7/12 SMTF..SmartForce Reports Strong Second Quarter 2000 Results
SmartForce Solidifies its Position as the World's Largest Provider of E-Learning
REDWOOD CITY, Calif.--(BUSINESS WIRE)--July 12, 2000--SmartForce (NASDAQ: SMTF - news), the e-Learning company, today announced strong financial results for its second quarter ended June 30, 2000. SmartForce reported revenues of $36.4 million for the quarter, which significantly exceeded analysts' estimates. The Company reported a net loss of $7.6 million, or $0.15 per share, before amortization of intangible assets, beating the First Call consensus estimate of $0.17 per share and showing a 25% sequential improvement over a net loss before amortization of intangible assets of $0.20 per share in the first quarter. On a reported basis, the Company reported a net loss for the second quarter of $9.9 million, or $0.19 per share.
The Company reported fully committed contract backlog of $256 million as of June 30, 2000, significantly exceeding the Company's original targets for the quarter. This backlog represents the highest backlog level in Company's history, as well as a 15% sequential increase over the $222 million in backlog reported as of March 31, 2000.
The strong results for the quarter were fueled by the continued rapid customer adoption of SmartForce e-Learning, the Company's integrated, Internet-based e-Learning solution. The adoption of SmartForce e-Learning continued to be strong in the Company's core North American corporate business. Of the contract value added during the quarter in this business area, approximately two-thirds was attributable to contracts for SmartForce e-Learning. For the Company's business as a whole, a majority of the contract value generated during the quarter was attributable to e-Learning contracts.
In addition, the Company significantly expanded the international reach of SmartForce e-Learning, signing major agreements to extend its solutions to the Spanish-speaking world and Malaysia. (See separate releases). These initiatives, made in alliance with powerful distribution partners, create entirely new opportunities for SmartForce in rapidly developing markets. While the United States has been the focus of much of the early activity in e-Learning, the potential for growth internationally is also substantial. With approximately $60 million in 1999 revenues outside the United States, and SmartForce's existing sales presence in 35 countries throughout Europe, Asia Pacific, Latin America and elsewhere, SmartForce has emerged as the world's largest e-Learning company, with a global reach that is unparalleled in the industry.
``Our results clearly demonstrate our leading position in the e-Learning market, a position that prompted IDC to recognize us as the world's largest e-Learning company,'' said Greg Priest, SmartForce's President and Chief Executive Officer. ``Customers continue to adopt SmartForce e-Learning at rates far in excess of our original expectations, allowing us to generate a substantial backlog as the base for future business growth. At the same time, we are capitalizing on opportunities to further extend e-Learning around the world. Leadership in a B2B Internet business requires scale, resources and market reach. We believe that we have assembled the ingredients necessary to build a powerful, lasting Internet education franchise.''
The results reflect the Company's second full quarter of operations under its Internet rental model, in which revenues under e-Learning agreements are recognized ratably over the term of the agreements. For that six month period ended June 30, 2000, the Company's revenues were $64.9 million. Net loss for the six months ended June 30, before amortization of acquired intangibles, was $17.7 million, or $0.35 per share. On a reported basis, the Company recorded a net loss for the six months ended June 30, 2000 of $21.6 million, or $0.43 per share.
SmartForce also continued its progress toward its goal of building a major base of subscribers to SmartForce e-Learning. The Company has approximately 550,000 subscribers, an 83% increase over the 300,000 subscribers reported with the Company's results for the first quarter of 2000.
Additional Highlights
SmartForce announced the following additional milestones in the second quarter:
SmartForce announced the introduction of e-Learning workshops
that leverage the latest developments in Internet
collaboration technologies including integrated
teleconferencing, streaming media, real-time application
sharing, and live interactive sessions with other students and
faculty over the Internet.
SmartForce announced a multi-year e-Learning agreement with
Siemens Medical Systems, Inc. to establish e-Learning for U.S.
Siemens Medical Systems' employees.
SmartForce announced that it has been ranked as the world's
largest e-Learning company by International Data Corporation
(IDC).
SmartForce announced it has partnered with Linuxcare and
Turbolinux to collaborate on the delivery of online seminars
covering Linux and open-source software.
SmartForce announced that it has signed a multi-year agreement
with Humana Inc., a major healthcare provider, to provide
e-Learning for as many as 5,000 Humana employees.
SmartForce announced a partnership with Capella University to
provide content for Capella University's undergraduate
information technology courses and degree program. SmartForce
also has taken a minority equity stake in Capella University's
privately held parent company, Capella Education Company.
SmartForce announced a multi-year $1 million agreement with
Tampa-based kforce Consulting to provide e-Learning solutions.
SmartForce announced a partnership with business simulation
developer Strategic Management Group, Inc. to integrate SMG's
real-world simulations with SmartForce's e-Learning courseware
with real-world systems.
SmartForce and Intraware, Inc. announced a partnership under
which Intraware will offer e-Learning as a part of every IT
software system purchase.
SmartForce announced that it has expanded its relationship
with Robert Half International (RHI) by entering into a
multi-year agreement to provide e-Learning to 6,300 RHI
employees and temporary and consulting professionals.
SmartForce acquired Learning Productions, a developer of
Internet-based role play business simulations covering sales
and customer service, as well as Advanced Educational Systems
(AES), a provider of e-Testing services that allow companies to implement secure, proctored certification and compliance testing over the Internet.
SmartForce unveiled its e-Learning object strategy, which
allows any learning event to be broken down into its component
parts, and incorporated into any e-Learning solution.
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any forward-looking statements in the press release are subject to certain risks and uncertainties that could cause actual results to differ materially from those stated. Factors that could cause or contribute to such differences include those discussed in SmartForce's Form 10-K, as amended, for the year ended December 31, 1999 and its Form 10-Q for the quarter ended March 31, 2000. Any forward-looking statements in this press release reflect management's opinions only as of the date hereof and SmartForce assumes no obligation unless required by law to revise or publicly release the results of any revision to any such forward-looking statements.
About SmartForce:
SmartForce, the e-Learning company, formerly CBT Systems, provides integrated enterprise e-Learning solutions. SmartForce e-Learning is available as a fully hosted Internet environment through an Internet rental model. With more than 2,500 major corporate customers, SmartForce e-Learning solutions bring the power of the Internet to the critical training business process. The SmartForce e-Learning environment is also used by leading Internet, software and other companies to provide the infrastructure to support their e-Learning initiatives. SmartForce is quoted on the NASDAQ National Market under the symbol ``SMTF.'' The company, which has more than 1,500 employees worldwide, has corporate headquarters at 900 Chesapeake Drive, Redwood City, Calif., 94063. Phone: 650.817.5900. Fax: 650.817.5061. Web site: www.smartforce.com
SmartForce, SmartForce e-Learning and the SmartForce logo are trademarks of SmartForce. All other company and product names may be trademarks of the respective companies with which they are associated.
SmartForce PLC
Condensed Consolidated Statements of Operations
(dollars in thousands, except per share amounts)
Three Months Six Months
Ended June 30, Ended June 30,
1999 2000 1999 2000
---- ---- ---- ----
Revenues $ 47,247 $ 36,393 $ 87,444 $ 64,927
Cost of revenues 7,528 5,921 13,858 10,588
-------- ------- -------- ------
Gross profit 39,719 30,472 73,586 54,339
Operating expenses:
Research and development 7,554 10,347 14,941 18,847
Sales and marketing 21,642 24,813 42,615 48,006
General and
administrative 4,461 4,841 8,939 9,305
Amortization of acquired
intangibles 157 2,240 157 3,957
Acquired research and
development 5,900 -- 5,900 --
-------- -------- -------- --------
Total operating
expenses 39,714 42,241 72,552 80,115
-------- ------- -------- -------
Income (loss) from
operations 5 (11,769) 1,034 (25,776)
Other income, net 633 1,037 1,166 2,191
-------- -------- -------- --------
Income (loss) before
provision for income
taxes 638 (10,732) 2,200 (23,585)
Provision (benefit) for
income taxes 1,004 (849) 1,238 (1,963)
-------- -------- -------- -------
Net income (loss) (366) (9,883) 962 (21,622)
======== ======== ======= ========
Net income (loss)
per share - Basic $ (0.01) $ (0.19) $ 0.02 $(0.43)
======== ======= ======== ======
Shares used in computing
net income (loss) per
share - Basic 45,219 50,990 44,850 50,671
======== ======= ======== ======
Net income (loss)
per share - Diluted $ (0.01) $ (0.19) $ 0.02 $(0.43)
======== ======= ======== ======
Shares used in computing
net income (loss) per
share - Diluted 45,219 50,990 47,957 50,671
======== ======= ======== ======
SmartForce PLC
Condensed Consolidated Balance Sheets
(dollars in thousands)
Dec. 31, June 30,
1999 2000
-------- --------
ASSETS
Current assets
Cash $ 69,260 $ 56,171
Short term investments 38,913 41,204
Accounts receivable, net 62,035 53,785
Inventories 188 299
Deferred tax assets, net 192 2,035
Prepaid expenses 9,935 13,484
-------- --------
Total Current assets 180,523 166,978
Intangible assets 59,155 78,376
Property and equipment, net 26,111 27,349
Investment 850 2,824
Deferred tax assets, net -- 119
Other assets 23,078 26,624
-------- --------
Total assets $289,717 $302,270
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deferred revenues 6,141 25,408
Other current liabilities 40,261 30,799
-------- --------
Total current liabilities 46,402 56,207
Non current liabilities 592 1,830
Shareholders' equity 242,723 244,233
-------- --------
Total liabilities and
shareholders' Equity $289,717 $302,270
======== ========
--------------------------------------------------------------------------------
Contact:
SmartForce
David Drummond, 650/817-5775
david_drummond@smartforce.com
or
S&S Public Relations
Jill Schmidt, 847/955-0700
jills@sspr.com |
