Caminus Corporation to Acquire Software Business of Altra Energy Technologies
NEW YORK--(BUSINESS WIRE)--Oct. 15, 2001--
Affirms Caminus' Leadership Position in
Software Solutions for Energy Markets
Company Updates Third and Fourth Quarter 2001 Financial Guidance
Caminus Corporation (Nasdaq: CAMZ), the energy industry's leading provider of software and strategic consulting for trading and risk management in North America and Europe, today announced that it has signed a definitive purchase agreement to acquire the software operations of Altra Energy Technologies, Inc.
Altra, a private company located in Houston, Texas, has its roots and retains its dominant position in providing software systems primarily focused on managing the transactions and physical movement of the gas/pipeline segment of the energy industry. With over 100 customers, now including some power and multi-fuel customers, Altra has the largest installed base of systems in the gas segment of the market, thereby significantly enhancing Caminus' leadership position in the energy software marketplace.
"By combining Caminus' historical strength in financial and risk management of power transactions with Altra's expertise in managing physical logistics and transactions in gas markets, we're creating an extremely strong suite of integrated applications for the growing number of energy market participants active in both gas and electricity," said David Stoner, Caminus' President and CEO. "Further, we gain a large customer base to upgrade to a new generation of systems. We will have the opportunity to sell our power and risk systems to Altra customers and to sell Altra's new generation of systems to Caminus' customers. We gain the strongest staff of gas sector subject matter experts in the industry, and we have the opportunity to deepen the joint relationships we already enjoy with key energy players like Conoco, PG&E and Dynegy."
Under the terms of the agreement, the acquisition will be financed with 1.975 million shares of Caminus common stock and $30 million in cash. The transaction is expected to close in the fourth quarter, upon receipt of applicable regulatory approvals. CIBC World Markets Corp. acted as exclusive financial advisor to Altra.
Guidance Update
Caminus also reported today that it has adjusted its financial guidance for the third and fourth quarters of 2001. The Company now expects total revenues for the third quarter ended September 30, 2001 to be approximately $15 million, compared with consensus analysts' estimates of $17.8 million. Pro forma net income per diluted share for the third quarter is now expected to be approximately $0.04, versus consensus analyst estimates of $0.13. For the fourth quarter, pro forma net income per diluted share is expected to increase to $0.27 per share from $0.23 per share.
The adjustment in third quarter guidance is a direct result of the events of September. Prior to September 11th Caminus was on track to achieve guidance given to investors, as it has done for all previous quarters in its history. The Company books a large portion of its license revenue in the last month of each quarter. This pattern is particularly true in the third quarter because of the need to wait until the end of the European vacation season and the North American summer power demand peaks to gain sufficient institutional attention of customers to close large sales. This year business activity ceased just as the peak closing period got underway. Certain well-qualified, anticipated license sales did not close in September. None were lost to a competitor. All these prospects have confirmed an intention to buy and all are expected to close in the months ahead.
The Company's strategic and implementation consulting revenues are based on time billing. Again, the events of September had an adverse effect. The effective cessation of business activity and business travel for more than a week resulted in a non-recoverable loss of some time-based billings. The delay in closing certain license sales will reduce the level of fourth quarter implementation consulting revenues that are driven by, but lag, prior period license sales.
Because the Company expects to close the license transactions that slipped from the third quarter, it is increasing its pro forma EPS guidance for the fourth quarter of 2001 to $0.27 per share from $0.23 per share. The revision excludes any consideration of the Altra transaction.
The Company expects Altra to add about 40% to Caminus' current stand-alone guidance for 2002 revenues. The transaction is expected to be accretive to Caminus pro forma earnings beginning in the fourth quarter of 2001, and the combined operation is expected to produce growth rates and margins consistent with prior guidance. More detailed guidance for the fourth quarter and 2002 inclusive of Altra will be provided on the Company's earnings announcement call scheduled for October 30th.
"With respect to our near-term outlook, the tragic events of September 11th affected our ability to conduct normal business during a key period for us," stated Mr. Stoner. "However, as we move forward we continue to see an excellent market environment in spite of challenging economic conditions. The underlying strength in our business, both in North America and Europe, is evidenced by a continued strong sales pipeline and a consistently high win rate on competitive deals. The prospects and customers comprising our pipeline assure us that they will continue with their plans to purchase our products and services. We look forward to a strong fourth quarter and confidently reiterate our very positive guidance for 2002."
Conference Call
Caminus will hold a conference call Monday morning, October 15th at 9:00 a.m. Eastern time to discuss today's announcement. To participate in the teleconference, please dial 212-346-0175 ten minutes prior to the scheduled start time. A replay of the conference call will be available approximately one hour after the conclusion of the live call and will run until 11:00 a.m. Eastern Time on October 17, 2001. To access the replay, please dial 800-633-8284 (U.S) / 858-812-6440 (Int'l) and enter the pass code of 19812505.
Caminus will also hold a live Webcast of the conference call at www.caminus.com. Please visit the Web site about 15 minutes prior to 9:00 a.m. to download and install any necessary audio software to access the Webcast.
About Caminus Corporation
Caminus Corporation is a leading provider of risk management software and strategic consulting services for participants in energy markets throughout North America and Europe, including utilities, electrical power generating companies, energy marketers, electric power pools, gas producers, processors, and pipelines. Caminus offers a suite of software solutions and associated services to enable energy market participants to manage complex risk scenarios and effectively trade and manage energy transactions addressing multiple energy commodities and types of risk across varied geographies.
In addition to its suite of risk management software solutions, Caminus also provides strategic consulting services for market-related issues within the energy sector. The company currently has over 150 energy enterprise customers of its software solutions and strategic consulting services, including British Energy, Consolidated Edison, Conoco, and Powergen. Caminus is headquartered in New York, with offices in London and Cambridge, UK; Houston and Dallas, Texas; and Calgary, Canada. For more information about Caminus, please visit the corporate Web site at www.caminus.com.
This press release contains forward-looking statements relating to Caminus Corporation's financial outlook for 2001, and such statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are Caminus Corporation's lengthy sales cycle, its dependence on large license agreements to meet revenue targets, competition in the energy industry, continued market acceptance of Caminus products, changes in customer requirements, Caminus Corporation's inability to manage its growth, governmental regulations, general economic conditions and the risk factors detailed from time to time in Caminus Corporation's periodic reports and registration statements filed with the Securities and Exchange Commission, including without limitation its Annual Report on Form 10-K for the quarter ended December 31, 2000. Caminus Corporation expressly disclaims any obligation to update or alter any of its forward-looking statements, whether as a result of new information, future events or otherwise.
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