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MINNEAPOLIS, Oct. 21 /PRNewswire/ -- Net Perceptions, Inc. (Nasdaq: NETP), the leading supplier of realtime personalization solutions, today announced record revenues of $4.1 million for the third quarter ended September 30, 1999, the 9th consecutive quarter of solid revenue growth.
Revenues were up 256% over the $1.2 million reported in the same period last year and 46% from the $2.8 million the company reported in the second quarter. The company also reported a net loss for the quarter of $3.0 million, or $0.15 per share, compared with a loss of $1.2 million for the same period in 1998. For the nine-month period, Net Perceptions reported revenues of $8.8 million, up 213% over the $2.8 million reported in the first nine months of 1998. Losses for the first nine months of 1999 totaled $9.0 million, compared with $3.1 million in the same period last year.
"Net Perceptions solidified its position as the market leader in one-to-one realtime personalization," said Steven Snyder, Net Perceptions' president and chief executive officer. "We gained tremendous traction in software sales, which rose more than 200% over the same period last year, and the investment we have made in consulting services began to pay off, resulting in more than a 563% increase in revenues form this business segment over the same period last year."
Other key Q3 highlights included 25 new licensed customers and, broadened distribution through both new channel and strategic partners. Specifically:
Customer Base
Net Perceptions added 25 new licensed customers in the quarter. New E-commerce customers include the Carlson Companies, a $22 billion private international hotel, restaurant and travel industry company headquartered in suburban Minneapolis. Additionally, eTOYs has purchased Net Perceptions for E-commerce for use on its award-winning website. Based in Santa Monica, Calif., eToys Inc. is one of the leading Internet retailers for children's products.
Other new E-commerce sites include Publisher's ClearingHouse, Follett Higher Education Group Inc., Sportsline.com and Wine.com (formerly Virtual Vineyards). Procter & Gamble became the first Net Perceptions for Knowledge Management customer; Follett Higher Education Group also purchased a license for Net Perceptions for Marketing Campaigns.
As of September 30, 1999, Net Perceptions customers totaled 138, making the company the leading provider of real-time personalization solutions.
"Our strategy of leveraging our technology across multiple touchpoints is succeeding," Mr. Snyder said. "In addition to our category-leading presence in the Internet, we are establishing a significant footprint in markets that span catalogue marketing, cross-platform 'clicks and mortar' businesses, email, and the all-new market of Knowledge Management in corporations. We are in an excellent position with products, services and expertise to dominate the personalization category of these tremendously large markets."
New Products and Intellectual Property
Net Perceptions has announced three new products since the beginning of the third quarter: Net Perceptions for Marketing Campaigns, Net Perceptions for Knowledge Management and the Net Perceptions Recommendation Engine as an embedded OEM solution. The Net Perceptions for Marketing Campaigns and Net Perceptions for Knowledge Management products deliver on the company's plan to leverage its technology into new Internet-related applications as well as new markets altogether.
"We believe these new product offerings give us the broadest offering of personalization solutions in the industry," said Mr. Snyder. "Our Net Perceptions for Marketing Campaigns is the first realtime personalization technology directed at the massive email market. As consumers become more attuned to email communication, but also more selective with respect to the emails they're willing to read, Net Perceptions for Marketing Campaigns is meant to ensure that the email a consumer receives from a retailer is specifically tailored to that individual's tastes and needs."
Net Perceptions for Knowledge Management is the company's first product designed to leverage its core technology into an entirely new market. The product targets Fortune 1000 companies with a solution that helps customers capture both the explicit and the implicit knowledge accumulated in an organization.
"With this new product, our customers will be able to transform their virtual library into a resource that also captures the collective knowledge of the organization," said Mr. Snyder. "This product actually captures the experience workers have with documents, and then passes that information --all through a corporate intranet -- onto workers undertaking similar endeavors."
Finally, the company introduced its core recommendation platform as a stand-alone product with enhanced features that include a 10-millisecond response time, further performance improvements on the NT platform and significant advances in allowing merchandiser control over recommendations.
During the quarter, Net Perceptions filed four new patents meant to protect the franchise that in the Company's view distinguishes Net Perceptions as the undisputed leader in the personalization category. In the broadest sense, the company filed patents to protect key aspects of Net Perceptions' marketing campaigns product as well as features that make its core recommendation engine a unique offering in the personalization market.
Broadened Distribution
Net Perceptions, Inc. began to capitalize on its investment in additional personnel and leadership in the development of channel and strategic partnerships. Under the leadership of George Nader, who was promoted in the second quarter to Vice President in charge of accelerating the development of our channel and strategic partners, Net Perceptions added six new customers as a result of its relationships with partners. Several of these opportunities were facilitated through relationships with Oracle Corp. and Pandesic LLC, a joint venture between Intel Corp. and SAP.
During the quarter, for example, Net Perceptions began shipping its Windows NT API (Application Programmer's Interfaces) integration with Oracle's iStore/iMarketing product. Subsequent to quarter end, the company also closed an OEM transaction with Interleaf, Inc.), a Waltham, Mass.-based company that provides software solutions for publishing complex documents across the extended enterprise. The company also launched three new live sites through partnerships with systems integrators, and strengthened its ties with Allaire and Open Market.
"This has been a gratifying quarter by any measure," Mr. Snyder said. "We have moved forward with new products, and continued to gain momentum in the marketplace, in our view firmly establishing Net Perceptions as the leader in realtime personalization products."
About Net Perceptions
Net Perceptions is the world's preeminent developer and supplier of real-time personalization solutions that enable Internet retailers to market to customers on a true one-to-one basis. The originator of the Realtime Recommendation Platform, which integrates collaborative filtering and automatically applies the optimum technology to whatever recommendation or personalization task is at hand. Net Perceptions' founders include the original team of University of Minnesota researchers who pioneered the concepts and applications of collaborative filtering. Net Perceptions products include Net Perceptions for E-commerce, Net Perceptions for Call Centers, Net Perceptions for Marketing Campaigns, Net Perceptions for Knowledge Management and the Net Perceptions Recommendation Engine. Based in Minneapolis, Net Perceptions is a publicly held company that operates additional offices in New York, San Francisco and London. More than 100 Internet innovators have selected Net Perceptions solutions including: ART.com, Audio Book Clubs, Bertelsmann Online, Billboard Talent Net, CDnow, E!Online, eToys, Planet Direct, SkyMall, Ticketmaster Online and Tower Records. Net Perceptions can be reached by calling 800-466-0711 or on the World Wide Web at http://www.netperceptions.com
Net Perceptions is a registered trademark of Net Perceptions. All other trademarks are the property of their respective owners. This news release contains forward-looking statements that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the company's limited operating history, delays in product development, development of the Internet market, changes in product pricing policies, competitive pressures, and the risk factors detailed from time to time in the company's periodic reports and registration statements filed with the U.S. Securities and Exchange Commission.
NET PERCEPTIONS, INC.
CONDENSED BALANCE SHEETS
(in thousands)
September 30, December 31,
1999 1998
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $27,126 $972
Short-term investments 15,310 -
Accounts receivable, net 4,995 3,382
Prepaid expenses and other current assets 969 142
Total current assets 48,400 4,496
Marketable securities 7,320 -
Property and equipment, net 3,021 1,019
Other assets 861 122
Total assets $59,602 $5,637
Liabilities, Convertible Redeemable
Preferred Stock and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $4,890 $1,666
Deferred revenue 2,803 2,107
Current portion of long-term liabilities 477 255
Total current liabilities 8,170 4,028
Long-term liabilities, net of current portion 842 538
Total liabilities 9,012 4,566
Commitments and contingencies
Series A Convertible Redeemable Preferred
Stock at redemption value -- 650
Stockholders' equity:
Series B Convertible Preferred Stock -- --
Series C Convertible Preferred Stock -- --
Common Stock 2 1
Additional paid-in capital 70,386 11,137
Unrealized loss on investments (64) --
Accumulated deficit (19,734) (10,717)
Total stockholders' equity 50,590 421
Total liabilities, convertible redeemable
preferred stock and stockholders' equity $59,602 $5,637
NET PERCEPTIONS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
(Unaudited) (Unaudited)
Revenues:
Product $3,035 $992 $6,700 $2,499
Service and maintenance 1,079 163 2,123 316
Total revenues 4,114 1,155 8,823 2,815
Cost of revenues:
Product 32 10 127 25
Service and maintenance 782 106 1,586 205
Total cost of revenues 814 116 1,713 230
Gross margin 3,300 1,039 7,110 2,585
Operating expenses:
Sales and marketing 3,275 1,144 7,570 3,185
Research and development 2,270 607 5,839 1,481
General and administrative 1,169 383 2,556 902
Stock compensation expense 339 112 1,206 178
Total operating expenses 7,053 2,246 17,171 5,746
Loss from operations (3,753) (1,207) (10,061) (3,161)
Other income, net 735 24 1,044 89
Net loss $(3,018) $(1,183) $(9,017) $(3,072)
Net loss per share:
Basic and diluted $(0.15) $(0.32) $(0.68) $(0.95)
Shares used in
computing basic and
diluted net loss
per share 20,587,072 3,710,262 13,281,169 3,233,906
Pro forma basic and
diluted net loss
per share $(0.15) $(0.08) $(0.50) $(0.22)
Shares used in
computing pro forma
basic and diluted net
loss per share 20,587,072 14,378,962 17,892,549 13,767,247
SOURCE Net Perceptions, Inc.
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