Crossworlds Software Announces Record Revenues for Fiscal 2001 First Quarter.Business Editors/High-Tech Writers BURLINGAME, Calif.--(BUSINESS WIRE)--April 26, 2001 Revenues Ahead 181 Percent over Q1 FY2000, 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 Losses Reduced to $2.9 Million, Over $2.0 Million Ahead of Projected Losses CrossWorlds(R) Software (Nasdaq:CWLD), a leading business integration provider, today announced its financial results for the first quarter ended March 31, 2001. First quarter highlights include: -- Record revenues of $21.7 million, an increase of 181 percent over prior year Q1 -- Pro forma net loss narrows to $0.11 per share - excluding non-cash charges for deferred stock-based compensation -- Gross margin improves to 65 percent from 60 percent in Q4 and from 40 percent in prior year Q1 -- Services gross margin improves to 42 percent from 31 percent in Q4 and from 0 percent in prior year Q1 -- Expanded existing alliance relationship with PricewaterhouseCoopers as their primary integration partner for the financial services industry -- Announced availability of leading edge B2B exchange offering -- CrossWorlds Trading Partner Interchange -- Announced new connectors for i2, PeopleSoft and Broadvision Total revenue for the first quarter was $21.7 million, compared with $17.1 million in the preceding quarter and $7.7 million in the prior year comparable period, representing an increase of 26 percent and 181 percent, respectively. Pro forma net loss for the first 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 $2.9 million, or $0.11 per share, versus $6.3 million, or $0.24 per share in the preceding quarter and $9.9 million or $0.50 per share in the prior year comparable period. Pro forma net loss, including these non-cash charges for deferred stock-based compensation and warrant expense, was $3.2 million or $0.12 per share compared with a loss of $6.6 million or $0.25 per share in the preceding quarter and a loss of $10.9 million or $0.55 per share in the same period a year ago. At March 31, 2001, CrossWorlds had $34.7 million in cash, cash equivalents and 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. investments with a pro forma working capital of $32.9 million -- pro forma working capital excludes deferred revenue. "During Q1, CrossWorlds continued to build on the outstanding year the Company had in fiscal 2000," said Fred Amoroso Am`o`ro´so n. 1. A lover; a man enamored. adv. 1. (Mus.) In a soft, tender, amatory style. , CrossWorlds' 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. . "Despite the slowing economy, we nearly tripled our revenue and trimmed our losses by two-thirds over the same quarter last year. We continued to expand our product line, we added and strengthened our alliances and we enjoyed continued acceptance of our technology by new and existing customers." "Even though CrossWorlds is not immune to the effects of this difficult economy, the proven time to benefit and return on investment value proposition our products offer allowed us to exceed our revenue and earnings targets and sign several notable customers including The Dow Chemical Company The Dow Chemical Company (NYSE: DOW TYO: 4850 ) is an American multinational corporation headquartered in Midland, Michigan. Overview The Dow Chemical Company is currently the second largest chemical manufacturer in the World (after BASF)[1]. , Federal Mogul Mogul: see Mughal. , Whirlpool whirlpool, revolving current in an ocean, river, or lake. It may be caused by the configuration of the shore, irregularities in the bottom of the body of water, the meeting of opposing currents or tides, or the action of the wind upon the water. , Shell, 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 , Telecom Mobile Limited (New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. Telecom) and Siemens Westinghouse Siemens Power Generation, Inc (SPGI) is a power generation company based in the United States. Run by the German Siemens AG Corporation, Formerly Siemens Westinghouse, SPGI, was formed by the acquisition of the Westinghouse Electric Corporation by the Siemens power generation ," continued Amoroso. "We are excited that our now over 100 customers continue to extend their use of CrossWorlds technology to manage the heavy lifting of their business integration." Financial Outlook "While CrossWorlds continues to improve its financial performance and we are pleased by our significant growth and progress toward profitability, the slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in both the economy and technology spending create uncertainties that may impact our business in the coming quarters," said James Budge, CrossWorlds' CFO See Chief Financial Officer. . "Considering the market uncertainty, we are placing primary emphasis on achieving profitability." Budge continued, "Our financial model has historically provided us with excellent visibility into future quarters and we expect that it will continue to do so in the future. In light of that visibility and our goal to be profitable, we began over two months ago to enact expense cutting measures to ensure our ability to meet or exceed our break-even projection in the future. The Q1 expense cutting measures were not headcount related and included slowing down our internal capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. and facilities growth plans, as well as tightening our purchasing and travel and expense policies. In addition, in the current quarter we are reducing our workforce by 7% and our Senior Executive team is taking a 10% pay reduction. We believe that these expense reduction plans combined with the continuing leverage of our business development and marketing activities, will position us well as we progress toward profitability." Budge continued, "Based on our actions to realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. our expense structure with our overriding (programming) overriding - Redefining in a child class a method or function member defined in a parent class. Not to be confused with "overloading". goal of profitability, our revenue growth plans in 2001 will be impacted as we have now balanced our focus between growth and achieving profitability. However, we still expect full year revenues to increase by nearly 55% over 2000 and fall in a range between $75-$80 million for the full year of 2001. This growth rate exceeds overall market growth projections as well as the growth rate of many of our competitors. We also believe that given our strong focus on operational efficiencies and financial discipline, we will continue to be able to meet or exceed our full year earnings projections of pro forma losses of $0.41 per share. We expect that as a result of our lowered revenue expectations, we will experience an initial increase in pro forma losses in Q2 to over $5.6 million, or approximately $0.22 per share; however, we expect that our expenditure initiatives will allow us to reduce our Q3 losses to less than those of Q1 and allow us to pull forward our break-even point break-even point - In the process of implementing a new computer language, the point at which the language is sufficiently effective that one can implement the language in itself. to the fourth quarter of this year." Customer and Product Highlights Selected by PricewaterhouseCoopers as the primary integration partner for the 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. industry vertical. CrossWorlds and PricewaterhouseCoopers announced the expansion of their existing alliance relationship by delivering additional business integration solutions to financial services companies. The expansion of the CrossWorlds and PricewaterhouseCoopers relationship will enable the two organizations to share their Enterprise Application Integration experience and operational best practices to address critical technology and business issues. The Dow Chemical Company and Whirlpool select CrossWorlds Trading Partner 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:
in full Extensible Markup Language. Markup language developed to be a simplified and more structural version of SGML. It incorporates features of HTML (e.g., hypertext linking), but is designed to overcome some of HTML's limitations. , EDI (Electronic Data Interchange) The electronic communication of business transactions, such as orders, confirmations and invoices, between organizations. Third parties provide EDI services that enable organizations with different equipment to connect. , and RosettaNet, among others. CrossWorlds expands industry vertical and pre-built application connectors. CrossWorlds reinforced its position as a leading provider of cutting-edge integration technology with the launch of a set of integration tools conforming to the Chemical Industry Data eXchange's (CIDX CIDX Chemical Industry Data Exchange CIDX Combined Immunodeficiency, X-Linked CIDX Canadain International DX Club ) Chem eStandards(TM), a set of nonproprietary, XML-based standards for conducting global e-business in the chemical industry. CrossWorlds also released a connector for i2 Technologies products, and additional connectors for PeopleSoft and Broadvision. With these releases, CrossWorlds continues to provide integration solutions for the latest versions of the leading packaged applications. About CrossWorlds(R) Software, Inc. CrossWorlds Software, Inc. provides a full suite of business integration software that unites and extends business processes. Our combination of products -- business process integration modules, sophisticated, easy-to-use tools and a patented, scaleable architecture -- make integrating processes within the enterprise and across the Internet possible. By focusing on business process automation, companies use CrossWorlds to streamline and improve internal operations and trading relationships. Our products help companies reduce information technology costs, increase productivity and improve responsiveness to customer demands. Along with our products, CrossWorlds offers a skilled, global services organization experienced in the complex challenges of enterprise-wide and e-business integration. Together, CrossWorlds products and services not only enhance our customers' competitiveness, they give them immediate cost savings by cutting the time needed for implementation. The company's customers include industry-leading companies such as Caterpillar caterpillar (kăt`əpĭl'ər, kăt`ər–), common name for the larva of a moth or butterfly. Caterpillars have distinct heads and are segmented and wormlike. , The Dow Chemical Company, DuPont, Ingersoll-Rand, Nortel Networks, Norwich Union Norwich Union is an insurance company in the UK. It is the biggest life-insurer in the UK, and has a strong position in motor insurance. It is part of the Aviva group, itself created by a merger of Norwich Union and CGU plc in 2000. , Sony, Telekom Austria Telekom Austria is a provider of a range of fixed line, mobile, data, and Internet communications services. In addition to its operations in Austria, Telekom Austria also has a wireline segment represented in the Czech Republic with Czech On Line, a leading Internet service , Telecom Mobile Limited (New Zealand Telecom) 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. with European headquarters in Munich, Germany and other offices in the United Kingdom and France. 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 other statements that include the words "anticipate," "believe," "will" 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 successful 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 set forth above. Potential risks and uncertainties also include, without limitation, those mentioned in CrossWorlds' 10-K report filed with the Securities and Exchange Commission on March 23, 2001 under the heading "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations," subheading sub·head·ing n. See subhead. subheading Noun the heading of a subdivision of a piece of writing Noun 1. "Factors that Could Affect Future Results." Note to Editors: CrossWorlds, CrossWorlds Software, the CrossWorlds logo and "Integration is more than just connections" are trademarks or registered trademarks of CrossWorlds Software, Inc. 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. and/or foreign countries. All other company or product names are trademarks or registered trademarks of their respective owners.
CROSSWORLDS SOFTWARE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three months ended
March 31,
2001 2000
Revenue:
Software license $ 9,070 $ 3,183
Service, maintenance and other 12,586 4,515
Total revenue 21,656 7,698
Cost of revenue:
Software license and royalties 209 121
Service, maintenance and other 7,276 4,528
Total cost of revenues 7,485 4,649
Gross profit 14,171 3,049
Operating expenses:
Research and development 4,773 3,775
Sales and marketing 8,472 6,388
General and administrative 3,766 2,653
Amortization of deferred
stock-based compensation 298 708
Total operating expenses 17,309 13,524
Operating loss (3,138) (10,475)
Other income (expense), net (27) (383)
Net loss $ (3,165) $ (10,858)
Net loss per share:
Basic and diluted $ (0.12) $ (3.41)
Weighted average shares
used in computation 26,446 3,181
Pro forma net loss per share:
Basic and diluted $ (0.12) $ (0.55)
Weighted average shares
used in computation 26,446 19,723
Pro forma net loss per share
excluding the amortization
of deferred stock-based
compensation and the warrant
financing expense of $256
included in other income
(expense) during the three
months ended March 31, 2000:
Basic and diluted $ (0.11) $ (0.50)
Weighted average shares
used in computation 26,446 19,723
CROSSWORLDS SOFTWARE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, December 31,
2001 2000
ASSETS
Current Assets:
Cash and short-term investments $ 34,665 $ 39,592
Accounts receivable 16,044 24,798
Prepaids and other current assets 4,138 3,723
Total current assets 54,847 68,113
Property and equipment, net 7,141 6,310
Deposits and other assets 1,208 1,345
Total assets $ 63,196 $ 75,768
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,514 $ 2,970
Accrued payroll and
related expenses 7,322 6,036
Accrued commissions 2,968 4,379
Other accrued liabilities 4,389 5,801
Current portion of capital
lease obligations 485 477
Current portion of long-term debt 2,303 2,626
Deferred revenue 20,412 30,011
Total current liabilities 42,393 52,300
Other long-term liabilities 265 114
Capital lease obligations,
less current portion 202 325
Long-term debt, less current portion -- 310
Total liabilities 42,860 53,049
Stockholders' equity:
Convertible preferred stock -- --
Common stock 26 26
Additional paid-in capital 157,418 156,934
Deferred stock-based compensation (2,347) (2,645)
Accumulated deficit (134,761) (131,596)
Total stockholders' equity 20,336 22,719
Total liabilities and
stockholders' equity $ 63,196 $ 75,768
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