Daleen Reports First Quarter 2001 Results.Business Editors BOCA RATON Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Fla.--(BUSINESS WIRE)--April 25, 2001 Daleen Technologies Inc. (Nasdaq:DALN), a global provider of software that manages the revenue chain for next-generation service providers, today reported revenues of $5.2 million for its first quarter 2001. Net loss for the quarter, on an adjusted basis, was $10.8 million, or $.50 per share. See "Note on Adjusted Results of Operations" below for a description of the methods used to calculate net loss and net loss per share on an adjusted basis. First Quarter Highlights: -- Launched RevChain(TM) product line with new pure Internet architecture and modular design -- Secured significant OEM license agreement and expansion into B2B market -- Won contract with one of the five tier-one Network Access Points (NAPs) in the United States -- Continued to establish strategic alliances -- Entered into private placement agreements for $27.5 million of new capital "The ongoing challenges faced by the entire telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. market combined with the overall macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. environment continued to negatively affect our financial results into the first quarter," said James Daleen, chairman and chief executive officer for the company. "To bring our business in line with the current market conditions and reach profitability as quickly as possible, we have taken the necessary actions to restructure our business and streamline operations. I am confident that these actions will positively impact the long-term prospects for our business." Key achievements during the quarter include the introduction of the new Daleen RevChain product line including industry-focused software suites that are composed of individual applications built on the new Daleen Internet Integration Architecture (IIA (1) (Information Industry Association, Washington, DC) In 1999, IIA merged with SPA (Software Publishers Association) to become the Software & Information Industry Association. See SIIA. (TM)) system. These industry-focused software suites automate and manage service providers' revenue chains and provide functionality including service creation and management, customer management, order and fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. , billing and settlement. The Daleen IIA architecture leverages open Internet technologies to integrate seamlessly with legacy and existing systems. The company's new value proposition based on managing the revenue chain has been accepted in the market, which has been demonstrated by the announcement of significant customer wins, an OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and license agreement and strategic partnerships, including: -- Terremark Worldwide Inc. (AMEX AMEX See: American Stock Exchange :TWW TWW The West Wing (TV show) TWW The Wind Waker (Nintendo Zelda video game) TWW Teaming with Wildlife TWW Two-Week Wait TWW The War Within (Transformers comics) ), a global leader in providing Internet infrastructure and managed services An umbrella term for third-party monitoring and maintaining of computers, networks and software. The actual equipment may be inhouse or at the third-party's facilities, but the "managed" implies an ongoing effort; for example, making sure the equipment is running at a certain quality , selected Daleen's RevChain software to provide the billing and customer care platform for the NAP (1) See network access protection. (2) (Network Access Point) The first public Internet exchange points (IXPs). Established by the National Science Foundation in the early 1990s, they were set up to provide a standard way to exchange packets for of the Americas(SM), located in Miami. Terremark is the owner and operator of the NAP of the Americas, which is the only tier-one NAP that is "carrier neutral" and the only one supported by a consortium of more than 100 telecommunications industry leaders. -- i2 Technologies Inc. (Nasdaq:ITWO ITWO I2 Technologies (stock abbreviation, AMEX) ), a leading provider of supply chain and marketplace solutions, agreed to license Daleen's billing and customer management software under a multi-year strategic OEM license agreement. Daleen integrated its RevChain applications with the i2 TradeMatrix Platform(TM), a flexible, open, standards-compliant, integrated software Separate software components or applications that have been combined into one package. See integrated software package. system that provides infrastructure, administration services and intelligence for marketplace owners, enabling them to manage complete transaction lifecycles across multiple entities and marketplaces. i2 intends to offer the integrated solution to several customers immediately. -- FLAG Telecom (Nasdaq:FTHL FTHL Flat-Tailed Horned Lizard ; LSE LSE - Language Sensitive Editor :FTL (Flash Translation Layer) See flash memory. ), a leading independent network services provider and global carriers' carrier, selected the Daleen RevChain for Broadband industry-focused software suite to support billing and customer management for its customers, which include 17 of the top 20 carriers in the world. -- Daleen partnered with Quallaby Corp., a leading provider of highly scalable network performance management solutions for service providers, to provide an integrated operations support system (OSS Oss (ôs), city (1994 pop. 62,141), North Brabant prov., S Netherlands; chartered 1399. It is a significant industrial center. Manufactures include meat products, chemicals, pharmaceuticals, electrical equipment, and metalware. ) solution for enhanced customer care and enriched billing. -- Additional customers and partners announced during the quarter include Aether aether: see ether, in physics and astronomy. Aether god of whole atmosphere. [Gk. Myth.: Jobes, 42] See : Air Systems Inc. (Nasdaq:AETH), Illuminet Holdings Inc. (Nasdaq:ILUM) and Foxfire fox·fire n. A phosphorescent glow, especially that produced by certain fungi found on rotting wood. Consulting LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . To further strengthen its financial position, the company entered into definitive agreements with existing and new investors for the private placement of $27.5 million of convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". and warrants. The consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the transaction is subject to approval by the company's stockholders, which is expected to be received at its annual meeting June 7. Daleen intends to invest the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from this private placement for working capital purposes, including continued developments and enhancements to the company's products and technology, marketing and sales, and expansion of the company's strategic alliances and international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. . "The first quarter of 2001 has been challenging for the entire telecommunications and technology industry. As a result, we have had to make key strategic decisions to ensure our long-term success," said Daleen. "I am confident that our recent actions will enable our RevChain product line to continue to gain momentum, allowing us to achieve our financial goals." Conference Call As previously announced, Daleen Technologies will hold a conference call on April 26 at 8:00 a.m. ET to discuss the quarter results. The conference call will be available as an audio Webcast via the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Daleen's Website at http://www.daleen.com/investor. Alternatively, the teleconference may also be accessed by dialing 1-800-289-0579 or, outside the U.S, +1-719-457-2550, and referencing confirmation code 495307. About Daleen Daleen Technologies Inc. is a global provider of software that manages the revenue chain for next-generation service providers. Daleen's industry-focused RevChain software suites automate and manage service providers' revenue chains -- including customers, services, activation, order fulfillment Order fulfillment (in BE also: order fulfilment) is in the most general sense the complete process from point of sales inquiry to delivery of a product to the customer. Sometimes Order fulfillment and billing -- internally in the back-office, customer-facing through the Web and with customer service representatives, as well as with partner relationships. Daleen enables service providers to use the Internet to maximize time-to-revenue and rapidly adapt to new opportunities, giving them a competitive advantage in today's economy. The company distributes its software worldwide via its Business Alliance Partners and Daleen Solution Providers. Additional information is available at www.daleen.com. Note on Adjusted Results of Operations: Net loss and net loss per share on an adjusted basis are computed by excluding acquisition-related charges, non-cash stock compensation charges related to the issuance of certain stock options, and 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). and impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges. The acquisition-related charges were incurred in connection with the company's December 1999 acquisition of Inlogic Software Inc. The 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. are related to the January 5, 2001 restructuring in addition to impairment charges related to assets associated with the April 10, 2001 restructuring. For the three months ended March 31, 2001 these 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. are approximately $11.5 million. Including these adjustments described in this note, the historical net loss per share for the three months ended March 31, 2001 is $1.02 per share. See "Information with Respect to Forward Looking Statements" below. Information with Respect to 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. Statements in this release may be considered "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These include statements regarding the intent, belief or current expectations of the company and the assumptions on which these statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include additional capital from private placement required to fund operations in 2001; not yet achieving profitability; variance of quarterly operating results; competition; general market conditions; need to expand our sales and distribution capabilities; lengthy sales cycles and timing of contract awards; continued use of strategic relationships to implement and sell our products; recent introduction of our RevChain product family; and enhancing our product offering to meet the changing needs of service providers. These factors are described in the Company's 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. filed on April 4, 2001, and in the company's Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. . The company undertakes no obligation to update the forward-looking statements in this news release. Daleen, IIA and RevChain are registered trademarks or trademarks of Daleen Technologies 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 other countries. All other trademarks and registered trademarks are property of their respective owners.
DALEEN TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
March 31 December 31
2001 2000
----------- -----------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 9,212 $ 23,199
Accounts receivable, net 11,672 13,929
Costs in excess of billings 710 2,213
Other current assets 2,579 904
----------- -----------
Total current assets 24,173 40,245
Property and equipment, net 6,788 10,146
Goodwill and other intangibles, net 38,246 44,726
Other assets 5,714 4,345
----------- -----------
Total assets $ 74,921 $ 99,462
----------- -----------
----------- -----------
Liabilities and Stockholders' Equity
Current liabilities:
Accrued payroll and other accrued
expenses 12,421 12,731
Accounts payable 2,167 2,968
Billings in excess of costs 1,164 1,466
Deferred revenue 2,654 2,944
Other current liabilities 209 1,061
----------- -----------
Total current liabilities 18,615 21,170
Long term portion of capitalized lease 609 607
----------- -----------
Total liabilities 19,224 21,777
Total stockholders' equity 55,697 77,685
----------- -----------
Total liabilities and
stockholders' equity $ 74,921 $ 99,462
----------- -----------
----------- -----------
DALEEN TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months ended
--------------------------
March 31 December 31
2001 2000
----------- -----------
(Unaudited)
Revenue:
License fees $ 1,712 $ 5,702
Professional services and other 3,462 3,268
----------- -----------
Total revenue 5,174 8,970
----------- -----------
Cost of revenue:
License fees 47 158
Professional services and other 3,437 2,932
----------- -----------
Total cost of revenue 3,484 3,090
----------- -----------
Gross margin 1,690 5,880
Operating expenses:
Sales and marketing 4,325 3,169
Research and development 5,335 4,994
General and administrative 8,233 7,668
Restructuring and impairment charges 6,300 -
----------- -----------
Total operating expenses 24,193 15,831
----------- -----------
Operating loss (22,503) (9,951)
----------- -----------
Total interest income and nonoperating
income, net 195 798
----------- -----------
Net loss $ (22,308) $ (9,153)
----------- -----------
----------- -----------
Net loss per share - basic and diluted $ (1.02) $ (0.43)
----------- -----------
----------- -----------
Weighted average outstanding shares -
basic and diluted 21,787 21,445
----------- -----------
----------- -----------
Adjustments to net loss for goodwill
and other intangibles, stock
compensation expense, restructuring
and impairment:
Goodwill, other intangibles, non-cash
stock compensation expense,
restructuring and impairment 11,509 3,858
----------- -----------
Adjusted net loss (see note in press
release): (10,799) (5,295)
----------- -----------
----------- -----------
Adjusted net loss per share -
basic and diluted $ (0.50) $ (0.25)
----------- -----------
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