Concero Reports Second Quarter 2002 Financial Results.Business Editors & High-Tech Writers AUSTIN, Texas--(BUSINESS WIRE)--July 26, 2002 Concero Inc. (Nasdaq:CERO), a provider of interactive television solutions, today reported financial results for the second quarter ended June 30, 2002. Revenue for the second quarter was $215,000, down 97% from $6.7 million for the second quarter of 2001. Concero reported a net loss for the second quarter of 2002 of $616,000, or $0.06 per share, compared to a net loss of $3.4 million, or $0.33 per share, for the second quarter of 2001. As a result of a recent lease 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). with Concero's Austin, Texas, landlord, results for the second quarter of 2002 include a reduction of the accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. for excess leased office space of $1.4 million. Results also benefited by a $210,000 reversal of bad debt reserves associated with the collection of previously reserved receivables during the second quarter of 2002. Collectively, these items reduced net loss for the second quarter of 2002 by approximately $1.6 million, or $0.15 per share. Results for the second quarter of 2001 included costs associated with workforce reductions, 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. of capitalized equipment, accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. for excess leased office space, and additional bad debt reserves. Collectively, these items increased the net loss for the second quarter of 2001 by $2.4 million, or $0.23 per share. To further conserve cash resources, Concero recently completed a significant reduction in force, in order to reduce its staff expenses by an anticipated $3.2 million annually. As a result of these reductions, Concero will include 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 related costs of approximately $400,000 in its third quarter 2002 results, and expects quarterly 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. below $1.5 million once the financial benefit of these reductions is fully realized. "The Concero Marquee demonstrations at the National Cable & Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. Association's `Cable 2002' convention in May were well received. At the Cable Television Administration and Marketing convention in Boston earlier this month, Starz Encore Group displayed a Starz On Demand(sm) subscriber interface developed on Marquee. This subscriber interface incorporates a number of innovative features enabled by Marquee, such as DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. On-Demand, Linear to On-Demand cross-promotion and instant preview," 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. "We are pursuing several opportunities with major cable operators as a result of these showings, and we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about Concero Marquee's potential. Although cable operators are cautious around their spending, we believe that Marquee will prove to create engaging and entertaining subscriber experiences that drive profitable, on-demand interactive services once tested in the field," added Webb. About Concero Concero Inc. (Nasdaq:CERO) is a provider of interactive television solutions. Concero provides 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 cable operators, content providers and application providers to deliver compelling entertainment-on-demand services and other VOD-enabled applications and intends to provide related software products. 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 CreativEdge developer programs, Concero operates state-of-the-art integration facilities with head-ends, set-top boxes The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. , VOD See video-on-demand. VoD - video on demand servers, operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. and middleware Software that functions as a conversion or translation layer. It is also a consolidator and integrator. Custom-programmed middleware solutions have been developed for decades to enable one application to communicate with another that either runs on a different platform or comes from a from Motorola, Scientific-Atlanta, SeaChange, Concurrent and other major technology providers. These assets combined with our dedicated and experienced team of interactive television consultants and software engineers offer customers substantial cost savings and rapid time-to-market benefits. Conference Call Concero will host a conference call on Thursday, Aug. 1, at 10:00 a.m. (Eastern). The conference call will be broadcast live over the Internet 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 10 minutes before the live call to allow time to register, download 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 Concero's ability to continue to market and sell its services to achieve anticipated results or to address the interactive television market and other 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 See broadband and broadband service provider. ; (ii.) our transition from an e-business consultancy to a provider of broadband solutions; (iii.) our ability to identify emerging technologies that will gain widespread 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 29, 2002, and the Form 10-Q Form 10-Q See 10-Q. filed May 14, 2002.
Concero Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
-------- -------- -------- --------
(unaudited) (unaudited)
Revenue $ 215 $ 6,671 $ 996 $ 15,156
Operating expenses:
Technical staff 97 4,064 731 11,000
Research and
development 1,171 -- 1,925 --
Selling and
administrative staff 492 1,442 1,088 4,129
Other expenses (879) 4,721 356 12,979
-------- -------- -------- --------
Total operating expenses 881 10,227 4,100 28,108
-------- -------- -------- --------
Income (loss)
from operations (666) (3,556) (3,104) (12,952)
Interest income
(expense), net 50 162 118 404
-------- -------- -------- --------
Income (loss) before
provision for
income taxes (616) (3,394) (2,986) (12,548)
-------- -------- -------- --------
Income tax
provision (benefit) -- -- (605) 2,281
Net income (loss) $ (616) $ (3,394) $ (2,381) $(14,829)
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Diluted earnings
(loss) per share $ (0.06) $ (0.33) $ (0.23) $ (1.46)
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Shares used in diluted
earnings (loss)
per share calculation 10,229 10,188 10,227 10,188
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Concero Inc.
Condensed Consolidated Balance Sheets
(In thousands)
June 30, Dec. 31,
2002 2001
------- -------
Assets (unaudited)
Current assets:
Cash $ 401 $ 4,141
Short-term investments 8,976 8,964
Accounts receivable, net 28 823
Unbilled revenue under
customer contracts -- 557
Income tax receivable 604 11
Prepaid expenses and
other current assets 449 594
------- -------
Total current assets 10,458 15,090
Property and equipment, net 1,084 1,554
------- -------
Total assets $11,542 $16,644
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Liabilities and stockholders' equity
Current liabilities:
Trade payables $ 109 $ 66
Accrued expenses and
other current liabilities 2,677 5,445
------- -------
Total current liabilities 2,786 5,511
Stockholders' equity 8,756 11,133
------- -------
Total liabilities and
stockholders' equity $11,542 $16,644
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