MINNEAPOLIS--(BUSINESS WIRE)--Oct. 25, 2001--Net Perceptions, Inc.
(Nasdaq:NETP) today reported revenue of $2.2 million for the quarter
ended September 30, 2001, and a pro forma loss of $3.5 million, or
($0.13) per share before restructuring charges, amortization of
goodwill and other intangibles and stock compensation expense. In the
same period last year the company reported $7.7 million in revenue and
a pro forma loss of $8.0 million, or ($0.30) per share before
amortization of goodwill and other intangibles and stock compensation
expense.
During the third quarter of 2001, the company further reduced its
workforce by approximately 45 employees. As a result, the company
recorded a restructuring charge of $1.8 million in the third quarter
of 2001 consisting of $450,000 of severance payments, a $900,000 loss
on the disposal of assets and $450,000 of facility leasehold
write-offs. Of the $1.8 million, approximately $1.3 million was a
non-cash charge.
Including restructuring charges, amortization of goodwill and
other intangibles and stock compensation expense, the company reported
a loss of $6.2 million, or ($0.23) per share, compared with a loss of
$15.8 million, or ($0.60) per share in the same period last year.
"Net Perceptions is emerging from the challenges of the last 12
months with a renewed focus and energy," said Don Peterson, Net
Perceptions president and CEO. "During the quarter, we made
significant progress on several initiatives that we expect to see pay
off in the coming months. We believe we are building momentum on the
sales front and we are seeing the benefits of cost cutting and
restructuring measures taken earlier in the year. Overall, plans are
beginning to coalesce, and we're seeing increased optimism throughout
the company."
Developments in the quarter included:
-
Development progress on the company's next-generation products
and analytical capabilities to be announced in the coming
months.
-
Continued proof of the company's ability to significantly
increase the revenue performance of its catalog and e-commerce
clients.
-
Significant progress in bringing the company's cost structure
in line with the current operating level of the business.
-
Slowing cash use during the quarter to approximately $5
million. As a result, cash and marketable securities exceeded
$76 million as of September 30, 2001, ahead of the company
plan.
-
Revenue of $2.2 million, with margins improving significantly
over the previous quarter. Gross margins on the company's
services and maintenance business reached 51%, the highest in
the company's history.
-
Solid progress on leasing the company's excess office space,
signing long-term sublease agreements for nearly half of the
space available for sublet.
Outlook
The company anticipates that revenues for the fourth quarter will
be $1.8 to $2.8 million and that pro forma net loss per share will be
$.11 to $.13 cents per share. Net Perceptions completed the quarter
with more than $76 million in cash and short-term investments. The
company believes that it will end 2001 with more than $70 million in
cash and short-term investments.
About Net Perceptions
Net Perceptions (Nasdaq:NETP) is a software and services company
that provides solutions for more intelligent customer interaction that
drive demand, grow revenue and increase profitability. Founded in
1996, Net Perceptions is headquartered in Minneapolis and has offices
throughout the United States and in Europe. Customers include market
leaders such as Brylane, GUS (Great Universal Stores), JC Penney,
Kmart, Palm 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. 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 filings 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 Nine Months Ended
September 30, September 30,
----------------------------------------------------------------------
2001 2000 2001 2000
----------------------------------------------------------------------
(Unaudited) (Unaudited)
Revenues:
Product $ 674 $ 4,424 $ 2,068 $ 21,456
Service and maintenance 1,509 3,301 5,753 8,162
----------------------------------------------------------------------
Total revenues 2,183 7,725 7,821 29,618
Cost of revenues:
Product 121 193 272 520
Service and maintenance 739 3,019 4,153 7,552
----------------------------------------------------------------------
Total cost of revenues 860 3,212 4,425 8,072
Gross margin 1,323 4,513 3,396 21,546
Operating expenses:
Sales and marketing 2,446 6,311 13,432 18,490
Research and development 2,084 5,464 8,270 13,974
General and administrative 1,006 2,628 5,398 7,637
Lease abandonment expense - - 225 800
----------------------------------------------------------------------
Total operating expenses 5,536 14,403 27,325 40,901
----------------------------------------------------------------------
Loss from operations (4,213) (9,890) (23,929) (19,355)
Other income, net 714 1,907 3,602 3,812
----------------------------------------------------------------------
Net loss $ (3,499) $ (7,983) $ (20,327) $ (15,543)
======================================================================
Net loss per share:
Basic and diluted $ (0.13) $ (0.30) $ (0.76) $ (0.62)
Shares used in computing
basic and diluted net
loss per share 27,037,320 26,339,150 26,917,459 24,892,510
======================================================================
(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 $888 and $9,470 for the three and
nine months ended September 30, 2001, respectively. In addition,
restructuring charges of $1,771 and $15,691 were excluded from the
three and nine months ended September 30, 2001, respectively.
Further, a $75,298 charge for the impairment of KD1 goodwill and
other intangibles was excluded from the nine months ended
September 30, 2001. For the three and nine months ended September
30, 2000, this Pro Forma Statement of Operations excludes stock
compensation expense and amortization of acquired intangibles of
$7,786 and $19,536, respectively.
NET PERCEPTIONS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
======================================================================
Sept. 30, Dec. 31,
2001 2000
----------------------------------------------------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 23,252 $ 16,396
Short-term investments 53,150 52,484
Accounts receivable, net 1,099 6,339
Royalties receivable - 671
Prepaid expenses and other current assets 3,119 1,839
----------------------------------------------------------------------
Total current assets 80,620 77,729
Marketable securities - 27,356
Property and equipment, net 5,798 12,760
Goodwill & other intangible assets, net 7,637 92,194
Other assets 1,354 1,795
----------------------------------------------------------------------
Total assets $ 95,409 $211,834
======================================================================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $ 4,238 $ 7,040
Deferred revenue 2,057 3,743
Accrued restructuring costs 9,774 -
Current portion of long-term liabilities 277 582
----------------------------------------------------------------------
Total current liabilities 16,346 11,365
Long-term liabilities, net of current portion 610 1,951
----------------------------------------------------------------------
Total liabilities 16,956 13,316
----------------------------------------------------------------------
Commitments and contingencies
Stockholders' equity:
Common stock 2 2
Additional paid-in capital 274,783 274,458
Accumulated other comprehensive income 757 361
Accumulated deficit (197,089) (76,303)
----------------------------------------------------------------------
Total stockholders' equity 78,453 198,518
----------------------------------------------------------------------
Total liabilities and stockholders' equity $ 95,409 $211,834
======================================================================
NET PERCEPTIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
======================================================================
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------------------------------------------
2001 2000 2001 2000
----------------------------------------------------------------------
(Unaudited) (Unaudited)
Revenues:
Product $ 674 $ 4,424 $ 2,068 $ 21,456
Service and maintenance 1,509 3,301 5,753 8,162
----------------------------------------------------------------------
Total revenues 2,183 7,725 7,821 29,618
Cost of revenues:
Product 158 526 679 1,354
Service and maintenance 739 3,019 4,153 7,551
----------------------------------------------------------------------
Total cost of revenues 897 3,545 4,832 8,905
Gross margin 1,286 4,180 2,989 20,713
Operating expenses:
Sales and marketing 2,454 6,372 13,465 18,736
Research and development 2,121 5,582 8,416 14,229
General and administrative 1,014 2,647 5,430 7,700
Lease abandonment expense - - 225 800
Restructuring charges 1,771 - 15,691 -
Amortization of goodwill
and other intangibles 798 7,255 8,852 18,139
Impairment of goodwill
and other intangibles - - 75,298 -
----------------------------------------------------------------------
Total operating expenses 8,158 21,856 127,377 59,604
----------------------------------------------------------------------
Loss from operations (6,872) (17,676) (124,388) (38,891)
Other income, net 714 1,907 3,602 3,812
----------------------------------------------------------------------
Net loss $ (6,158) $ (15,769) $ (120,786) $ (35,079)
======================================================================
Net loss per share:
Basic and diluted $ (0.23) $ (0.60) $ (4.49) $ (1.41)
Shares used in computing
basic and diluted net
loss per share 27,037,320 26,339,150 26,917,459 24,892,510
======================================================================
| CONTACT: |
Net Perceptions, Inc., Minneapolis |
| |
Corporate Communications: |
| |
Jacqueline Hanson, 952/842-5063 |
| |
jhanson@netperceptions.com |
| |
or |
| |
Chief Financial Officer: |
| |
Tom Donnelly, 952/842-5400 |
| |
tdonnelly@netperceptions.com |
|
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