Onyx Software Announces Financial Results; Second Quarter Revenue Grew Sequentially; Restatement Reduces 2000 Revenues By $2.2 Million.Business Editors BELLEVUE, Wash.--(BUSINESS WIRE)--Aug. 10, 2001 Onyx onyx (ŏn`ĭks), variety of cryptocrystalline quartz, differing from agate only in that the bands of which it is composed are parallel and regular. Software Corp. (Nasdaq:ONXS) today announced financial results for the three- and six-month periods ended June 30, 2001, and restated prior results with the effect of reducing 2000 annual revenues and earnings by $2.2 million, a revenue impact that was less than two percent. The 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. also reduced services revenues and bad debt expense in the first quarter of 2001 by $74,000 and $384,000 respectively, and consequently improved reported earnings by $310,000. Financial Results Revenue for the second quarter of 2001 was $28.9 million, up 5 percent from $27.6 million in the second quarter of 2000, a modest sequential quarter increase over the first quarter 2001 level. Reported operating results for the second quarter of 2001 were a loss of $13.7 million or a loss of $0.35 per share, compared with a loss of $738,000 or a loss of $0.02 per share in the second quarter of 2000. 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 for the second quarter of 2001, excluding the amortization of intangibles, stock-based compensation expense, restructuring-related costs and impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of certain assets, was $7.7 million or a loss of $0.20 per share, compared to income of $560,000 or earnings of $0.01 per share in the second quarter of 2000. Second quarter reported and pro forma results include bad debt expense of $1.6 million. Revenue for the six month period ended June 30, 2001 was $57.2 million, up 13 percent from $50.8 million in the six month period ended June 30, 2000. Reported operating results for the six months ended June 30, 2001 were a loss of $29.4 million or a loss of $0.76 per share, compared with a loss of $1.2 million or a loss of $0.04 per share in the six months ended June 30, 2000. Pro forma net loss for the six month period ended June 30, 2001, excluding the amortization of intangibles, stock-based compensation expense, restructuring-related costs and write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of certain assets, was $19.9 million or a loss of $0.52 per share, compared with income of $1.3 million or earnings of $0.03 per share in the six month period ended June 30, 2000. On July 24, 2001, Onyx postponed the earnings release previously scheduled for that date to conduct an investigation spurred by the Company's discovery late in the earnings release cycle of an unauthorized side agreement. That investigation included a review of transactions from 1999, 2000 and the first six months of 2001. The investigation efforts were directed by Onyx Software's audit committee of the Board of Directors, and carried out by the company's outside law firm and its auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together with the full cooperation of the company. The restatement includes two definitive unauthorized side agreements and two possible unauthorized side agreements aggregating $797,000. In addition, upon completion of the investigation procedures and a thorough review of all the facts now available with the benefit of hindsight hind·sight n. 1. Perception of the significance and nature of events after they have occurred. 2. The rear sight of a firearm. , the company believed it was appropriate to reverse three other transactions aggregating $1,417,000 - all of which have not been paid. These were all transactions in the fourth quarter of 2000 and resulted in a $2.2 million adjustment to revenues. The investigation found that both finance and executive management acted in good faith. Revenue for the fourth quarter of 2000 previously reported as $37.9 million has been restated to $35.7 million. Reported operating results for the fourth quarter of 2000 previously reported as a net loss of $581,000, or a loss of $0.02 per share, has been restated to a net loss of $2.8 million or a loss of $0.08 per share. Revenue for 2000 previously reported as $121.5 million has been restated to $119.3 million. Reported operating results for 2000 previously reported as a net loss of $2.5 million, or a loss of $0.07 per share, has been restated to a net loss of $4.7 million, or a loss of $0.13 per share. Revenue for the first quarter of 2001 previously reported as $28.4 million has been restated to $28.3 million. Reported operating results for the first quarter of 2001 previously reported as a net loss of $16.0 million, or a loss of $0.42 per share, has been restated to a net loss of $15.7 million, or a loss of $0.42 per share. Business Summary "Despite the very difficult economic environment, we achieved sequential quarter revenue growth," said Onyx Software chief executive officer, Brent Brent, outer borough (1991 pop. 226,100) of Greater London, SE England. The area is a rail and industrial center. Its manufactures include automobile parts, clocks and watches, and electrical equipment. Frei. "We continued to take aggressive action to reduce costs and better position the company for profitable growth. We benefited from our traditional strength in the mid-market, and also booked two end-user sales over one million dollars in the second quarter. We believe strong add-on A purchase of additional goods before payment is made for goods already purchased. An add-on may be covered by a clause in an installment payment contract that allows the seller to hold a security interest in the earlier goods until full payment is made on the later goods. purchases from existing customers demonstrate continued customer satisfaction," Frei added. Onyx added 38 new customers during the second quarter, compared to 33 in the prior quarter, for a total over 800 worldwide. A diverse group of companies and industry sectors contributed to Onyx second quarter revenue, and no customer represented more than 6 percent of the total revenue. New customers included mid-market and large enterprise customers, such as Ryland Homes Ryland Homes is the United States' 11th-largest developer and home-builder. The builder, based in Calabasas, California, has built over 250,000 homes across the United States since its inception, focusing primarily on first-time homebuyers and first- and second-time moveup buyers. (NYSE NYSE See: New York Stock Exchange :RYL), RHB Bank RHB Bank Berhad (also known as the Rashid Hussein Bank) is a bank based in Kuala Lumpur, Malaysia. It specializes in commercial banking, corporate banking and international banking services. , Toyota Financial Services The business known as Toyota Financial Services operates in over thirty countries around the globe and is the wholly owned financial services operation of the Toyota Motor Corporation. , Westcoast Energy (Toronto:W.TO), Calor Gas Calor Gas Noun Trademark, Brit butane gas liquefied under pressure in portable containers for domestic use Calor gas® n → butano Calor gas , Foster-Wheeler (NYSE:FWC FWC Fish and Wildlife Conservation Commission (Florida) FWC Foster Wheeler Corporation (Clinton, NJ) FWC Family Winemakers of California FWC Fresh Water Cooling FWC Flight Warning Computer ), and cruise-operator Costa Crociere SPA. Existing customers making significant add-on purchases included Airborne Express Airborne Express (IATA: n/a, ICAO: ABX, and Callsign: Abex) was an express delivery company and cargo airline. Headquartered in Seattle, Washington, its hub was at Wilmington, Ohio. , Ingenix Health Intelligence - a segment of UnitedHealth Group UnitedHealth Group Incorporated NYSE: UNH is a managed health care company. It is the parent of United Healthcare, one of the largest health insurers in the U.S. It was created in 1977, as UnitedHealthCare Corporation (it renamed itself in 1998), but traces its origin to a , Phillips Oral Healthcare, Advent Software Advent Software (NASDAQ: ADVS) makes software designed to automate portfolio accounting for investment management firms, ranging from family offices and investment advisors to large institutional investors and hedge funds. , Agile ag·ile adj. 1. Characterized by quickness, lightness, and ease of movement; nimble. 2. Mentally quick or alert: an agile mind. Software, Interwoven in·ter·weave v. in·ter·wove , in·ter·wo·ven , inter·weav·ing, inter·weaves v.tr. 1. To weave together. 2. To blend together; intermix. v.intr. , Timberline timberline, elevation above which trees cannot grow. Its location is influenced by the various factors that determine temperature, including latitude, prevailing wind directions, and exposure to sunlight. Software and Singapore Cable Vision. 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. contributed 27 percent of total revenue. Onyx Japan, the company's majority-owned joint venture initiated late last year, demonstrated encouraging partnering progress and revenue growth in the second quarter. Onyx Japan shipped the Japanese version of the web-based Onyx Customer Portal and Onyx KnowledgeBase during the Quarter. "We continue to see robust opportunities for initial and add-on business, but timing of revenue remains difficult to predict as prospects and customers delay IT investment decisions in the face of economic uncertainty," said Brian Henry Brian Henry is a United States poet. He lives in Virginia. Education
Onyx Software's strategy for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. profitable growth is to attract the best people, develop strong and meaningful partnerships, and integrate advanced technology into its products. The company demonstrated second quarter progress on each of these fronts, while emphasizing efforts to hasten has·ten v. has·tened, has·ten·ing, has·tens v.intr. To move or act swiftly. v.tr. 1. To cause to hurry. 2. its return to profitability. Onyx continues to attract high caliber professionals, evidenced by second quarter appointments including Brian Henry as executive VP and chief financial officer, Nobuo Hashimoto as president of Onyx Japan, Dennis Allan as VP of European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Operations and Alvin Kok Kah Sing as VP and managing director of Asia Pacific. "The addition of strong business leaders with regional profit and loss responsibility helps drive the tremendous international opportunity for Onyx Software," said Les Rechan, president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . Onyx announced a strategic alliance with Avanade, Inc., a joint venture between Microsoft and Accenture, to deliver Onyx's customer relationship management (CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. ) solutions on the Microsoft .NET See .NET. server. The alliance offers businesses a complete solution for large-scale integrations of CRM applications. Through this strategic alliance, Avanade and Onyx will offer end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. CRM solutions to address customer demand for scalability and reliability. Onyx also announced partnerships with FileNet, MarketFirst, Brainshark, Firepond, Brightware, and AvantGo. Technology leadership continued to be a significant competitive differentiator for Onyx in the second quarter. Onyx shipped the third-generation of its award-winning thin-client CRM portal that has now been purchased by more than 300 clients worldwide. Onyx believes that it continues to enjoy competitive advantage in hosted solutions. Onyx continues to build on its strong Microsoft relationship, becoming the only CRM software company to-date to achieve Microsoft Advanced Server Certification. Onyx received Microsoft certification A series of programs that provide certification of competency in Microsoft products. Administered throughout the world at Microsoft centers as well as colleges and universities, the certification exams consist of both core topics and elective material. for Onyx Enterprise Application Server (OEAS OEAS Office of Operational Excellence and Assessment Support ), the company's new XML-based customer management platform. OEAS is designed to give large, complex enterprises a single, flexible platform for effectively managing mission-critical customer and partner relationships in a highly personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. and targeted way. Onyx bettered its own CRM application scalability record. Demonstrating its new three-tier internet architecture, Onyx posted sub-second average user response times for more than 40,000 concurrent users In computer science, the number of concurrent users for a resource in a location, with the location being a computing network or a single computer, refers to the total number of people using the resource at the same time. on a single eight processor database server. Earnings Conference Call The Onyx Software earnings conference call is scheduled to start promptly at 4:30 pm Eastern (1:30 pm Pacific.) We suggest that you access the call 10-15 minutes prior to the start time by signing on at http://investor.onyx.com. The call will be archived and available for replay at this same URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. . Alternatively, you can participate by phone. When: Friday, August 10, 2001 Time: 4:30 pm (Eastern) / 1:30 pm (Pacific) Dial-In: 800/289-0468 International Dial-In: 913/981-5517 Replay: 719/457-0820 (available through midnight, August 17) Passcode: 427078 About Onyx Software Onyx Software Corp. (Nasdaq:ONXS) is a global supplier of customer relationship management (CRM) enterprise applications that power a company's entire business world, connecting sales, marketing and service organizations with customers, prospects and partners. Through an innovative mix of Internet technology, strategic services and customer commitment, Onyx helps companies create the seamless, branded customer experiences they need to forge forge Open furnace for heating metal ore and metal for working and forming, or a workshop containing forge hearths and related equipment. From earliest times, smiths (see smithing) heated iron in forges and formed it by hammering on an anvil. competitive advantage and build real business value. Its reliable, scalable, flexible, holistic Holistic A practice of medicine that focuses on the whole patient, and addresses the social, emotional, and spiritual needs of a patient as well as their physical treatment. Mentioned in: Aromatherapy, Stress Reduction, Traditional Chinese Medicine solutions enable companies to attract, acquire and retain customers and partners across all channels and touch points. Onyx customers include American Express American Express (NYSE: AXP), sometimes known as "AmEx" or "Amex", is a diversified global financial services company, headquartered in New York City. The company is best known for its credit card, charge card and traveler's cheque businesses. , Broadwing, Commerce One, Credit Suisse The Credit Suisse Group (SWX:CSGN, NYSE: CS) is a financial services company, headquartered in Zürich, Switzerland. It is the second-largest Swiss bank, behind UBS AG. , Dreyfus, FirstWorld Communications, Portland Trail Blazers The Portland Trail Blazers are a professional basketball team based in Portland, Oregon. They play in the National Basketball Association (NBA). The franchise, based in Portland throughout its existence, entered the league in 1970 and has won the NBA Championship once, in 1977. , Prudential Prudential is the name of two different companies and buildings named after them: Companies:
This press release contains 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. , which provide our current expectations or forecasts of future events. Forward-looking statements include statements about our plans, objectives, expectations and intentions and other statements that are not historical facts. When used in this press release, the words "believes," "anticipates" and "intends" and similar expressions are intended to identify forward-looking statements, but the absence of these words does not necessarily mean a statement is not forward-looking. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the factors described under "Important Factors That May Affect Our Business, Our Results of Operations and Our Stock Price" in our quarterly report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2001 and in the reports we file from time to time with the Securities and Exchange Commission. Readers should not rely on the forward-looking statements, which speak only as of the date of this release. We undertake no obligation to publicly revise any forward-looking statement to reflect current circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release or to reflect the occurrence of unanticipated events. Onyx is a registered trademark of Onyx Software Corporation 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.
Onyx Software Corporation
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
---------- ---------- ---------- ----------
Revenues
License $11,779 $16,615 $24,767 $30,956
Service 17,118 11,020 32,445 19,863
--------- --------- --------- ---------
Total revenues 28,897 27,635 57,212 50,819
Costs of revenues
Cost of license 588 831 1,488 1,491
Acquisition-related
amortization -
technology 204 205 408 410
Cost of service 9,704 5,634 19,378 10,148
--------- --------- --------- ---------
Total cost of revenues 10,496 6,670 21,274 12,049
--------- --------- --------- ---------
Gross margin 18,401 20,965 35,938 38,770
Operating Expenses
Sales and marketing 16,196 13,421 35,384 24,801
Research and development 5,844 4,784 13,073 8,542
General and
administrative 4,684 2,458 8,750 4,577
Restructuring and
other-related charges 3,589 -- 3,589 --
Acquisition-related
amortization - other
intangibles 1,623 881 3,246 1,557
Amortization of stock-based
compensation 226 146 536 352
--------- --------- --------- ---------
Total operating expenses 32,162 21,690 64,578 39,829
Operating loss (13,761) (725) (28,640) (1,059)
Interest income, net 151 291 442 483
Equity investment
losses and impairment (500) (200) (2,000) (437)
--------- --------- --------- ---------
Loss before income taxes (14,110) (634) (30,198) (1,013)
Income tax provision (benefit) (8) 104 (102) 212
Minority interest in loss
of consolidated subsidiary (414) -- (668) --
--------- --------- --------- ---------
Net loss $(13,688) $(738) $(29,428) $(1.225)
========= ========= ========= =========
Basic and diluted
net loss per share $(0.35) $(0.02) $(0.76) $(0.04)
========= ========= ========= =========
Shares used in computation
of basic and diluted
net loss per share 39,213 34,720 38,505 34,487
========= ========= ========= =========
Onyx Software Corporation
Condensed Consolidated Balance Sheets
(In Thousands)
Dec. 31,
June 30, 2000
2001 (Restated,
(Unaudited)(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $20,387 $11,492
Short-term marketable securities 4,902 5,522
Accounts receivable, net 27,376 41,135
Prepaid expenses and
other current assets 6,118 4,533
--------- ---------
Total current assets 58,783 62,682
Property and equipment, net 28,872 20,848
Purchased technology, net 1,315 1,958
Other intangibles, net 21,121 19,674
Other assets 2,028 3,878
--------- ---------
Total Assets $112,119 $109,040
========= =========
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $5,039 $6,792
Salary and benefits payable 3,829 5,778
Accrued liabilities 5,743 4,691
Current portion
long-term liabilities 172 242
Income taxes payable 650 808
Restructuring-related liabilities 425 --
Deferred revenues 18,195 19,119
--------- ---------
Total current liabilities 34,053 37,430
Long-term liabilities 339 428
Deferred tax liability 1,908 2,201
Minority Interest in joint venture 2,228 2,895
Shareholders' Equity
Common stock 113,963 75,416
Notes payable to shareholders
in the form of equity 4,320 4,320
Notes receivable from officers -- (157)
Deferred stock-based compensation (1,384) (413)
Accumulated deficit (42,204) (12,776)
Accumulated other comprehensive loss (1,104) (304)
--------- ---------
Total shareholders' equity 73,591 66,086
--------- ---------
Total Liabilities
and Shareholders' Equity $112,119 $109,040
========= =========
Onyx Software Corporation
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
Three Months Three Months
Ended Year Ended Ended
Dec. 31, Dec.31, March 31,
2000 2000 2001
------------ ---------- -------------
(Restated, (Restated, (Restated,
Unaudited) Unaudited) Unaudited)
Revenues
License $22,342 $73,701 $12,988
Service 13,378 45,608 15,327
--------- --------- ---------
Total revenues 35,720 119,309 28,315
Costs of revenues
Cost of license 1,152 3,520 900
Acquisition-related
amortization - technology 205 820 204
Cost of service 7,027 23,552 9,674
--------- --------- ---------
Total cost of revenues 8,384 27,892 10,778
--------- --------- ---------
Gross margin 27,336 91,417 17,537
Operating Expenses
Sales and marketing 18,935 59,182 19,188
Research and
development 6,368 21,046 7,229
General and
administrative 3,564 11,120 4,066
Restructuring and
other-related charges -- -- --
Acquisition-related
amortization - other
intangibles 1,429 4,332 1,623
Amortization of
stock-based compensation 91 548 310
--------- --------- ---------
Total operating expenses 30,387 96,228 32,416
Operating loss (3,051) (4,811) (14,879)
Interest income, net 124 788 291
Equity investment
losses and impairment -- (500) (1,500)
--------- --------- ---------
Loss before income taxes (2,927) (4,523) (16,088)
Income tax
provision (benefit) 84 404 (94)
Minority interest in loss
of consolidated
subsidiary (216) (216) (254)
--------- --------- ---------
Net loss $(2,795) $(4.711) $(15.740)
========= ========= =========
Basic and diluted
net loss per share $(0.08) $(0.13) $(0.42)
========= ========= =========
Shares used in computation
of basic and diluted
net loss per share 35,628 34,922 37,821
========= ========= =========
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