Concero Reports Fourth Quarter and Full Year 2001 Financial Results.Business Editors & High-Tech Writers AUSTIN, Texas--(BUSINESS WIRE)--Jan. 31, 2002 Concero Inc. (Nasdaq:CERO), a leading provider of interactive television solutions, today reported financial results for the fourth quarter and the year ended Dec. 31, 2001. Revenue for the fourth quarter was $2.0 million, down 83% from $11.8 million for the fourth quarter of 2000. Concero reported a net loss for the fourth quarter of 2001 of $901,000, or $0.09 per share, compared to a net loss of $3.4 million, or $0.34 per share, for the fourth quarter of 2000. Results for the fourth quarter of 2000 included additional bad debt reserves, severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and idle equipment charges and an adjustment to the estimated cost of a cancelled stock offering. Collectively, these items increased the net loss for the fourth quarter of 2000 by $570,000, or $0.06 per share. For the year ended Dec. 31, 2001, Concero reported $20.2 million in revenue, a decline of 65% from revenue of $57.3 million for 2000. Net loss for 2001 was $21.7 million, compared with a net loss of $3.9 million in 2000. Loss per share was $2.13 for 2001, compared with a loss per share of $0.39 for 2000. Results for 2001 include costs totaling approximately $12.2 million associated with workforce reductions, and the establishment of reserves and write-downs for excess leased office space and capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. equipment. Results for 2001 also include a non-cash income tax charge of $2.3 million to establish a valuation allowance against the deferred tax asset for stock options which was previously recorded as a reduction of shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. for the quarter ended March 31, 2001. Results for 2001 were benefited by the receipt of a $234,000 Texas Smart Jobs grant associated with training costs incurred prior to 2001. Collectively, these items increased the net loss for 2001 by $14.3 million, or $1.40 per share. Results for 2000 included additional bad debt reserves, expenses related to a cancelled stock offering, severance and idle equipment charges and a write-off Write-Off A 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 an investment in a start-up company start-up company A new business. which increased the net loss for 2000 by $2.6 million, or $0.26 per share. "2001 was an extremely difficult year for information technology services companies. A weak economy and low capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. negatively impacted our business and the fourth quarter was no exception. We did make significant progress with the development of the Concero Marquee software product suite scheduled for release in the second half of 2002, while reducing our cost structure and conserving con·serve v. con·served, con·serv·ing, con·serves v.tr. 1. a. To protect from loss or harm; preserve: our ample cash resources. We reduced operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. by 81% this quarter from the fourth quarter of 2000 and ended the year with $13.1 million in cash and interest bearing investments, up from $11.6 million at the end of the third quarter this year," said Tim Webb, president 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. of Concero. "Leveraging our relationships with Motorola and Scientific-Atlanta and our experienced team of interactive TV consultants, the Concero Marquee software suite will enable on-demand applications including entertainment-on-demand, interactive advertising, promotional services and next generation user interfaces," added Webb. About Concero Concero Inc. (Nasdaq:CERO) is a leading provider of interactive television solutions. Concero provides software products and systems integration consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" that enable application providers, content programmers This is a list of programmers notable for their contributions to software, either as original author or architect, or for later additions. See also: Game programmer, List of computer scientists , studios, and cable operators to quickly deploy a wide range of broadband services See broadband and broadband service provider. such as entertainment-on-demand, television commerce, interactive advertising and promotional services. Our solutions create engaging and entertaining user experiences and drive profitable, on-demand interactive services. Concero possesses unique delivery capabilities for supporting interactive television solutions. In conjunction with Motorola's Horizon and Scientific-Atlanta's CreativeEdge developers programs, Concero operates state-of-the-art integration labs with specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. equipment and expertise that enable development of cross-platform applications that run on Harmonic harmonic. 1 Physical term describing the vibration in segments of a sound-producing body (see sound). A string vibrates simultaneously in its whole length and in segments of halves, thirds, fourths, etc. , Motorola and Scientific-Atlanta head-ends and leading set top boxes. These assets combined with our dedicated and experienced team of interactive TV consultants and software engineers offer customers substantial cost savings and rapid time-to-market benefits. Our customers include @Security Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). , CANAL+ U.S. TECHNOLOGIES, DigitalThink, Grande Communications About Grande Communications is a United States telecommunications firm, based out of San Marcos, Texas, that uses a deep-fiber optic network for broadband services. In 1999, the company was established when the largest single round of venture capital funding in Texas was raised, , Keen Personal Media, LodgeNet Entertainment, Power TV and TV Guide. Headquartered in Austin, Texas, more information about Concero is available on the Web at www.concero.com. Conference Call Concero will host a conference call on Thursday, January 31 at 10:00 a.m. (Eastern). The conference call will be broadcast live over 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 and available for a period of time thereafter through CCBN CCBN Central Coast Bancorp CCBN Charles County Business Network at www.streetevents.com. New StreetEvents service users should log-on at least ten minutes before the live call to allow time to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. 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. Disclosure "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 under 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: This press release contains forward-looking statements that involve risks and uncertainties, including the Company's ability to continue to market and sell its services to achieve anticipated results or to address emerging markets successfully. Forward-looking statements are based on current information and assumptions that by their nature are dynamic and subject to change. Among important factors which could affect Concero's financial results and cause actual results to differ materially from those in forward-looking statements are (i.) our refocused business strategy which emphasizes expansion into new and largely untested areas such as interactive TV software products and broadband services; (ii.) our transition from an e-business consultancy to a provider of broadband solutions; (iii.) our ability to identify emerging technologies that will gain wide-spread acceptance and have long-term viability; (iv.) the ability of our existing emerging company customers to pay our fees; (v.) our ability to manage our cost structure in light of continued near-term weakness in revenue generation; and (vi.) intense competition to attract and retain customers. For further discussion of these and other factors, please refer to our recent filings with the SEC, particularly the Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed March 27, 2001 and Form 10-Q Form 10-Q See 10-Q. filed November 13, 2001. -0-
Concero Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
-------- -------- -------- --------
(unaudited) (unaudited)
Revenue $ 1,990 $ 11,773 $ 20,223 $ 57,290
Operating expenses:
Technical staff 1,489 8,592 14,670 33,833
Selling and administrative
staff 563 2,805 5,424 10,872
Other expenses 905 4,408 20,094 18,178
-------- -------- -------- --------
Total operating expenses 2,957 15,805 40,188 62,883
-------- -------- -------- --------
Loss from operations (967) (4,032) (19,965) (5,593)
Interest income (expense),
net 66 245 596 943
-------- -------- -------- --------
Loss before benefit from
income taxes (901) (3,787) (19,369) (4,650)
-------- -------- -------- --------
Income tax expense (benefit) -- (410) 2,281 (725)
Net loss $ (901) $ (3,377) $(21,650) $ (3,925)
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Basic and diluted loss per
share $ (0.09) $ (0.34) $ (2.13) $ (0.39)
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Shares used in basic and
diluted loss per share
calculation 10,222 10,066 10,188 9,971
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Concero Inc.
Condensed Consolidated Balance Sheets
(In thousands)
December 31, December 31,
2001 2000
------- -------
Assets (unaudited)
Current assets:
Cash $ 4,141 $ 1,611
Short-term investments 8,964 12,598
Accounts receivable, net 823 11,243
Unbilled revenue under customer contracts 557 86
Income tax receivable 11 664
Prepaid expenses and other current assets 594 1,005
------- -------
Total current assets 15,090 27,207
Property and equipment, net 1,554 6,318
Deferred income taxes, net -- 2,281
------- -------
Total assets $16,644 $35,806
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Liabilities and stockholders' equity
Current liabilities:
Trade payables $ 66 $ 573
Accrued expenses and other current
liabilities 5,445 2,473
------- -------
Total current liabilities 5,511 3,046
Stockholders' equity 11,133 32,760
------- -------
Total liabilities and stockholders' equity $16,644 $35,806
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