MINNEAPOLIS--(BUSINESS WIRE)--April 24, 2000--Net Perceptions, Inc. (Nasdaq: NETP), a leading supplier of realtime personalization and precision marketing software solutions, today announced record revenues of $9.5 million for the first quarter ended March 31, 2000, the 11th consecutive quarter of strong revenue growth. First quarter revenues were up 401% over the $1.9 million reported in the same period last year and 51% from the $6.3 million reported in the fourth quarter of 1999, exceeding consensus analysts' expectations by more than 26%.
The company reported a pro forma net loss for the quarter of $3.8 million before amortization of goodwill and other intangibles related to the recent KD1 acquisition, or ($0.17) per share, compared with a pro forma loss of $2.9 million, or ($0.19), in the same period in 1999. The quarter's results were $0.03 per share better than the First Call Consensus of ($0.20). The company's loss including the amortization of intangibles associated with the purchase of KD1 of Austin, Texas was $7.6 million, or ($0.34) per share.
"The first quarter of 2000 marked a number of significant milestones for Net Perceptions," said Steven Snyder, Net Perceptions' president and CEO. "In a single three-month period, the company completed both the acquisition and integration of KD1, and a secondary offering, bringing cash and marketable securities to more than $120 million. At the same time, we generated another quarter of record sales across an ever broadening product and customer base."
During the quarter, Net Perceptions added 25 new license customers, further increased its average deal size and significantly broadened distribution through channel partners, and international sales efforts. Key highlights include:
-
Net Perceptions completed the sale of two million shares of
common stock in a secondary offering that raised $84.8 million
in net proceeds, bringing cash, cash equivalents and
investments to more than $120 million.
- As of March 31, Net Perceptions had 191 customers, maintaining
its leadership in the realtime personalization space. New
customers included SBC Services, Inc., parent company of
Southwestern Bell, Ameritech and Pacific Bell, in the
company's first major call center application in the
telecommunications market. Other new customers include Sony
Electronics, a major customer win that resulted from the
company's joint venture in Japan, and J.P. Morgan, which
became a new Net Perceptions for Knowledge Management
customer.
- The company continued to diversify its customer mix. Of its 18
new retail-oriented customers, 11 are multi-channel retailers,
consistent with the company's strategy of focusing on this key
segment of the retail industry. Less than 25% of the company's
reported revenues in the quarter were attributable to "pure
dot.com" companies.
- Net Perceptions filed two new patent applications, bringing to
17 the total number of pending patent applications.
- Pro forma operating margins continued to improve, increasing
to a negative 47% compared with a negative 53% in the fourth
quarter and further reinforcing the pathway to profitability.
Year over year, operating margins improved by 101 percentage
points from negative 148%.
- In February the company launched its GreenLight Go!
Application Service Provider (ASP) product that features an
interface with its Marketing Campaigns product.
Broadened Distribution
During the first quarter, the company recognized its first significant revenue from its joint venture in Japan with the sale of Net Perceptions for E-commerce to Sony Electronics, and generated channel-related sales through Net Effect BV, The Hong Kong Connection Ltd., Wheelhouse, Inc., BroadVision, and Fort Point Partners. These efforts resulted in a significant improvement in the percentage of revenue derived from indirect channels and in the geographic distribution of the company's sales. Indirect channel sales accounted for 28% of our revenues, up from 12% in the fourth quarter, and international sales increased to 36% of total revenues, up from 13% in the fourth quarter.
Earlier this month, Net Perceptions announced that i2 Technologies, Inc. plans to license the Net Perceptions' Knowledge Refinery for integration into i2's TradeMatrix(TM) business-to-business (B2B) and business-to-consumer (B2C) marketing, commerce, fulfillment and customer care solutions. i2 will also resell Net Perceptions' GreenLight Retail Discovery Suite and its full line of realtime recommendation products for e-commerce, call centers and e-mail campaign management.
"Our people worked exceptionally hard to achieve our goals of expanding our business through new product offerings, acquisitions, selling through indirect channels, continued traction in our customer base and strengthening our balance sheet," said Mr. Snyder. "We have begun to realize a significant return on the investments we have made to develop our channel partners and strategic alliances and to build our sales organization internationally."
About Net Perceptions
Net Perceptions is a leading provider of enterprise-wide personalization and precision marketing software solutions for Internet and multi-channel retailers. Its software is designed to help retailers understand customers individually, optimize product assortments, prices and inventories and offer the right product to the right customer at the right price. Net Perceptions' customers include many of the world's best-known brands including: Art.com, Bertelsmann, CDNOW, The Children's Place, Egghead.com, eToys.com, Fingerhut, Hudson's Bay Company, J.C. Penney, Procter & Gamble, Tower Records and Walgreens. Incorporated in Delaware, July 3, 1996, the company has offices in Minneapolis; San Francisco; New York; Austin, Texas; Richardson, Texas; Berkshire, U.K. and a joint venture operation in Japan. For more information about Net Perceptions products visit http://www.netperceptions.com or call 800-466-0711.
KEYWORDS: Analytic Applications, CRM, Customer Relationship Management, Database Marketing, data warehouse, Web, one-to-one-marketing, data mining, marketing campaigns, campaign management, E-commerce, Sales, Marketing, Customer Service, Support, Enterprise Information Portals, E-Business, Personalization, E-Mail, Collaborative Filtering, customer-centric, customer.
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.
PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (a)
(in thousands, except share and per share amounts)
======================================================================
Three Months Ended
March 31,
2000 1999
----------------------------------------------------------------------
Revenues:
Product $ 7,524 $ 1,561
Service and maintenance 1,968 334
---------------------------------------------------------------------
Total revenues 9,492 1,895
Cost of revenues:
Product 108 36
Service and maintenance 1,809 313
---------------------------------------------------------------------
Total cost of revenues 1,917 349
Gross margin 7,575 1,546
Operating expenses:
Sales and marketing 5,901 1,737
Research and development 3,658 1,536
General and administrative 2,259 574
Stock compensation expense 193 503
---------------------------------------------------------------------
Total operating expenses 12,011 4,350
---------------------------------------------------------------------
Loss from operations (4,436) (2,804)
Other income, net 649 (72)
---------------------------------------------------------------------
Net loss $ (3,787) $ (2,876)
=====================================================================
---------------------------------------------------------------------
Net loss per share:
Basic and diluted $ (0.17) $ (0.64)
Shares used in computing basic and
diluted net loss per share 22,499,002 4,518,784
---------------------------------------------------------------------
Pro forma basic and
diluted net loss per share $ (0.17) $ (0.19)
Shares used in computing pro
forma basic and diluted net
loss per share 22,499,002 15,187,484
---------------------------------------------------------------------
(a) For the quarter ended March 31, 2000, this Pro Forma Statement of
Operations excludes amortization of acquired intangibles of $
3,794 related to the company's acquisition of Knowledge Discovery
One during the quarter.
NET PERCEPTIONS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
=====================================================================
March 31, Dec. 31,
2000 1999
---------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $102,767 $ 17,457
Short-term investments 13,413 19,397
Accounts receivable, net 8,792 7,663
Royalties receivable 1,061 1,135
Prepaid expenses and other current assets 1,703 1,373
---------------------------------------------------------------------
Total current assets 127,736 47,025
Marketable securities 3,964 6,317
Property and equipment, net 6,778 4,749
Goodwill & other intangible assets 114,960 -
Other assets 665 657
---------------------------------------------------------------------
Total assets $254,103 $ 58,748
---------------------------------------------------------------------
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $ 6,516 $ 5,846
Deferred revenue 4,128 3,336
Current portion of long-term liabilities 743 471
---------------------------------------------------------------------
Total current liabilities 11,387 9,653
Long-term liabilities, net of current portion 917 707
---------------------------------------------------------------------
Total liabilities 12,304 10,360
---------------------------------------------------------------------
Commitments and contingencies
Stockholders' equity:
Common Stock 2 2
Additional paid-in capital 272,226 71,231
Other comprehensive loss (92) (89)
Accumulated deficit (30,337) (22,756)
---------------------------------------------------------------------
Total stockholders' equity 241,799 48,388
---------------------------------------------------------------------
Total liabilities and stockholders'
equity $254,103 $ 58,748
---------------------------------------------------------------------
NET PERCEPTIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
=====================================================================
Three Months Ended
March 31,
2000 1999
---------------------------------------------------------------------
Revenues:
Product $ 7,524 $ 1,561
Service and maintenance 1,968 334
---------------------------------------------------------------------
Total revenues 9,492 1,895
Cost of revenues:
Product 274 36
Service and maintenance 1,809 313
---------------------------------------------------------------------
Total cost of revenues 2,083 349
Gross margin 7,409 1,546
Operating expenses:
Sales and marketing 5,901 1,737
Research and development 3,658 1,536
General and administrative 2,259 574
Amortization of intangibles 3,628 -
Stock compensation expense 193 503
---------------------------------------------------------------------
Total operating expenses 15,639 4,350
---------------------------------------------------------------------
Loss from operations (8,230) (2,804)
Other income, net 649 (72)
---------------------------------------------------------------------
Net loss $ (7,581) $ (2,876)
---------------------------------------------------------------------
---------------------------------------------------------------------
Net loss per share:
Basic and diluted $ (0.34) $ (0.64)
Shares used in computing basic and 22,499,002 4,518,784
diluted net loss per share
---------------------------------------------------------------------
Pro forma basic and $ (0.34) $ (0.19)
diluted net loss per share
Shares used in computing pro forma
basic and diluted net loss per share 22,499,002 15,187,484
---------------------------------------------------------------------
CONTACT: Net Perceptions, Inc.
Tony Carideo
Investor Relations
612-833-9618
tcarideo@netperceptions.com
or
Tom Donnelly
Chief Financial Officer
612-903-1270
tdonnelly@netperceptions.com
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