Thursday February 3, 4:00 pm Eastern Time
Company Press Release
SOURCE: Rainmaker Systems, Inc.
Rainmaker Reports $18.6 Million Revenues
and 35 Percent Growth in Fourth Quarter
SCOTTS VALLEY, Calif., Feb. 3 /PRNewswire/ -- Rainmaker Systems, Inc. (Nasdaq: RMKR
- news), a leading provider of web-based Customer Relationship Management (eCRM) services,
today announced results for the fourth quarter and all of 1999. For the quarter ended December
31, 1999 -- the company's first as a publicly traded company -- revenues were $18.6 million, a
35 percent increase over revenues of $13.8 million for the same period a year ago. The
company reported a net loss for the quarter of $2.7 million, or $0.08 per pro forma share,
compared to net income of $233,000, or $0.01 per pro forma diluted share, in the fourth quarter
of 1998.
For all of 1999, Rainmaker eCRM services revenues increased 37 percent to $60.7 million from
$44.2 million for 1998. Gross profits for eCRM services increased 36 percent to $19.1 million
for 1999 from $14.0 million for 1998. Total 1999 Rainmaker revenues of $60.7 million
represent a 20 percent increase over total revenues of $50.4 million in 1998 that included $6.2
million of revenues from the catalog/distributor businesses that were sold in May 1998. The
company reported a net loss of $7.3 million, or $0.20 per pro forma share, in 1999 compared
with net income of $2.6 million, or $0.09 per pro forma diluted share, in 1998.
``We are particularly pleased with our revenue growth for the quarter. We ended the fourth
quarter with seven more clients than the same quarter of 1998,' said Michael Silton, chief
executive officer of Rainmaker. ``In the coming year, we have aggressive plans for new client
acquisition, and see a significant opportunity to grow the new clients that we added in 1999.'
Silton noted that, in January, the company signed its first new client for fiscal 2000, an
undisclosed mid-size Internet software company for which Rainmaker will provide eCRM
services for all of the client's North American maintenance programs.
Fourth quarter operating expenses were $10.3 million versus $3.8 million in the fourth quarter
of 1998. Silton stated that key investments made during the quarter were for start-up expenses
for new clients, aggressive hiring for key sales and marketing positions to serve new clients,
Y2K-related expenses, and continued development of information technology for enhancing
Rainmaker's eCRM services.
About Rainmaker Systems
Rainmaker Systems is a leading provider of web-enabled Customer Relationship Management
(eCRM) services to software and other technology companies. By integrating technologies,
processes and people, the company provides a transparent customer relationship infrastructure
for its clients. Its sophisticated eSales and eMarketing programs are designed to increase
revenue per customer, strengthen customer loyalty, and improve awareness of clients' products
and services such as software subscriptions, support contracts, and education services.
Rainmaker completed its IPO on November 16, selling 5,750,000 shares, including the
underwriters' overallottment, for $8 per share. For more information visit www.rmkr.com.
Cautionary Note Regarding Forward-looking Statements Under the Private Securities Litigation
Reform Act of 1995: Information in this release that involves Rainmaker's expectations, beliefs,
hopes, plans, intentions or strategies regarding the future are forward-looking statements that
involve risks and uncertainties. All forward-looking statements included in this release are
based upon information available to Rainmaker as of the date of the release, and we assume no
obligation to update any such forward-looking statements. These statements are not guarantees
of future performance and actual results could differ materially from our current expectations.
For further discussion of the risks and uncertainties, readers should refer to the Company's
registration statement on Form S-1 declared effective by the Securities and Exchange
Commission on November 16, 1999.
NOTE: Rainmaker Systems and the Rainmaker logo are trademarks of Rainmaker Systems, Inc.
All other trademarks are the property of their respective owners.
Rainmaker Systems, Inc.
Balance Sheets
(In thousands)
December 31,
1999 1998
Assets
Current assets:
Cash, cash equivalents
and short term
investments $43,885 $4,608
Accounts receivable, net 8,192 6,881
Current portion of note
receivable 800 900
Other current assets 2,451 1,639
Total current assets 55,328 14,028
Long term assets 2,539 3,181
Total assets $57,867 $17,209
Liabilities, Redeemable preferred stock and Stockholders' equity
Current liabilities:
Accounts payable $8,133 $6,855
Other current liabilities 3,436 2,050
Total current liabilities 11,569 8,905
Long term liabilities 1,090 2,827
Redeemable preferred stock -- 977
Total stockholders' equity 45,208 4,500
Total liabilities and
stockholders' equity 57,867 $17,209
Rainmaker Systems, Inc
Statements of Operations
(in thousands, except per share amounts)
Three months ended Years ended
December 31, December 31,
1999 1998 1999 1998
(unaudited)
Revenue:
CRM services $18,630 $13,810 $60,665 $44,212
Catalog/distributor -- -- -- 6,165
Total revenue 18,630 13,810 60,665 50,377
Cost of revenue:
CRM services 12,602 9,670 41,539 30,196
Catalog/distributor -- -- -- 5,135
Total cost of
revenue 12,602 9,670 41,539 35,331
Gross profit:
CRM services 6,028 4,140 19,126 14,016
Catalog/distributor -- -- -- 1,030
Total gross profit 6,028 4,140 19,126 15,046
Selling, general and
administrative
expenses 10,288 3,818 28,939 13,457
Operating income
(loss) (4,260) 322 (9,813) 1,589
Interest income, net 404 68 774 138
Gain from sale of
catalog/distributor -- -- 80 2,525
Income (loss)
before income
taxes (3,856) 390 (8,959) 4,252
Income tax expense
(benefit) (1,129) 157 (1,650) 1,702
Net income (loss) (2,727) 233 (7,309) 2,550
Preferred A dividends -- (18) -- (36)
Preferred C and D
cumulative dividends (200) -- (1,265) --
Income (loss) available
to common
stockholders $(2,927) $215 $(8,574) $2,514
Net income (loss)
per common share:
Basic $(0.10) $0.01 $(0.40) $0.12
Diluted $(0.10) $0.01 $(0.40) $0.09
Pro forma-basic $(0.08) $0.01 $(0.20) $0.10
Pro forma-diluted $(0.08) $0.01 $(0.20) $0.09
Number of shares used
in per share
computations:
Basic 28,151 21,269 21,300 21,004
Diluted 28,151 30,479 21,300 30,356
Pro forma-basic 35,242 25,888 35,798 25,623
Pro forma-diluted 35,242 30,479 35,798 30,356
SOURCE: Rainmaker Systems, Inc |
