Concero Reports Third Quarter 2001 Financial Results.Business Editors & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers AUSTIN Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas--(BUSINESS WIRE)--Oct. 18, 2001 Concero Inc. (Nasdaq:CERO), a leading broadband services See broadband and broadband service provider. firm, today reported financial results for the third quarter ended Sept. 30, 2001. Revenue for the third quarter was $3.1 million, down 78% from $14.2 million for the third quarter of 2000. Concero reported a net loss for the third quarter of 2001 of $5.9 million, or $0.58 per share, compared to a net loss of $2.2 million, or $0.22 per share, for the third quarter of 2000. Results for the third quarter of 2001 includes costs of $4.3 million associated with the elimination of excess office space and equipment and $421,000 in connection with workforce reductions. In the third quarter of 2000, results included costs totaling $2.0 million for additional bad debt reserves, recognition of deferred expenses related to a cancelled secondary offering and the 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. , partially offset by the reversal of $590,000 in accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. bonuses. These costs contributed to the net loss per share for the third quarters of 2001 and 2000 by $0.47 and $0.09, respectively. For the first nine months of 2001, the Company reported $18.2 million in revenue, a decline of 60% from revenue of $45.5 million for the same period in 2000. Net loss for the first nine months of 2001 was $18.5 million, compared with a net loss of $549,000 for the same period in 2000. Loss per share was $1.81 for the first nine months of 2001, compared with a loss per share of $0.06 for the first nine months of 2000. Results for the first nine months of 2001 include costs totaling $12.1 million associated with workforce reductions, the elimination of excess office space and equipment and additional bad debt reserves. These costs contributed to the net loss per share for the first nine months of 2001 by $1.18. Results for the first nine months of 2000 included the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. costs in the third quarter of 2000, which contributed to the loss per share for the period by $0.09 per share. "Our business continued to be negatively impacted by 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. this quarter. We have focused our sales and marketing efforts around our interactive TV services where we see near-term revenue opportunities while making further adjustments in our cost structure to conserve our ample cash resources. We ended the quarter with $11.6 million in cash and interest bearing investments, which is up from $11.1 million at the end of the second quarter of 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. "Concero possesses unique capabilities for creating interactive television solutions. In conjunction with the Motorola and Scientific-Atlanta developer programs, we maintain development centers 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 that enable the development of open cross-platform applications that run on multi-vendor head-ends and 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. . These assets combined with our dedicated and experienced team of interactive TV consultants and software engineers offer our clients substantial cost savings and rapid time-to-market benefits," added Webb. About Concero Concero Inc. (Nasdaq:CERO) is a broadband services firm committed to transforming business through the creative application of new technologies. Concero builds and deploys Interactive Television Applications, Content Management Solutions and Customer Portals. Our solutions enable clients to offer new revenue producing services such as entertainment-on-demand, enhanced television Enhanced Television (ETV) is a collection of specifications developed under the OpenCable project of CableLabs (Cable Television Laboratories, Inc.) that define an ETV Application consisting of resources (files) adhering to the Enhanced TV Binary Interchange Format (EBIF) content and targeted interactive advertising while simultaneously streamlining operations. In conjunction with Motorola's Horizon and Scientific-Atlanta's CreativeEdge developers programs, Concero maintains development centers with specialized equipment and deep technical expertise that enables development of cross-platform interactive TV applications that run on Divicom, Motorola and Scientific-Atlanta head-ends and set-top boxes. Our clients 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, , Hitachi American, Keene Personal Media, 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, October 18 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 eTV and broadband services; (ii.) our shift from longer-term development and maintenance arrangements to shorter term e-business project engagements; (iii.) our ability to identify emerging technologies that will gain wide-spread acceptance and have long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. viability; (iv.) the ability of our existing emerging company clients 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 clients. 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 Aug. 10, 2001.
Concero Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
---- ---- ---- ----
(unaudited) (unaudited)
Revenue $ 3,077 $ 14,224 $ 18,233 $ 45,517
Operating expenses:
Technical staff 2,180 9,160 13,180 25,242
Selling and administrative
staff 732 2,320 4,861 8,067
Other expenses 6,211 6,421 19,190 13,770
-------- -------- -------- --------
Total operating expenses 9,123 17,901 37,231 47,079
-------- -------- -------- --------
Loss from operations (6,046) (3,677) (18,998) (1,562)
Interest income (expense),
net 126 226 530 698
-------- -------- -------- --------
Loss before benefit from
income taxes (5,920) (3,451) (18,468) (864)
-------- -------- -------- --------
Income tax benefit -- (1,225) -- (315)
Net loss $ (5,920) $ (2,226) $(18,468) $ (549)
======== ======== ======== ========
Basic and diluted loss
per share $ (0.58) $ (0.22) $ (1.81) $ (0.06)
======== ======== ======== ========
Shares used in basic and
diluted loss per share
calculation 10,212 10,018 10,188 9,940
======== ======== ======== ========
Concero Inc.
Condensed Consolidated Balance Sheets
(In thousands)
Sept. 30, Dec. 31,
2001 2000
--------- --------
Assets (unaudited)
Current assets:
Cash $ 1,593 $ 1,611
Short-term investments 9,981 12,598
Accounts receivable, net 3,728 11,243
Unbilled revenue under customer contracts 74 86
Income tax receivable 630 664
Net deferred taxes -- --
Prepaid expenses and other current assets 743 1,005
------- -------
Total current assets 16,749 27,207
Property and equipment, net 1,861 6,318
Deferred income taxes, net -- 2,281
------- -------
Total assets $18,610 $35,806
======= =======
Liabilities and stockholders' equity
Current liabilities:
Trade payables $ 216 $ 573
Accrued expenses and other current
liabilities 6,362 2,473
------- -------
Total current liabilities 6,578 3,046
Net deferred taxes -- --
Stockholders' equity 12,032 32,760
------- -------
Total liabilities and stockholders'
equity $18,610 $35,806
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