Canada Burlington, town (1991 pop. 129,575), SE Ont., Canada, on Lake Ontario. First settled (1798) by Mohawk Loyalist Joseph Brandt, Burlington's economy was built on the shipment of wheat, lumber, and quarried rock by waterway. Northern Santa Fe Santa Fe, city, Argentina Santa Fe, city (1991 pop. 341,000), capital of Santa Fe prov., NE Argentina, a river port near the Paraná, with which it is connected by canal. , Fidelity Investments Fidelity Investments is a group of privately held companies in the financial services industry. It is made up by two independent but closely cooperating companies, Fidelity Management and Research Corporation (FMR Co. , 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. , New Horizons, Rollins Orkin, Schwan's, Symantec, University of Michigan (body, education) University of Michigan - A large cosmopolitan university in the Midwest USA. Over 50000 students are enrolled at the University of Michigan's three campuses. The students come from 50 states and over 100 foreign countries. and Vodafone, among others. Accenture Yesterday Click2learn announced that Accenture has licensed its Aspen Learning Management System (LMS) -- a major component of the Aspen Enterprise Productivity Suite(TM) -- for use as part of Accenture's web-based outsourced learning offerings. The Aspen LMS will provide the scheduling, tracking, resource management and other administrative elements that will form a component of Accenture's outsourced cross-industry learning solutions for Global 2000 and government clients. "When it comes to improving performance through learning, Accenture is considered one of the top organizations in the world. We believe that their use of our technology validates our leadership position," said Kevin Oakes. "One of the most powerful ways we're able to help customers solve business problems is by building relationships with industry leaders such as Accenture. We are delighted that Accenture has chosen to base part of its outsourced learning offerings on Aspen." Financial Guidance Click2learn's guidance for the second quarter of 2003 is a range of $7.7 - $8.2 million for revenue, and a loss of between $0.04 - $0.05 per share, while maintaining positive cash flow from operations. "We believe there continues to be a large market for products such as Aspen that show a real and immediate return-on-investment," said John Atherly, CFO See Chief Financial Officer. . "We're also encouraged by the opportunities being generated by our expanded relationship with Accenture and with our growing backlog. Despite these positive trends, we recognize that the macro economic and geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. environments remain unpredictable; therefore, we feel our guidance ranges are realistic at this time." Investor Conference Call The live audio of the conference call will be accessible to the public via Webcast at www.click2learn.com/investor, or via phone at 888/368-4278 or at 706/679-3154. A replay of the conference call will be available via archived Webcast at the same URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. and via phone through May 31, 2003 at 800/642-1687 or 706/645-9291, ID number 9590990. About Click2learn, Inc. Click2learn (Nasdaq:CLKS) is the recognized leader in enterprise productivity solutions for Global 2000 organizations and government agencies seeking to improve business performance and workforce productivity. Using Click2learn's Aspen Enterprise Productivity Suite(TM), many of the world's best-known corporations improve sales force readiness, achieve and demonstrate regulatory compliance, improve speed and quality of customer service, and educate customers and partners, while at the same time realizing significant cost savings. Click2learn's clients include such industry leaders as Accenture, American Airlines American Airlines Major U.S. airline. American was created through a merger of several smaller U.S. airlines and incorporated in 1934. It continued to buy the routes of other airlines, becoming an international carrier in the 1970s; its routes include South America, the , Anheuser Busch, AT&T, Blue Cross/Blue Shield, Cendant, Fujitsu, Microsoft, New Horizons, Pfizer, the National Guard, The Thomson Corporation, Symantec and Vodafone. Based in Bellevue, Wash., with offices throughout the U.S., Click2learn (www.click2learn.com, 800/448-6543) also is represented in Europe, Australia, Japan and India. This announcement contains 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 involve risks and uncertainties, including information contained in this document where statements are preceded by, followed by or include the words "believes," "plans," "intends," "expects," "anticipates" or similar expressions. For such statements, the Company claims the protection of the 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. for forward-looking statements contained in 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. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Factors that could cause actual results to differ from those contained in the forward-looking statements include economic conditions generally and overall spending levels for technology and enterprise software, market acceptance of and continued demand for the Aspen platform and competing offerings, the ability to successfully implement Aspen for our customers and increase revenues from existing customers, the ability to successfully address technological developments and standards and the risk factors set forth in filings the Company has made with the SEC. Click2learn, Aspen and ToolBook are trademarks of Click2learn. All other company and product names are the trademarks of their respective owners.
CLICK2LEARN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
March 31, December 31,
2003 2002
------------ ------------
Assets
Current assets:
Cash and cash equivalents $4,058 $3,586
Accounts receivable, net of allowance
for returns and doubtful accounts of
$726 in 2003 and $927 in 2002 9,176 10,785
Other 1,737 1,776
------------ ------------
Total current assets 14,971 16,147
Property and equipment, net 1,109 1,214
Goodwill and other intangible assets,
net 2,877 2,877
Intangible assets 4,568 4,636
Other 632 599
------------ ------------
Total assets $24,157 $25,473
============ ============
Liabilities and Stockholders' Equity
Current liabilities $12,159 $13,247
------------ ------------
Total current liabilities 12,159 13,247
Noncurrent liabilities 366 -
------------ ------------
Total liabilities 12,525 13,247
------------ ------------
Stockholders' equity 11,632 12,226
------------ ------------
Total liabilities and
stockholders' equity $24,157 $25,473
============ ============
CLICK2LEARN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
March 31,
--------------------------
2003 2002
------------ -----------
Revenue:
Tools $774 $1,258
Content services 674 633
Platforms 6,552 5,419
------------ -----------
Total revenue 8,000 7,310
Cost of revenue:
Tools 125 395
Content services 572 655
Platforms 1,574 1,574
------------ -----------
Total cost of revenue 2,271 2,624
Gross margin 5,729 4,686
Operating expenses:
Research and development 1,484 2,282
Sales and marketing 3,678 4,432
General and administrative 1,340 1,602
------------ -----------
Total operating expenses 6,502 8,316
Operating loss from continuing operations (773) (3,630)
Other income (expense) (47) 16
Loss from affiliate (25) (75)
------------ -----------
Loss from continuing operations before
income tax (845) (3,689)
Income tax (10) -
------------ -----------
Loss from continuing operations (855) 3,689)
Loss from discontinued operations - (1,995)
------------ -----------
Net loss (855) (5,684)
============ ===========
Amounts per share, basic and diluted:
Loss from continuing operations (0.03) (0.15)
Loss from discontinued operations - (0.08)
------------ -----------
Net loss (0.03) (0.23)
============ ===========
Weighted average common shares
outstanding, basic and diluted 24,819 24,199
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