Tumbleweed Communications Announces Q2 2001 Financial Results; Tumbleweed Reports Sequential Revenue Growth of More Than 90% in Q2.Business Editors REDWOOD CITY Redwood City, city (1990 pop. 66,072), seat of San Mateo co., W Calif., on San Francisco Bay; inc. 1868. Manufactures include commmunications, electrical, electronic, and medical equipment. , Calif.--(BUSINESS WIRE)--July 25, 2001 Tumbleweed tumbleweed, any of several plants, particularly abundant in prairie and steppe regions, that commonly break from their roots at maturity and, drying into a rounded tangle of light, stiff branches, roll before the wind, covering long distances and scattering seed as (R) Communications Corp. (Nasdaq:TMWD), a leading provider of secure content management solutions for enabling the business Internet, today reported results for the second quarter ended June 30, 2001. Total revenue from products and services in the second quarter was $7.7 million, a more than 90% increase over revenue of $4.0 million in the first quarter of 2001. Net loss in Q2 01, excluding restructuring and impairment charges, and certain non-cash expenses, was $11.5 million, or $0.38 per basic and diluted share. This compares to $13.3 million, or $0.45 per basic and diluted share in the first quarter of 2001. Including these items, the Company reported a net loss for the quarter ended June 30, 2001 of $14.0 million or $0.46 per basis and diluted share. "We are pleased with our performance this quarter," said Jeff Smith, 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 Tumbleweed Communications Tumbleweed Communications Corp. provides messaging security solutions for enterprise and government customers of all sizes [1]. Organizations use their products to block security threats, protect information, and conduct business online. Corp. "In Q2, we grew revenue and significantly reduced our operating costs operating costs npl → gastos mpl operacionales , exceeding our targets. We continue to deliver on our 2001 plan that we outlined in January, including the addition of strong management talent to our team. "Today, companies are looking to innovate and fully leverage the business Internet to improve productivity and reduce costs," continued Smith. "Customers are prioritizing investment in our solutions because we empower them to achieve these efficiencies while improving their customer relationships. This positions us to capture the significant opportunity within the secure content management market, which, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. IDC, is the fastest growing market segment in Internet security ''This article or section is being rewritten at Internet security is the process of protecting data and privacy of devices connected to internet from information robbery, hacking, malware infection and unwanted software. ." The Company also announced that it continued to make solid progress towards its plan to achieve cashflow breakeven by Q4 of this year. Net cash used for operations in the second quarter was $8.4 million, an improvement of 28%, over $12.3 million used in the first quarter. Tumbleweed's cash balance at June 30, 2001 was $48.5 million versus cash of $58.0 million at the end of Q1. The Company will remain focused on improving its cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses in subsequent quarters. "In Q2, we were successful at selling into our existing installed base and adding new customers," said Doug Sabella, 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. of Tumbleweed Communications Corp. "We also added to our growing channel of resellers with the launch of our new Tumbleweed Channel Alliance Program, which targets information systems and security specialists. "This year, we'll remain committed to delivering on our 2001 objectives by providing a high quality of service to our customers in order to grow our existing relationships and attract new customers," added Sabella. "Like most companies, we remain cautious about the second half of the year due to the slowdown in technology spending, and so we will continue to manage our business aggressively as we did for the first half of this year." Q2 01 Customer Highlights In Q2, Tumbleweed signed approximately 200 contracts with new and existing customers. Tumbleweed now has an installed base of approximately 1,000 customers worldwide. Tumbleweed customers and partners include enterprises from more than a dozen sectors such as financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , healthcare, pharmaceutical, manufacturing, government and technology. The Company expanded its position across a number of vertical industries in the second quarter of 2001. In financial services, over 320 banking, brokerage, credit card, insurance and mutual fund customers use Tumbleweed software to manage their communications. In Q2, Tumbleweed signed contracts with both new and existing customers including: Skandiniska Enskilden Banken (The SEB Noun 1. SEB - a form of staphylococcal enterotoxin that has been used as an incapacitating agent in biological warfare staphylococcal enterotoxin B Group), JP Morgan Chase & Co., OppenheimerFunds, Inc., Spectrum EBP EBP Evidence Based Practice EBP Enterprise Buyer Professional EBP Education Business Partnership EBP European Business Programme EBP Efficiency Bandwidth Product EBP Electronic Billing and Payment EBP Extended Base Pointer EBP Error Back Propagation , LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , and Royal & Sun Alliance Insurance Plc. Financial services providers are using Tumbleweed solutions to improve customer service and enhance customer relationships, at the same time as they reduce the cost and waste of paper-based communications. Tumbleweed software also helps meet various regulatory standards, including the information security guidelines issued by U.S. federal and state regulatory bodies under the Gramm-Leach-Bliley Act The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub. L. No. 106-102, 113 Stat. 1338 (November 12, 1999), is an Act of the United States Congress which repealed the Glass-Steagall Act, opening up competition of 1999. In Q2, the Company expanded its position in the healthcare market with new contracts with a number of healthcare companies, including LabOne, Inc., Glaxo SmithKline UK Ltd., Catholic Healthcare West Catholic Healthcare West (CHW) is a California not-for-profit public benefit corporation that operates hospitals in California, Arizona, and Nevada[1]. As such, it is exempt from federal and state income taxes. , and Baxter International Baxter International Inc. (NYSE: BAX), is a global healthcare company with 48,000 employees and 2006 sales of US$10.4 billion. Its headquarters is in Deerfield, Illinois. . Healthcare providers and pharmaceutical companies are using Tumbleweed software to improve communications and productivity and reduce administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. . Tumbleweed solutions also help meet growing requirements under new U.S. and European federal government privacy regulations to protect healthcare patient data. The Company was successful in further penetrating additional verticals in Q2, new contracts signed include: Verizon Communications
Verizon Communications, Inc. Inc. and Siebel Systems Siebel is a brand name of Oracle Corporation. Siebel Systems, Inc., founded by Thomas Siebel in 1993, was principally engaged in the design, development, marketing and support of CRM applications. , Inc. in telecommunications and technology, and Hilton Hotels Corporation Hilton Hotels Corporation (NYSE: HLT) is one of the leading global hospitality companies. As of April 2007 there are 2,645 hotels and 485,000 rooms employing 105,000 people in more than 80 countries. in real estate. The Company also expanded further in Japan in Q2 with new contracts including Hitachi netBusiness Ltd. and Sakura Information Systems Co., Ltd. Conference Call Information The Company will host a conference call with the investment community at 2 PM PT/5 PM ET today to discuss its results for the second quarter. This call is being made available to all interested parties via a LIVE webcast on Tumbleweed's website at http://www.tumbleweed.com, under Company heading, investor relations Investor relations The process by which the corporation communicates with its investors. . A replay of the conference call will be available for 30 days at the Company's website or by telephone at 913/385-6780, pin No. 2017. About Tumbleweed Communications Corp. Tumbleweed is a leading provider of solutions for managing secure communication and collaboration to enable the business Internet. Tumbleweed's robust policy-based framework empowers organizations to safely share and protect critical information, increase customer loyalty and privacy and dramatically reduce costs. Tumbleweed is trusted by 1,000 blue-chip customers including 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. , JP Morgan Chase & Co., Chevron, Datek Online, the European Union's Joint Research Council, Federal Drug Administration, John Deere, Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. , Nike, Northern Trust, NTT NTT Nippon Telegraph and Telephone Corporation NTT New Technology Telescope NTT National Technology Transfer, Inc NTT Name That Tune (TV game show) NTT National Tree Trust NTT Number Theoretic Transform , Salomon Smith Barney Smith Barney is a division of Citigroup Global Capital Markets Inc., a global, full-service financial firm, that provides brokerage, investment banking and asset management services to corporations, governments and individuals around the world. , Travelers, United Parcel Service United Parcel Service, Inc. (NYSE: UPS), commonly referred to as UPS, is the world's largest package delivery company, delivering more than 15 million packages[1] a day to 6.1 million customers in over 200 countries and territories around the world. , and seven of the world's largest postal services. Tumbleweed Communications was founded in 1993 and is headquartered in Redwood City, CA with offices around the world. Tumbleweed cautions that forward-looking statements contained in this press release are based on current plans and expectations, and that a number of factors could cause the actual results to differ materially from the guidance given at this time. These factors are described in the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. statement below. The Company undertakes no obligation to update this guidance during the current quarter or future quarters. Except for the historical information contained herein, the matters discussed in this press release may constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected, particularly with respect to the growth of Tumbleweed's market share, product adoption rate, or number of customers, as well as Tumbleweed's financial performance, including its ability to reach cash flow breakeven at any particular point and the ability of Tumbleweed's software to assist customers in meeting future regulations. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "potential," "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates," and similar expressions. For further cautions about the risks of investing in Tumbleweed, we refer you to the documents Tumbleweed files from time to time with the Securities and Exchange Commission, particularly Tumbleweed's 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. filed March 30, 2001 and Form 10-Q Form 10-Q See 10-Q. filed May 15, 2001. Tumbleweed assumes no obligation to update information contained in this press release.
Tumbleweed Communications Corp.
Consolidated Comparative Income Statements
June 30, 2001
(in thousands, except per share data)
(unaudited)
Three months ended Six months ended
6/30/01 6/30/00 6/30/01 6/30/00
REVENUES
Product Revenue $ 5,059 $ 8,342 $ 6,753 $ 13,428
Service Revenue 2,620 1,748 4,943 3,272
NET REVENUE 7,679 10,090 11,696 16,700
COST OF REVENUES 3,085 3,192 6,137 5,440
GROSS PROFIT 4,594 6,898 5,559 11,260
OPERATING EXPENSES
Research &
Development 4,419 3,171 8,123 6,014
Sales & Marketing 10,221 9,742 19,512 16,934
General &
Administrative 2,013 2,312 4,251 3,952
SUB-TOTAL OPERATING
EXPENSES 16,653 15,225 31,886 26,900
Stock Compensation 656 1,451 1,990 2,936
Amortization of
Goodwill and
Intangible Assets 1,739 59 9,583 59
Impairment of
Goodwill and
Intangible Assets - - 50,983 -
Restructuring Costs 69 - 8,939 10,392
TOTAL EXPENSES 19,117 16,735 103,381 40,287
OPERATING LOSS (14,523) (9,837) (97,822) (29,027)
Other Income, net 474 365 1,405 1,021
Minority Interest (120) (94) (220) (94)
NET LOSS BEFORE
TAXES (13,929) (9,378) (96,197) (27,912)
Income Tax Expense 35 150 61 238
NET LOSS $(13,964) $(9,528) $(96,258) $(28,150)
========= ======== ========= =========
Weighted Average
Shares 30,127 26,068 29,969 25,828
======= ======= ======== ========
-
EPS $(0.46) $(0.37) $(3.21) $(1.09)
======= ======= ======= =======
-
Loss before stock
compensation,
goodwill
amortization,
goodwill
impairment, and
restructuring
costs $(11,500) $(8,018) $(24,763) $(14,763)
========= ========= ========== ==========
EPS (before non-cash,
amortization, and
one-time charges) $(0.38) $(0.31) $(0.83) $(0.57)
======== ======== ======== ========
Tumbleweed Communications Corp.
Condensed Consolidated Balance Sheets
June 30, 2001
(in thousands)
ASSETS 6/30/01 12/31/00
(unaudited)
CURRENT ASSETS
Cash $ 48,474 $ 75,497
Accounts Receivable, net 10,160 11,220
Other Current Assets 2,303 3,641
TOTAL CURRENT ASSETS 60,937 90,358
Property & Equipment, net 11,077 13,700
Goodwill, net 8,929 65,319
Intangibles Assets, net 391 4,297
Other Assets 4,957 5,226
TOTAL ASSETS $ 86,291 $ 178,900
========= ==========
LIABILITIES & EQUITY
CURRENT LIABILITIES
Notes Payable $ 532 $ 587
Accounts Payable 3,327 3,872
Accrued Liabilities 10,208 16,833
Accrued Restructuring 5,491 -
Deferred Revenue 6,501 2,557
TOTAL CURRENT LIABILITIES 26,059 23,849
LONG TERM LIABILITIES
Long Term Debt 90 497
Other Long term Liabilities 708 942
TOTAL LONG TERM LIABILITIES 798 1,439
TOTAL LIABILITIES 26,857 25,288
SHAREHOLDERS' EQUITY
Common Stock 30 30
Additional Paid-in Capital 294,240 295,183
Deferred Compensation Expense (2,973) (6,461)
Accumulated Translation Loss (526) (61)
Retained Earnings Deficit (231,337) (135,079)
TOTAL SHAREHOLDERS' EQUITY 59,434 153,612
TOTAL LIABILITIES & EQUITY $ 86,291 $ 178,900
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