FirePond Reports Record Second-Quarter Revenues
Product-Related Revenue Up 129% From Last Year's Second Quarter
Loss Narrowed by More Than 50%
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WALTHAM, Mass.--(BUSINESS WIRE)--May 24, 2000--FirePond, Inc. (Nasdaq: FIRE - news), the leading global provider of integrated e-business solutions for multi-channel selling, today announced financial results for the Company's second quarter ended April 30, 2000. Total revenue increased to a record $13.6 million compared with $8.4 million in last year's second quarter. During the quarter, the Company posted product-related revenue of $10.0 million compared to $4.4 million in the second quarter of last year, a 129% increase. Revenue from software licenses, which equaled 49% of product-related revenue in the quarter, was $4.9 million compared to $2.4 million in the prior year's second quarter.
In connection with the Company's initial public offering completed on February 4, 2000, certain preferred shareholders received a stock dividend of $65.5 million and the Company incurred a non-recurring charge of $1.4 million for the early extinguishment of debt. In addition, the Company recorded a non-recurring credit of $500,000 during the quarter from the reversal of restructuring charges.
On a pro forma basis, excluding stock-based compensation expense of $1.8 million and non-recurring items, the net loss was $1.9 million, or $0.05 per share, compared to a pro forma net loss of $5.9 million, or $0.23 per share, in last year's second quarter. Including the non-recurring items and stock-based compensation expense, the net loss was $4.6 million, or $0.13 per share based on pro forma shares outstanding, compared with a net loss of $6.3 million, or $0.24 per share, based on pro forma shares outstanding in the prior period.
For the six months ended April 30, 2000, the Company recorded total revenue of $25.6 million, an increase of 64% from $15.6 million in the first six months of last year. Product-related revenue increased to $18.3 million from $7.3 million, an increase of more than 150% in the comparable six-month periods. On a pro forma basis, excluding stock-based compensation expense of $2.9 million and non-recurring items, the net loss would have been $6.5 million, or $0.21 per share, compared to a pro forma net loss of $11.3 million, or $0.47 per share, in last year's first six months. Including stock-based compensation expense and non-recurring items, the net loss was $10.4 million, or $0.33 per share based on pro forma shares outstanding, compared with a loss of $12.0 million, or $0.50 per share based on pro forma shares outstanding, in the prior period.
Commenting on the results, Klaus P. Besier, Chairman and Chief Executive Officer of FirePond, Inc., said, ``This was a very exciting quarter for FirePond, as our market momentum continued to drive aggressive growth, strategic global relationships were established, and our net losses were reduced dramatically. Product-related revenue continued to grow aggressively and now represents almost 75% of the Company's total revenue. In the second quarter, we announced important deals in all of our key verticals, notable among which were Scania, Isuzu, and CareFirst Blue Cross Blue Shield, a direct result of FirePond's agreement with the Blue Cross Blue Shield National Association.''
He added, ``Our momentum has also carried into the current quarter as we have already closed three large deals, one of which was the largest in the history of the Company. Third quarter license bookings already exceed those of the second quarter, thereby giving us exceptional revenue visibility for the next two quarters. In addition, we announced two major European partnerships, Deutsche Telekom and World Online, under which the FirePond Application Suite will be offered to their global customer bases, a total of approximately 40,000 customers. Also consummated were two unannounced alliances, one with a large Japanese technology company and the other with one of the ''Big 5`` consulting firms. FirePond's balance sheet remains strong, with $110.9 million in cash and investments, and a modest cash burn rate.''
Highlights of the Quarter
Customers: Thirty customers contributed to product-related revenue in the second quarter. During the quarter, new customers for the FirePond Application Suite were announced from all three of FirePond's targeted verticals. CareFirst Blue Cross Blue Shield represents the third Blue Cross Blue Shield plan, of which there are 48 in the US, to adopt the FirePond Application Suite. Scania, a major European truck manufacturer, is deploying the FirePond Application Suite to its network of dealerships across the UK, another example of the result of FirePond's significant investment last year to penetrate the European market. A well-recognized US computer manufacturer is also deploying the FirePond product across multiple channels to support interactive selling of complex storage systems. A large Japanese technology company is also adopting the Suite, indicative of FirePond's growing presence in Asia.
Implementations: Six customers continued their roll-outs during the quarter, three of which were in health care, insurance and financial services. Among the six customers were the Blue Cross and Blue Shield of Minnesota plan, SBLI Mutual Life Insurance, and Empire Blue Cross and Blue Shield, which deployed the FirePond Application Suite to its network of brokers, serving over 4.1 million members.
Partners & Distribution Infrastructure: FirePond announced two major European partnerships during the quarter (Deutsche Telekom and World Online), as well as two other yet unannounced, global partnerships, one of which is with one of the ``Big-5'' consulting firms and the other with a large Japanese technology company, both of which generated revenue in the second quarter.
Product Update: FirePond delivered Release 1.5 of the FirePond Application Suite, which represents enhancements driven from customer input. FirePond also announced its intent to deploy its applications on a variety of handheld wireless devices, initially using the Wireless Application Protocol (WAP) standard.
Conference Call Information:
The quarterly conference call will be held later today at 5:00 p.m. EDT. The dial in number is: (800) 230-1074 International: (612) 332-0718, Password: Q2. This event is also available at the investor relations section of the FirePond web site: www.firepond.com. The call will be archived on the FirePond site for 48 hours following the conference call.
About FirePond
Headquartered in Waltham, Mass., FirePond (www.firepond.com) is the leading global provider of integrated e-business solutions focused on multi-channel sales success. Our award winning technology and sales process expertise enable companies to exceed revenue goals and increase margins by taking control of every selling interaction.
The FirePond Application Suite enables companies to standardize their enterprise e-business sales strategies on a single Internet-based solution, by applying consistent, consultative selling practices across all sales channels simultaneously. Capturing real-time customer information from automated selling interactions, companies can coordinate immediate, intelligent responses to every revenue opportunity.
Some of the world's most successful companies depend on FirePond solutions to help them sell and distribute their complex products and services, including Freightliner, Blue Cross and Blue Shield of Minnesota, Renault, Empire Blue Cross and Blue Shield, Compaq, Subaru and Hitachi.
As defined under Safe Harbor provisions of The Private Securities Litigation Reform Act of 1995, except for the historical information contained herein, some of the matters discussed in this release contain forward-looking statements regarding future events that are subject to risks and uncertainties. The following factors, among others, could cause actual results to differ materially from those described by such statements. These factors include, but are not limited to: quarterly fluctuations in operating results attributable to the timing and amount of orders for the Company's products and services, market acceptance of the FirePond Application Suite and its components, the Company's ability to keep pace with changing product requirements and factors affecting the demand for e-business sales and marketing solutions, the timing of the implementation of the software in the customers' applications, and those factors contained in the section titled ``Risk Factors'' beginning on page 4 of the Company's Registration Statement on Form S-1 (No. 333-90911) declared effective by the Securities and Exchange Commission.
FirePond and FirePond products are trademarks of FirePond, Inc. All other product or company names are the properties of their respective owners.
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