Engage Announces Fiscal 2002 Second Quarter Results.Business Editors ANDOVER Andover (ăn`dōvər), town (1990 pop. 29,151), Essex co., NE Mass.; inc. 1646. Chiefly a textile producer in the 19th cent., Andover now makes toiletries, electronic and computer equipment, chemicals, medical instruments, rubber products, , Ma.--(BUSINESS WIRE)--March 11, 2002 Engage, Inc., (Nasdaq: ENGA) a leading content management and ad serving software company, and a majority-owned operating company operating company A business that engages in transactions with outsiders. of CMGI CMGI Commonly Maintained Grounds Infrastructures CMGI College Marketing Group Information (Services) , Inc. (Nasdaq: CMGI), today announced operating and financial results for its second fiscal quarter of 2002 ended January January: see month. 31, 2002. Revenue for the second fiscal quarter was $6.1 million, compared to $6.7 million for the first fiscal quarter of 2002. Gross profit for the second fiscal quarter, excluding non-cash amortization, was $2.5 million, or 41% of revenue, compared to $2.0 million, or 30% of revenue, for the previous quarter. On a cash basis, Engage's 2002 second quarter net loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the before amortization, 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). costs and stock compensation narrowed to $5.6 million, or $0.03 per share, using a weighted average share count of 196.6 million. This compared to a loss of $6.2 million, or $0.03 per share, for the 2002 first fiscal quarter. For the second fiscal quarter, total net loss from continuing operations was $13.2 million, or $0.07 per share, compared to a loss of $14.9 million, or $0.08 per share, in the previous quarter. "The second fiscal quarter 2002 represents the first full quarter of our transition, marking Engage's shift from a period of stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders to one of rebuilding and growth," said Christopher Cuddy cud·dy 1 n. pl. cud·dies 1. Nautical A small cabin or the cook's galley on a ship. 2. A small room, cupboard, or closet. [Origin unknown. , 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 Engage. "We have made substantial progress in a number of key areas, including adding new customers, strengthening our leadership team, enhancing our core products, and implementing several operational improvements. In particular, we are pleased to report that our backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of contractual or other customer commitments has grown to $11.0 million, representing a 32% sequential One after the other in some consecutive order such as by name or number. increase from the first fiscal quarter." "A key component of our growth strategy is to strengthen our presence in the retail and publishing industries within our content management business," said Cuddy. "During the quarter, we secured notable new relationships with retail customers such as H-E-B H.E. Butt Grocery Company (abbreviated H-E-B) is a privately held San Antonio, Texas-based supermarket chain with over 300 stores throughout Texas and northern Mexico. H-E-B ranked No. , and publishing clients such as The Columbus Columbus. 1 City (1990 pop. 178,681), seat of Muscogee co., W Ga., at the head of navigation on the Chattahoochee River; settled and inc. 1828 on the site of a Creek village. Dispatch A dispatch or dispatches can refer to:
Engage's hosted ad serving solution, AdBureau, recorded an 11% increase in volume over the first fiscal quarter 2002 and a 48% increase in volume in the first 6 months of fiscal year 2002 compared to the last 6 months of fiscal year 2001. The Company also extended key relationships and signed new agreements with customers using its site-side ad serving solution, AdManager, this fiscal quarter, including BTopenworld, British Telecom's mass-marketing Internet Internet 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 division and one of the UK's fastest growing ISPs; Cyberwing, a subsidiary of NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98). NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. Corporation (NASDAQ: NIPNY) and a leading provider of interactive agency, sales and marketing services in the Asian market; and e.BizMedia, a leading Italian multimedia publishing company and wholly-owned subsidiary of e.Biscom SpA. "Additionally, we've we've Contraction of we have. we've have made significant progress in revitalizing re·vi·tal·ize tr.v. re·vi·tal·ized, re·vi·tal·iz·ing, re·vi·tal·iz·es To impart new life or vigor to: plans to revitalize inner-city neighborhoods; tried to revitalize a flagging economy. our sales force this quarter," said Cuddy. "As previously announced, we're we're Contraction of we are. we're we are pleased to have appointed John Barone You may have meant:
v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. market opportunities." Engage reduced its cash utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be rate for the second quarter to $5.7 million, from $11.2 million in the prior quarter. As of January 31, 2002, Engage's cash and cash equivalents totaled $24.3 million. Furthermore, during the second fiscal quarter, Engage successfully completed its exit from the media network business well ahead of budget. "In addition to strengthening our sales leadership and recruiting efforts, we have been focused on enhancing our core products during the second fiscal quarter," said Cuddy. "We remain confident that our progress both operationally and financially, positions us for continued leadership in the content management and ad serving markets. This progress also gives us the confidence to reiterate re·it·er·ate tr.v. re·it·er·at·ed, re·it·er·at·ing, re·it·er·ates To say or do again or repeatedly. See Synonyms at repeat. re·it our goal of achieving profitability exiting Q4 of fiscal year 2002." Engage will conduct a conference call and simultaneous Webcast today at 5:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. to discuss the Company's fiscal 2002 second quarter results. To access the live call, please dial 952-556-2869 at least ten minutes prior to 5:00 p.m. To access the online Webcast, please visit the investor section of Engage's corporate Web site at www.engage.com. About Engage, Inc. Engage, Inc. (Nasdaq: ENGA) is a leading content management and ad serving software company. Engage's content management products are designed to enable companies to harness harness, comprehensive term for the gear of a draft animal, excluding the yoke, by which it is attached to the load that it pulls. Although harnesses are used on dogs (for drawing travois and dogsleds), on goats, and sometimes on oxen, the typical harness is for the power of multichannel marketing Refers to using several methods to sell products and services. The term has become popular since the advent of the Web, because it adds a prominent new channel to storefronts and catalog sales. One consideration of multichannel marketing is that each channel reinforce the other. to create more loyal customers and increase brand visibility and recognition, while the company's versatile and scalable online ad management solutions provide interactive publishers with a competitive advantage by enabling them to capitalize on new revenue streams and improve operational efficiencies. A majority-owned operating company of CMGI, Inc. (Nasdaq: CMGI), Engage is headquartered in Andover, Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. , with offices in London London, city, CanadaLondon, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. and worldwide. For more information on Engage, please call 877-U ENGAGE or visit www.engage.com. Engage, AdBureau and AdManager are trademarks of Engage Inc. Other product names mentioned herein may be trademarks and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. registered trademarks of their respective owners. Statement Under 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 This press release includes 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. about Engage, including statements regarding the Company's plan to hire 20 sales professionals, the Company being well-positioned to accelerate its sales and marketing initiatives to better capitalize on market opportunities, the Company's plan to deliver three major releases from its content management and ad serving product lines in the third fiscal quarter, the Company's progress positions it for continued leadership in the content management and ad serving markets, and the Company's reiteration reiteration in eukaryotes, multiple copies of certain relatively short nucleotide sequences that are repeated from a few times to millions of times; three classes are defined, single copy, moderately reiterated and highly reiterated; some occur as inverted repeats. of its goal to achieve profitability exiting Q4 of fiscal year 2002. These forward-looking statements are based on information available to Engage as of the date of this press release, and not as of any subsequent date, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. For example, over the next several years the content management market may not grow rapidly or grow at all. Other risks that could affect Engage include the Company's ability to reduce expenses and to increase sales of its product offerings, the impact of competition within its industry, Engage's ability to enter into additional strategic relationships, and other risks detailed in the Company's 2001 Annual Report on 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 from time to time in its other reports filed with the SEC. While Engage may elect to update forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, even if the information available to it with respect to the subject of any forward-looking statement changes.
Engage, Inc.
Consolidated Balance Sheets
(In thousands)
January 31, July 31,
2002 2001
---------- ----------
(unaudited)
Assets
Current assets:
Cash and cash equivalents.....................$ 24,301 $ 33,261
Accounts receivable, net...................... 4,628 8,357
Prepaid expenses.............................. 1,681 1,221
Current assets of discontinued operations..... 2,349 13,016
---------- ----------
Total current assets....................... 32,959 55,855
---------- ----------
Property and equipment, net.................... 5,580 7,094
Intangible assets, net......................... 46,740 61,389
Other assets................................... 673 7,258
Non-current assets of discontinued operations.. 556 1,241
---------- ----------
Total assets...............................$ 86,508 $ 132,837
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of obligation under capital
lease........................................$ 663 $ 2,806
Current portion of long-term debt............. 4 1,693
Debt to CMGI.................................. 56,266 -
Accounts payable.............................. 2,243 5,903
Due to CMGI affiliates........................ 3,293 1,699
Accrued expenses.............................. 11,452 38,396
Deferred revenue.............................. 2,889 6,365
---------- ----------
Total current liabilities.................. 76,810 56,862
---------- ----------
Due to CMGI.................................... - 39,821
Deferred revenue............................... - 24
Obligation under capital lease, net of current
portion....................................... 219 759
Long-term debt, net of current portion......... - 266
Other long-term liabilities.................... 390 396
---------- ----------
Total liabilities.......................... 77,419 98,128
---------- ----------
Minority interest.............................. - 6,755
Stockholders' equity:
Common stock.................................. 1,964 1,965
Additional paid-in capital.................... 3,713,442 3,774,494
Deferred compensation......................... (1,832) (4,337)
Accumulated other comprehensive income........ 947 558
Accumulated deficit...........................(3,705,432) (3,744,726)
---------- ----------
Total stockholders' equity................. 9,089 27,954
---------- ----------
Total liabilities and stockholders'
equity....................................$ 86,508 $ 132,837
========== ==========
Engage, Inc.
Consolidated Operating Results
(unaudited)
(In thousands, except per share data)
Three months ended
---------------------------------
January 31, October 31, January 31,
2002 2001 2001
--------- --------- ---------
Revenue:
Product revenue....................$ 2,340 $ 1,012 $ 2,119
Services and support revenue....... 3,735 5,646 6,189
--------- --------- ---------
Total revenue................... 6,075 6,658 8,308
--------- --------- ---------
Cost of revenue:
Cost of product revenue............ 60 (142) 68
Cost of services and support
revenue........................... 3,509 4,821 5,757
Amortization of developed
technology........................ 1,459 1,458 1,458
--------- --------- ---------
Total cost of revenue........... 5,028 6,137 7,283
--------- --------- ---------
Gross profit.................... 1,047 521 1,025
--------- --------- ---------
Operating expenses:
Research and development........... 1,883 2,419 3,008
Selling and marketing.............. 2,890 3,264 12,849
General and administrative......... 2,137 2,636 6,081
Amortization and impairment of
goodwill and other intangibles.... 5,866 5,866 18,680
Restructuring costs................ - 975 857
Stock compensation................. 294 362 475
--------- --------- ---------
Total operating expenses........ 13,070 15,522 41,950
--------- --------- ---------
Operating loss.................. (12,023) (15,001) (40,925)
Other income (expense):
Interest income.................... 137 243 1,572
Interest expense................... (1,042) (406) (2)
Minority interest.................. 16 93 311
Other income (expense), net........ (289) 161 (1,608)
--------- --------- ---------
Loss from continuing operations..... (13,201) (14,910) (40,652)
--------- --------- ---------
Loss from discontinued operations... - - (654,911)
--------- --------- ---------
Net loss............................$ (13,201) $ (14,910) $(695,563)
========= ========= =========
Basic and diluted net loss per share
data:
Continuing operations...............$ (0.07) $ (0.08) $ (0.21)
Discontinued operations............. - - (3.32)
--------- --------- ---------
Basic and diluted net loss per
share..............................$ (0.07) $ (0.08) $ (3.53)
========= ========= =========
Weighted average number of basic
and diluted shares outstanding .... 196,574 196,615 196,774
========= ========= =========
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