Corio Reports Fourth Quarter and Full Year 2004 Financial Results.SAN CARLOS San Carlos (săn kär`lōs), residential city (1990 pop. 26,167), San Mateo co., W Calif.; inc. 1925. The chief manufactures are plastic products, hardware, and machine parts. , Calif. -- Corio Corio may refer to
cRIO Compact Reconfigurable Input Output (National Instruments) ) (http://www.corio.com/press), a leading enterprise application service provider, today reported results for its fourth quarter and full year 2004 ended December December: see month. 31, 2004. Revenues for the fourth quarter of 2004 were $17.7 million, compared to $17.1 million reported for the same period in 2003. Net loss on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis for the fourth quarter of 2004 was $2.3 million, or $0.04 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 to the net loss of $2.5 million, or $0.04 per diluted share, reported for the same period in 2003. Revenues for full year 2004 were $70.8 million, compared to $68.7 million reported for the prior year. Net loss on a GAAP basis for full year 2004 was $12.7 million, or $0.20 per diluted share, compared to the net loss of $12.9 million, or $0.22 per diluted share, reported for the prior year. Included in the results for the fourth quarter of 2004 is the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.14 million of Applications Management Services expense related to a liability for which the company no longer believes payment is probable PROBABLE. That which has the appearance of truth; that which appears to be founded in reason. . The company also recorded approximately $315,000 of professional fees in General and Administrative expense related to the company's merger agreement with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , previously announced January January: see month. 25, 2005. As of December 31, 2004, the total of cash, cash equivalents, restricted cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments was $31.1 million. Quarterly Conference Call Cancelled can·cel v. can·celed also can·celled, can·cel·ing also can·cel·ling, can·cels also can·cels v.tr. 1. To cross out with lines or other markings. See Synonyms at erase. 2. . In view of its announced merger agreement with IBM, the Company will not be holding its previously scheduled earnings conference call in connection with this release of financial results. About Corio, Inc. Corio, Inc. (Nasdaq: CRIO) is a leading enterprise application service provider (ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). ). Corio Applications on Demand 2005(TM) is an operational platform that delivers enterprise applications from leading software vendors as a service. Corio provides infrastructure, applications management, professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. and Corio iSRVCE(TM) technology resource management (TRM) software. Corio guarantees system reliability through service level agreements (SLA's) and allows customers to 'pay-as-you-go,' minimizing upfront project costs, improving return on investment (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). ) and reducing IT cost overall. Corio Applications on Demand 2005(TM) is available for a monthly fee. Additional information about Corio is available at www.corio.com. Corio(R) and SRVCE(R) are registered trademarks of Corio, Inc. Applications on Demand(TM), Applications on Demand 2005(TM) and iSRVCE(TM) are trademarks of Corio, Inc. All other product and company names mentioned herein may be the trademarks of their respective owners.
CORIO, INC.
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Twelve Months
Ended Dec. 31, Ended Dec. 31,
--------------- -----------------
2004 2003 2004 2003
------- ------- -------- --------
Revenues:
Application management services $14,261 $14,416 $ 57,330 $ 60,179
Professional services and other 3,450 2,727 13,475 8,559
------- ------- -------- --------
Total revenues 17,711 17,143 70,805 68,738
Costs and Expenses:
Application management services 10,256 11,423 44,948 47,756
Professional services and other 2,867 2,253 11,435 6,708
Research and development 360 819 2,107 4,638
Sales and marketing (1) 2,971 2,068 10,819 8,700
General and administrative (1) 3,261 2,585 11,769 9,501
Restructuring charges - - 714 2,334
Amortization of stock based
compensation - 12 3 458
Amortization of intangible
assets 273 550 1,464 1,807
------- ------- -------- --------
Total operating expenses 19,988 19,710 83,259 81,902
------- ------- -------- --------
Loss from operations $(2,277)$(2,567)$(12,454)$(13,164)
------- ------- -------- --------
Interest and other income
(expense) (11) 62 (85) 295
Taxes - - (115)
------- ------- -------- --------
Net Loss $(2,288)$(2,505)$(12,654)$(12,869)
======= ======= ======== ========
Basic and diluted net loss per
share $ (0.04)$ (0.04)$ (0.20)$ (0.22)
======= ======= ======== ========
Shares used in computation-basic
and diluted 64,370 60,803 63,291 57,228
======= ======= ======== ========
RECONCILIATION OF NET LOSS TO Three Months Twelve Months
EBITDA Ended Dec. 31, Ended Dec. 31,
--------------- -----------------
2004 2003 2004 2003
------- ------- -------- --------
Net loss $(2,288)$(2,505)$(12,654)$(12,869)
Amortization expense (1) 278 565 1,481 2,695
Interest and other income (expense) 11 (62) 85 (295)
Taxes - - 115 -
Depreciation 2,164 2,380 8,175 11,169
------- ------- -------- --------
EBITDA $ 165 $ 378 $ (2,798)$ 700
======= ======= ======== ========
(1) AMORTIZATION EXPENSE IN EBITDA
RECONCILIATION ABOVE Three Months Twelve Months
Ended Dec. 31, Ended Dec. 31,
--------------- -----------------
2004 2003 2004 2003
------- ------- -------- --------
Amortization expense included in
other Statement of
Operations expense line items:
Sales and marketing $ - $ - $ - $ 416
General and administrative 5 3 14 14
------- ------- -------- --------
Total amortization expense in other
Statement of Operations expense
line items 5 3 14 430
Amortization of stock based
compensation - 12 3 458
Amortization of intangible assets 273 550 1,464 1,807
------- ------- -------- --------
Total amortization expense $ 278 $ 565 $ 1,481 $ 2,695
======= ======= ======== ========
CORIO, INC.
BALANCE SHEETS
(in thousands)
(unaudited)
December December
31, 31,
2004 2003
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 4,653 $ 15,440
Short-term investments 18,636 19,591
Accounts receivable 6,897 6,484
Prepaid expenses and other assets 2,539 2,502
-------- --------
Total current assets 32,725 44,017
Restricted cash 7,853 7,680
Property and equipment and other assets 24,361 20,446
-------- --------
Total assets $ 64,939 $ 72,143
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 13,742 $ 14,676
Deferred revenue 2,136 4,017
Other current liabilities (1) 6,644 476
-------- --------
Total current liabilities 22,522 19,169
Long-term liabilities 4,973 5,738
-------- --------
Total liabilities 27,495 24,907
Stockholders' equity 37,444 47,236
-------- --------
Total liabilities and stockholders' equity $ 64,939 $ 72,143
======== ========
(1) Current liabilities as of December 31, 2004 included a $6.3
million equipment loan with Wells Fargo Bank (WFB). The original
terms of the loan require repayment of the loan plus interest
pursuant to 30 monthly payments which began in October 2004.
Covenants associated with this loan require that the Company's
results from operations generate certain levels of EBITDA on a
quarterly basis. The Company has classified this obligation as
current as of December 31, 2004 as the Company has future quarterly
EBITDA covenants with WFB that it does not believe it will be able to
comply with due to increased operating expenses, the loss of revenue
associated with the customer contract with Avaya which terminated
July 29, 2004 and acquisition-related cost associated with the
previously announced purchase of the Company by IBM. The Company has
$23.3 million of unrestricted cash and cash equivalents as of
December 31, 2004.
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