Commtouch Reports Q4 2002 and Year-End Results.Business Editors/High-Tech Writers MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--March 7, 2003 Commtouch (Nasdaq:CTCH CTCH Common Traffic Channel ), a developer and provider of proprietary anti-Spam Spam elimination. See spam filter, spambot and e-mail obfuscator. solutions, today announced results for the year ended December December: see month. 31, 2002. "Once again, the results for Q4 2002 met with the company's internal goals. The cash burn for the fourth quarter was negligible  This article or section is written like a personal reflection or and may require .Please [ improve this article] by rewriting this article or section in an . . However, we anticipate that as we expand our efforts to promote and sell our new anti-Spam solution (ASAP (chat) asap - As soon as possible. !(TM)), cash burn will increase going forward," said 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. Mr. Mantel added, "We are encouraged by the progress we have made in rolling out ASAP!. Likewise, we are pleased to announce that the closing conditions of the first tranche Tranche One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. tranche A class of bonds. of the convertible loan, as described by us in the press release of February February: see month. 13, have been met." Revenues for the quarter -- attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to email services See Internet e-mail service. -- were $0.6 million compared to $0.5 million in the prior quarter and $2.6 million in the comparable quarter last year. Total loss for the quarter was $2.2 million, which consists primarily of non-recurring non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of idle equipment write-offs, depreciation and reserves against notes receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed . In comparison, the losses for the prior quarter and Q4 2001 were $1.1 million and $7.5 million respectively. During the fourth quarter, the company had impaired assets Impaired Asset An asset with a market value that is worth less than its book value. Notes: If the sum of all estimated future cash flows is less than the carrying value of the asset, then the asset would be considered impaired and would have to be written down to its fair totaling $750K to reflect the value of idle equipment. Revenues for the year ended December 31, 2002 were $3.4 million compared to $13.6 million in the comparable period last year. Total loss for the year ended December 31, 2002 was $4.9 million compared to $61.0 million in the comparable period last year. 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 of December 31, 2002 was at 25, down from 94 at the end of 2001. Also, during 2002, the company divested itself of its majority interest in Commtouch Japan KK and retains an equity interest therein. About Commtouch Commtouch Software Ltd. is a developer and provider of proprietary anti-Spam solutions. The company's core technologies reflect its decade of experience as a leading vendor of email software applications and provider of global messaging services. Commtouch is headquartered in Netanya Netanya (nətän`yə), city (1994 pop. 144,900), W central Israel, on the Mediterranean Sea; also spelled Nathania. It is a beach resort and the trade center for agricultural settlements in the region. , Israel Israel, in the Bible 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, Commtouch Inc., is based in Mountain View, CA. The company was founded in 1991 and has been publicly traded since 1999 (Nasdaq:CTCH). To learn more about Commtouch's solutions visit our web site at http://www.commtouch.com. Note: Commtouch(R) is a registered trademark and ASAP! is a trademark of Commtouch Software Ltd. Other 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 COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; 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
(USD in thousands)
Dec. Dec.
31, 31,
-------- -------
2002 2001
-------- -------
Assets
Current Assets:
Cash and cash equivalents $ 1,388 $ 2,248
Trade receivables, net 64 864
Prepaid expenses and other accounts receivable 231 700
------- --------
Total current assets 1,683 3,812
------- --------
Long-term lease deposits 5 261
Equity investment 3 -
Severance pay fund 264 320
Property and equipment, net 1,029 5,152
------- --------
$ 2,984 $ 9,545
------- --------
Liabilities and Shareholders' Equity
Current Liabilities:
Bank credit line and current maturities
of bank loans and capital leases $ - $ 799
Accounts payable 338 1,374
Employees and payroll accruals 424 633
Deferred revenues - 839
Accrued expenses and other liabilities 372 774
------- --------
Total current liabilities 1,134 4,419
------- --------
Long-term maturities of bank loans
and capital leases - 260
Other liabilities 135 255
Accrued severance pay 278 425
------- --------
413 940
------- --------
Minority interest - 127
------- --------
Shareholders' equity 1,437 4,059
------- --------
$ 2,984 $ 9,545
======= ========
COMMTOUCH SOFTWARE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(USD in thousands, except per share amounts)
Three Three Twelve Twelve
Months Months Months Months
Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
-------- -------- -------- ---------
2002 2001* 2002 2001*
-------- -------- -------- ---------
Revenues:
Email services $637 $2,598 $3,438 $13,588
Cost of revenues:
Email services 183 2,180 1,675 13,962
-------- -------- -------- ---------
Gross profit/(loss) 454 418 1,763 (374)
-------- -------- -------- ---------
Operating expenses:
Research and development, net 522 53 2,246 5,884
Sales and marketing 190 1,419 1,176 12,894
General and administrative 1,022 236 2,588 10,337
Amortization of stock-based
employee deferred compensation 137 548 551 2,204
Write-off of property and
equipment 750 -- 750 6,486
---------------------------------
Amortization of goodwill and
other purchased intangibles -- 104 -- 2,794
Write-off of impaired
intangibles and other assets -- 4,884 -- 16,960
-------- -------- -------- ---------
Total operating expenses 2,621 7,244 7,311 57,559
-------- -------- -------- ---------
Operating loss (2,167) (6,826) (5,548) (57,933)
Interest and other income, net (36) (343) (60) 583
Share of equity interest (27) -- (56) --
Write-off of impaired investment -- -- -- (2,000)
Minority interest -- 105 74 285
-------- -------- -------- ---------
Loss from continuing operation (2,230) (7,064) (5,590) (59,065)
-------- -------- -------- ---------
Gain on disposal of Wingra -- -- 1,014 --
Discontinued operations
- Wingra -- (440) (335) (1,942)
-------- -------- -------- ---------
Gain/(Loss) from sale of
discontinued operations -- (440) 679 (1,942)
-------- -------- -------- ---------
Net loss $(2,230) $(7,504) $(4,911) $(61,007)
======== ======== ======== =========
Basic and diluted net
loss per share
Loss from continuing
operations $(0.10) $(0.40) $(0.27) $(3.45)
Gain/(Loss) from sale of
discontinued operations -- (0.03) 0.03 (0.11)
-------- -------- -------- ---------
Net loss $(0.10) $(0.43) $(0.24) $(3.56)
======== ======== ======== =========
Weighted average number of
shares used in computing
basic and diluted
net loss per share 22,226 17,443 20,854 17,152
======== ======== ======== =========
* - Reclassified to conform with the current quarters
classification mainly due to divestiture of Wingra.
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