Critical Path Announces 2004 Fourth Quarter and Year-End Results; Revenues and Adjusted EBITDA Results In Line With Guidance.SAN FRANCISCO San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden -- Critical Path, Inc. (Nasdaq:CPTH), a leading provider of messaging software and services, today announced financial results for the fourth quarter and year ended December December: see month. 31, 2004. For the fourth quarter of 2004, revenues were $19.5 million, compared to $17.5 million in the third quarter of 2004 and $20.0 million in the fourth quarter of 2003. For the fiscal year 2004, revenues were $71.1 million, compared to $72.3 million for the 2003 fiscal year. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Results For the fourth quarter of 2004, net loss attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to common shareholders, based on 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. 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), was $10.7 million or $0.50 per share, compared to a net loss of $30.4 million or $1.43 per share for the third quarter of 2004 and a net loss of $18.1 million or $0.89 per share for the fourth quarter of 2003. For the fourth quarter of 2004, total cost of net revenues and 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. , based on GAAP, were $25.7 million, compared to $27.7 million for the third quarter of 2004 and $33.6 million for the fourth quarter of 2003. For the 2004 fiscal year, net loss attributable to common shareholders, based on GAAP, was $66.6 million or $3.15 per share, compared to a net loss of $74.6 million, or $3.73 per share for the 2003 fiscal year. For the 2004 fiscal year, total cost of net revenues and operating expenses, based on GAAP, were $112.5, compared to $123.2 million for the 2003 fiscal year. Adjusted 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 Results For the fourth quarter of 2004, earnings before interest income, interest expense, provision for income taxes, depreciation and amortization adjusted to exclude other items such as other income (expense), net, loss on extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt, gain on investment, non-cash severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , reserve for officer note receivable note receivable A debt due from borrowers and evidenced by a written promise of payment. Note receivable, an entry on the asset side of many corporate balance sheets, indicates the dollar amount of loans due to be repaid by borrowers. , restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). expenses, stock-based expenses and accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the on mandatorily Adv. 1. mandatorily - in a manner that cannot be evaded; "the ministry considers that contributions to such a fund should be met from voluntary donations rather than from rates compulsorily levied." compulsorily, obligatorily redeemable Redeemable Eligible for redemption under the terms of an indenture. preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. (or adjusted EBITDA), a non-GAAP measure which we use to measure the performance of our business, was a loss of $2.0 million, or $0.10 per share, compared to a loss of $4.9 million or $0.23 per share for the third quarter of 2004 and a loss of $3.5 million or $0.17 per share for the fourth quarter of 2003. For the fourth quarter of 2004, total cost of net revenues and operating expenses on an adjusted EBITDA basis were $21.5 million, compared to $22.4 million for the third quarter of 2004 and $23.4 million for the fourth quarter of 2003. For the 2004 fiscal year, adjusted EBITDA loss was $22.8 million or $1.08 per share compared to a loss of $22.5 million, or $1.12 per share for the 2003 fiscal year. For the 2004 fiscal year, total cost of net revenues and operating expenses on an adjusted EBITDA basis were $93.8 million, compared to $94.8 million for the 2003 fiscal year. "I am very pleased with our continued progress toward a sound financial structure," said Mark Ferrer Ferrer is a surname known in many countries. The name itself is a mutation of the Latin word Ferrarius, meaning iron-worker or smith; for this reason, the crests of the various branches of Ferrer nobles and knights always include horse shoes. , chief executive officer and chairman of Critical Path. "Not only have we continued toward profitability, we have introduced two new exciting solutions that position us well for future growth." As of December 31, 2004, the Company's cash and cash equivalents totaled $23.2 million, compared to $20.2 million at September September: see month. 30, 2004 and $19.0 million at December 31, 2003. Guidance The Company currently expects revenue for the first quarter of 2005 to be in the range of $17.0 million to $19.0 million. The following guidance is on an adjusted EBITDA (non-GAAP) basis as described above. If the Company is successful in delivering the middle to high end of its revenue range, it expects total gross margins in the first quarter to increase to a range of 45% to 50%. Additionally, the Company expects its operating expenses to remain relatively unchanged from the fourth quarter of 2004 and be in the range of $10.0 million to $11.0 million in the first quarter of 2005. Regulation G Due to the forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. nature of the projections of gross margins and operating expenses on an adjusted EBITDA basis given directly above, information to reconcile such non-GAAP financial measures to the most directly comparable GAAP measures is not available without unreasonable effort. The Company believes that the information necessary to reconcile the non-GAAP financial measures to GAAP, such as future restructuring costs, if any, other income (expense), interest income and expense, stock-based expenses and accretion on mandatorily redeemable preferred stock, are not reasonably estimable es·ti·ma·ble adj. 1. Possible to estimate: estimable assets; an estimable distance. 2. Deserving of esteem; admirable: an estimable young professor. or predictable. 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: income (loss) on an adjusted EBITDA basis and the total of cost of net revenues and operating expenses on an adjusted EBITDA basis. The most directly comparable GAAP measures are net income (loss) attributable to common shareholders and the total of cost of net revenues and operating expenses, 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 these non-GAAP metrics are in the alternative measurement reconciliation table below. Preliminary Results of Sarbanes-Oxley 404 Review Beginning with the year ending December 31, 2004, United States Securities and Exchange Commission rules Securities and Exchange Commission Rules Rules enacted by the SEC to assist in the regulation of US financial markets. promulgated prom·ul·gate tr.v. prom·ul·gat·ed, prom·ul·gat·ing, prom·ul·gates 1. To make known (a decree, for example) by public declaration; announce officially. See Synonyms at announce. 2. under Section 404 of the Sarbanes-Oxley Act See SOX. of 2002 require us to provide an annual report of management on internal control over financial reporting. In seeking to achieve compliance with Section 404 within the prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). period, management has engaged outside consultants and adopted a detailed project work plan to assess the adequacy of our internal control over financial reporting, validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data through testing that internal controls are functioning as documented and remediate re·me·di·a·tion n. The act or process of correcting a fault or deficiency: remediation of a learning disability. re·me internal control weaknesses that may be identified. As a result of efforts to-date on this initiative, we have identified deficiencies which we believe are material weaknesses in our internal control over financial reporting. These material weaknesses relate to issues involving inadequate segregation segregation: see apartheid; integration. of duties in numerous business processes, inadequate internal controls over accounting for income taxes and other taxes and lack of resources to apply generally accepted accounting principles to significant non-routine transactions. Based upon these material weaknesses, in management's report on internal controls over financial reporting we will conclude that our internal control over financial reporting was ineffective as of December 31, 2004. We have identified additional deficiencies in internal control over financial reporting and we have not yet determined whether they constitute material weaknesses. We may identify further material weaknesses during the continuing course of management's assessment of our internal control over financial reporting. Although we are working diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to complete our assessment, we are uncertain whether we will complete this work in a timely fashion. The existence of a material weakness or weaknesses is an indication that there is more than a remote likelihood that a material misstatement mis·state tr.v. mis·stat·ed, mis·stat·ing, mis·states To state wrongly or falsely. mis·state  ment n. of our financial statements will not be prevented or detected by
internal controls over financial reporting. Additional information
regarding these and potentially other material weaknesses and plans for
remediation will be disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in our upcoming management report on internal controls over financial reporting to be included in our 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. . Management is committed to the 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. and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. improvement of our internal controls over financial reporting and will work diligently to refine our procedures and internal controls to address the material weaknesses identified. The effectiveness of the steps we have taken to date and the steps we will take in the future will be subject to continued management review, as well as audit committee oversight
Oversight may refer to:
The financial information contained in this press release is based on current estimates and we are not aware of any pending adjustments that will need to be made. Actual results may differ materially as a result of the completion of our review of our financial performance for the fourth quarter and year ended December 31, 2004 and completion of our audit for the fiscal year ended December 31, 2004. Conference Call Critical Path will host a conference call on Thursday Thursday: see week. , February February: see month. 24, 2005, at 5:00 p.m. Eastern Time to discuss the financial results for the fourth quarter and year ended December 31, 2004. The conference call is scheduled to last up to one hour. Those who would like to participate should dial +1 877-231-3543 (within the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ) or +1 706-634-1329 (from outside the U.S. and Canada) five to ten minutes prior to the scheduled start time (no passcode is needed). In addition, the conference call and a subsequent replay will be available via Web cast from the Company's Web site, www.criticalpath.net. A replay of the conference call will also be available by telephone for fourteen days following the call. To access the telephone replay, please dial +1 800-642-1687 (within the U.S. and Canada) or +1 706-645-9291 (from outside the U.S. and Canada) and use conference ID 4080927. The Web cast and earnings release will be available on the Company's Web site for twelve months following the conference call. About Critical Path, Inc. Critical Path's Memova(TM) solutions provide a new and improved email experience for millions of consumers worldwide, helping mobile operators, broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). and fixed-line Refers to wired devices. For example, a fixed-line phone is a standard phone with the handset wired to the base unit in contrast to a portable phone or cellphone. service providers unlock the potential of email in the mass market. Memova(TM) Mobile gives consumers instant, on-the-go access to the messages that matter most. Featuring industry-leading anti-spam Spam elimination. See spam filter, spambot and e-mail obfuscator. and anti-virus See antivirus program. technology, Memova(TM) Anti-Abuse protects consumers against viruses and spam E-mail that is not requested. Also known as "unsolicited commercial e-mail" (UCE), "unsolicited bulk e-mail" (UBE), "gray mail" and just plain "junk mail," the term is both a noun (the e-mail message) and a verb (to send it). . Memova(TM) Messaging provides consumers with a rich email experience, enabling service providers to develop customized offerings for high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. subscribers. Headquartered in San Francisco, California “San Francisco” redirects here. For other uses, see San Francisco (disambiguation). The City and County of San Francisco (EN IPA: [sænfrənˈsɪskoʊ] with offices around the globe, Critical Path's messaging solutions are deployed by more than 200 service providers throughout the world. More information is available at www.criticalpath.net. Cautionary Note Regarding 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 21E of the Securities Exchange Act of 1934, 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. . 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 forward-looking statements include, but are not limited to, statements regarding our assessment on our internal control over financial reporting, future revenue, future gross margins and future operating expenses. 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, the potential that we or our independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. may identify additional control deficiencies in our internal control over financial reporting, including deficiencies that constitute material weaknesses within the meaning of the accounting requirements, 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 and changes in economic and market conditions. These and other risks and uncertainties are described in more detail in the Company's filings with the United States 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/A for the fiscal year ended December 31, 2003, its Quarterly Reports on Forms 10-Q for the fiscal quarters ended March 31, 2004, June June: see month. 30, 2004 and September 30, 2004, Current Reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. , as may be amended from time to time, and all subsequent filings with the United States 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, the Critical Path logo, Memova and the Memova logo are the trademarks of Critical Path, Inc. All other trademarks are the property of their respective holders
Critical Path, Inc.
Condensed Consolidated Balance Sheets
Dec. 31, Sept. 30, Dec. 31,
2003 2004 2004
--------------------------
ASSETS (in thousands; unaudited)
Current assets
Cash and cash equivalents $18,984 $20,152 $23,239
Accounts receivable, net 16,880 15,730 19,667
Other current assets 4,664 5,919 4,567
--------------------------
Total current assets 40,528 41,801 47,473
Property and equipment, net 14,821 10,085 11,379
Goodwill 6,613 6,613 6,613
Other assets 5,763 6,301 3,734
--------------------------
Total assets $67,725 $64,800 $69,199
--------------------------
LIABILITIES, MANDATORY REDEEMABLE PREFERRED
STOCK AND SHAREHOLDERS' DEFICIT
Current liabilities
Accounts payable $5,022 $4,877 $4,973
Accrued expenses 20,755 22,676 23,207
Deferred revenue 8,856 9,925 9,978
Loan line of credit 2,298 - -
Capital lease and other obligations,
current 1,721 1,310 1,067
Notes payable, current - 5,565 5,565
--------------------------
Total current liabilities 38,652 44,353 44,790
Deferred revenue long-term 1,343 1,249 173
Notes payable, long-term 48,376 - 8,875
Capital lease and other obligations,
long-term 1,295 64 -
Embedded derivative liability 24,890 2,092 3,045
--------------------------
Total liabilities 114,556 47,758 56,883
--------------------------
Mandatorily redeemable preferred stock 30,411 118,621 122,377
--------------------------
Total shareholders' deficit (77,242)(101,579)(110,061)
--------------------------
Total liabilities and
shareholders' deficit $67,725 $64,800 $69,199
--------------------------
Critical Path, Inc.
Condensed Consolidated Statement of Operations on a United States
GAAP Basis
Three months ended Fiscal year ended
Dec. 31, Sept. 30, Dec. 31, December 31,
2003 2004 2004 2003 2004
---------------------------- ------------------
(in thousands, except per share amounts;
unaudited)
NET REVENUE
SW licensing $7,201 $4,744 $4,923 $22,104 $19,326
Hosted messaging 4,619 4,621 5,167 19,444 17,842
Professional
services 3,366 3,092 4,143 12,315 12,829
Maintenance and
support 4,776 5,038 5,250 18,434 21,075
---------------------------- ------------------
Total net revenue 19,962 17,495 19,483 72,297 71,072
COST OF NET REVENUE
SW licensing 1,008 1,322 1,522 4,068 5,463
Hosted messaging 6,631 5,995 6,458 26,193 25,404
Professional
services 3,109 2,667 3,143 12,203 11,939
Maintenance and
support 1,224 1,422 1,301 5,803 5,495
Stock-based expense
- Hosted messaging - - 23 8 28
Stock-based expense
- Professional
services - - 47 3 47
Stock-based expense
- Maintenance and
support - - 1 6 1
Restructuring
expense - - - - 175
---------------------------- ------------------
Total cost of net
revenue 11,972 11,406 12,495 48,284 48,552
---------------------------- ------------------
GROSS PROFIT 7,990 6,089 6,988 24,013 22,520
OPERATING EXPENSES
Selling and
marketing 6,834 5,242 4,487 31,224 22,703
Research and
development 5,003 5,260 4,589 19,047 20,973
General and
administrative 2,829 2,854 5,259 12,603 15,005
Stock-based expense
- Sales and
marketing - - 3 18 48
Stock-based expense
- Research and
development - - 20 15 37
Stock-based expense
- General and
administrative 26 308 256 35 1,754
Stock-based expense
- Settlement of
litigation 5,056 - - 5,056 -
Restructuring
expense (credit) 1,852 2,590 (1,394) 6,886 3,404
---------------------------- ------------------
Total operating
expenses 21,600 16,254 13,220 74,884 63,924
---------------------------- ------------------
OPERATING LOSS (13,610) (10,165) (6,232) (50,871) (41,404)
Other income
(expense), net (875) (2,781) (167) (8,026) 7,281
Interest income 101 125 108 407 405
Interest expense (932) (467) (271) (3,336) (4,384)
Loss on extinguishment
of debt - (12,783) - - (12,783)
Gain on investments 200 - - 549 -
---------------------------- ------------------
Loss before provision
for income taxes (15,116) (26,071) (6,562) (61,277) (50,885)
Provision for income
taxes (102) (88) (212) (856) (1,112)
---------------------------- ------------------
NET LOSS (15,218) (26,159) (6,774) (62,133) (51,997)
Accretion on
mandatorily
redeemable preferred
stock (2,917) (4,193) (3,876) (12,446) (14,565)
---------------------------- ------------------
NET LOSS ATTRIBUTABLE
TO COMMON
SHAREHOLDERS $(18,135) $(30,352)$(10,650) $(74,579)$(66,562)
---------------------------- ------------------
Net loss per share $(0.75) $(1.24) $(0.32) $(3.10) $(2.46)
---------------------------- ------------------
Net loss per share
attributable to
common $(0.89) $(1.43) $(0.50) $(3.73) $(3.15)
---------------------------- ------------------
Shares used in the per
share calculations 20,415 21,171 21,252 20,020 21,123
---------------------------- ------------------
Critical Path, Inc.
Condensed Consolidated Statement of Operations on a Non-GAAP
(Adjusted EBITDA(1)) Basis
Three months ended Fiscal year ended
------------------ -----------------
Dec. 31, Sept. 30, Dec. 31 December 31,
2003 2004 2004 2003 2004
---- ---- ---- ---- ----
(in thousands, except per share amounts; unaudited)
NET REVENUE
SW licensing $7,201 $4,744 $4,923 $22,104 $19,326
Hosted messaging 4,619 4,621 5,167 19,444 17,842
Professional services 3,366 3,092 4,143 12,315 12,829
Maintenance and
support 4,776 5,038 5,250 18,434 21,075
-------- -------- -------- --------- ---------
Total net revenue 19,962 17,495 19,483 72,297 71,072
COST OF NET REVENUE
SW licensing 1,008 1,321 1,522 4,068 5,463
Hosted messaging 5,052 5,034 5,345 17,498 21,073
Professional services 2,993 2,637 3,110 11,587 11,779
Maintenance and
support 1,112 1,403 1,283 4,991 5,413
-------- -------- -------- --------- ---------
Total cost of net
revenue 10,165 10,395 11,260 38,144 43,728
-------- -------- -------- --------- ---------
GROSS PROFIT 9,797 7,100 8,223 34,153 27,344
OPERATING EXPENSES
Selling and marketing 6,478 5,093 4,312 29,048 21,928
Research and
development 4,174 4,125 3,082 16,238 16,570
General and
administrative 2,612 2,781 2,849 11,355 11,619
-------- -------- -------- --------- ---------
Total operating
expenses 13,264 11,999 10,243 56,641 50,117
-------- -------- -------- --------- ---------
ADJUSTED EBITDA LOSS $(3,467) $(4,899) $(2,020) $(22,488) $(22,773)
-------- -------- -------- --------- ---------
Adjusted EBITDA loss
per share $(0.17) $(0.23) $(0.10) $(1.12) $(1.08)
-------- -------- -------- --------- ---------
Shares used in the per
share calculations 20,415 21,171 21,252 20,020 21,123
-------- -------- -------- --------- ---------
(1) Excludes interest income, interest expense, provision for income
taxes, depreciation and amortization adjusted to exclude other items
such as other income (expense), net, loss on extinguishment of debt,
gain on investment, non-cash severance, reserve for officer note
receivable, restructuring expenses, stock-based expenses and accretion
on mandatorily redeemable preferred stock.
Critical Path, Inc.
Alternative Measurements Reconciliation
The following table provides a reconcilation between the Company's
Non-GAAP results and Adjusted EBITDA Loss to the Company's Condensed
Consolidated Statement of Operations on a United States GAAP basis.
Three months ended Fiscal year ended
------------------- -----------------
Dec. 31, Sept. 30, Dec. 31, December 31,
2003 2004 2004 2003 2004
-------- --------- ------- ----------------
(in thousands, except per share amounts; unaudited)
Adjusted EBITDA loss $(3,467) $(4,899) $(2,020) $(22,488) $(22,773)
Interest income 101 125 108 407 405
Interest expense (932) (467) (271) (3,336) (4,384)
Provision for
income taxes (102) (88) (212) (856) (1,112)
Depreciation and
amortization (3,209) (2,368) (2,946) (16,356) (10,251)
Other income
(expense), net (875) (2,781) (167) (8,026) 7,281
Loss on
extinguishment of
debt - (12,783) - - (12,783)
Gain on investment 200 - - 549 -
Non-cash severance - - (360) - (936)
Reserve for
officer note
receivable - - (1,950) - (1,950)
Restructuring
expenses (1,852) (2,590) 1,394 (6,886) (3,579)
Stock-based
expenses (5,082) (308) (350) (5,141) (1,915)
--------- --------- --------- --------- ---------
Net loss (15,218) (26,159) (6,774) (62,133) (51,997)
Accretion on
mandatorily
redeemable
preferred stock 2,917 4,193 3,876 12,446 14,565
--------- --------- --------- --------- ---------
Net loss
attributable to
common
shareholders $(18,135) $(30,352) $(10,650) $(74,579) $(66,562)
--------- --------- --------- --------- ---------
Net loss per share $(0.75) $(1.24) $(0.32) $(3.10) $(2.46)
--------- --------- --------- --------- ---------
Net loss per share
attributable to
common $(0.89) $(1.43) $(0.50) $(3.73) $(3.15)
--------- --------- --------- --------- ---------
Shares used in the
per share
calculations 20,415 21,171 21,252 20,020 21,123
--------- --------- --------- --------- ---------
The following table provides a reconcilation between the total cost of
net revenues and operating expenses on an Adjusted EBITDA basis to the
Company's cost of revenues and operating expenses on a United States
GAAP basis.
Three months ended Fiscal year ended
------------------- -----------------
Dec. 31, Sept. 30, Dec. 31 December 31,
2003 2004 2004 2003 2004
-------- -------- -------- ----------------
(in thousands, except per share amounts; unaudited)
Total cost of net revenues and
operating expenses
on an Adjusted
EBITDA basis $23,429 $22,394 $21,503 $94,785 $93,845
Depreciation and
amortization (3,209) (2,368) (2,946) (16,356) (10,251)
Non-cash severance - - (360) - (936)
Restructuring
expenses (1,852) (2,590) 1,394 (6,886) (3,579)
Reserve for officer
note receivable - - (1,950) - (1,950)
Stock-based expenses (5,082) (308) (350) (5,141) (1,915)
-------- -------- -------- --------- ---------
Total cost of net
revenues and
operating expenses
on a United States
GAAP basis $33,572 $27,660 $25,715 $123,168 $112,476
-------- -------- -------- --------- ---------
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