Critical Path Announces 2003 Fourth Quarter and Year-End Results.Business Editors/High-Tech Writers SAN FRANCISCO--(BUSINESS WIRE)--Feb. 4, 2004 Critical Path, Inc. (Nasdaq:CPTH), a global provider of digital communications Transmitting text, voice and video in binary form. See communications. software and services, today announced financial results for the fourth quarter and year ended December December: see month. 31, 2003. Revenues for the fourth quarter of 2003 were $20.0 million, up 23% from $16.2 million in the third quarter of 2003. Cash operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , which exclude amortization, depreciation and restructuring charges 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. , were $23.4 million, as compared to $21.8 million in the third quarter of 2003. Based on Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) 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. , net loss attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to common shares for the fourth quarter of 2003 was $18.1 million, or $0.89 per share, compared to $18.6 million, or $0.92 per share in the third quarter of 2003. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
"We are very pleased to see our revenues up from the previous quarter," said William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack McGlashan, Jr., chairman and chief executive officer of Critical Path. "We saw continued business from existing customers such as Wind, ENI, Telecom Italia Telecom Italia is formerly a partially state-owned Italian telco. It was once known as SIP, and it has the largest user base in Italy. Telecom Italia also owns shares in Telecom Argentina and Telecom Personal, fixed and cellular networks in Argentina. Media, O2, SK Communications and Banca Intesa Banca Intesa S.p.A. is a major Italian bank based in Milan. It was born in 1998 from the merger of Cassa di Risparmio delle Provincie Lombarde (aka Cariplo) and Banco Ambroveneto (former Banco Ambrosiano). and gained new customers such as the German Army and several telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. carriers in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. ."
Revenues for fiscal year 2003 were $72.3 million, compared with $87.1 million in 2002. Cash operating expenses, excluding special charges, amortization and depreciation, were $94.8 million, compared with $108.8 million in 2002. GAAP net loss attributable to common shares for the year was $74.6 million, or $3.73 per share, compared with a net loss attributable to common shares of $131.8 million, or $6.78 per share, in 2002. Adjusted EBITDA, excluding special charges, for the year amounted to a loss of $22.5 million, compared with an Adjusted EBITDA loss of $21.7 million in 2002. As of December 31, 2003, the Company's cash and cash equivalents totaled $19.0 million as compared with its September September: see month. 30, 2003 balance of $18.2 million. During the quarter the Company raised $10 million in proceeds through a financing with General Atlantic Partners and repaid $2.6 million of its line of credit facility with Silicon Valley Bank. Subsequent to the quarter, the Company raised an additional $15 million through a financing with Apex Capital and Passport passport Document issued by a national government identifying a traveler as a citizen with a right to protection while abroad and a right to return to the country of citizenship. It is normally a small booklet containing a description and photograph of the bearer. Capital. Regulation G The Company uses both GAAP and non-GAAP metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. to measure its financial results. It utilizes two primary non-GAAP metrics: cash operating expenses and Adjusted EBITDA. The most directly comparable GAAP measures are revenues and net income (loss), respectively. Management believes that, in addition to GAAP metrics, these non-GAAP metrics assist the Company in measuring its cash-based performance. In addition, management believes these non-GAAP metrics are useful to investors because they remove unusual and nonrecurring charges Nonrecurring Charge An expense occurring only once on a company's financial statement. Notes: An extraordinary item is an example of a nonrecurring charge. Also known as "nonrecurring item". that occur in the affected period and provide a basis for measuring the Company's financial condition against other quarters. Since the Company has historically reported non-GAAP results to the investment community, management also believes the inclusion of non-GAAP measures provides consistency Consistency can refer to:
As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP. The calculations for cash operating expenses and Adjusted EBITDA are in the Alternative Measurement Reconciliation table below. Conference Call Critical Path will host a conference call on Wednesday Wednesday: see week. , February February: see month. 4, 2004, to discuss the financial results for the fourth quarter of 2003. Those who would like to participate in this conference call should dial 877-231-3543 (in USA) or +1 706-634-1329 (international) prior to 4:50pm EST EST electroshock therapy. EST abbr. electroshock therapy . The conference call and its replay will also be available via Web cast from the Company's Web site, www.criticalpath.net. A telephone replay of the conference call will be available for seven days following the call. To access the replay, please dial 800-642-1687 (in USA) or +1 706-645-9291 (international) and give the passcode 5229892. The Web cast and this earnings release will be available on the Company's Web site for twelve months following the conference call. 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. : This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words and expressions "look forward to," "will," "expect," "plan," "believe," "seek," "strive for," "anticipate," hope," "estimate" and similar expressions are intended to identify the Company's forward-looking statements. These are statements that relate to future events and include, but are not limited to, continued business from existing customers and the acquisition of new customers. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks include, but are not limited to, our success in raising sufficient capital to continue operations, our evolving business strategy and the emerging and changing nature of the market for our products and services, our ability to deliver on our sales objectives, the ability of our technology and our competitors' technologies to address customer demands, changes in economic and market conditions, unplanned system interruptions and capacity constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. , software and service design defects. These and other risks and uncertainties are described in more detail in the Company's filings with the U.S Securities and Exchange Commission (www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. ) made from time to time, including Critical Path's 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. for the fiscal year ended December 31, 2002 and Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the fiscal quarter ended September 30, 2003, as may be 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. from time to time, and all subsequent filings with the Securities and Exchange Commission (www.sec.gov). The company makes no commitment to revise or update any forward-looking statements in order 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 any such statement is made. Note to Editors: Critical Path and the Critical Path logo are the trademarks of Critical Path, Inc. All other trademarks are the property of their holders.
CRITICAL PATH, INC.
Condensed Consolidated Balance Sheets
(In thousands)
Dec. 31, Dec. 31,
2002 2003
-------- --------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $33,498 $18,984
Short-term marketable securities 5,583 -
Accounts receivable, net 22,818 16,880
Other current assets 4,030 4,664
--------- --------
Total current assets 65,929 40,528
Long-term marketable securities 3,990 -
Equity investments 357 -
Property and equipment, net 18,142 14,821
Goodwill 6,613 6,613
Restricted cash 2,729 -
Other assets 6,246 5,763
--------- --------
Total assets $104,006 $67,725
--------- --------
LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS'
DEFICIT
Current liabilities
Accounts payable and accrued liabilities $31,857 $25,777
Deferred revenue 10,272 8,856
Line of credit facility - 2,298
Capital lease and other obligations, current 3,323 1,721
--------- --------
Total current liabilities 45,452 38,652
Deferred revenue 516 1,343
Convertible subordinated notes payable 38,360 38,360
Convertible secured note payable - 10,016
Capital lease and other obligations, long-term 1,332 1,295
--------- --------
Total liabilities 85,660 89,666
--------- --------
Mandatorily redeemable preferred stock 26,900 51,546
--------- --------
Shareholders' deficit (8,554) (73,487)
--------- --------
Total liabilities, mandatorily redeemable
preferred stock and shareholders' deficit $104,006 $67,725
--------- --------
CRITICAL PATH, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Year Ended
--------------------------- --------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2002 2003 2003 2002 2003
--------- --------- --------- ---------- ---------
Net revenues
Software license $7,436 $4,264 $7,201 $35,176 $22,104
Hosted messaging 5,886 4,583 4,619 24,893 19,444
Professional
services 3,958 2,574 3,366 11,593 12,315
Maintenance and
support 4,554 4,744 4,776 15,471 18,434
--------- --------- --------- ---------- ---------
Total net
revenues 21,834 16,165 19,962 87,133 72,297
--------- --------- --------- ---------- ---------
Cost of net revenues
Software license 1,246 541 1,008 2,682 4,068
Hosted messaging 6,468 6,196 6,631 29,303 26,193
Professional
services 3,018 2,734 3,109 10,020 12,203
Maintenance and
support 2,121 1,263 1,224 8,670 5,803
Amortization of
purchased
technology 4,630 - - 18,522 -
Stock-based
expense -
Hosted
messaging 60 - - 590 8
Stock-based
expense -
Professional
services 26 - - 222 3
Stock-based
expense -
Maintenance and
support 49 - - 413 6
--------- --------- --------- ---------- ---------
Total cost of
net revenues 17,618 10,734 11,972 70,422 48,284
--------- --------- --------- ---------- ---------
Gross profit 4,216 5,431 7,990 16,711 24,013
--------- --------- --------- ---------- ---------
Operating expenses
Sales and
marketing 10,342 7,150 6,834 43,604 31,224
Research and
development 4,320 4,608 5,003 19,649 19,047
General and
administrative 3,792 3,228 2,829 22,128 12,603
Amortization of
goodwill and
other intangible
assets 6,206 - - 24,784 -
Stock-based
expense - Sales
and marketing 240 - - 3,877 18
Stock-based
expense -
Research and
development 152 - - 1,214 15
Stock-based
expense -
General and
administrative(1) 61 - 5,082 3,681 5,091
Restructuring
and other
expense 1,629 953 1,852 3,168 6,886
--------- --------- --------- ---------- ---------
Total operating
expenses 26,742 15,939 21,600 122,105 74,884
--------- --------- --------- ---------- ---------
Loss from
operations (22,526) (10,508) (13,610) (105,394) (50,871)
Non-operating
expenses
Interest and
other income
(expense), net (5,049) (3,944) (774) (5,852) (7,619)
Interest expense (492) (852) (932) (2,748) (3,336)
Gain (loss) on
investments, net (1,530) - 200 (1,530) 549
Equity in net
loss of joint
venture - - - (1,408) -
--------- --------- --------- ---------- ---------
Total non-
operating
expenses (7,071) (4,796) (1,506) (11,538) (10,406)
--------- --------- --------- ---------- ---------
Loss before
provision for
income taxes (29,597) (15,304) (15,116) (116,932) (61,277)
Provision for
income taxes (724) (273) (102) (979) (856)
--------- --------- --------- ---------- ---------
Net loss (30,321) (15,577) (15,218) (117,911) (62,133)
Accretion on
mandatorily
redeemable
preferred stock (3,837) (3,025) (2,917) (13,904) (12,446)
--------- --------- --------- ---------- ---------
Net loss
attributable to
common shares $(34,158) $(18,602) $(18,135) $(131,815) $(74,579)
--------- --------- --------- ---------- ---------
Net loss per share
attributable to
common shares -
basic and diluted $(1.74) $(0.92) $(0.89) $(6.78) $(3.73)
--------- --------- --------- ---------- ---------
Weighted average
common shares
outstanding(2) 19,639 20,126 20,415 19,445 20,020
(1) Includes $5,056 related to the settlement of litigation during
the fourth quarter of 2003.
(2) The share and per-share amounts have been retroactively
restated to give effect to the one-for-four reverse stock split,
effected on August 1, 2003, of the Company's authorized and
outstanding common stock and of all shares of common stock subject to
stock options and warrants.
CRITICAL PATH, INC.
Alternative Measurement Reconciliations
(Unaudited)
(In thousands)
Three Months Ended Year Ended
----------------------------- --------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2002 2003 2003 2002 2003
--------- --------- --------- ---------- ---------
Adjusted EBITDA(1)
Net loss attributable
to common shares $(34,158) $(18,602) $(18,135) $(131,815) $(74,579)
Adjustments
Cost of net
revenues
Depreciation 3,407 3,107 2,593 18,149 11,848
Amortization of
purchased
technology 4,630 - - 18,522 -
Stock-based
expense - Hosted
messaging 60 - - 590 8
Stock-based
expense -
Professional
services 26 - - 222 3
Stock-based
expense -
Maintenance and
support 49 - - 413 6
Operating
expenses
Depreciation 1,914 810 616 9,075 4,506
Amortization of
intangible
assets 6,206 - - 24,784 -
Stock-based
expense - Sales
and marketing 240 - - 3,877 18
Stock-based
expense -
Research and
development 152 - - 1,214 15
Stock-based
expense - General
and administrative 61 - 5,082 3,681 5,091
Restructuring and
other expense 1,629 953 1,852 3,168 6,886
Non-operating
expenses
Interest and
other income and
expense, net
Change in fair-
value of
preferred stock
instrument 5,280 4,920 720 7,440 12,200
Other income
and expense,
net (231) (976) 54 (1,588) (4,581)
Interest expense 492 852 932 2,748 3,336
Loss (gain) on
investments, net 1,530 - (200) 1,530 (549)
Equity in net
loss of joint
venture - - - 1,408 -
Provision for
income taxes 724 273 102 979 856
Accretion on
mandatorily
redeemable
preferred stock 3,837 3,025 2,917 13,904 12,446
--------- --------- --------- ---------- ---------
Total non-cash and
non-operating
adjustments(2) 30,006 12,964 14,668 110,116 52,089
--------- --------- --------- ---------- ---------
Adjusted EBITDA(1) $(4,152) $(5,638) $(3,467) $(21,699) $(22,490)
--------- --------- --------- ---------- ---------
Cash Operating Costs
Net loss attributable
to common shares $(34,158) $(18,602) $(18,135) $(131,815) $(74,579)
Adjustments
Total net
revenues (21,834) (16,165) (19,962) (87,133) (72,297)
Total non-cash,
restructuring and
non-operating
adjustments(2) 30,006 12,964 14,668 110,116 52,089
--------- --------- --------- ---------- ---------
Cash Operating
Costs $(25,986) $(21,803) $(23,429) $(108,832) $(94,787)
--------- --------- --------- ---------- ---------
(1) Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation and amortization, adjusted to exclude non-cash stock-
based charges, extraordinary restucturing expenses, accretion on
redeemable convertible preferred stock and other non-operating
expenses.
(2) Total non-cash, restructuring and non-operating adjustments is
defined in the Adjusted EBITDA table presented above.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion