CrossWorlds Software Announces Record Revenues For Fiscal 2000 Second Quarter; Revenues Ahead 173 Percent over Q2 FY1999, Sequential Revenues Grow 48 Percent.Business Editors BURLINGAME Burlingame, city (1990 pop. 26,801), San Mateo co., W Calif., on San Francisco Bay; founded 1868, inc. 1908. Burlingame is mainly residential, with light manufacturing (plastic and metal products, furniture, and computers). The city is named for U.S. diplomat Anson Burlingame. , Calif.--(BUSINESS WIRE)--July 20, 2000 CrossWorlds Software (NASDAQ NASDAQ 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 : CWLD), an e-business infrastructure software provider, today announced its results for the second quarter ended June 30, 2000. Second quarter highlights include: -- Record revenues of $11.4 million, an increase of 173 percent over prior year Q2 -- Pro forma net loss narrows to $0.42 per basic and fully diluted share - excluding non-cash charges for deferred stock and warrant expenses -- Gross margin improves to 48 percent -- Substantial deferred revenue increase to $24.8 million -- Announced two major product releases "In this past quarter, we continued to see strong demand for our software because companies need tightly integrated business processes and systems to better compete in the new economy," said Fred Amoroso Am`o`ro´so n. 1. A lover; a man enamored. adv. 1. (Mus.) In a soft, tender, amatory style. , president and chief executive officer of CrossWorlds Software. "We believe the adaptability a·dapt·a·ble adj. Capable of adapting or of being adapted. a·dapt  a·bil and scalability of our
comprehensive e-business solution makes us the integration platform of
choice for global 1000 companies and that this will fuel continued
growth in demand for CrossWorlds products."
Total revenue for the second quarter was a record $11.4 million, compared with $7.7 million in the preceding quarter and $4.2 million in the prior year comparable period, representing an increase of 48 percent and 173 percent, respectively. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss for the second quarter, excluding certain non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for deferred stock-based compensation and warrant expense, was $9.2 million, or $0.42 per basic and fully 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, versus $10.2 million, or $0.51 per basic and fully diluted share in the preceding quarter. Pro forma net loss, including these non-cash charges for deferred stock-based compensation and warrant expense, was $11.2 million or $0.51 loss per basic and diluted share compared with a loss of $10.9 million or $0.55 per basic and diluted share in the preceding quarter and a loss of $9.4 million or $0.62 per basic and diluted share in the same period a year ago. Commenting on the company's outlook, Mark Kent, chief financial officer said, "We are very pleased with CrossWorlds' financial performance in the second quarter, especially our revenue growth, expense management and our services margin improvements. Based on our current visibility, we expect to achieve at least 150 percent year over year revenue growth in each of Q3 and Q4 of fiscal 2000." At June 30, 2000, CrossWorlds had $51.4 million in cash and cash equivalents and working capital of $30.1 million, reflecting the funds raised in its June initial public offering. Concurrent with the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. , several leading customers and partners made strategic equity investments in CrossWorlds, including Delphi Automotive, Dow (Direct OverWrite) See magneto-optic disk. Chemical, and EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. . CrossWorlds now has nearly 65 customers. The company has significantly extended its presence in its target industries, with customer wins in the manufacturing, telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and e-business segments. In particular, the company extended its strong positions in telecommunications, adding five new significant European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. customers in this industry, and in e-business, adding three new 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). ) companies in the US and Europe. Over the past several months, companies such as Clarify, Dow Chemical, Ingersoll-Rand Company, HighwayOne, Rx.com, SourceAlliance.com and Sony Broadcast & Professional have become CrossWorlds customers. CrossWorlds continues to work with top-tier system integrator See systems integrator. partners such as Andersen Consulting See Accenture. , Cap Gemini, CSC (Card Security Code) A three- or four-digit number printed on the back of credit cards for security purposes. Called "Card Verification Value" (CVV) by Visa, "Card Validation Code" (CVC) by MasterCard and "Card Identification (CID) by American Express and Discover, , Deloitte Consulting, EDS, Ernst & Young, IBM Global Services IBM Global Services is the world's largest business and technology services provider. It is the fastest growing part of IBM, with over 190,000 professionals serving customers in more than 160 countries. and PricewaterhouseCoopers. In the second quarter, CrossWorlds also announced the launch of two new products that will help to keep the company at the technological forefront of the industry: a new version of CrossWorlds' Interchange An interchange is a location where two things meet, usually perform some kind of exchange, and possibly go on their ways again. It is most commonly used in four contexts:
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 . About CrossWorlds Software, Inc. CrossWorlds provides a comprehensive e-business platform both for integrating internal operations and extending these operations over the Internet. CrossWorlds' products help the Global 2000 and emerging businesses work more efficiently with customers and suppliers through unified, 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. business processes. The CrossWorlds platform enhances competitiveness and reduces information technology costs by decreasing 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. maintenance costs and enabling faster business application integration than traditional approaches. The company's customers include industry-leading companies such as Applied Materials Applied Materials, Inc. NASDAQ: AMAT (HKSE: 4336 ) is the global leader in nanomanufacturing technology solutions with a broad portfolio of innovative equipment, service and software products for the fabrication of semiconductor chips, flat panel solar displays, solar , Delphi Automotive, Dow Chemical, DuPont, Nortel Networks (Nortel Networks Limited, Brampton, Ontario, www.nortelnetworks.com) A world leader in telecommunications products, which includes switching, wireless and broadband systems for service providers and carriers, telephones and systems for residential and business users, computer telephony , Roche Group, Sony, Siemens AG Siemens AG German electrical-equipment manufacturer. The first Siemens company, Siemens & Halske, was founded in Berlin in 1847 to build telegraph installations. , U S WEST and Whirlpool Corporation Whirlpool Corporation (NYSE: WHR) is the world's leading manufacturer and marketer of major home appliances,with annual sales of approximately $18 billion, more than 73,000 employees, and more than 70 manufacturing and technology research centers around the world. . CrossWorlds (Nasdaq: CWLD) is based in Burlingame, Calif. Additional information can be found at www.crossworlds.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements and information contained herein concerning markets for CrossWorlds' products and trends in financial results, and all other statements that include the words "anticipate," "believe," and "expect," and other similar expressions, constitute forward-looking statements. These forward-looking statements are subject to business and economic risks and uncertainties, including without limitation market acceptance of CrossWorlds' products, customer demand for our products, competitive factors, success of customer implementations of our products, timeliness and success of our product development efforts, and relationships with systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. . CrossWorlds' actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the factors and the risks to our business set forth elsewhere herein. Potential risks and uncertainties include, without limitation, those mentioned in CrossWorlds' prospectus dated June 2, 2000 under the heading "Risk Factors."
CROSSWORLDS SOFTWARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three months ended
June 30,
2000 1999
Revenue:
Software license $ 5,031 $ 1,811
Service, maintenance and other 6,348 2,353
-------- --------
Total revenue 11,379 4,164
Cost of revenue:
Software license and royalties 204 311
Service, maintenance and other 5,716 2,420
-------- --------
Total cost of revenues 5,920 2,731
-------- --------
Gross profit 5,459 1,433
-------- --------
Operating expenses:
Research and development 4,114 3,383
Sales and marketing 8,242 5,103
General and administrative 2,436 1,401
Amortization of deferred
stock-based compensation 852 782
-------- --------
Total operating expenses 15,644 10,669
Operating loss (10,185) (9,236)
Other income (expense), net (1,029) (197)
-------- --------
Net loss $(11,214) $ (9,433)
======== ========
Net loss per share:
Basic and diluted $ (1.06) $ (4.40)
Weighted average shares
used in computation 10,619 2,145
Pro forma net loss per share:
Basic and diluted $ (0.51) $ (0.62)
Weighted average shares
used in computation 21,809 15,314
Pro forma net loss per share
excluding the amortization
of deferred stock-based compensation
and the warrant financing expense
of $1,151 included in other income
(expense) during the three months
ended June 30, 2000:
Basic and diluted $ (0.42) $ (0.56)
Weighted average shares
used in computation 21,809 15,314
CROSSWORLDS SOFTWARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
June 30, December 31,
2000 1999
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 51,445 $ 12,506
Accounts receivable, net of
allowance of $297 at June 30, 2000
and December 31, 1999 20,021 11,689
Prepaids and other current assets 1,713 1,019
--------- ---------
Total current assets 73,179 25,214
Property and equipment, net 4,048 3,846
Deposits and other assets 1,606 117
--------- ---------
Total assets $ 78,833 $ 29,177
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts Payable $ 1,446 $ 797
Accrued payroll and
related expenses 3,676 2,597
Accrued commissions 3,850 2,742
Accrued royalties 103 1,439
Other accrued liabilities 6,082 2,563
Current portion of
capital lease obligations 459 347
Current portion of long-term debt 2,700 2,622
Deferred revenue 24,786 13,158
--------- ---------
Total current liabilities 43,102 26,265
Other long-term liabilities 115 124
Capital lease obligations,
less current portion 565 577
Long-term debt, less
current portion 1,488 2,936
--------- ---------
Total liabilities 45,270 29,902
--------- ---------
Stockholders' equity (deficit):
Convertible preferred stock,
$0.01 par value; 17,000
shares authorized; 16,126
shares issued and outstanding
at December 31, 1999 -- 161
Common stock, $0.001 par value;
150,000 shares authorized;
25,871 shares issued and
outstanding at
June 30, 2000 and 3,154
shares issued and outstanding at
December 31, 1999 26 3
Additional paid-in capital 154,074 96,757
Deferred stock-based compensation (3,358) (2,540)
Accumulated deficit (117,179) (95,106)
--------- ---------
Total stockholders'
equity (deficit) 33,563 (725)
--------- ---------
Total liabilities and
stockholders' equity (deficit) $ 78,833 $ 29,177
========= =========
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