Commtouch Reports Q4 2001 and Year-End Results.Business/Technology Editors MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Feb. 27, 2002 Commtouch Software Ltd. (Nasdaq: CTCH CTCH Common Traffic Channel ), a leading vendor of highly scalable messaging solutions to service providers, today announced results for the fourth quarter and fiscal year ended December December: see month. 31, 2001. Revenues for the fourth quarter of 2001 were $3.0M compared with $5.3M for the same period last year and $4.0M in the third quarter of 2001. Net loss for the fourth quarter of 2001 was $2.0M ($0.11 per share), excluding a total of $5.5M of amortization of prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. marketing expense,
amortization of stock-based employee deferred compensation, in-process
research and development, amortization of goodwill and other purchased
intangibles, write-off Write-OffA reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of impaired investments and write-off of impaired intangibles and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. . This represents an 88% reduction from the comparable period last years net loss of $16.9M ($1.06 per share), and a 65% reduction from the third quarter of 2001 net loss of $5.7M ($0.33 per share). Total loss for the fourth quarter of 2001 was $7.5M compared with $24.1M in the same period last year and $27.8M in the third quarter of 2001. Headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. as at December 31, 2001 was at 92 employees. Revenues for the year ended December 31, 2001 were $15.3M, compared with $19.1M in fiscal 2000. Excluding amortization of prepaid marketing expense, amortization of stock-based employee deferred compensation, in-process research and development, amortization of goodwill and other purchased intangibles, write-off of impaired investments and write-off of impaired intangibles and other assets of $30.4M, net loss for the fiscal year was $30.6M ($1.78 per share), a 24% reduction from the previous fiscal year's net loss of $40.4M ($2.61 per share). Total loss for the fiscal year was $61.0M ($3.56 per share), compared with $54.2M ($3.51 per share), in the previous year. Included in the $61.0M loss are impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges to write-off intangibles from an acquisition and economically impaired 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. unused assets. Also included are charges to exit the messaging services business and renegotiate re·ne·go·ti·ate tr.v. re·ne·go·ti·at·ed, re·ne·go·ti·at·ing, re·ne·go·ti·ates 1. To negotiate anew. 2. To revise the terms of (a contract) so as to limit or regain excess profits gained by the contractor. contractual obligations for the services business. In regards to the company's present situation, Gideon Gideon (gĭd`ēən), or Jerubbaal (jērŭb`āəl, –rəbā`əl) Mantel, 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. of Commtouch, noted, "Today we announced the sale of Wingra to its current senior management. We have implemented the sale of the consumer business unit to CPSG CPSG Cryptologic Systems Group (US Air Force) CPSG Clusters Policy Steering Group (UK) CPSG Computer Program Steering Group - Mail Centro Centro (Portuguese and Spanish for center) may refer to: Places:
tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to future royalties. Currently, we are expanding this agreement to also include our enterprise customers. Upon successful execution of these transactions we will continue to minimize our cash burn and expenses and our target is to become cash flow positive by the end of 2002. Based on today's cash balance, the current projection of revenues and expenses, and the private placement that we have announced today, we expect to have sufficient cash to continue operations until we become cash positive." About Commtouch Commtouch Software Ltd. is the developer and provider of comprehensive and highly scalable messaging solutions through its Commtouch Messaging Platform (CMP CMP (cytidine monophosphate): see cytosine. (1) (CMP Media LLC, Manhasset, NY, www.cmp.com) Part of United Business Media, CMP is a leading integrated media company that offers a wide variety of publications and services in the information ) for service providers such as ISPs, ASPs, Data Centers, Telcos and Wireless Operators. The CMP offers service providers an opportunity to increase revenue from their business and residential subscribers utilizing CMP's advanced messaging services, which can be deployed and managed easily and quickly. The Company's core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. and its subsidiary company, Commtouch Inc., operates out of Mountain View, CA. The Company was founded in 1991 and has been a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. since 1999 (Nasdaq: CTCH). To learn how Commtouch solutions are designed to meet service providers' messaging and collaboration Working together on a project. See collaborative software. needs, visit our web site at http://www.commtouch.com. Note to Editors: MS-Exchange(R) is a registered trademark of Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, . Commtouch is a registered trademark of Commtouch Software Ltd. Terms and product names in this document may be trademarks of others. This press release 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. , including projections about our business, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. For example, statements in the future tense future tense n. A verb tense expressing future time. Noun 1. future tense - a verb tense that expresses actions or states in the future future , and statements including words such as "expect", "plan", "estimate", anticipate", or "believe" are forward-looking statements. These statements are based on information available to us at the time of the release; we assume no obligation to update any of them. The statements in this release are not guarantees of future performance and actual results could differ materially from our current expectations as a result of numerous factors, including business conditions and growth or deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in 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 market, commerce and the general economy both domestic as well as international; fewer than expected new-partner relationships; competitive factors including pricing pressures; technological developments, and products offered by competitors; availability of qualified staff for expansion; and technological difficulties and resource constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. encountered in developing new products as well as those risks described in the Company's Annual Reports on Form 20-F and reports on Form 6-K, which are available through www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. .
COMMTOUCH SOFTWARE LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2001 2000
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 2,248 $ 20,831
Marketable securities -- 8,607
Trade receivables, net 864 4,355
Prepaid expenses and
other accounts receivable 700 3,626
--------- ---------
Total current assets 3,812 37,419
Long-term lease deposits 261 1,440
Severance pay fund 320 949
Property and equipment, net 5,152 19,417
Long-term investment -- 2,000
Goodwill and other purchased
intangibles, net -- 16,055
--------- ---------
$ 9,545 $ 77,280
========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Bank credit line and current
maturities of bank loans
and capital leases 799 1,115
Accounts payable 1,374 4,205
Employees and payroll accruals 633 3,279
Deferred revenues 839 1,523
Accrued expenses and
other liabilities 774 3,529
--------- ---------
Total current liabilities 4,419 13,651
--------- ---------
Long-term maturities of
bank loans and capital leases 260 841
Other long-term liabilities 255 --
Accrued severance pay 425 984
--------- ---------
940 1,825
--------- ---------
Minority interest 127 76
--------- ---------
Shareholders' equity 4,059 61,728
--------- ---------
$ 9,545 $ 77,280
========= =========
COMMTOUCH SOFTWARE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2001 2000 2001 2000
---- ----- ---- ----
(unaudited) (unaudited)
Revenues:
Email services $ 2,791 $ 4,612 $ 14,697 $ 17,965
Software licenses 171 650 621 1,150
-------- -------- -------- --------
Total revenues 2,962 5,262 15,318 19,115
-------- -------- -------- --------
Cost of revenues:
Email services 2,314 3,934 14,605 11,864
Software licenses -- -- -- --
-------- -------- -------- --------
Total cost of revenues 2,314 3,934 14,605 11,864
-------- -------- -------- --------
Gross profit 648 1,328 713 7,251
-------- -------- -------- --------
Operating expenses:
Research and development 392 3,533 7,278 10,357
Sales and marketing 1,551 9,098 13,496 26,585
General and administrative 428 5,755 11,236 13,621
Amortization of prepaid
marketing expense -- 150 -- 4,508
Amortization of
stock-based
employee deferred
compensation 548 762 2,204 3,050
In-process research
and development -- 1,280 -- 1,280
Amortization of goodwill
and other purchased
intangibles 104 -- 2,794 --
Write-off of impaired
intangibles and
other assets 4,884 -- 23,446 --
-------- -------- ------- -------
Total operating expenses 7,907 20,578 60,454 59,401
-------- -------- -------- --------
Operating loss (7,259) (19,250) (59,741) (52,150)
Interest and other
income, net (350) 118 449 2,870
Write-off impaired
investments -- (5,000) (2,000) (5,000)
Minority interest 105 55 285 55
-------- -------- -------- --------
Net loss $ (7,504) $(24,077) $(61,007) $(54,225)
======== ======== ======== ========
Basic and diluted net
loss per share $ (0.43) $ (1.51) $ (3.56) $ (3.51)
======== ======== ======== ========
Weighted average number
of shares used in
computing basic and
diluted net loss
per share 17,443 15,900 17,152 15,462
======== ======== ======== ========
Net Loss
-as adjusted (1) $ (1,968) $(16,885) $(30,563) $(40,387)
-------- -------- -------- --------
Basic and diluted net
loss per share
-as adjusted (1) $ (0.11) $ (1.06) $ (1.78) $ (2.61)
-------- -------- -------- --------
(1) Excludes non-cash charges for the amortization of prepaid
marketing expense, amortization of stock-based employee deferred
compensation, in-process research and development, amortization of
goodwill and other purchased intangibles, write-off impaired
investments and write-off of impaired intangibles and other assets.
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