8/10...SPWX..Second Quarter 2000 Financial Results
BOSTON--(BUSINESS WIRE)--Aug. 10, 2000--SpeechWorks International, Inc. (Nasdaq: SPWX - news), the market leader in the telephony-based speech technology industry(a), which completed its initial public offering on August 4, today reported revenues of $6.0 million for the three months ended June 30, 2000, representing a 58.6% increase over revenues of $3.8 million over the year earlier period. For the six-month period ended June 30, 2000, revenues totaled $11.1 million, a 56.7% increase over the same period in 1999.
Product license revenues for the second quarter of 2000 grew 163.6% to $2.8 million, from $1.1 million for the same period last year, and represented 46.0% of total revenues compared to 27.7% in the second quarter of last year. For the six-month period ended June 30, 2000, product license revenues totaled $5.4 million, a 286.2% increase over the same period in 1999, and represented 48.4% of total revenues in 2000, compared to 19.7% during the first two quarters of 1999.
Professional services revenue for the second quarter of 2000 increased 44.4% to $2.4 million, from $1.6 million in the second quarter of last year, and represented 39.1% of total revenues compared to 43.0% in the same period last year. For the six-month period ended June 30, 2000, professional services revenue totaled $4.5 million, a 65.3% increase from $2.7 million in the same period in 1999, and represented 40.7% and 38.6% of total revenues for the six months ended June 30, 2000 and 1999, respectively.
Other revenue, which includes the resale of hardware products, decreased to $892,000 in the second quarter of 2000, from $1.1 million in the second quarter of 1999, and represented 14.8% and 29.3% of total revenues in the three months ended June 30, 2000 and 1999, respectively. For the six months ended June 30, 2000, other revenue totaled $1.2 million, or 10.9% of total revenue, compared to $3.0 million, or 41.8% of total revenue, for the six months ended June 30, 1999.
The net loss for the three months ended June 30, 2000, excluding non-cash charges related to stock compensation, was $6.6 million, or $0.29 per share on a pro forma basis, compared to $2.6 million, or $0.15 per share on a pro forma basis, for the three months ended June 30, 1999. For the six-month period ended June 30, 2000, the pro forma net loss, excluding non-cash charges related to stock compensation, totaled $12.3 million, or $0.59 per share on a pro forma basis, compared to a loss of $5.1 million, or $0.32 per share on a pro forma basis, in the same period in 1999. The net loss for the quarter was $7.3 million, or $0.32 per share on a pro forma basis, compared to a net loss of $2.7 million, or $0.16 per share on a pro forma basis, for the second quarter last year. For the six-month period ended June 30, 2000 the net loss totaled $13.4 million, or $0.64 per share on a pro forma basis, compared to $5.1 million, or $0.32 per share on a pro forma basis, for the same period in 1999.
During the second quarter, SpeechWorks signed the following strategic agreements:
- In June 2000, SpeechWorks entered into a development and license
agreement with AT&T Corp. to develop and sell products that use
AT&T speech technology. The technology includes AT&T's speech
software and text-to-speech software, as well as other technology
related to computer processing of the human voice. AT&T has agreed
to assist the Company in marketing to AT&T business units the
products and services that SpeechWorks develops.
- In June 2000, SpeechWorks entered into a software license,
professional services and marketing agreement with America Online
to enable America Online to develop voice portals to its online
services.
- In June 2000, SpeechWorks entered into a letter of intent with
Net2Phone under which the Company will grant a software license
and provide professional services to Net2Phone and pursue joint
marketing and promotional efforts.
Subsequent to the second quarter, SpeechWorks successfully completed its initial public offering, totaling 5.46 million shares on August 4, 2000, including 712,500 shares which were subject to the underwriters' over-allotment option which was exercised on August 2, 2000. The offering raised approximately $100 million, net of estimated expenses. Concurrent with the initial public offering, the company completed two private placements of common stock which raised an additional $9 million. As of today, the company has more than $120 million in cash and cash equivalents.
(a) Based on Frost and Sullivan's U.S. ``Telephony-based Speech
Technology Software Market 2000`` report.
About SpeechWorks International, Inc.
Organizations worldwide rely on SpeechWorks (Nasdaq: SPWX - news) to delight their callers and provide them with a new level of service over the phone. Complementing the self-service model of the Web, SpeechWorks speech recognition solutions, including the revolutionary SpeechSite(TM) product, let callers communicate, obtain information and complete transactions automatically, simply by speaking naturally over any phone, anytime.
SpeechWorks customers include some of the world's most sophisticated customer service innovators such as America Online, Amtrak, BellSouth, Continental Airlines, E*Trade, FedEx, Fidelity Investments Institutional Brokerage Group, MapQuest.com, McKessonHBOC, Quack.com and United Airlines. SpeechWorks strategic partners include technology leaders such as AT&T, Dialogic, an Intel Company, InterVoice-Brite and Net2Phone. The Company offers the SpeechWorks Here(TM) Guarantee, the industry's only customer results program with a money-back guarantee.
SpeechWorks is headquartered in Boston, Massachusetts and has offices around the world. To experience the power of SpeechWorks, call 1.888.SAY.DEMO. For additional information, call 617.428.4444 or visit speechworks.com .
SpeechWorks, SpeechSite and SpeechWorks Here are either trademarks or registered trademarks of SpeechWorks International, Inc. in the United States and other countries. All other trademarks are the property of their respective owners.
Note:
Other than historical information contained herein, certain statements in this release are ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on management's current expectations. Factors that could cause future results to differ materially from such expectations include: the timing of sales of the Company's products and services; market acceptance of the Company's speech-activated systems; the Company's reliance on a limited number of large orders for substantially all its revenue; the Company's ability to develop new products and services in the face of rapidly evolving technology; the uncertainties related to the Company's planned international operations; the Company's ability to manage growth of its business; the Company's ability to protect its intellectual property; the Company's reliance on resellers and original equipment manufactures for a portion of its sales; the Company's ability to respond to competitive developments; and the Company's reliance on attracting, retaining and motivating key technical and management personnel. These and other risk factors are detailed in the Company's filings with the Securities and Exchange Commission.
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SPEECHWORKS INTERNATIONAL, INC.
Consolidated Statement of Operations
(unaudited, in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
2000 1999 2000 1999
---- ---- ---- ----
Revenue
Product license $2,776 $1,053 $5,383 $1,394
Professional services 2,364 1,637 4,522 2,736
Other revenue 892 1,114 1,214 2,964
----------------- ---------------
Total revenues 6,032 3,804 11,119 7,094
----------------- ---------------
Cost of revenues:
Cost of product licenses 66 32 111 41
Cost of professional services 1,856 1,265 3,550 2,239
Cost of other revenue 659 814 809 2,053
------------------ ---------------
Total cost of revenues 2,581 2,111 4,470 4,333
------------------ ---------------
Gross profit 3,451 1,693 6,649 2,761
------------------ ---------------
Operating expenses:
Selling and marketing 4,478 2,135 8,272 3,682
Research and development 2,006 965 3,816 1,863
General and administrative 3,652 1,338 6,960 2,424
Stock compensation 664 42 1,057 54
------------------ ---------------
Total operating expenses 10,800 4,480 20,105 8,023
------------------ ---------------
Loss from operations (7,349) (2,787) (13,456) (5,262)
------------------ ---------------
Other income (expenses):
Interest and other income
(expense), net 97 107 105 122
------------------ ---------------
Net loss (7,252) (2,680) (13,351) (5,140)
Accretion and deemed dividends on
redeemable convertible preferred
stock (6,055) (454) (6,655) (697)
------------------ ---------------
Net loss attributable to common
stockholders $(13,307) $(3,134) $(20,006) $(5,837)
================== ================
Basic and diluted net loss per
common share $ (2.12) $ (0.59) $ (3.36) $ (1.16)
Shares used in computing basic and
diluted net loss per common
share 6,281 5,285 5,963 5,036
Pro forma Data: (1)
Net loss attributable to common
stockholders $ (13,307) $ (3,134) $ (20,006)$ (5,837)
Stock compensation 664 42 1,057 54
Accretion and deemed dividends on
redeemable convertible preferred
stock 6,055 454 6,655 697
------------------ --------------
Pro forma net loss attributable to
common stockholders $(6,588) $ (2,638) $(12,294) $(5,086)
================== ===============
Pro forma basic and diluted net
loss per common share $ (0.29) $ (0.15) $ (0.59) $ (0.32)
Shares used in computing pro forma
basic and diluted net loss per
common share 22,388 17,171 20,952 15,916
(1) The pro forma net loss per common share is calculated assuming the
automatic conversion of all of the outstanding redeemable
convertible preferred stock into common stock had occurred as of
the beginning of the period presented, or as of the date of
issuance of the preferred stock, if later. Additionally, the pro
forma data excludes non-cash stock compensation charges. This does
not purport to be prepared in compliance with Generally Accepted
Accounting Principles.
SPEECHWORKS INTERNATIONAL, INC.
Consolidated Balance Sheets June 30, December 31, (in thousands) 2000 1999
------------- Assets (unaudited)
Current Assets: Cash and cash equivalents $ 16,210 $11,474 Accounts receivable, net 8,572 4,097 Other current assets 2,236 1,036
-------------
Total current assets 27,018 16,607
Net fixed assets and other assets 5,094 3,959 Net intangible assets 11,497 -
-------------
Total assets $43,609 $20,566
======= =======
Liabilities, redeemable convertible preferred stock and stockholders' equity
Current Liabilities: Accounts payable and accrued
expenses $ 4,664 $ 2,937
Current portion of leases and
notes payable 539 683
Deferred revenue 3,175 854
-------------
Total current liabilities 8,378 4,474
Long term debt 542 833 Redeemable convertible preferred stock 64,923 43,507 Stockholders' equity (deficit) (30,234) (28,248)
-------------
Total liabilities, redeemable
convertible preferred stock
and stockholders' equity $43,609 $20,566 |
