Concerto Software Announces First Quarter 2002 Results; Pro Forma EPS, ContactPro and Ensemble Revenue Exceed Expectations; Number of New Customers Increases by 38%.Business/Technology Editors WESTFORD, Mass.--(BUSINESS WIRE)--April 18, 2002 Davox Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : DAVX), now doing business as Concerto Software(TM), a proven provider of customer interaction management (CIM (1) (Computer-Integrated Manufacturing) Integrating office/accounting functions with automated factory systems. Point of sale, billing, machine tool scheduling and supply ordering are part of CIM. ) solutions, today announced financial results for the first quarter, which ended March 31, 2002. Concerto generated revenue of $23.3 million for the first quarter of 2002, compared to $24.9 million for the same period in 2001. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income for the first quarter of 2002, which excludes the effect of $5.5 million of one-time merger and integration costs, non-recurring restructuring costs and the amortization of purchased intangible assets recorded as a result of the acquisition of CELLIT, Inc. (CELLIT), was $22,000 or pro forma diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.00, which exceeded management's estimate of pro forma diluted loss per share of $0.01 - $0.03. Net loss for the first quarter of 2002, including all charges, was $4.1 million or $0.33 per diluted share, compared to net income of $0.3 million or $0.03 per diluted share for the same period in 2001. During the first quarter of 2002, Concerto recorded a non-recurring restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of approximately $2.0 million due to a decrease of approximately 8% of the consolidated Concerto workforce, which affected all departments. Also during the first quarter of 2002 in connection with the acquisition of CELLIT, a one-time merger and integration charge of approximately $3.1 million was recorded. Included in this charge were one-time expenses associated with the merger of Davox and CELLIT, such as transition employee costs, travel, training and corporate re-branding efforts associated with the Company's name change. Also included in the one-time charge was the write-off of $1.1 million of prepaid software licenses In computing, software that is copyrighted and licensed under a software license is done under a variety of licensing schemes. For end-users there are proprietary licenses and there are free software licenses, and there are proprietary Within these schemes are further classifications. under an OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and agreement with a third party vendor given that a similar technology was obtained in the CELLIT acquisition. "In January, Davox and CELLIT combined to form Concerto Software, and through aggressive sales and marketing efforts we are positioned to be the leader in the competitive global CIM marketplace," said James Foy, 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 Concerto Software. "We set forth ambitious, specific goals for Concerto this quarter and I am pleased that we have delivered measurable results that demonstrate success early on. Given the challenging economic environment, we are pleased with our sequential increase in total revenue during the first quarter and in particular, the growth of our product revenue as a percentage of total revenue. This growth demonstrates that customers are willing to make investments in mission-critical software applications from financially stable vendors who can substantiate a tangible and rapid ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). ." During the first quarter of 2002, Concerto recorded ContactPro revenue totaling approximately $1.1 million, exceeding management's estimate by 10%. New ContactPro customers include FutureCall, a contact services outsourcer; GNG GNG Global Nomads Group GNG Growing Neural Gas GNG Gluconeogenesis GNG Go No Go (marketing) GNG Ginga Nagareboshi Gin (Anime/Manga) GNG Girl's Not Grey (AFI song) Solutions, a call center application service provider (ASP) and Istonish, a multi-channel customer service outsourcer. The Company also achieved a record quarter for Ensemble product revenue totaling approximately $2.5 million, a 48% increase from $1.7 million in the fourth quarter of 2001. In addition, Asia Pacific continues to be a high-growth region for Concerto with total product revenue for the first quarter of approximately $2.2 million, representing sequential growth of approximately 35% from the fourth quarter of 2001. "Within weeks of the merger, the product convergence strategy was in place and the entire worldwide sales and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. staff was selling the full range of Concerto solutions," said Foy. "Our rapid integration of people, process and technology has positioned Concerto to exploit the growing demand for CIM solutions that address the needs of mid-size and enterprise contact centers." Our balance sheet remains solid. At the end of the first quarter, cash and short-term investments totaled $46.2 million, which represents a decrease of approximately $21.8 million from the previous quarter. The decrease is principally attributed to the use of approximately $10.2 million as cash consideration for the purchase of CELLIT, payment of $1.9 million outstanding under CELLIT's bank credit facility, payments associated with the non-recurring restructuring, merger and integration related expenses totaling $2.6 million and approximately $5.7 million of cash utilized during the quarter to repurchase 658,500 shares of the company's common stock under its stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSO See CSO. ) increased in the first quarter to 61 days from 46 days in the fourth quarter of 2001, but continues to remain well below the industry average. First Quarter Business Highlights Company Gains 29 New Customers During the first quarter, Concerto increased its number of new customers by 38% from 21 in the fourth quarter of 2001 to 29 in the first quarter of 2002. First quarter new customers included AT&T's BCO BCO Banco BCO Boulder, Colorado BCO Biodiversity Convention Office (Canada) BCO Beneficial Cargo Owner (importer of record who takes possession of cargo at destination) division, Diabetes Self Care, GC Services and FutureCall in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. ; Endsleigh Insurance Endsleigh Insurance is a Cheltenham-based UK insurance intermediary specialising in the student and graduate markets. It is the preferred insurer for several unions and professional associations. , Laura Ashley Laura Ashley CBE, (7 September 1925–17 September 1985) was a Welsh designer. She became a household name on the strength of her work as a designer and manufacturer of a range of colourful fabrics for clothes and home furnishings. , Quelle (via Siemens), Reid Kerr and SDS 1. (company) SDS - Scientific Data Systems. 2. (tool) SDS - Schema Definition Set. in Europe; and Aoba Life Insurance Japan (via Tomen Telecom), Bharti Telecom India, GE Melbourne, LINA LINA Laboratoire d'Informatique de Nantes Atlantique LINA Life Insurance Company of North America LINA Life Insurance Needs Analysis (Cigna) Korea and HDFC/Stan Life (India) in Asia Pacific. Concerto also secured 137 new orders from existing customers including Air Jamaica Vacations, Ameriquest, Associates, First Tennessee This article or section has multiple issues: * Its neutrality is disputed. * It reads like an advertisement and needs to be rewritten in a neutral point of view. * It may require general cleanup to meet Wikipedia's quality standards. , GreenPoint Financial, Time Life, Westlake Financial and Wells Fargo Wells Fargo armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147] See : Protectiveness Wells Fargo company that handled express service to western states; often robbed. [Am. Hist. . Concerto Releases ContactPro 4.2 In March, Concerto announced the release of the latest version of ContactPro, its unified computer telephony See CTI, VoIP and IP telephony. Computer Telephony - Computer Telephone Integration based CIM solution. ContactPro 4.2 is designed to improve contact center productivity and efficiency by enabling supervisors to manage all contact center functions from a single administration point and allowing agents to handle interactions across all channels, including voice, fax, email and the Web. The new version of ContactPro offers the full spectrum of multimedia capabilities to route, monitor, record, report and administer all contact center interactions, and adds enhanced email management, automatic workflow distribution and secure sockets layer (networking, security) Secure Sockets Layer - (SSL) A protocol designed by Netscape Communications Corporation to provide secure communications over the Internet using asymmetric key encryption. (SSL (Secure Sockets Layer) The leading security protocol on the Internet. Developed by Netscape, SSL is widely used to do two things: to validate the identity of a Web site and to create an encrypted connection for sending credit card and other personal data. ) support for Web chat and collaboration. Concerto Releases Ensemble 3.0 In March, Concerto further strengthened its line of contact center offerings with the newest release of Ensemble Customer Contact Suite, version 3.0. Ensemble 3.0's modular platform is designed for flexible deployment on cost-effective hardware platforms Each hardware platform, or CPU family, has a unique machine language. All software presented to the computer for execution must be in the binary coded machine language of that CPU. Following is a list of the major hardware platforms in existence today. See platform. and can be tailored to meet specific business needs. The Ensemble Customer Contact Suite features inbound, outbound, call blending and real-time reporting and is primarily targeted towards contact center customers who wish to leverage their existing technology investments through computer telephony integration Computer Telephony Integration - Computer Telephone Integration . Concerto Adds to Management Team Concerto recently appointed Neil McMullan as Vice President of Sales and Operations for EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. (Europe, Middle East and Africa). McMullan is a seasoned international sales executive with expertise in both software and hardware. During his career, McMullan has held a number of senior executive positions, most recently serving as Vice President of Worldwide Sales for Informix Software. "From my experience working with Neil over the years, I am extremely confident in his ability to expand Concerto's presence throughout the EMEA region," said Foy. "I am pleased to welcome Neil as the newest addition to our management team." Webcast Concerto will host a conference call and Webcast today, April 18, 2002, at 5:00 pm EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss its first quarter 2002 financial and operating results and its business and financial outlook for the second quarter. To participate in the conference call, RSVP (ReSerVation Protocol) A communications protocol that signals a router to reserve bandwidth for real time transmission. RSVP is designed to clear a path for audio and video traffic, eliminating annoying skips and hesitations. to 978-952-0294 before 4:30 pm EDT on April 18. This call is being Webcasted by CCBN CCBN Central Coast Bancorp CCBN Charles County Business Network and can be accessed through Concerto's Website at www.concerto.com. The Webcast will also be distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center (www.companyboardroom.com) or by visiting any of the investor sites in CCBN's Individual Investor Network such as America Online's Personal Finance Channel, Fidelity Investments Fidelity Investments is a group of privately held companies in the financial services industry. It is made up by two independent but closely cooperating companies, Fidelity Management and Research Corporation (FMR Co. (R) (www.fidelity.com) and others. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents (www.streetevents.com). A replay of the conference call will be available from April 18, 2002 at 8:00 pm EDT until April 25, 2002 at 12:00 am EDT. To access the replay, dial 800-642-1687 (from within the US or Canada) or 706-645-9291 (from outside the US) and enter the passcode 3740483, or log onto the Concerto Software website at www.concerto.com. About Concerto Software(TM) Concerto Software provides contact center solutions that help companies more effectively manage customer interactions via voice, fax, email and the Web. More than 1,100 companies worldwide -- including banks, service bureaus, telecommunications firms, utilities and retailers -- use Concerto solutions to deliver superior customer service, and to successfully acquire, retain and grow valuable customer relationships. Concerto Software is headquartered in Westford, Massachusetts Westford is a town in Middlesex County, Massachusetts, United States. The population was 20,754 at the 2000 census. History Westford was first settled in 1635. Originally a part of neighboring Chelmsford, West Chelmsford soon grew large enough to sustain its own , with operations across North America, Europe and Asia. For more information, visit www.concerto.com. Note: Davox is a registered trademark of Davox Corporation and Concerto Software and Ensemble are trademarks of Davox Corporation. CELLIT and ContactPro are trademarks of CELLIT, Inc. All other trademarks are the property of their respective owners. In addition to historical information contained herein, this press release contains forward-looking statements concerning future expected financial, operating results, and product and marketing strategies. Forward-looking statements in this release include, but are not limited to, estimates of future business prospects or financial results and statements containing the words "believe," "estimate," "project," "expect" or similar expressions. Concerto Software's future actual results could differ materially from the forward-looking statements discussed or implied herein because of risks or uncertainties including, but not limited to, the difficulty of integrating two complex businesses and their products, failure to achieve the beneficial synergies expected from the transaction, the potential for loss of key employees during the integration process, the difficulty in the development, marketing or selling of the company's solutions, risks associated with competition and competitive pricing pressures, technological change, new product introduction and market acceptance, stock price volatility, the ability of Concerto Software to attract and retain key personnel, weakness in IT spending, weakness in the contact center market, the war against terrorism, terrorist acts, general economic conditions in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and worldwide markets served by Concerto Software, and those other factors discussed from time to time in Davox's public reports filed with the Securities and Exchange Commission, such as those discussed under "Certain Factors That May Affect Future Results" in Davox's quarterly reports on Form 10-Q Form 10-Q See 10-Q. and annual report on 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. . All forward-looking statements and reasons why results might differ included in this release are made as of the date hereof, and Concerto Software assumes no obligation to update any such forward-looking statements or reasons why results might differ.
DAVOX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
Three Months Ended
March 31,
(Unaudited)
2002 2001
Product revenue $ 10,625 $ 11,903
Service revenue 12,700 13,029
Total revenue 23,325 24,932
Cost of product revenue 2,014 1,970
Cost of service revenue 6,341 7,308
Total cost of revenue 8,355 9,278
Gross profit 14,970 15,654
Operating expenses:
Research, development and engineering 4,064 4,746
Selling, general and administrative 11,204 11,365
Non-recurring merger and integration costs 3,112 --
Non-recurring restructuring costs 2,030 --
Amortization of purchased intangible assets 368 --
Total operating expenses 20,778 16,111
Loss from operations (5,808) (457)
Other income, net 327 938
Income before provision for
(benefit from) income taxes (5,481) 481
Provision for (benefit from) income taxes (1,371) 149
Net income (loss) $ (4,110) $ 332
Proforma net income (1) $ 22 $ 332
Earnings (loss) per share:
Basic $ (0.33) $ 0.03
Diluted $ (0.33) $ 0.03
Pro forma earnings per share (1):
Basic $ 0.00 $ 0.03
Diluted $ 0.00 $ 0.03
Weighted average shares outstanding:
Basic 12,534 12,683
Diluted 12,534 13,230
Pro forma weighted average shares outstanding:
Diluted 12,739 13,230
(1) Proforma results exclude the non-recurring restructuring and
merger integration costs and the amortization of purchased
intangible assets as a result of the acquisition of CellI on
January 14, 2002.
DAVOX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
MARCH 31, DECEMBER 31,
2002 2001
ASSETS (Unaudited) (Audited)
Current assets:
Cash and short term investments $46,187 $67,943
Accounts receivable, net 15,422 11,007
Deferred tax assets 5,161 3,791
Prepaid expenses & other current assets 4,907 5,310
Total current assets 71,677 88,051
Property and equipment, net 7,967 6,447
Goodwill 17,160 --
Purchased intangible assets, net 6,692 --
Long-term deferred tax asset 2,382 2,382
Other assets 559 276
$106,437 $97,156
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $8,377 $5,307
Accrued expenses 13,121 8,643
Customer deposits 5,233 4,664
Deferred revenue 11,839 8,074
Current portion of long-term debt 938 --
Total current liabilities 39,508 26,688
Long-term debt 559 --
Total liabilities 40,067 26,688
Total stockholders' equity 66,370 70,468
$106,437 $97,156
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