Level 8'S First Quarter Revenues Up 22% Over Q4 1999; Software Sales Increase 37% Over Q4 1999.Business Editors CARY, N.C.--(BUSINESS WIRE)--April 26, 2000 Level 8 Systems, Inc. (Nasdaq: LVEL), a leading global provider of eBusiness See e-business. Integration Software, today reported financial results for the first quarter ended March 31, 2000. Revenue for the first quarter from ongoing operations was a record $17 million, an increase of 29% over the same period last year, and a sequential increase of 22% over $13.9 million reported for the fourth quarter of 1999. The Company reported record software license revenues of $8.2 million for the quarter, an increase of 204% over the first quarter of 1999 and 37% over the fourth quarter of 1999. Selected comparative financial data is summarized below.
Three Months ended
(In thousands, except per share amounts)
Mar. 31, Dec. 31, % Mar. 31, %
2000(a) 1999 B/(W) 1999 B/(W)
----- ----- ----- ---- -----
Software revenue $ 8,233 $6,016 37% $ 2,712 $ 204%
Total revenue 17,009 13,904 22% 13,205 29%
Pro forma gross
profit (b) 10,555 8,707 21% 5,459 93%
EBITDA (c) (2,018) 1,266 -- 297 --
Pro forma net
income (loss) (d) (2,962) 703 -- (1,118) --
Pro forma net income
(loss) per
share (d) (0.24) 0.05 -- (0.13) --
Shares outstanding (e) 12,778 14,177 -- 8,710 --
(a) Excludes services revenue of $2,653 and estimated gross profit of
$561 from U.S. Government services operations. The U.S. Government
services business is not expected to be an ongoing part of the
Company's operations after the middle of the second quarter of
2000.
(b) Excludes depreciation and capitalized software amortization of
$1,582, $710, and $1,019 for the periods ended March 31, 2000,
March 31, 1999, and December 31, 1999, respectively.
(c) EBITDA excludes acquisition-related charges of $2,583 for the
period ended December 31, 1999.
(d) See reconciliation of reported net loss to pro forma income
attached.
(e) Outstanding preferred stock, options, and warrants have been
included in the share and per share amounts for the period ended
December 31, 1999 as these securities have a dilutive impact on
pro forma net income per share in these periods.
During the first quarter, Level 8 invested $7.1 million in sales and marketing compared to $3.8 million in the fourth quarter of 1999. This investment contributed to top line revenue growth and resulted in a first quarter loss before interest, taxes, depreciation and amortization (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) of approximately $2.0 million, compared to EBITDA of $297,000 for the prior year's first quarter and EBITDA of $1.3 million in the fourth quarter of 1999. The Company also reported a 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 net loss of $3.0 million or $.24 per share compared to a pro forma net loss of $1.1 million or $.13 in the first quarter of 1999 and a pro forma net income of $703,000 or $.05 per share in the previous quarter. Level 8 reported total revenues of $19.7 million for the quarter, including U.S. Government services which are not expected to be part of the Company's ongoing business after the middle of the second quarter of 2000. For the first quarter of 2000, revenues generated from U.S. Government services were approximately $2.6 million and contributed an estimated gross profit of $561,000. Level 8 reported a net loss for the quarter of $8.0 million or $.64 per share compared to a loss of $3.8 million or $.44 per share for the same period of the previous year. "We are pleased to see our investment in sales and marketing beginning to pay off as reflected in first quarter revenue growth and increased gross profit over the previous quarter," said Arik Arik is a given name, and may refer to: In sports:
"Particularly impressive this quarter was the growth in our software license revenues which accounted for 48% of total ongoing revenues compared to 43% in the fourth quarter. This marked the fifth consecutive quarterly increase in software license sales," said Steven Ste´ven n. 1. Voice; speech; language. Ye have as merry a steven As any angel hath that is in heaven. - Chaucer. 2. An outcry; a loud call; a clamor. To set steven to make an appointment. Dmiszewicki, president of Level 8. "We made tremendous progress during the quarter in assimilating as·sim·i·late v. as·sim·i·lat·ed, as·sim·i·lat·ing, as·sim·i·lates v.tr. 1. Physiology a. To consume and incorporate (nutrients) into the body after digestion. b. and integrating the recently completed Template (1) A pre-designed document or data file formatted for common purposes such as a fax, invoice or business letter. If the document contains an automated process, such as a word processing macro or spreadsheet formula, then the programming is already written and embedded in the acquisition. We believe we have the product footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. and the right infrastructure in place to enhance our market position and leverage the growth in the EAI (Enterprise Application Integration) Refers to various techniques used to share data and business processes in large enterprises. When companies acquire another organization, disparate information systems have to be made to work together. marketplace. Our goal for 2000 is to continue our aggressive investment in sales and marketing, and enhancing our relationships with strategic partners to identify and pursue new business opportunities." Quarter Highlights Level 8 Successfully Integrates Template Software Level 8 successfully completed the integration of Template Software (functions, employees and facilities) into Level 8 with a focus on ramping product sales, while spinning off non-strategic components of the former Template business. Development is already underway to integrate Level 8's existing product line with the former Template products. Level 8 Powers Cirqit.com Level 8 announced successful deployment of Geneva Geneva, canton and city, Switzerland Geneva (jənē`və), Fr. Genève, canton (1990 pop. 373,019), 109 sq mi (282 sq km), SW Switzerland, surrounding the southwest tip of the Lake of Geneva. eBusiness Integration Software for Cirqit.com. Cirqit.com is an application service provider of online printing 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. that leverages the 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 to streamline the procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. , production, delivery and management of printed and business communications for Global 2000 companies. Level 8 and HP Form Alliance Level 8 and Hewlett-Packard See HP. Hewlett-Packard - (HP) Hewlett-Packard designs, manufactures and services electronic products and systems for measurement, computation and communications. The company's products and services are used in industry, business, engineering, science, medicine and announced a marketing alliance that allows customers to more easily integrate HP back-office applications with Web-based applications See Web application. . Known for its reliability in hosting business-critical enterprise applications, the HP e3000 provides the Web-enabling technologies required to develop back-office applications for the Internet. Level 8 eBusiness Software Shipping with Windows 2000 Level 8 announced that the company's Message Queuing The process of lining up events in the order you want them processed. Whether it refers to packets in an IP network that search for the most optimal path to their destination, or telephone callers sitting in a "hold queue" waiting to be answered, queuing means the same thing: deciding on Connector, a reliable cross-platform (software, hardware) cross-platform - A term that describes a language, software application or hardware device that works on more than one system platform (e.g. Unix, Microsoft Windows, Macintosh). E.g. Netscape Navigator, Java. integration product, is being distributed with Windows 2000. The Message Queuing Connector is the Windows resident companion of Level 8's Geneva Message Queuing product and provides a gateway from any Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. application to applications that run on non-Windows platforms. Under the exclusive agreement with Microsoft, Windows 2000 users are directed to Level 8 to purchase Geneva Message Queuing on the non-Windows platforms. Level 8 Offers Message Queuing Software for Red Hat Linux Red Hat Linux, assembled by Red Hat, was a popular, "middle-aged" Linux distribution (not as old as Slackware but older than Ubuntu) upon its discontinuation in 2004.[1] Red Hat Linux 1.0 was released on November 3, 1994. Level 8 announced the availability of Geneva XIPC XIPC XORP's Inter-Process Communication for Linux Linux Nonproprietary operating system (OS) for digital computers. In 1991 Linus Torvalds of Finland began asking for volunteer programmers over the Internet to collaborate on the development of a UNIX-like OS for personal computers; the “1. , the first message-oriented middleware Message-oriented middleware comprises a category of inter-application communication software that generally relies on asynchronous message-passing as opposed to a request/response metaphor. software product specifically designed for the Linux platform. Red Hat, Inc. will include a demonstration version of Geneva XIPC on the next release of the Red Hat Linux Application Library CD. Level 8 Software Integrates ABN AMRO ABN AMRO Algemene Bank Nederland-Amsterdam Roterdam Bank (Dutch bank) for Online Banking Level 8 announced that ABN AMRO, a leading international bank group, deployed Level 8's Geneva Integration Broker product for new cash management and online banking integration projects. Level 8's Geneva Integration Broker enabled ABN AMRO to integrate several of the company's backend legacy systems with Web-based applications in order to handle the growing number of customer on-line inquiries. Crystal Systems Incorporates Level 8 Products for eBusiness Level 8 announced that Crystal Systems Solutions signed an agreement to incorporate Level 8 products in Crystal's eBusiness projects worldwide. Under the non-exclusive agreement, Crystal incorporates Level 8's Geneva Integration Broker and Geneva Message Queuing products as part of its software renovation projects. Crystal will use Level 8's products for the accelerated delivery of eBusiness and eCommerce See e-commerce. solutions. Level 8 Partners with Meridian Meridian (mərĭd`ēən), city (1990 pop. 41,036), seat of Lauderdale co., E Miss., near the Ala. line; settled 1831, inc. 1860. Systems Consulting Level 8 announced a partnership that enables Meridian Systems Consulting to rapidly build and deploy eBusiness integration solutions for their clients based on Level 8's Geneva technology. Meridian Systems Consulting is a full service eBusiness and Enterprise Resource Planning See ERP. (application, business) Enterprise Resource Planning - (ERP) Any software system designed to support and automate the business processes of medium and large businesses. solutions provider, offering a versatile combination of information technology and business consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" . Level 8 Announces Java Support for Geneva Message Queuing Level 8 announced Geneva Message Queuing for Java. The new release enables developers to write downloadable, platform-independent Java applets A Java program that is downloaded from the server and run from the browser. The Java Virtual Machine built into the browser is interpreting the instructions. Contrast with Java application. for the Web that integrate with Windows applications A program that is written to run under Microsoft's Windows operating system. Such applications typically run under all 32-bit versions of Windows, but earlier applications might also run under the 16-bit versions (Windows 3.x) as well. See Windows. . About Level 8 Systems Level 8 Systems (Nasdaq: LVEL; www.level8.com) is a leading global provider of eBusiness integration software that enable organizations to integrate new and existing information and processes with the Internet to create new business value. Level 8's product portfolio represents the broadest enterprise application integration (EAI) offering from a single vendor in the market today. The Geneva Integration Suite provides enterprise messaging, application integration, business process automation and application engineering. Level 8 has more than 700 customers and over 450 employees worldwide with corporate headquarters in Cary, North Carolina Cary is the second largest municipality in Wake County, North Carolina and the third largest municipality in The Triangle (North Carolina) behind Raleigh and Durham. It is the seventh largest municipality in North Carolina. , and offices in the US, UK, Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , Denmark Denmark (dĕn`märk), Dan. Danmark, officially Kingdom of Denmark, kingdom (2005 est. pop. 5,432,000), 16,629 sq mi (43,069 sq km), N Europe. , France, Italy and Australia. Level 8, Level 8 Systems, Level 8 Technologies, Geneva, Geneva Integration Suite, Geneva Enterprise Integrator (1) In electronics, a device that combines an input with a variable, such as time, and provides an analog output; for example, a watt-hour meter. (2) See systems integrator. , Geneva Business Process Automator, Geneva Integration Broker, Geneva Message Queuing, Geneva XIPC and Geneva AppBuilder are trademarks of Level 8 Technologies, Inc., a wholly-owned subsidiary of Level 8 Systems, Inc. All other company and product names are for identification purposes only and are the property of, and may be trademarks of, their respective owners. Except for any historical information contained herein, this news release contains forward looking statements on such matters as anticipated financial performance, business prospects, the development and capabilities of next generation EAI solutions, new products, and similar matters. Actual results may differ materially from the anticipated results or other expectations expressed in this release as a result of a variety of factors, including risks presented by market acceptance of the company's strategic direction; continued market acceptance of the company's existing technology; the integration of Template's operations and technologies; the potential failure to meet product delivery dates; matters relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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. ; protection of intellectual property and proprietary rights; difficulties in attracting and retaining consultants, development professionals, and trained qualified sales professionals and the ability of those sales professionals to perform to quota quota In international trade, a government-imposed limit on the quantity of goods and services that may be exported or imported over a specified period of time. Quotas are more effective than tariffs in restricting trade, since they limit the availability of goods rather ; the sufficiency of the company's liquidity and capital resources; and the risks more fully described in Level 8's Form S-4 filed with the Securities and Exchange Commission (File Number 333-91413). Level 8, Level 8 Systems, Level 8 Technologies, Geneva, Geneva Integrator, Geneva Message Queuing, Geneva XIPC, Geneva MonitorMQ, Geneva AppBuilder, Enterprise Integration Template and Business Process Template are trademarks of Level 8 Technologies, Inc., a wholly-owned subsidiary of Level 8 Systems, Inc. All other company and product names are for identification purposes only and are the property of, and may be trademarks of, their respective owners.
LEVEL 8 SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended
March 31,
2000 1999
------------ --------------
Revenue:
Software $ 8,233 $ 2,712
Maintenance 3,674 3,883
Services 7,755 6,610
------------ --------------
Total operating revenue 19,662 13,205
------------ --------------
Cost of revenue:
Software 1,930 838
Maintenance 1,384 1,600
Services 6,814 6,018
------------ --------------
Total cost of revenue 10,128 8,456
------------ --------------
Gross profit 9,534 4,749
Operating expenses:
Sales and marketing 7,119 2,619
Research and development 2,211 1,679
General and administrative 3,548 1,753
Amortization of intangible
assets 3,526 1,697
------------ --------------
Total operating expenses 16,404 7,748
Loss from operations (6,870) (2,999)
Interest and other income
(expense), net (908) (627)
------------ --------------
Loss before provision for
income taxes (7,778) (3,626)
Income tax provision
(benefit) 250 202
------------ --------------
Net loss $ (8,028) $ (3,828)
============ ==============
Loss per common share -
basic and diluted $ (0.64) $ (.44)
============ ==============
Weighted average common
shares outstanding -
basic and diluted 12,778 8,710
LEVEL 8 SYSTEMS, INC.
CONDENSED BALANCE SHEETS
(In thousands)
March 31, December 31,
2000 1999
--------------- ----------------
Assets
Cash $ 7,993 $ 6,509
Accounts receivable, net 22,499 22,199
Goodwill and other
intangibles, net 65,697 69,948
Other assets 33,371 34,925
---------------- ---------------
Total assets $ 129,560 $ 133,581
================ ===============
Liabilities and Stockholders' Equity
Notes payable and
long-term debt $ 27,534 $ 27,593
Notes payable and loans
from related company 3,519 4,519
Accounts payable 1,836 2,235
Deferred revenue 9,687 9,800
Other liabilities 15,606 17,213
----------------- --------------
Total liabilities 58,182 61,360
Stockholders' equity 71,378 72,221
------------------ -------------
Total liabilities and
stockholders' equity $ 129,560 $ 133,581
================== =============
LEVEL 8 SYSTEMS, INC.
PRO FORMA INCOME RECONCILATION
(In thousands, except per share amounts)
Qtr Qtr Qtr
Ended Ended Ended
March 31, Dec 31, March 31,
2000 1999 1999
--------- -------- -------
Net loss from continuing operations,
as reported $(8,028) $(4,882) $(3,828)
Adjustments to reconcile net loss
from continuing operations to pro forma
net income (loss):
Depreciation 408 296 404
Amortization of capitalized
software 1,480 945 609
Amortization of intangible assets 3,526 1,761 1,697
Other acquisition-related charges -- 2,583 --
Amortization of loan guaranty 213 -- --
Gross profit from federal services (561) -- --
Pro forma net income (loss) $(2,962) $ 703 $(1,118)
======== ========= =========
Pro forma net income (loss) per share $ (0.24) $ 0.05 $ (0.13)
======== ======== =========
Shares outstanding - diluted 12,778 14,177 8,710
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