Daleen Reports Second Quarter 2003 Operating Results; Revenues Increase on New Business Activity.Business Editors/High-Tech Writers 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)--July 24, 2003 Daleen Technologies, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :DALN), a global provider of licensed and outsourced billing, customer care, event management, and revenue assurance solutions for traditional and next generation service providers, today reported revenues of $4.2 million for the second quarter of 2003, an increase over its first quarter reported revenues of $4.1 million. Net loss for the quarter was $1.4 million, or $0.03 per share, which was the same as the net loss of $1.4 million, or $0.03 per share, for the first quarter of 2003, and compared to a $2.3 million net loss, or $0.10 per share in the second quarter of 2002, prior to Daleen's acquisition of Abiliti Solutions. The company experienced a significant increase in new business during the second quarter, including entering into a multi-year RevChain(R) license and services contract with Empresa de Telecomunicaciones de Bogota Bo·go·tá The capital and largest city of Colombia, in the central part of the country on a high plain in the eastern Andes. It was a center of Chibcha culture before the Spanish established a settlement in 1538. Population: 6,980,000. (ETB ETB - End Transmission Block ), one of Colombia's leading telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. providers. The contract, which has a total value of $10.5 million, is expected to generate more than $7.6 million (net of $2.9 million of Colombian taxes) in new revenues to Daleen over the next twenty-nine months. This includes a seventeen-month implementation and a one-year adj. 1. completing its life cycle within a year. Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants maintenance commitment. Daleen also reported new milestones in the execution of its technology integration and market expansion strategies this quarter. The company successfully integrated its core RevChain billing software into the BillingCentral(R) 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). , and delivered the first outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. solution that combines RevChain with Asuriti(TM), Daleen's new event management and revenue assurance software. Launched in June June: see month. , Asuriti combines the proven event management capabilities that were available in Simpliciti.net(TM) with additional configurations that are designed to allow service providers to establish an automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. process for revenue capture and recovery. "Our results reflect a consistently high level of activity throughout our business," said Gordon Gordon, river in W Tasmania, Australia, 125 mi (200 km) long. Flowing from mountains to the W coast, its main tributaries are the Franklin and Denison from the N, and Serpentine and Olga to the S. Quick, 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. of Daleen. "Across the organization - from the product development organization, to the sales, marketing and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. teams - our employees are successfully executing in critical areas of our business that are helping to drive sustainable revenue growth." Second Quarter Highlights: -- Revenues increased for the third consecutive quarter as a result of license and service revenues from existing and new customers, including ETB and Pac-West Telecomm See telecommunications. . Pac-West Telecomm signed a contract to implement Daleen's Asuriti for Event Management software as part of its migration from the BillPlex(R) platform to RevChain. -- Daleen moved two new outsourcing clients into production in its BillingCentral ASP, and completed a multi-phase implementation of its licensed software for a third customer. -- Total expenses were $5.7 million for the quarter, compared to $5.6 million for the first quarter of 2003. Quarterly expenses included approximately $145,000 in up-front costs related to stamp tax stamp tax, method of collecting duties on certain transactions by means of a validating stamp attached to the taxable instrument, which may be a judicial act, a commercial document, a transfer of property, or law proceedings. associated with the ETB contract and a write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of $500,000 for a third-party investment. -- The company's total cash and cash equivalents used in the quarter were $1.4 million, compared to $500,000 in the first quarter of 2003. Revenues and cash use were both affected by the bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most of Allegiance allegiance, in political terms, the tie that binds an individual to another individual or institution. The term usually refers to a person's legal obligation of obedience to a government in return for the protection of that government, although it may have reference Telecom, a significant customer of the company. As a critical vendor, subsequent to the end of the quarter Daleen received from Allegiance the balance of a mutually agreed amount for pre-petition services, pursuant to the terms of a bankruptcy court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. order. Allegiance is current on all post-petition payments and Daleen continues to provide services to Allegiance in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the terms of its contract. "Given the unusual challenges and opportunities we encountered this quarter, our ability to increase revenues, while still maintaining tight control on expenses, is evidence of our continued progress in managing the business," said Jeanne Prayther, chief financial officer for Daleen. "The ETB contract, on top of our other recent customer successes, provides excellent momentum as we move into the second half of the year." About Daleen Daleen Technologies, Inc. is a global provider of high performance billing, customer care, event management and revenue assurance software, with a comprehensive outsourcing solution for traditional and next generation service providers. Daleen's solutions utilize advanced technologies to enable providers to reach peak operational efficiency while driving maximum revenue from products and services. Core products include its RevChain(R) billing and customer management software, Simpliciti.net(TM) event management application, BillingCentral(R) ASP outsourcing services, and the new Asuriti(TM) event management and revenue assurance software. More information is available at http://www.daleen.com. 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 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. 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 business concentration; the Company's ability to continue as a going concern; the ability of the Company to successfully integrate the Abiliti assets, operations and management; the Company's ability to successfully implement its aggregation strategy; our inability to achieve profitability; customers' and potential customers' market position and lack of financial resources; the costs and success of the Company's international expansion; the ability of the Company to develop and protect its intellectual property; the Company's relationship with third party software vendors and service providers; competition; the Company's ability to retain senior management and other key personnel; low price and volatility of the Company's common stock and the impact of the delisting Delisting When the stock of a company is removed from a stock exchange. Notes: Reasons for delisting include violating regulations and/or failure to meet financial specifications set out by the stock exchange. from The Nasdaq SmallCap Market; on-going securities class action against the Company; and the rights and preferences of the series F 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". . These factors and others are described in the Company's most recent SEC filings including its 2003 Annual Meeting Proxy Statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. and the most recently filed 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. 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. (C)Daleen Technologies, Inc. All rights reserved. Daleen, the Daleen logo, RevChain, Simpliciti.net, Asuriti, and BillingCentral are trademarks, or service marks, 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)
Unaudited
June 30 December 31
2003 2002
------- ------------
Assets
Current assets:
Cash and cash equivalents $ 4,682 $ 6,589
Restricted Cash 30 30
Accounts receivable, net 2,282 2,761
Cost in excess of billings 380 -
Other current assets 407 1,022
-------- --------
Total current assets 7,781 10,402
Property and equipment, net 1,381 1,989
Goodwill 5,086 5,086
Other assets 438 1,312
-------- --------
Total assets $ 14,686 $ 18,789
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable 329 368
Accrued payroll and other accrued expenses 2,033 2,576
Billings in excess of costs 474 616
Deferred revenue 875 1,279
Other current liabilities 94 217
-------- --------
Total current liabilities 3,805 5,056
Other long term liabilities 7 26
-------- --------
Total liabilities 3,812 5,082
Total stockholders' equity 10,874 13,707
-------- --------
Total liabilities and stockholders' equity $ 14,686 $ 18,789
======== ========
Daleen Technologies, Inc.
and Subsidiaries
Condensed Consolidated Statements of
Operations
(in thousands except per share data)
Unaudited
Three Months Ended Six Months Ended
----------------------- ----------------
June 30 March 31 June 30 June 30 June 30
2003 2003 2002 2003 2002
------- -------- ------- ------- -------
Revenue:
Professional services
and other $ 3,982 $ 3,824 $ 1,290 $ 7,809 $ 2,983
License fees 231 245 753 475 963
------- ------- ------- ------- -------
Total revenue 4,213 4,069 2,043 8,284 3,946
------- ------- ------- ------- -------
Cost of revenue:
Professional services
and other 1,109 1,067 608 2,165 1,614
License fees 165 303 63 468 98
------- ------- ------- ------- -------
Total cost of revenue 1,274 1,370 671 2,633 1,712
------- ------- ------- ------- -------
Gross margin 2,939 2,699 1,372 5,651 2,234
Operating expenses:
Sales and marketing 831 900 1,083 1,732 2,233
Research and development 1,602 1,681 1,054 3,284 2,386
General and
administrative 1,517 1,614 1,250 3,129 2,583
Impairment charges 500 - - 500 -
Restructuring charges - - 745 - 745
------- ------- ------- ------- -------
Total operating
expenses 4,450 4,195 4,132 8,645 7,947
------- ------- ------- ------- -------
Operating loss (1,511) (1,496) (2,760) (2,994) (5,713)
------- ------- ------- ------- -------
Total interest income and
nonoperating expense, net 99 78 509 163 659
------- ------- ------- ------- -------
Net loss applicable to
common shareholders $(1,412)$(1,418)$(2,251) $(2,831)$(5,054)
======= ======= ======= ======= =======
Net loss applicable to
common shareholders per
share - basic and
diluted $ (0.03)$ (0.03)$ (0.10) $ (0.06)$ (0.22)
======= ======= ======= ======= =======
Weighted average outstanding
shares - basic and diluted 45,829 45,829 23,532 45,829 22,882
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