NetManage Announces Third Quarter Results; Company Files 10-Q for Second and Third Quarters and 10-Q/A for First Quarter.Business Editors CUPERTINO Cu·per·ti·no A city of western California west of San Jose. It has an electronics industry. Population: 50,000. , Calif.--(BUSINESS WIRE)--Nov. 20, 2002 NetManage, Inc. (Nasdaq:NETME), experts in host access and integration solutions, today reported financial results for its third quarter ended September September: see month. 30, 2002. Net revenue for the third quarter of 2002 was $14.1 million, compared with $17.7 million, as restated, for the third quarter of 2001. Net loss for the third quarter of 2002 amounted to $11.3 million, or $1.27 per share, including a restructuring charge 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. of $4.6 million ($0.52 per share) and the write down of certain investments of $2.5 million ($0.29 per share). This compares to a net loss of $2.2 million, or $0.24 per share, as restated, for the third quarter of 2001. During the third quarter, the Company received new business from such customers as Royal Bank of Scotland
The Royal Bank of Scotland Plc (Scottish Gaelic: Banca Rìoghail na h-Alba , Ohio State government, the U.S. Department of Justice, Merck Merck may refer to:
Cash and cash equivalents amounted to $28.5 million, or approximately $3.23 per share, at September 30, 2002. In the last two quarters, the Company has repurchased over 265,000 shares of its common stock as part of its previously announced stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program. The Company has completed the review of its previously reported financial results for fiscal 2001 and 2000 and the first quarter of 2002 which resulted in a number of adjustments. The adjustments are reflected in its Forms 10-Q for the quarters ended September 30, 2002 and June June: see month. 30, 2002 and its Form 10-Q/A for the quarter ended March 31, 2002, which were filed with the Securities and Exchange Commission on November November: see month. 20, 2002. The net effect of the adjustments on prior years' losses is an increase of approximately $3.1 million and a decrease to the first quarter 2002 loss of approximately $46,000. Second quarter 2002 results are in line with preliminary results announced on July 24, 2002. The $3.1 million restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. to prior years' losses is substantially less than the estimated understatement of $4 million to $5 million that the Company announced in a press release on August 28, 2002. None of the adjustments affected the Company's cash balances. "Third quarter revenues were impacted by the continued slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the economy and extremely tight IT spending," said Zvi Alon, president, chairman 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 NetManage. "During the third quarter, we restructured our operations to help refine our focus and bring our costs more in line with our current revenues. We also felt it was necessary to write down a number of investments we made in other technology companies which have also been impacted by the economy. We believe these cost reduction initiatives will accelerate our return to profitability. Our fourth quarter is historically our strongest and we enter it focused on helping our large customer base leverage their investments in legacy systems by transforming them to better service their businesses." The Company has scheduled a conference call at 2:00 p.m. PT (5:00 p.m. ET) on Thursday, November 21, 2002. The call will be broadcast live via the Investors section on the NetManage Web site, www.netmanage.com or by dialing 719-457-2641 and entering the reservation number 275041. A playback Playback could mean:
About NetManage Founded in 1990, NetManage, Inc. (Nasdaq:NETME), experts in host access and integration solutions, provides software and 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" to extend and maximize a company's investment in existing legacy systems and applications. NetManage offers a full range of application integration, Web publishing Creating a Web site and placing it on the Web server. A Web site is a collection of HTML pages with the home page typically named INDEX.HTML. Web sites are designed using Web authoring software which provides a graphical layout capability or by hand coding in HTML or both. and host access software for mid-size and Global 2000 enterprises. NetManage has more than 30,000 customers including 480 of the Fortune 500. NetManage sells its products and services worldwide through its direct sales force, international subsidiaries, and authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: channel partners. NetManage is headquartered in Cupertino and has offices worldwide. For more information, visit www.netmanage.com. This press release contains, in addition to historical information, 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. that involve risks and uncertainties, including statements regarding improvement in the Company's competitive position, improvement in financial results and business pipeline, the Company's positioning in the eBusiness market, and the progress and benefits of the Company's execution on its business plan. The Company's actual results could differ materially from the results discussed in the forward-looking statements. The factors that could cause or contribute to such differences include, among others, that the markets for the Company's products could grow more slowly than the Company or market analysts believe; that current worldwide economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. could continue or worsen wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. worsen Verb to make or become worse worsening adjn ; that the Company may be unable to position itself to take advantage of growth in the eBusiness market, that the Company may be unable to integrate or take advantage of its acquisitions successfully; that the Company may not be able to take advantage of growth in the Company's target markets; that there is no assurance that the Company will not suffer increased competitive pressures, that corporate buying decisions will not be influenced by the actions of the Company's competitors or other market factors, or that the Company will continue to progress in the execution of its business plan; that the Company recently regained compliance with Securities and Exchange Commission and Nasdaq periodic reporting requirements by filing its Forms 10-Q for the periods ended June 30, 2002 and September 30, 2002 and its 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. Form 10-Q Form 10-Q See 10-Q. for the period ended March 31, 2002 on November 20, 2002; that the Company had been notified by Nasdaq of its failure to timely file its Form 10-Q for the period ended June 30, 2002, which subjected its common stock to 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. by Nasdaq, and that the Company was unable to comply with Nasdaq's continued listing condition that, on or before November 14, 2002, it file its Forms 10-Q for the periods ended September 30, 2002 and June 30, 2002 and all other public reports that required restatement; that the Company has not been profitable on an annual basis since 1995 and may never achieve profitability in the future; or that the Company has restated certain financial results. Additional information on these and other risk factors that could affect the Company's financial results is included in the Company's 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. , Forms 10-Q, Forms 8-K and other documents filed with the Securities and Exchange Commission. Note to Editors: NetManage, the NetManage logo, the lizard-in-the-box logo, RUMBA, ONESTEP ONESTEP Ontario Network of Employment Skills Training Projects (Ontario, Canada) , ViewNow, SupportNow, and OnWeb are either trademarks or registered trademarks of NetManage, Inc., its subsidiaries, and affiliates 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/or other countries. All other trademarks are the property of their respective owners.
NETMANAGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
(Unaudited)
Sep 30, Dec 31,
2002 2001
------- -------
(As restated)
Cash, cash equivalents and
short-term investments 28,569 $33,558
Accounts receivable, net 6,912 17,801
Prepaid expenses and other
current assets 3,387 3,487
------- -------
Total current assets 38,868 54,846
Property and equipment, net 2,390 3,883
Goodwill, net 6,701 6,701
Other intangibles, net 5,153 7,530
Other assets 1,548 3,133
------- -------
$54,660 $76,093
======= =======
Current liabilities $30,768 $36,719
Long-term liabilities 160 286
Stockholders' equity 23,732 39,088
------- -------
$54,660 $76,093
======= =======
NETMANAGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30 September 30
2002 2001 2002 2001
-------- -------- -------- --------
(As restated) (As restated)
Net revenues:
License fees $ 5,477 $ 7,873 $ 23,588 $ 28,681
Services 8,616 9,795 25,777 31,045
-------- -------- -------- --------
Total net revenues 14,093 17,668 49,365 59,726
Cost of revenues:
License fees 379 791 1,761 2,598
Services 1,561 1,948 4,877 6,211
-------- -------- -------- --------
Cost of revenues 1,940 2,739 6,638 8,809
-------- -------- -------- --------
Gross margin 12,153 14,929 42,727 50,917
-------- -------- -------- --------
Operating expenses:
Research and
development 3,130 3,817 10,319 14,317
Sales and marketing 8,448 9,713 28,234 34,850
General and
administrative 3,729 2,065 8,699 8,747
Restructuring charge 4,614 -- 4,614 --
Amortization of
intangible assets 793 1,445 2,378 4,333
-------- -------- -------- --------
Total operating expenses 20,714 17,040 54,244 62,247
-------- -------- -------- --------
Loss from operations (8,561) (2,111) (11,517) (11,330)
Loss on investments (2,534) -- (2,534) (1,824)
Interest income and
other, net 69 237 272 2,082
Foreign currency
transaction losses (79) (231) (1,387) (429)
-------- -------- -------- --------
Loss before provision
for income taxes (11,105) (2,105) (15,166) (11,501)
Provision (benefit) for
income taxes 160 132 361 719
-------- -------- -------- --------
Net loss $(11,265) $ (2,237) $(15,527) $(12,220)
Net loss per share:
Basic and diluted $ (1.27) $ (0.24) $ (1.73) $ (1.31)
Weighted average common
shares and equivalents:
Basic and diluted 8,878 9,281 8,980 9,317
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