MINNEAPOLIS, Feb. 2 /PRNewswire/ -- Net Perceptions, Inc. (Nasdaq: NETP), the leading supplier of realtime personalization solutions, today announced record revenues of $6.3 million for the fourth quarter ended December 31, 1999, the 10th consecutive quarter of strong revenue growth.
Fourth quarter revenues were up 279% over the $1.7 million reported in the same period last year and 53% from the $4.1 million the company reported in the third quarter, exceeding analysts' expectations by more than 26%. The company also reported a net loss for the quarter of $3.0 million, or $0.14 per share, compared with a loss of $1.9 million for the same period in 1998. For the full year, Net Perceptions reported revenues of $15.1 million, up 238% over the $4.5 million reported in 1998. Losses in 1999 totaled $12.0 million, compared with $5.0 million in the same period last year.
"Net Perceptions extended its customer lead in one-to-one realtime personalization, and also continued to perform against its business plan by introducing new products and establishing key new alliances," said Steven Snyder, Net Perceptions' president and CEO. "Most recently, Net Perceptions executed a definitive agreement to acquire KD1, which would allow the company to add a major new component to its product suite. Our technology is proving itself in the marketplace by providing working solutions to help businesses serve their customers better and build both their top and bottom line."
During the quarter, Net Perceptions added 18 new license customers, significantly increased its average selling price and broadened its distribution through new channel and strategic partners. Other key highlights include:
-- As of December 31, Net Perceptions had 156 customers, far outdistancing its nearest competitors in the one-to-one realtime personalization space. Fingerhut Corp., which will deploy Net Perceptions for eCommerce across its eight proprietary Internet sites, including www.fingerhut.com, www.andysgarage.com, www.OutdoorSpirit.com, and www.thehut.com, became Net Perceptions' latest marquee customer. Other new customers included Home Box Office, ZDNet, Mattel and Thompson Direct Inc., which will deploy Net Perceptions for eCommerce on its RCA.com site.
-- Net Perceptions filed six new patent applications, including two foreign applications, designed to protect key aspects and innovations in our product line.
-- Operating margins improved to a negative 53% in the fourth quarter from a negative 113% over the same period last year, a 60% improvement year-over-year.
-- The company introduced Net Perceptions for Knowledge Management, an all-new vertical application, its 5.0 edition of its flagship Net Perceptions for eCommerce product, its "Sales Coach" picture prompt feature for the Net Perceptions for Call Centers product and a new, even faster and more scalable version of its award-winning recommendation engine.
-- In November, Net Perceptions hosted the first Personalization Summit, a sold-out event that attracted more than 600 participants and 39 exhibitors to San Francisco. The summit, which featured more than a dozen CEOs from personalization-oriented companies, as well as globally recognized leaders and authors in the personalization space, was an unprecedented success and will be followed by a second summit this spring.
"Online realtime personalization came of age in 1999, and Net Perceptions was clearly a major reason it did so," said Mr. Snyder. "Today, virtually any etailer considering realtime personalization knows the Net Perceptions name. And with the traction we gained in our fourth quarter I anticipate this will be true of all major retailers -- both online and offline -- in the coming year."
Broadened Distribution
During the fourth quarter, the company signed partner agreements with three Asian resellers for distribution and support of Net Perceptions' technology throughout China, Hong Kong, Korea, Singapore and Taiwan. The new Net Perceptions resellers include The Web Connection, which will represent Net Perceptions' products out of their base in Hong Kong as well as through offices in Taiwan, China and Singapore, as well as MPC Limited, and DACOM System Technologies. All three companies will sell Net Perceptions for eCommerce and Net Perceptions for Call Centers to the Korean and other markets, focusing on each of their individual areas of expertise.
Net Perceptions in November announced that it will work with IBM Corp., net.Genesis and DoubleClick Technologies Inc. to offer an adaptive Internet marketing solution to help customers make more informed decisions about online marketing campaigns, sales strategies and Web content. Additionally, BroadVision Inc. and Net Perceptions announced they will collaborate to deliver integrated e-commerce personalization solutions for their shared customers; Carlson Companies Inc. is the first customer deployment.
In the fourth quarter, Lycos and Net Perceptions also launched the first online shopping cart to make cross-merchant product recommendations to online shoppers, thereby making it easier for the community of more than 30 million Lycos customers to find items they will value. Net Perceptions also announced it had joined together with leading vendors in e-business and e-customer applications, to support the Customer Profile Exchange (CPEX), a standard for allowing e-businesses to have a unified view of their customers within multiple enterprise applications.
In addition, the company announced that Vignette Corp. would now embed the full version of the Net Perceptions Recommendation Engine in its StoryServer platform, enhancing the company's opportunity through Vignette's platform and its broad and diverse customer base.
KD1 Acquisition
Net Perceptions on January 17th announced that it has signed a definitive agreement to acquire privately held KD1, Inc. (Knowledge Discovery One, www.kd1.com), the leader in building advanced data analysis solutions for multi-channel and dot.com retailers, for 2.24 million shares of Net Perceptions common stock. The company anticipates that the transaction, which is still subject to KD1 shareholder approval, will close within the next month.
The KD1 acquisition combines Net Perceptions' market-leading, realtime recommendation technology with KD1's ability to analyze and integrate vast amounts of customer information. KD1's analysis of customers, products and promotions allows retailers to improve their merchandise assortment, marketing tactics and pricing strategies. This sets the stage for what Net Perceptions does best -- building on this knowledge in realtime to provide more accurate delivery of personalized recommendations across all customer touch points, including call centers, point-of-sale, kiosks and Web sites.
About Net Perceptions
Net Perceptions is the world's preeminent developer and supplier of realtime 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 eCommerce, 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 150 retail innovators have selected Net Perceptions solutions including: ART.com, Audio Book Clubs, Bertelsmann Online, Billboard Talent Net, CDNOW, E!Online, eToys, Kraftfoods.com, 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)
December 31, December 31,
1999 1998
Assets
Current assets:
Cash and cash equivalents $ 17,457 $ 972
Short-term investments 19,397 --
Accounts receivable, net 7,663 3,169
Royalties receivable 1,135 213
Prepaid expenses and other current assets 1,373 142
Total current assets 47,025 4,496
Marketable securities 6,317 --
Property and equipment, net 4,749 1,019
Other assets 657 122
Total assets $ 58,748 $ 5,637
Liabilities, Convertible Redeemable Preferred
Stock and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 5,846 $ 1,666
Deferred revenue 3,336 2,107
Current portion of long-term liabilities 471 255
Total current liabilities 9,653 4,028
Long-term liabilities, net of current portion 707 538
Total liabilities 10,360 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 71,231 11,137
Other comprehensive loss (89) --
Accumulated deficit (22,756) (10,717)
Total stockholders' equity 48,388 421
Total liabilities, convertible redeemable
preferred stock and stockholders' equity $ 58,748 $ 5,637
NET PERCEPTIONS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
Three Months Ended Year Ended
December 31, December 31,
1999 1998 1999 1998
Revenues:
Product $ 4,708 $ 1,456 $ 11,408 $ 3,955
Service and maintenance 1,598 206 3,721 522
Total revenues 6,306 1,662 15,129 4,477
Cost of revenues:
Product 159 27 286 52
Service and maintenance 1,149 167 2,735 373
Total cost of revenues 1,308 194 3,021 425
Gross margin 4,998 1,468 12,108 4,052
Operating expenses:
Sales and marketing 4,529 1,795 12,099 4,980
Research and development 2,355 834 8,194 2,314
General and administrative 1,169 522 3,725 1,424
Stock compensation expense 289 188 1,495 366
Total operating expenses 8,342 3,339 25,513 9,084
Loss from operations (3,344) (1,871) (13,405) (5,032)
Other income, net 322 (26) 1,366 64
Net loss $ (3,022) $ (1,897) $ (12,039) $ (4,968)
Net loss per share:
Basic and diluted $ (0.14) $ (0.46) $ (0.78) $ (1.40)
Shares used in computing
basic and diluted net loss
per share 20,964,818 4,103,526 15,402,419 3,545,516
Pro forma basic and diluted
net loss per share $ (0.14) $ (0.13) $ (0.64) $ (0.35)
Shares used in computing pro
forma basic and diluted
net loss per share 20,964,818 14,772,226 18,851,478 14,112,696
SOURCE Net Perceptions, Inc.
CONTACT: Tony Carideo, Investor Relations, 612-833-9618, tcarideo@netperceptions.com , or Tom Donnelly, Chief Financial Officer of Net Perceptions, Inc., 612-903-1270, tdonnelly@netperceptions.com /
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