ReSourcePhoenix.com Announces Second Quarter Results; Continues Focus On Financing, Client Acquisition and Strategic Cost-Cutting Initiatives.Business Editors SAN RAFAEL San Rafael (săn rəfĕl`), residential city (1990 pop. 48,404), seat of Marin co., W Calif., a suburb of San Francisco on the northern shore of San Francisco Bay; inc. 1913. , Calif.--(BUSINESS WIRE)--July 25, 2000 ReSourcePhoenix.com (Nasdaq:RPCX), a leader in online financial 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. , today announced its financial results for the quarter ended June June: see month. 30, 2000. Revenue for the three months ended June 30, 2000, totaled $2.8 million, a slight increase over the second quarter of 1999. Contract service revenue, excluding affiliates, was $1.6 million, a 75% increase over the second quarter of 1999. The second quarter net loss was $7.7 million or $0.68 per share, compared to a net loss of $3.7 million, or $0.51 per share for the same quarter a year ago. The second quarter net loss included approximately $800,000 in one time costs associated with the cost reduction program initiated during the second quarter. Excluding those charges, the net loss for the second quarter was approximately $6.9 million or $0.61 per share. Revenue for the six-month period ended June 30, 2000, increased 39% to $5.8 million, compared with revenue of $4.2 million for the comparable six-month period in 1999. Contract service revenue, excluding affiliates, grew to $3 million, a 74% increase versus the same period in 1999. The net loss for the first half of 2000 totaled $15.4 million, or $1.36 per share, compared to a loss of $7.6 million, or $1.05 per share for the same period last year. Excluding the one time cost of approximately $800,000 referred to above, the net loss for the first half of 2000 was approximately $14.6 million or $1.29 per share. This quarter's focus centered on efforts to raise financing, rebuild client acquisition momentum and reduce operating costs operating costs npl → gastos mpl operacionales . "We began the second quarter with operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. well in excess of $3 million per month. A key goal was to reduce those losses by half, and we expect to achieve that goal over the next several months," said Corey Cor·ey , Elias James Born 1928. American chemist. He won a 1990 Nobel Prize for developing techniques of creating synthetic compounds. West, 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. . "A second objective was to restart To resume computer operation after a planned or unplanned termination. See boot, warm boot and checkpoint/restart. client contract signings. We are pleased with the renewed sales momentum we are beginning to see. We signed eight clients in the second quarter with six of those eight signings occurring in the last five weeks of the quarter. Our sales efforts, however, continue to be hampered by concerns over the company's financial viability." Mr. West continued, "While we have made progress toward our goal of securing financing for the company, we continue to work on alternatives to address our near term liquidity needs and secure capital for our 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. growth." About ReSourcePhoenix.com ReSourcePhoenix.com (RPC (Remote Procedure Call) A programming interface that allows one program to use the services of another program in a remote machine. The calling program sends a message and data to the remote program, which is executed, and results are passed back to the calling ) is a leading provider of outsourced accounting operations and business information management, including enterprise application hosting services. RPC pioneered the use of 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 integrate a top-tier 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. (ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ) infrastructure with the expertise of information technology, accounting, finance, and transaction processing Updating the appropriate database records as soon as a transaction (order, payment, etc.) is entered into the computer. It may also imply that confirmations are sent at the same time. Transaction processing systems are the backbone of an organization because they update constantly. professionals. This news 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. that involve risks and uncertainties. These statements relate to our future plans, objectives, expectations and intentions, and the assumptions underlying or relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc these statements. These statements may be identified by the use of words such as "expect," "anticipate," "intend" and "plan." Our actual results may differ materially from those discussed in these statements. Factors that could contribute to such differences include, but are not limited to, our ability to negotiate and conclude a financing transaction, continued market acceptance of RPC's Internet-based software applications and service offerings, potential turnover among RPC's early stage and middle market client base, difficulties in attracting qualified professional personnel, the loss of a significant customer, and disruptions with respect to third-party vendors and suppliers, as well as the factors discussed under "Risk Factors" in RPC's recent filings with the Securities and Exchange Commission.
ReSourcePhoenix.com
Selected Consolidated Financial Highlights
(In thousands except share and per-share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
---- ---- ---- ----
Revenue
Contract service revenue $ 1,628 $ 932 $ 3,031 $ 1,741
Contract service
revenue -- affiliate 944 435 1,960 913
Software revenue 271 1,413 803 1,507
-------- -------- -------- -------
Total revenue 2,843 2,780 5,794 4,161
Operating expenses
Cost of providing
services 3,414 1,378 6,757 2,406
Cost of providing
software revenue 289 225 613 402
General and administrative 2,747 488 5,052 999
Research and development 796 695 1,798 1,351
Client acquisition 2,607 613 5,729 1,089
Depreciation and
amortization 667 137 1,268 228
Stock-related
compensation expense - 2,933 - 5,291
-------- -------- -------- --------
Total operating expenses 10,520 6,469 21,217 11,766
Loss from operations $ (7,677) $ (3,689) $(15,423) $(7,605)
Other income/(expense),
net 16 8 191 17
Net loss before change
in accounting
Principal (7,661) (3,681) (15,232) (7,588)
-------- -------- -------- --------
Cumulative effect
on prior years - - (129) -
-------- -------- -------- --------
Net loss $ (7,661) $ (3,681) $(15,361) $(7,588)
-------- -------- -------- --------
Earnings per share,
basic and diluted $ (0.68) $ (0.51) $ (1.36) $ (1.05)
Weighted average shares,
basic and diluted 11,318 7,200 11,260 7,200
Selected Balance Sheet Information 6/30/00 12/31/99
Cash and cash equivalents $ 4,210 $ 15,780
Total assets 14,216 24,053
Total debt 3,133 -
Stockholders equity 4,940 19,949
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