MINNEAPOLIS--(BUSINESS WIRE)--April 24, 2001--Net Perceptions,
Inc. (Nasdaq:NETP) today announced revenue of $3.2 million for the
quarter ended Mar. 31, 2001, and a loss of $11.9 million, or ($0.44)
per share before restructuring charges, a non-cash charge for the
impairment of goodwill and other intangibles, amortization of
intangibles and stock compensation expense. In the same period last
year the company reported $9.5 million in revenue and a net loss of
$3.6 million or ($0.16) per share before amortization of intangibles
and stock compensation expense. Including restructuring charges, a
non-cash charge for the impairment of goodwill and other intangibles,
amortization of intangibles and stock compensation expense, the
company reported a loss of $108.8 million or ($4.05) per share for the
first quarter ended Mar. 31, 2001.
During the quarter, the company instituted a plan of restructuring
related to the reorganization and consolidation of operations in
various United States and international locations. The restructuring
charge of $13.9 million consisted of $10.2 million related to facility
consolidation, $1.2 million of termination payments resulting from the
company's March 23, 2001 reduction in workforce and $2.5 million of
losses on the disposal of assets and other restructuring related
costs. Of the $13.9 million, approximately $3.4 million was a non-cash
charge.
The company has reduced the goodwill and other intangibles value
in the March 31, 2001 balance sheet by $75.3 million. The non-cash
write-down in goodwill and other intangibles is based on an impairment
test of the company's February 2000 acquisition of Knowledge Discovery
One, Inc.
"While the current economic situation is extremely frustrating
because it continues to lengthen IT decisions, the positive results we
are bringing to our current customers continues to grow," said Steven
Snyder, Net Perceptions' president and CEO. "In addition, our recent
restructuring actions are positive steps to preserve cash and improve
the financial performance of our company in the later half of 2001."
During the quarter, Net Perceptions continued to focus on serving
the needs of its target market, large multi-channel retail customers:
-
Key customers such as Brylane, GUS (Great Universal Stores)
and Musician's Friend, a wholly owned subsidiary of Guitar
Center, Inc. saw significant, measurable improvements in their
direct sales channels by using Net Perceptions marketing and
merchandising optimization solutions. For example, Musician's
Friend sited Net Perceptions as a key factor in helping it
increase direct channel sales by more than 60% during the last
year.
-
The company received several follow-on orders from existing
customers such as Fingerhut, Hudson's Bay, J.C. Penney,
Walgreens and German-based, H.O.T. (Home Order Television),
who all upgraded or renewed their licenses. Still others, such
as Smith & Hawken and GUS purchased additional Net Perceptions
products during the quarter.
-
The company took measures to streamline and size its business
to focus more aggressively on its core retail audiences as
well as reflect the current economic environment. Therefore,
in March, it trimmed its workforce by 46 percent, or a total
of 124 positions and developed a restructuring plan to
consolidate various company facilities. Total headcount as of
Mar. 31, 2001 was 146.
-
In early January, the company launched "Retail Revelations," a
suite of products and services representing a re-branded and
renamed product line that reflects the company's core business
focus on multi-channel retailers. Retail Revelations combines
retail solutions that cover critical merchandising and
marketing performance issues. These include providing precise
insight into what products to advertise to generate the most
traffic, recommendations for how to liquidate overstocks on
the Web while optimizing profit margins, and increasing
overall promotional effectiveness and sales.
Outlook
The company anticipates that revenues for the second quarter will
be $2 to $5 million dollars and that pro forma net loss per share will
be $0.18 to $0.25 cents per share. We completed the quarter with $87.3
million in cash and investments, and expect to use $10 million of our
cash reserves during the second quarter, with $2.2 million
representing payments related to the company's recent restructuring.
We expect our total cash burn for 2001 will be $25 to $30 million,
inclusive of payments related to our recent restructuring.
About Net Perceptions
Net Perceptions is a leading provider of precision merchandising,
marketing and personalization software. Its products enable companies
to generate greater demand and better margins for their products by
capitalizing on business information and optimizing product
assortments, pricing and customer relationships. Customers include
market leaders such as Brylane, Best Buy, GUS, J.C. Penney, Kmart and
Tesco. For more information visit http://www.netperceptions.com or
call 800-466-0711.
Net Perceptions and the Net Perceptions logo are registered trademarks
of Net Perceptions, Inc. All other trademarks are the property of
their respective owners. This press release contains "forward-looking
statements" within the meaning of the federal securities laws,
including statements concerning business strategies and their intended
results, and similar statements concerning anticipated future events
and expectations that are not historical facts. These forward-looking
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The forward-looking
statements in this press release reflect management's best judgment at
the time they are made, but all such statements are subject to
numerous risks and uncertainties, which could cause actual results to
differ materially from those expressed in or implied by the statements
herein. Additional information concerning potential factors that could
effect future financial results are 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,
----------------------------------------------------------------------
2001 2000
----------------------------------------------------------------------
Revenues:
Product $1,008 $7,524
Service and maintenance 2,233 1,968
----------------------------------------------------------------------
Total revenues 3,241 9,492
Cost of revenues:
Product 108 108
Service and maintenance 2,198 1,809
----------------------------------------------------------------------
Total cost of revenues 2,306 1,917
Gross margin 935 7,575
Operating expenses:
Sales and marketing 7,958 5,901
Research and development 3,964 3,658
General and administrative 2,272 2,259
Lease abandonment expense 225 -
----------------------------------------------------------------------
Total operating expenses 14,419 11,818
----------------------------------------------------------------------
Loss from operations (13,484) (4,243)
Other income, net 1,593 649
----------------------------------------------------------------------
Net loss $(11,891) $(3,594)
----------------------------------------------------------------------
Net loss per share:
Basic and diluted $(0.44) $(0.16)
Shares used in computing basic
and diluted net loss per share 26,844,380 22,499,002
----------------------------------------------------------------------
(a) Pro Forma Consolidated Statement of Operations excludes stock
compensation expense and amortization of acquired intangibles
related to the Company's first quarter 2000 acquisition of
Knowledge Discovery One (KD1) of $7,685 and $3,987 for the three
months ending March 31, 2001 and 2000, respectively. In addition,
restructuring charges of $13,920 and a $75,298 charge for the
impairment of KD1 goodwill and other intangibles were excluded
from the first quarter of 2001.
NET PERCEPTIONS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
======================================================================
March 31, December 31,
2001 2000
----------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $26,535 $16,396
Short-term investments 60,729 52,484
Accounts receivable, net 2,603 6,449
Royalties receivable 617 671
Prepaid expenses and other
current assets 2,406 1,729
----------------------------------------------------------------------
Total current assets 92,890 77,729
Marketable securities - 27,356
Property and equipment, net 11,686 12,760
Goodwill & other intangible
assets, net 9,307 92,194
Other assets 1,339 1,795
----------------------------------------------------------------------
Total assets $115,222 $211,834
----------------------------------------------------------------------
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable and accrued
expenses $6,711 $7,040
Deferred revenue 2,468 3,743
Accrued restructuring costs 13,903 -
Current portion of long-term
liabilities 497 582
----------------------------------------------------------------------
Total current liabilities 23,579 11,365
Long-term liabilities, net of
current portion 1,808 1,951
----------------------------------------------------------------------
Total liabilities 25,387 13,316
----------------------------------------------------------------------
Commitments and contingencies
Stockholders' equity:
Common stock 2 2
Additional paid-in capital 274,576 274,458
Accumulated other
comprehensive income 354 361
Accumulated deficit (185,097) (76,303)
----------------------------------------------------------------------
Total stockholders' equity 89,835 198,518
----------------------------------------------------------------------
Total liabilities and
stockholders' equity $115,222 $211,834
----------------------------------------------------------------------
NET PERCEPTIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
======================================================================
Three Months Ended
March 31,
----------------------------------------------------------------------
2001 2000
----------------------------------------------------------------------
Revenues:
Product $1,008 $7,524
Service and maintenance 2,233 1,968
----------------------------------------------------------------------
Total revenues 3,241 9,492
Cost of revenues:
Product 441 274
Service and maintenance 2,198 1,809
----------------------------------------------------------------------
Total cost of revenues 2,639 2,083
Gross margin 602 7,409
Operating expenses:
Sales and marketing 7,970 6,011
Research and development 4,033 3,719
General and administrative 2,287 2,281
Lease abandonment expense 225 -
Restructuring charges 13,920 -
Amortization of goodwill and
other intangibles 7,256 3,628
Impairment of goodwill and
other intangibles 75,298 -
----------------------------------------------------------------------
Total operating expenses 110,989 15,639
----------------------------------------------------------------------
Loss from operations (110,387) (8,230)
Other income, net 1,593 649
----------------------------------------------------------------------
Net loss $(108,794) $(7,581)
----------------------------------------------------------------------
Net loss per share:
Basic and diluted $(4.05) $(0.34)
Shares used in computing basic
and diluted net loss per share 26,844,380 22,499,002
----------------------------------------------------------------------
| CONTACT: |
Net Perceptions, Inc., Minneapolis |
| |
Jacqueline Hanson, 952/842-5063 |
| |
jhanson@netperceptions.com |
| |
or |
| |
Tom Donnelly, 952/842-5400 |
| |
tdonnelly@netperceptions.com |
|
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