Critical Path Beats Fourth Quarter Estimates, Reports Record Year End Revenues of $16.2 Million, up 1,701%.Business Editors SAN FRANCISCO--(BUSINESS WIRE)--Jan. 20, 2000 Mailboxes Grew To 11.1 Million, a 66% Increased Over Previous Quarter Critical Path, Inc. (Nasdaq: CPTH) the dominant global provider of business-to-business  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. 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 messaging and collaboration Working together on a project. See collaborative software. solutions for corporations, Internet Service Providers Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. (ISPs), Web hosting Making a Web site available on the Internet. Many ISPs host a few personal Web pages for an individual at no additional cost above the monthly service fee, but the address is subordinate to the ISP; for example, www.friendlyisp.com/pat_smith. companies and Web portals See portal. , today announced record results for the fourth quarter and year ended December December: see month. 31, 1999. Revenues for the quarter mark the largest quarter in Critical Path's history at $8.2 million, a 67% increase over revenue of $4.9 million in the previous quarter ended September September: see month. 30, 1999, and an increase of 1,254% over revenue of $605,000 for the same quarter of the prior year. The net loss for the quarter, excluding the effects of stock-based compensation, acquisition expenses and the amortization of goodwill, was $11.0 million, or $0.26 per share. During the corresponding quarter in 1998, the net loss, excluding charges, was $3.5 million, or $0.75 per share. The net loss in the previous quarter, excluding charges, was $6.2 million, or $0.17 per share. Revenues for the year demonstrate Critical Path's continued leadership position in Internet messaging and the explosive demand for online messaging services. Year end 1999 revenues reached $16.2 million, up 1,701% from 1998 revenues of $897,000. The net loss for the year, excluding charges, was $29.4 million, or $0.99 per share, compared with a net loss, excluding charges, of $8.5 million, or $2.17 per share, in the prior year. Including the amortization of stock-based compensation, net loss for the year was $115.5 million or a loss of $3.88 per share. Critical Path continued its trend of positive gross margin this quarter. The company reported a gross margin of $1.5 million, a 552% increase compared with a gross margin of $232,000 last quarter. The Company also reported that in the fourth quarter revenue per mailbox A simulated mailbox in the computer that holds e-mail messages. Mailboxes are stored on disk as a file of messages, a database of messages or as an individual file for each message. The standard mailboxes are usually In, Out, Trash and Junk (Spam). reached $0.31 per month, compared with revenue per mailbox of $0.30 per month in the third quarter. This reflects Critical Path's ability to attract high quality revenue contracts in all categories. Cost per mailbox in the fourth quarter was $0.25 per month, compared to $0.28 per box per month in the third quarter. This trend demonstrates Critical Path's ability to grow revenue while reducing cost and provides a clear path to profitability. At the close of the quarter, Critical Path had 11.1 million active mailboxes, up 66% from 6.7 million active mailboxes at the close of the third quarter. This dramatic increase demonstrates the Company's ability to scale its mail center infrastructure. &uot;This was a pivotal quarter and phenomenal year for Critical Path. We continued to broaden our market leadership position and successfully execute an aggressive 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. growth strategy. We reported record revenues and increased gross margin, reflecting the success of our business model and our ability to grow rapidly while maintaining cost efficiencies,&uot; said Doug DOUG Dumb Old Utility Guy Hickey, Critical Path's 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. . &uot;Our performance reflects we are on a clear path to profitability.&uot; &uot;During the quarter, we continued to expand relationships with current customers and announced long term contracts with new customers in all our target markets, including Bell South, U.S. West, AT&, Pitney Bowes  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . , Medsite.com and Aether aether: see ether, in physics and astronomy. Aether god of whole atmosphere. [Gk. Myth.: Jobes, 42] See : Air Systems,&uot; said Hickey. &uot;This year Critical Path signed more than 800 net new contracts.&uot; &uot;In addition to the quarterly results, Critical Path successfully completed the acquisition of ISOCOR yesterday,&uot; said Hickey. &uot;We have significantly increased our lead in offering total messaging solutions that are reliable, flexible and secure. Critical Path is the first company to offer complete end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. Internet messaging solutions.&uot; (See related release today: Critical Path Creates Complete End-To-End Internet Messaging Solution With Close Of ISOCOR Acquisition). According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Hickey, Critical Path plans to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. this huge and rapidly emerging market opportunity by continuing to add to its portfolio services, creating additional revenue streams, extending relationships with current customers, and attracting new ones. &uot;We are committed to building a global infrastructure that satisfies the broadest range of email and messaging demands presented by customers and prospects,&uot; said Hickey. About Critical Path, Inc. Critical Path, Inc. (Nasdaq: CPTH) is a leading global provider of business-to-business Internet messaging solutions for corporations, Internet service providers (ISPs), Web hosting companies, and Web portals. Critical Path has built an industry-leading global infrastructure with data centers connected to key Internet exchange points See IXP and NAP. , and currently reaches millions of end-users through its customer relationships. Critical Path provides reliable, secure, and scalable e-mail, and a flexible suite of enhanced messaging services Abbreviated as EMS, an application-level extension to Short Message Service (SMS) for cellular phones available on GSM, TDMA and CDMA networks. An EMS enabled mobile phone can send and receive messages that have special text formatting (such as bold or italic), animations, to partners such as E*TRADE E*TRADE Financial Corporation (NASDAQ: ETFC) is a financial services company based in New York, NY, United States. It is a holding company, the major business of which is an online discount stock brokerage service for self-directed investors. , CompuServe An online information service that provides access to the Internet, e-mail, instant messaging and an integrated contact list. Founded in 1969 as a timesharing service, CompuServe is one of the oldest online services, being the first to offer e-mail in 1979 and online chat a year later. , Network Solutions, U S West, Sprint, and ICQ ("I Seek You") A conferencing program for the Internet from Mirabilis, Tel Aviv, Israel (www.icq.com). It provides interactive chat, e-mail and file transfer and can alert you when someone on your predefined list has also come online. . Critical Path is 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 in locations nationwide and in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). the UK, and in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. . More information on Critical Path can be found at www.cp.net. Critical Path is a service mark and the Critical Path logo is a trademark of Critical Path, Inc. This press release contains 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. regarding the company and its expectations which involve certain risks and uncertainties. Factors that could cause the company's results to differ materially from its expectations include: inability to convert available mailboxes to real revenue; failure of acquisitions to close; failure to expand our sales and marketing activities; 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)]. that could reduce our ability to provide email services See Internet e-mail service. and harm our business and our reputation; potential difficulties associated with strategic relationships; ability to respond to rapid technological change of the Internet messaging industry; competition; and problems related to managing the company's expected growth, including the ability to maintain or reduce cost efficiencies. These and other risks and uncertainties are described in more detail in the company's Critical Path's prospectus dated June June: see month. 1, 1999 and with filings with the Securities and Exchange Commission (www.sec.gov).
CRITICAL PATH, INC.
Condensed Consolidated Statement of Operations
(unaudited)
(in thousands, except per share data)
Three Months Ended Year Ended
----------------------------- ---------------------------
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1999 Dec. 31, 1998
-------------- --------------- ------------ ------------
Net
revenues (1) $ 8,189 $ 605 $ 16,157 $ 897
Cost of net
revenues (2) (7,697) (1,093) (21,557) (2,346)
----- ----- ------ ------
Total net revenues 492 (488) (5,400) (1,449)
Operating expenses:
Sales and
marketing 5,051 851 13,811 1,687
Research and
development 2,977 861 7,682 2,098
General and
administrative 6,132 1,726 14,051 3,814
Acquisition bonus 3,017 -- 3,587 --
Amortization
of intangibles 22,446 -- 32,259 --
Stock-based
expenses 19,750 1,532 44,994 2,400
--------- --------- --------- ---------
Total operating
expenses 59,373 4,970 116,384 9,999
--------- --------- --------- ---------
Loss from
operations (58,881) (5,458) (121,784) (11,448)
Other income (expense):
Interest income 1,987 255 7,061 375
Interest
expense (3) (341) (126) (752) (388)
------ ------ ------- ------
Net loss $ (57,235) $ (5,329) $(115,475) $ (11,461)
====== ====== ======= ======
Net loss per
share (basic
and diluted) $ (1.37) $ (1.14) $ (3.88) $ (2.94)
====== ====== ======= ======
Shares used
in per share
computations 41,712 4,674 29,770 3,899
====== ====== ======= ======
Acquisition bonus
charges included in:
(2) Cost of net
revenues 390 - 520 -
Stock-based
charges included in:
(1) Net revenues - 129 106 231
(2) Cost of net
revenues 631 127 4,532 193
(3) Interest
expense (16) (16) (64) (161)
CRITICAL PATH, INC.
Condensed Consolidated Financial Summary
(unaudited)
(in thousands, except per share data)
Three Months Ended Year Ended
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1999 Dec. 31,1998
------------- ------------- ------------- ------------
Net revenues $ 8,189 $ 605 $ 16,157 $ 897
======= ===== ======= ======
Net loss $ (57,235) $ (5,329) $(115,475) $ (11,461)
======= ===== ======= ======
Net loss
per share $ (1.37) $ (1.14) $ (3.88) $ (2.94)
======= ==== ======= ======
Net loss as
adjusted (1) $ (10,985) $ (3,525) $ (29,413) $ (8,476)
======= ===== ======= ======
Net loss per
share as
adjusted (1) $ (0.26) $ (0.75) $ (0.99) $ (2.17)
======= ===== ======= ======
Shares used
in per share
computations 41,712 4,674 29,770 3,899
======= ===== ======= ======
(1) Excludes charges for acquisition bonuses, amortization of
intangibles, and stock-based expenses
CRITICAL PATH, INC.
Condensed Consolidated Balance Sheet
(unaudited)
(in thousands)
Dec. 31, Dec. 31,
1999 1998
-------------- ------------------
ASSETS
Current assets
Cash and cash equivalents $ 75,932 $ 14,791
Restricted cash 325 325
Accounts receivable, net 10,147 121
Prepaid expenses
and other current assets 40,800 138
------- ------
Total current assets 127,204 15,375
Notes receivable
from officers 669 500
Property and equipment, net 52,517 4,687
Intangibles, net 474,297 --
Investments 18,426 --
Other assets 692 101
------- ------
$673,805 $ 20,663
======= ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable
and accrued liabilities $ 35,621 $ 423
Accrued compensation and
benefits 7,120 426
Deferred revenue,
current 1,603 500
Capital lease
obligations, current 6,585 1,502
------ -----
Total current liabilities 50,929 2,851
Deferred revenue,
long-term 215 --
Capital lease
obligations, long-term 5,669 2,454
------ -----
Total liabilities 56,813 5,305
Shareholders' equity 616,992 15,358
------- ------
$673,805 $ 20,663
======== =======
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