Continuus Software Reports Third Quarter 2000 Financial Results.Business Editors and 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 IRVINE Irvine, town, Scotland Irvine (ûr`vĭn), town (1991 pop. 32,507), North Ayrshire, SW Scotland, on the Irvine River estuary. Industries include iron and brass foundries. Other products are chemicals, electric goods, and clothing. , Calif.--(BUSINESS WIRE)--Oct. 25, 2000 Continuus Software Corp. (Nasdaq: CNSW), the leading provider of eAsset Management solutions, Wednesday Wednesday: see week. reported financial results for the third quarter ended Sept. 30, 2000. Total revenue for the third quarter was $11.0 million, a 22% sequential increase over revenue of $9.0 million for the second quarter of 2000 and a 13% increase over revenue of $9.7 million for the same period in 1999. The loss from operations for the third quarter on a 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 basis, excluding stock compensation, the amortization of goodwill and other costs associated with the acquisition of Pagoda Corp. and $171,000 of reorganization costs was $1.8 million, or $.17 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with a loss of $3.8 million, or $.36 per diluted share for the second quarter of 2000 and compared with income from operations of $372,000, or $.04 per diluted share, for the same period last year. The total net loss for the third quarter was $4.6 million, or $.43 per diluted share. Included in the net loss for the quarter is a $1.5 million write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. in the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of our investment in Project 1918, Inc, an early stage 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 company. For the nine months ended Sept. 30, 2000, total revenue increased 12% year over year to $29.9 million, compared with $26.7 million for the same period a year ago. Net loss for the nine months ended Sept. 30, 2000 was $11.3 million, or $1.08 per diluted share, compared with a net loss of $140,000, or $0.04 per diluted share, for the same period a year ago. Continuus also announced today that it has entered into a definitive merger agreement with Telelogic Telelogic AB (Stockholm Exchange:TLOG) is a global software and services company headquartered in Malmö, Sweden. Telelogic was founded in 1983 as a research and development arm of Swedish Telecom. AB, the leading Swedish-based supplier of solutions for real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. software development and requirements management The administration and control of the information needs of users. In order to achieve business objectives within an organization via information systems, user requirements must be defined in a consistent manner, prioritized and monitored. . Pursuant to the merger agreement Telelogic will commence a cash tender offer for all outstanding shares of Continuus at $3.46 per share. Continuus will host a conference call/webcast on Wednesday, October October: see month. 25 at 2:00 p.m. Pacific Daylight Time to discuss its third quarter results and the merger agreement. The dial-in number to access this call is 888/303-1409. From international locations, dial 212/271-4760. A taped replay of the call will be available starting approximately one hour after the calls' conclusion until Friday, October 27 at 9:00 a.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT . To access the replay, dial 800/633-8284 and enter the passcode 1670-7216. To access the webcast, go to Continuus' Web site at www.continuus.com. An archived webcast replay will also be available. John Wark John Wark (born Glasgow, 4 August 1957) was a Scottish footballer who grew up in the Ipswich Town side of the 1970s and went on to become a player synonymous with the club. He was also part of the all conquering Liverpool side of the mid 1980s. , 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 Continuus, commented: "This was our largest ever revenue quarter, with 33 new customers and 90 existing customers expanding their deployment of Continuus technologies. We also successfully shipped new versions of our ChangeSynergy and KnowledgeSynergy product lines, along with an integration of our CMSynergy solution with IBM's Visual Age for Java, which is used heavily in ecommerce application development environments by our Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and Financial customers. The merger with Telelogic will allow us to leverage these capabilities alongside the strong Telelogic product lines, into the merged companies' joint customer bases and target markets. Our customers will benefit from a financially stronger supplier with more global resources." About Continuus Continuus Software Corp. is the leading provider of eAsset Management solutions. eAsset Management enables organizations to develop, enhance, deploy and more effectively manage their teams building Internet and enterprise software and content-based systems. Continuus products enable organizations to improve the quality of their eAssets and to reduce the time it takes to deliver Internet and software applications. Continuus offers eAsset Management solutions, consisting of Continuus CM Synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. , Continuus WebSynergy, Continuus ChangeSynergy, and Continuus KnowledgeSynergy, designed to support the collaborative development, management, approval and deployment of the most complex and demanding software, Internet applications and Web content. The company also offers professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. through the eAsset Foundation that include consulting, training and maintenance services to facilitate successful implementation of their eAsset Management solutions. Continuus has licensed its products to more than 550 customers, 1,000 sites and 50,000 users worldwide. For more information on Continuus: 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. , call 949/830-8022; in Canada, call 613/751-4499; in the United Kingdom, call 44.1344.788.100; in Germany, call 49.89.54.8880; in France, call 33.1.69.59.1616; in Australia call 61.2.9904.6033, or visit its Web site at www.continuus.com. This news release contains certain 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. that are based largely on Continuus Software's current expectations and are subject to a number of risks and uncertainties. Actual results and events could differ significantly from those discussed in the forward-looking statements. These risks and uncertainties include those associated with the proposed acquisition of Continuus Software by Telelogic, fluctuation Fluctuation A price or interest rate change. in our revenue and financial performance, the development of new products and technologies, including Continuus eAsset Management solutions, the emerging markets for our products, and intense competition in our markets, as well as other risks and uncertainties described from time to time in our filings with the Securities and Exchange Commission, including our most recent 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. and our most recent Quarterly Report on Form 10-Q Form 10-Q See 10-Q. . This announcement is not an offer to purchase nor a solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to sell shares. The tender offer for the outstanding shares of Continuus common stock described in this announcement has not yet commenced. At the time the offer is commenced, Telelogic will file a tender offer statement with the SEC and Continuus will file a solicitation/recommendation statement with respect to the offer. Investors and security holders of both Telelogic and Continuus are urged to read each of the tender offer statement and the solicitation/recommendation statement referenced in this news release when it becomes available because it will contain important information about the transaction. Investors and security holders may obtain a free copy of the tender offer statement and the solicitation/recommendation statement when it is available and other documents filed by Telelogic and Continuus with the SEC at the SEC's Web site at www.Sec.Gov. The tender offer statement and the solicitation/recommendation statement and these other documents may also be obtained free from Telelogic and Continuus.
CONTINUUS SOFTWARE CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three months Ended Nine months Ended
September 30, September 30,
2000 1999 2000 1999
Revenues:
License fees $ 5,976 $ 5,304 $ 15,966 $ 14,304
Services 4,977 4,348 13,901 12,399
Total revenues 10,953 9,652 29,867 26,703
Cost of revenues:
License fees 260 152 835 470
Services 2,945 2,230 8,591 6,375
Amortization of
technology rights 260 0 608 0
Total cost of revenues 3,465 2,382 10,034 6,845
Gross Profit 7,488 7,270 19,833 19,858
Operating Expenses:
Sales and marketing 6,027 4,565 17,396 12,803
Research and development 2,559 1,438 6,920 4,007
General and administrative 1,144 895 3,556 2,413
Other compensation costs,
goodwill and other
amortization 543 57 1,253 155
Total operating expenses 10,273 6,955 29,125 19,378
Income (loss) from
operations (2,785) 315 (9,292) 480
Other expense, net (1,788) (34) (1,931) (612)
Net loss before income
taxes (4,573) 281 (11,223) (132)
Income taxes provision (3) (1) (50) (8)
Net loss $ (4,576) $ 280 $ (11,273) $ (140)
Net loss per share
Basic $ (0.43) $ 0.04 $ (1.08) $ (0.04)
Diluted $ (0.43) $ 0.03 $ (1.08) $ (0.04)
Weighted average shares outstanding
Basic 10,715 6,888 10,471 3,426
Diluted 10,715 10,188 10,471 3,426
CONTINUUS SOFTWARE CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
September 30, 2000 December, 31 1999
(unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 6,112 $ 11,570
Investments in securities 0 9,125
Accounts receivable,net 10,361 8,940
Prepaid and other current
assets 1,149 1,321
Total current assets 17,622 30,956
Property and equipment, net 5,569 2,154
Goodwill and other
intangible assets, net 9,602 107
Other assets 1,766 757
Total Assets $34,559 $33,974
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 2,801 $ 1,662
Accrued liabilities 5,191 5,554
Deferred revenue 5,427 4,961
Current portion of capital
leases obligations 203 488
Total current liabilities 13,622 12,665
Long-term liabilites:
Note payable 6,000 6,000
Capital lease obligations,
less current portion 129 261
Total liabilities 19,751 18,926
Total Stockholders' Equity 14,808 15,048
Total Liabilities and
Stockholders' Equity $ 34,559 $ 33,974
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