Corio Reports Third Quarter Financial Results; Results Exceed Guidance; Revenue Up 15% Over Prior Year.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
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 :CRIO CRIO COMSEC Regional Issuing Officer cRIO Compact Reconfigurable Input Output (National Instruments) ) (http://www.corio.com/press), a leading enterprise application service provider, today reported results for its third quarter ended September September: see month. 30, 2004. Revenues for the third quarter of 2004 were $17.8 million, compared to $15.5 million reported for the same period in 2003. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become loss for the third quarter of 2004 was $1.8 million. "We are very pleased with our results this quarter; our revenue grew significantly versus last year, and both revenue and EBITDA exceeded guidance," said Brett White Brett White (born April 8 1982 in Cooma, New South Wales) is an Australian professional rugby league footballer. He plays for the Melbourne Storm in the National Rugby League. , chief financial officer. Corio is pleased to announce important contract signings including new customers, customer renewals and contract extensions. They include: --A Fortune 50 financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. company --Mindspeed Technologies (NASDAQ:MSPD MSPD Memory Stick Pro Duo MSPD Matrix Solid Phase Dispersion ) --United Components, Inc. --Merisant Company --Small Business Administration --HMS Host Corporation --Jazz Semiconductor --On Command Video Corporation Corio also signed a strategic alliance agreement during the quarter with a major technology company that generated additional new customer wins. "Corio experienced continued demand momentum and strong customer bookings during the quarter, and we are pleased to be in a position to increase our outlook for the current quarter," said George George, river, c.345 mi (560 km) long, rising in a lake on the Quebec-Labrador boundary, E Canada. It flows N through Indian Lake (125 sq mi/324 sq km) to Ungava Bay (an arm of Hudson Strait). Kadifa, chairman 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 Corio. "We also expect our partner program to produce customer gains and revenue growth going forward." During the quarter Corio announced Applications on Demand 2005(TM), a new release of Corio's operational platform designed to reduce the cost and complexity of enterprise application systems and to facilitate compliance with regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. . This platform simplifies enterprise application management through automation and improves system security and service level agreements. Also during the quarter, Deloitte & Touche ranked Corio #196 in the 2004 Deloitte Technology Fast 500, a ranking of the 500 fastest growing technology companies 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. . Rankings are based on percentage revenue growth over five years, from 1999-2003. This is the third consecutive year that Corio has been recognized as part of the Deloitte Technology Fast 500, reflecting the company's continued strong position in the enterprise application service provider market. Quarterly Conference Call Management will host a conference call to discuss the results beginning at 2:00 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT . Interested parties may listen to the conference call via live broadcast 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 at http://www.corio.com/ir or over the telephone by dialing (888) 273-9885 with passcode "Corio Q3-04". For those unable to participate in the live call, a replay will be available by telephone beginning at 5:30 p.m. PDT after conclusion of the call and continuing through November November: see month. 4, 2004. The replay number is (800) 475-6701, with confirmation code 749899. A replay of the conference call will also be available for 30 days on Corio's website. Use of Non-GAAP Financial Measures The financial statements included with this press release disclose EBITDA, or earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. , which is considered a non-GAAP financial measure within the meaning set forth in the rules of the Securities and Exchange Commission, or SEC. EBITDA should be considered in addition to, and not as a substitute for, or superior to, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , cash flows, or other measures of financial performance prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . Generally, a non-GAAP financial measure is a numerical numerical expressed in numbers, i.e. Arabic numerals of 0 to 9 inclusive. numerical nomenclature a numerical code is used to indicate the words, or other alphabetical signals, intended. measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. In order to fully assess the company's financial operating results, management believes that EBITDA is an appropriate measure to consider along with other measures in evaluating Corio's operating performance. Corio believes that EBITDA offers the opportunity to evaluate operating performance on a current period basis without regard to depreciation or amortization rates associated with historical events such as acquisitions and without regard to interest expenses dictated dic·tate v. dic·tat·ed, dic·tat·ing, dic·tates v.tr. 1. To say or read aloud to be recorded or written by another: dictate a letter. 2. a. by interest rates established in prior periods. For example, EBITDA excludes depreciation and thereby removes the variability of the non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) of equipment, the prices and quantity of purchases of which have varied over time. EBITDA also excludes amortization, thereby excluding some of the non-cash effects of historical acquisitions, and excludes interest. These exclusions exclusions, n.pl the dental services not covered under a dental benefits program. may offer additional insight to an investor into Corio's operating performance for periods during which the existence or amount of depreciation, amortization or interest varied in comparison to prior periods. Corio's senior management also uses EBITDA as an important financial metric for internal evaluation of the company's current operating performance and as a tool for financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against , including expense management. However, EBITDA as a measure of Corio's operating performance has limitations that should be considered carefully, since EBITDA presents an incomplete picture of the company's financial results. For example, by excluding depreciation associated with Corio's capital equipment used in its business, EBITDA presents financial results without taking into account the ultimate replacement cost of that equipment. In excluding amortization expense associated with Corio's prior acquisitions of intangible and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. , EBITDA fails to recognize the historical financial cost to Corio of the acquisition. Similarly, the exclusion exclusion /ex·clu·sion/ (eks-kloo´zhun) 1. a shutting out or elimination. 2. surgical isolation of a part, as of a segment of intestine, without removal from the body. of interest expense in the use of EBITDA ignores the borrowing costs of working capital that is used by the company in its business. The non-GAAP financial measure included in the financial statements included with this press release has been reconciled rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. to the nearest GAAP measure as is required under SEC rules regarding the use of non-GAAP financial measures. As used herein, "GAAP" refers to accounting principles generally accepted 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. . 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. 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. : Matters discussed in this release and its attachments involving expectations, beliefs, plans, projections, intentions, future events or strategies are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , Section 21E of the Securities and Exchange Act of 1934, as amended, and 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, and are made under their safe-harbor provisions. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Forward-looking statements herein include statements regarding Corio's future financial and operating performance, statements regarding the company's financial outlook, any implication implication In logic, a relation that holds between two propositions when they are linked as antecedent and consequent of a true conditional proposition. Logicians distinguish two main types of implication, material and strict. that future financial and operating performance is predictable based on the results in the third quarter, statements or implications regarding Corio meeting its debt covenants in the future and regarding renegotiating or replacing its loan arrangements, statements or implications regarding expected continued strong bookings and demand momentum, statements regarding expectations around revenue growth, customer gains and the strength of, and benefits of, our partner program, any implication regarding Corio's future performance based on the results of the Deloitte Technology Fast 500 rankings, benefits of Corio's new strategic alliance, statements regarding any increase in adoption of Corio's services, and statements regarding services to be performed for certain customers and the benefits to Corio and its customers of Corio's services and of Applications on Demand 2005(TM). Some of the specific factors that may cause actual results to differ include, among others: the fact that Corio operates in a relatively new industry with a rapidly-evolving business model, the fact that visibility into future financial and operating performance in the current environment is poor, the fact that the structure of customer and strategic alliance relationships may change, may not be as beneficial as anticipated, and relationships may terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. , the fact that Corio will need to reach agreement with its lender LENDER, contracts. He from whom a thing is borrowed. 2. The contract of loan confers rights, and imposes duties on the lender. 1. The lender has the right to revoke the loan at his mere pleasure; 9 Cowen, R. 687; 8 Johns. Rep. 432; 1 T. R. 480; 2 Campb. Rep. in order to meet its future debt covenants or may decide to try to engage a new lender but may not be successful in replacing its loan, the fact that customers may not pay Corio as expected, the fact that services related to information technology can be challenging, and the fact that future demand for Corio's services and future bookings may not be as strong as currently expected. Additional risks that could cause actual results to differ materially from those projected are discussed in our public filings with the SEC which are available at the SEC's website (http://www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. ). Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . Corio undertakes no obligation to publicly release the results of any revision to these forward-looking statements that may be made to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof or to reflect the occurrence of unanticipated events, and Corio shall have no duty to update statements made herein.
CORIO, INC.
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
---------------- ------------------
2004 2003 2004 2003
------- ------- -------- --------
Revenues:
Application management
services $14,379 $14,295 $ 43,069 $ 45,762
Professional services and
other 3,445 1,245 10,025 5,833
------- ------- -------- --------
Total revenues 17,824 15,540 53,094 51,595
Costs and Expenses:
Application management
services 11,800 11,210 34,692 36,333
Professional services and
other 2,855 730 8,568 4,455
Research and development 562 1,123 1,747 3,819
Sales and marketing (1) 2,417 2,125 7,848 6,632
General and administrative
(1) 3,274 2,339 8,508 6,917
Restructuring charges 714 - 714 2,334
Amortization of stock based
compensation - (34) 3 445
Amortization of intangible
assets 273 367 1,191 1,257
------- ------- -------- --------
Total operating expenses 21,895 17,860 63,271 62,192
------- ------- -------- --------
Loss from operations $(4,071) $(2,320) $(10,177) $(10,597)
------- ------- -------- --------
Interest and other income
(expense) (233) 63 (74) 233
Taxes - - (115)
------- ------- -------- --------
Net Loss $(4,304) $(2,257) $(10,366) $(10,364)
======= ======= ======== ========
Basic and diluted net loss
per share $ (0.07) $ (0.04) $ (0.16) $ (0.18)
======= ======= ======== ========
Shares used in computation-
basic and diluted 63,515 57,684 63,124 56,098
======= ======= ======== ========
RECONCILIATION OF NET LOSS TO Three Months Nine Months
EBITDA Ended Ended
September 30, September 30,
---------------- ------------------
2004 2003 2004 2003
------- ------- -------- --------
Net loss $(4,304) $(2,257) $(10,366) $(10,364)
Amortization expense (1) 276 336 1,202 2,129
Interest and other (income)
expense 233 (63) 74 (233)
Taxes - - 115 -
Depreciation 2,015 2,701 6,011 8,788
------- ------- -------- --------
EBITDA $(1,780) $ 717 $ (2,964) $ 320
======= ======= ======== ========
(1) AMORTIZATION EXPENSE IN
EBITDA RECONCILIATION
ABOVE Three Months Nine Months
Ended Ended
September 30, September 30,
---------------- ------------------
2004 2003 2004 2003
------- ------- -------- --------
Amortization expense included in
other Statement of
Operations expense line
items:
Sales and marketing $ - $ - $ - $ 417
General and
administrative 3 3 9 10
------- ------- -------- --------
Total amortization expense in
other Statement of
Operations expense line
items 3 3 9 427
Amortization of stock based
compensation - (34) 3 445
Amortization of intangible
assets 273 367 1,190 1,257
------- ------- -------- --------
Total amortization expense $ 276 $ 336 $ 1,202 $ 2,129
======= ======= ======== ========
CORIO, INC.
BALANCE SHEETS
(in thousands)
(unaudited)
Sept. 30, Dec. 31,
2004 2003
----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 7,431 $ 15,440
Short-term investments 20,843 19,591
Accounts receivable 8,517 6,484
Prepaid expenses and other assets 1,688 2,502
----------- ---------
Total current assets 38,479 44,017
Restricted cash 7,853 7,680
Property and equipment and other assets 22,679 20,446
----------- ---------
Total assets $ 69,011 $ 72,143
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 14,332 $ 14,676
Deferred revenue 3,049 4,017
Other current liabilities (1) 7,344 476
----------- ---------
Total current liabilities 24,725 19,169
Long-term liabilities 5,100 5,738
----------- ---------
Total liabilities 29,825 24,907
Stockholders' equity 39,186 47,236
----------- ---------
Total liabilities and stockholders' equity $ 69,011 $ 72,143
=========== =========
(1) Current liabilities as of September 30, 2004 include a $7 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 beginning 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 did not
meet the EBITDA covenant for the quarter ended September 30, 2004 and
obtained a waiver from WFB on September 30, 2004 related to this
covenant violation. The Company has classified this obligation as
current as of September 30, 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 and to the loss of
revenue associated with the customer contract with Avaya which
terminated July 29, 2004. The Company is in discussions with WFB to
renegotiate the future EBITDA covenants or to discuss other
arrangements. The Company has $28.3 million of unrestricted cash and
cash equivalents as of September 30, 2004.
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