Daleen Reports Second Quarter Operating Results.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. -- Daleen Technologies, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :DALN), a global provider of licensed and outsourced billing and customer management, operational support systems (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. ) and revenue assurance solutions for traditional and next generation service providers, today reported that its net loss for the second quarter of 2004 was $3.5 million, or $.07 per share, as compared to $1.3 million(a), or $.03 per share in the first quarter. Revenues were $3.8 million for the second quarter of 2004, as compared to revenues of $4.3 million for the first quarter. The decrease in revenues was primarily due to delays in anticipated contract signings and an overall lower level of new business than expected. Total expenses for the second quarter, excluding costs associated with the company's proposed investment and acquisition, were $5.3 million, compared to $5.4 million(a) in the first quarter. For the three months ended March 31, 2004 and June June: see month. 30, 2004, transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). were approximately $185,000 and $2.0 million, respectively. The company's restricted cash decreased by $159,000 in the second quarter from $506,000 at March 31, 2004, due to the payment of insurance premiums that are the subject of a letter of credit associated with the restricted cash. "While our sales results were not up to our expectations this quarter, the revenue shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. appears to be more affected by the delay of customer decisions rather than by a decrease in demand for our solutions," 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. Second Quarter Highlights --On May 7, Daleen announced investment agreements of $25 million and $5 million, respectively, with Quadrangle quadrangle Rectangular open space completely or partially enclosed by buildings of an academic or civic character. The grounds of a quadrangle are often grassy or landscaped. Capital and Behrman Behr·man , S(amuel) N(athaniel) 1893-1973. American playwright whose works include The Second Man (1927) and No Time for Comedy (1939). Capital, into Daleen Holdings, Inc., a newly-formed holding company. Daleen Holdings will acquire Daleen Technologies and Protek Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. Solutions Limited, a UK-based software company, combining the two organizations to create a more diversified diversified (di·verˑ·s global service provider with billing, network management, real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. inventory, revenue assurance, mediation mediation, in law, type of intervention in which the disputing parties accept the offer of a third party to recommend a solution for their controversy. Mediation has long been a part of international law, frequently involving the use of an international commission, , and event management products. As part of this transaction, Daleen will become a private company. --Daleen signed a new license agreement for its Asuriti(TM) event management software with an existing RevChain(R) customer to provide enhanced mediation and event management capabilities across its customer base. Asuriti will be integrated with the RevChain billing system to provide greater control of and flexibility in managing operational data. --Daleen reached new milestones in the implementation of its RevChain software for ETB ETB - End Transmission Block in Bogota, Colombia. With Phase I of the project completed, Daleen has completed the tests and requirements to begin User Acceptance Testing (testing) user acceptance testing - The type of testing where monitored users determine whether a system meets all their requirements, and will support the business for which it was designed. on Phase II. --Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the second quarter were $7.3 million, including approximately $2.0 million in costs that were directly associated with Daleen's proposed investment transaction and acquisition. Excluding these transaction-related costs, the company's operating expenses remain consistent with or below previous quarters. --Behrman Capital extended a $5.1 million bridge loan to Daleen to cover costs related to the acquisition and to assist the company with its working capital needs prior to the close of the transaction. To date, Daleen has borrowed approximately $2.2 million against this loan. Of the total amount borrowed, $1.1 million was used by Daleen to provide a bridge loan to Protek for its working capital needs prior to the closing of the proposed transaction. (a) As reported on Form 10-Q Form 10-Q See 10-Q. filed by Daleen on May 17, 2004 for the period ended March 31, 2004. About Daleen Daleen Technologies, Inc. is a global provider of high performance billing and customer care, OSS and revenue assurance software, with a comprehensive 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 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, Asuriti(TM) event management and revenue assurance software, and 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). outsourcing services. 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 risks associated with the proposed investment and merger transactions; business concentration; the Company's ability to continue as a going concern; the Company's ability to successfully implement the transactions and its aggregation strategy generally; the Company's inability to achieve profitability; the consequences of any default on the SVB (Switched Video Broadcast) See switched video. operating loan; 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; the on-going securities class action against the Company; claims related to liabilities associated with the Abiliti acquisition; 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 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. . 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, Asuriti, BillingCentral, NetworkStrategies, and EventProcessor 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,
2004 2003
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 1,400 $ 2,497
Restricted Cash 347 561
Accounts receivable, net 2,839 1,002
Cost in excess of billings 2,454 2,032
Other current assets 376 487
------------ ------------
Total current assets 7,416 6,579
Property and equipment, net 697 931
Goodwill 5,086 5,086
Other assets 310 430
------------ ------------
Total assets $ 13,509 $ 13,026
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable 400 148
Accrued payroll and other accrued expenses 4,175 2,267
Billings in excess of costs 150 97
Note payable 2,867 -
Deferred revenue 528 372
Other current liabilities 64 42
------------ ------------
Total current liabilities 8,184 2,926
Other long term liabilities - 5
------------ ------------
Total liabilities 8,184 2,931
Total stockholders' equity 5,325 10,095
------------ ------------
Total liabilities and stockholders'
equity $ 13,509 $ 13,026
============ ============
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,
2004 2004 2003 2004 2003
--------- --------- --------- --------- ---------
Revenue:
Professional
services and other 3,150 $ 3,667 $ 3,982 $ 6,816 $ 7,809
License fees 670 587 231 1,257 475
--------- --------- --------- --------- ---------
Total revenue 3,820 4,254 4,213 8,073 8,284
--------- --------- --------- --------- ---------
Cost of revenue:
Professional
services and other 1,344 1,584 1,109 2,928 2,165
License fees - - 165 - 468
--------- --------- --------- --------- ---------
Total cost of
revenue 1,344 1,584 1,274 2,928 2,633
--------- --------- --------- --------- ---------
Gross margin 2,476 2,670 2,939 5,145 5,651
Operating expenses:
Sales and marketing 825 734 831 1,559 1,732
Research and
development 1,455 1,652 1,602 3,107 3,284
General and
administrative 1,630 1,623 1,517 3,253 3,129
Proposed transaction
costs 2,005 - - 2,005 -
Impairment charges - - 500 - 500
--------- --------- --------- --------- ---------
Total operating
expenses 5,915 4,009 4,450 9,924 8,645
--------- --------- --------- --------- ---------
Operating loss (3,439) (1,339) (1,511) (4,779) (2,994)
--------- --------- --------- --------- ---------
Total interest income
and nonoperating
expense, net (28) 36 99 9 163
--------- --------- --------- --------- ---------
Net loss applicable
to common
shareholders (3,467)$ (1,303)$ (1,412)$ (4,770)$ (2,831)
========= ========= ========= ========= =========
Net loss applicable
to common
shareholders per
share -
basic and diluted (0.07)$ (0.03)$ (0.03)$ (0.10)$ (0.06)
========= ========= ========= ========= =========
Weighted average
outstanding shares -
basic and diluted 46,923 46,858 45,829 46,891 45,829
========= ========= ========= ========= =========
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