Very, very bad quarter...
Monday December 4, 8:58 am Eastern Time
Press Release
CrossKeys Systems Corporation Announces Preliminary Estimates
for Second Quarter Results
KANATA, Ontario--(BUSINESS WIRE)--Dec. 4, 2000--CrossKeys Systems Corporation
(Nasdaq:CKEY - news; TSE:CKY. - news), today announced preliminary unaudited financial
results for the second quarter of fiscal 2001, which ended December 3, 2000.
Management expects revenue for the second quarter of fiscal 2001 to be between Cdn $4.2 and Cdn $4.7 million compared to
Cdn $11.0 million in the second quarter of fiscal 2000. This also compares with revenue of Cdn $13.3 million in the first quarter
of fiscal 2001. Before Amortization of Goodwill and Intangibles, this is expected to result in a net loss of between Cdn $12.3M
and $14.3M (between Cdn $0.64 and $0.75 per share, or US $0.42 to $0.49 per share). Including Amortization of Goodwill and
Intangibles, the company expects a net loss for the quarter of between Cdn $14.7M and $16.7M (between Cdn $0.77 and $0.87
per share, or US $0.50 to $0.57 per share). As a result of the continued losses the company expects to take a one-time charge to
write off deferred tax assets on the balance sheet. Including this charge and the Amortization of Goodwill and Intangibles, the
company expects a net loss of between Cdn $18.5M and $20.5M (between Cdn $0.97 and $1.07 per share, or US $0.63 to $0.70
per share).
Several deals in both the North American and European market failed to complete in the timeframe expected. This resulted in
second quarter revenue and earnings that were below recent analyst estimates.
CrossKeys expects to end the quarter with approximately Cdn $4 million in cash supported by a number of receivables which
the company expects to collect in the near term.
Ian McLaren, President and CEO, CrossKeys said, ``Despite significant sales support and positive buying signs from key
customer prospects throughout the quarter, we were not able to complete the deals. While some of the deals were with tier 1 and
2 new entrants, the larger deals were with large incumbents or ILECS. Our experience in the past several weeks seems to
indicate that customers are taking a slower approach to making buying decisions. We are concerned by the slowdown in buying
decisions. We are not aware of any of the deals we were tracking being awarded to other companies.''
Mr. McLaren went on to say ``Our latest financial results clearly indicate that we must take immediate and significant action to
re-align the company for today's market reality. We are in the process of evaluating the actions required to strengthen the
company to move forward, and I will update the market with those plans in the coming weeks.''
The preliminary results in this news release are estimates only and actual results may vary. Finalized results for the second
quarter of fiscal 2001 will be reported on Wednesday December 20, 2000. The company's preliminary results are prepared in
accordance with accounting principles generally accepted in the United States.
A conference call to discuss the preliminary results is scheduled for 10:00 a.m. today. Interested parties should call (877)
331-7860 or (416) 641-6441 10 minutes prior to the call. A playback of the call will be available at 12:00 noon (EST) today
until December 11, 2000. Interested parties should call 1-800-558-5232 in North America or (416) 626-4100 for those
overseas. The access code for the replay is 17149981.
This announcement may contain forward-looking statements as defined in the US Private Securities Litigation Reform Act of
1995, such as statements related to the industry motivators, market and partnership opportunities. The company cautions that
these statements are based on current expectations that are subject to risks and uncertainties. Actual results may differ due to
factors such as customer demand and timing of buying decisions, product shipping schedules, product mix, competitive products
and pricing pressures, changes in the service, network and element management software applications market specifically, our
ability to collect receivables, and the success of our actions to strengthen the company. Additional information identifying risks
and uncertainties is contained in the company's filings with the Ontario Securities Commission and the Securities and
Exchange Commission.
About CrossKeys Systems Corporation
CrossKeys Systems Corporation (www.crosskeys.com) develops software that makes the Internet work for business. The world's
largest and fastest growing service providers manage the equipment, traffic, and service on their telecom networks with
CrossKeys.
CrossKeys Systems Corporation is a public company whose common shares are listed for trading on Nasdaq (CKEY) in the
United States and on The Toronto Stock Exchange (CKY) in Canada. CrossKeys, CrossKeys Resolve and logo are registered
trademarks of CrossKeys Systems Corporation. All other trademarks are the property of their respective holders and are
acknowledged by CrossKeys Systems Corporation.
Contact:
CrossKeys Systems Corporation
Sue Rutherford, 613/599-2300 ext. 8391
srutherf@crosskeys.com
or
CrossKeys Systems Corporation
D'Arcy Rossiter, 613/599-2300 ext. 8558
drossite@crosskeys.com |
