BPNT BarPoint.com Reports Third Quarter Results; Implements Corporate
Restructuring Plan; Announces Management Changes and Declares Cash Dividend to
Shareholders
DEERFIELD BEACH, Fla., Nov 14, 2001 (BUSINESS WIRE) -- BarPoint.com
(Nasdaq:BPNT), a leading online and wireless product information service and
applications developer, today announced results for its third quarter ended
September 30, 2001. The Company also announced its intention to implement a
restructuring plan, including a substantial reduction in operating costs, the
preservation of capital, a cash dividend to shareholders, and planned management
changes.
For the quarter ended September 30, 2001, net revenue was $309,811, an increase
of 181% over same quarter last year revenue of $110,173. Approximately 74% of
third quarter revenue came from BarPoint services and related sales of scanning
devices; the remaining 26% of third quarter revenue was from sales of software
applications. During the same quarter last year, all revenue was from sales of
software.
The loss from operations for the third quarter ended September 30, 2001 was
$4,043,892. The loss from operations for the same quarter last year was
$5,463,109. The net loss for the third quarter ended September 30, 2001, was
$3,898,558, or $0.23 per share basic and diluted. For the quarter ended
September 30, 2000, the Company had a net loss of $6,666,170, or $0.40 per share
basic and diluted, including a write-off of $2.6 million, net of tax effect, for
the permanent impairment of marketable securities.
Net revenue for the nine months ended September 30, 2001, was $1,459,210
compared to $472,484 in the comparable 2000 period, an increase of 209%.
Approximately 75% of revenue during the first nine months came from BarPoint
services and related sales of scanning devices. During the comparable period
last year, all revenue was from sales of software.
The loss from operations for the nine months ended September 30, 2001, was
$12,851,243 compared to a loss from operations of $11,731,111 in the comparable
2000 period. The net loss for the nine months ended September 30, 2001, was
$10,290,537 versus net income for the comparable nine-month period in 2000 of
$5,036,301. The Company achieved net income for the 2000 period as a result of
capital gains of approximately $23.1 million on the sales of marketable
securities, partially offset by a $4.1 million write-off for the permanent
impairment of marketable securities.
According to John C. Macatee, BarPoint President and CEO, "We are pleased to
report a continued trend of increased revenue and reduced spending as compared
to last year. During the third quarter, we made substantial progress in
fine-tuning our technology infrastructure as we prepared for last month's launch
of our Mobile Merchant Marketplace with major retailers such as Sharper Image
and Office Depot. We also made substantial inroads toward reducing our overhead
during the quarter as part of our announced restructuring plan. The additional
steps we are announcing today will complete this restructuring process and
ensure that BarPoint will have the necessary resources to survive and prosper as
market conditions improve."
Details of the Restructuring
On August 8, 2001, the Company announced that it was beginning the
implementation of a restructuring plan to reduce its overhead, streamline
operations and enhance shareholder value. While business conditions in the
primary markets served by BarPoint were soft prior to the terrorist attacks of
September 11th, they have deteriorated further in the aftermath. Visibility
regarding the near-term opportunities in key areas such as wireless Internet
adoption, mobile commerce, handheld software applications, consumer scanning,
and Internet advertising and promotion has been impaired. While the Company
believes that the future opportunities are substantial and that it is better
positioned today than at any time in its history to capitalize on these
opportunities, there is significant uncertainty regarding short-term prospects
for revenue growth.
As a result of the current economic uncertainty, the Company is accelerating the
implementation of its restructuring program to enhance shareholder value both
short and longer term. The Company expects to accomplish the following
objectives:
-- Reduce overhead and operating costs substantially until market
conditions improve.
-- Reduce the capital required to fund the core BarPoint
business, allowing the Company to preserve a substantial
amount of capital for future strategic uses, including
dividends, investments, or acquisitions.
-- Protect and continue to develop BarPoint's proprietary
technology and products as the market for the Company's
products and services grows.
-- Pursue high margin revenue opportunities with existing
partners and products to ensure positive cash flow by the
fourth quarter of 2002.
To lower overhead and operating costs, the Company has further reduced its
headcount from 67 at the end of the second quarter to 22 as of today. All remote
field offices have been consolidated into the Deerfield Beach, Florida,
headquarters, and the Company is in negotiations to substantially reduce its
remaining lease obligations.
In addition, as part of the overall restructuring, the following management
changes will take place: Effective November 16, 2001, Michael A. Karmelin will
resign as Chief Financial Officer and Jeffrey S. Benjamin will be promoted to
Chief Financial Officer. Mr. Benjamin will also continue to perform his duties
as Vice President, Controller and Assistant Treasurer, and his former position
will not be replaced. Effective December 31, 2001, John C. Macatee will resign
as President and CEO. Mr. Macatee will remain on the BarPoint Board of Directors
and will continue to serve as a senior advisor to BarPoint management. Effective
January 1, 2002, Jeffrey W. Sass, current Chief Operating Officer and a
co-founder of BarPoint, will be promoted to President and CEO of BarPoint. Mr.
Sass will not be replaced as Executive Vice President and Chief Operating
Officer. Leigh M. Rothschild, the Company's founder, will remain as Chairman of
the Board of Directors.
Mr. Rothschild commented, "After carefully evaluating the current market
environment it was clear that BarPoint needed to substantially streamline its
operations to preserve shareholder value and maximize our opportunities for the
future. As we have made these necessary adjustments to operations, we have sadly
had to part with many employees who have made significant contributions to our
company and technology. While this process has been difficult, I am now firmly
convinced we have the correct management and technology to allow us to go
forward in today's tough economic environment with the clear goal of achieving
profitability as soon as possible."
With the substantial completion and stabilization of BarPoint's technology
infrastructure and the completion of several new Synergy software products, the
continuing costs for hardware, software, research and development will be
reduced substantially. As a result of these reductions and the savings detailed
above, the Company will substantially reduce its cash burn rate, as well as the
amount of capital required to fund BarPoint going forward. This will allow the
Company to preserve a substantial amount of its capital for future strategic
uses, including dividends, investments, or acquisitions.
In July, BarPoint retained the services of Ryan, Beck & Co. LLC, in conjunction
with its decision to restructure and to seek a buyer for the Synergy Solutions
packaged software products. Given the current economic environment, the Company
was unable to secure an acceptable offer for the Synergy assets, and has agreed
to end its relationship with Ryan, Beck. As a result, the Company will continue
to benefit from the incremental revenue from Synergy while exploring new market
opportunities for the product as well as a future sale of the Synergy assets.
BarPoint will continue to focus on growing revenue from its core operations: the
BarPoint product information service, the recently introduced Mobile Merchant
Marketplace (a branded wireless presence for retailers), custom software
applications for handheld devices, existing and newly developed Synergy software
products, and its proprietary data aggregation and integration services. All of
BarPoint's core activities are high margin opportunities and, as a result of the
substantial reduction in cash requirements for continuing operations going
forward, management believes it will be able to achieve cash break-even no later
than the fourth quarter of 2002.
According to Jeffrey Sass, Chief Operating Officer, "While we have reduced our
staff considerably, we have kept all of our operating functions intact and
continue to have a very strong and talented engineering and development team
with the ability to continue to support and enhance our technology platform.
With essentially all of the costly building stages behind us, we now have the
opportunity to go forward as a more streamlined and efficient organization,
focused on successfully monetizing our technology as the marketplace grows and
matures. We are committed to reaching our stated goal of cash break-even in the
next fiscal year."
Dividend Declaration
The Company currently estimates that it will have approximately $9 million in
excess cash, after reserving adequate resources to properly fund the BarPoint
continuing operations and to complete the restructuring plan, including costs
related to early termination of leases, and obligations under employment
contracts with certain senior executives. The Company does not anticipate
requiring these funds for core operations, and therefore intends to retain them
for future investments, acquisitions or for distribution to the shareholders as
discussed below.
As a result of the Company's reduced operating cost structure and limited
capital requirements going forward, the Company will proceed with a shareholder
dividend of $0.12 per Common share (approximately $2.3 million) to be paid on
January 14, 2002, to shareholders of record as of December 24, 2001. The Company
believes that this dividend is the best use of its excess capital, as it will
immediately benefit shareholders without compromising the Company's ability to
develop and grow its core services business.
The Company will host a conference call today at 11am ET to discuss the third
quarter results. To access the live Webcast or archive, please visit the
Company's Web site at barpoint.com.
About BarPoint.com
BarPoint.com is a leading online and wireless product information and commerce
platform as well as an applications developer and a pioneer in the use of unique
product identifiers, such as the UPC barcode number, and patent-pending
"reverse-search" technology to simplify the process of finding meaningful
product information. As a technology service provider, retail sales facilitator,
and applications developer, BarPoint is dedicated to helping businesses and
consumers make better buying decisions. Through its proprietary data aggregation
and integration processes and a device-independent platform for secure mobile
commerce, BarPoint provides cost-effective turnkey solutions for retail partners
who want to enable their customers to shop anytime, anywhere, from any mobile
device. The Company has previously announced strategic alliances with companies
such as Verizon Wireless (VZ), Cingular Wireless, AT&T Wireless (AWE), Sprint
PCS (PCS), Office Depot (ODP), The Sharper Image, Air2Web, GoAmerica (GOAM), i3
Mobile (IIIM), Palm (PALM) and Symbol Technologies (SBL) and in 1999 acquired
Synergy Solutions, now acting as BarPoint's application development division.
BarPoint.com is located at: 2200 SW 10th Street, Deerfield Beach, FL 33442. For
information, contact BarPoint.com at: 954/949-7000 or via the web:
www.barpoint.com. BarPoint.com's common stock is traded on Nasdaq under the
symbol BPNT.
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, regarding the Company's
business strategy and future plans of operations. Forward-looking statements
involve known and unknown risks and uncertainties, both general and specific to
the matters discussed in this press release. These and other important factors,
including the Company's ability to attract new customers, the Company's
relationships with strategic partners, the Company's ability to raise additional
capital and other factors mentioned in various Securities and Exchange
Commission filings made periodically by the Company, may cause the Company's
actual results and performance to differ materially from the future results and
performance expressed in or implied by such forward-looking statements. The
forward-looking statements contained in this press release speak only as of the
date hereof and the Company expressly disclaims any obligation to provide public
updates, revisions or amendments to any forward-looking statements made herein
to reflect changes in the Company's expectations or future events.
BarPoint, BarPoint.com and My BarPoint are trademarks or registered trademarks
of BarPoint.com, Inc. BarPoint technology is patent-pending.
(Tables Follow)
BarPoint.com, Inc. and Subsidiaries
(A Development Stage Company)
Condensed Consolidated Balance Sheets
(Unaudited)
ASSETS
September 30, December 31,
2001 2000
------------ ------------
CURRENT ASSETS
Cash and cash equivalents $10,579,025 $22,800,142
Marketable securities, at market 323,449 923,784
Restricted investments 1,500,000 1,500,000
Accounts receivable, net 324,199 150,104
Income taxes receivable 3,188,523 813,069
Inventories, net 1,423,870 2,397,195
Prepaid expenses 706,640 1,295,703
Other current assets 210,308 323,602
------------ -----------
Total Current Assets 18,256,014 30,203,599
------------ -----------
Property and equipment - net of
accumulated depreciation of
$2,236,065 and $636,553 at
September 30, 2001 and
December 31, 2000, respectively 6,251,712 4,968,426
------------ -----------
OTHER ASSETS
Goodwill-net of accumulated
amortization of $164,455 and
$91,161 at September 30, 2001
and December 31, 2000,
respectively 755,274 828,568
Deferred tax assets - 648,202
Other, net 53,290 73,583
------------ -----------
808,564 1,550,353
------------ -----------
TOTAL ASSETS $25,316,290 $36,722,378
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued
expenses $537,514 $1,636,344
Current portion of obligations
under capital leases 74,023 -
------------ -----------
Total Current Liabilities 611,537 1,636,344
OTHER LIABILITIES
Obligations under capital leases 224,756 -
------------ -----------
TOTAL LIABILITIES 836,293 1,636,344
------------ -----------
COMMITMENTS AND CONTINGENCIES (NOTE 4)
STOCKHOLDERS' EQUITY
Preferred stock: $.001 par value;
authorized 5,000,000
shares; 3 issued and outstanding - -
Common stock: $.001 par value;
authorized 100,000,000
shares; issued and outstanding
of 17,512,199 and 17,150,078
shares at September 30, 2001
and December 31, 2000,
respectively 17,512 17,150
Additional paid in capital 34,050,661 33,815,036
Deferred compensation (45,702) 0
(Deficit) retained earnings
accumulated during development
stage (9,451,787) 838,750
Accumulated other comprehensive
income (90,687) 415,098
------------ -----------
Total Stockholders' Equity 24,479,997 35,086,034
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $25,316,290 $36,722,378
============ ===========
BarPoint.com, Inc. and Subsidiaries
(A Development Stage Company)
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2001 2000 2001 2000
Revenue
BarPoint services and
related sales $230,072 $ - $1,090,855 $ -
Applications 79,739 110,173 368,355 472,484
-------- -------- -------- --------
Total Revenue 309,811 110,173 1,459,210 472,484
Cost of sales 138,226 14,097 903,504 50,946
-------- -------- -------- --------
Gross profit 171,585 96,076 555,706 421,538
-------- -------- -------- --------
Operating Expenses:
Selling, general and
administrative 3,480,403 4,092,479 11,190,189 9,443,635
Research and
development 28,086 180,420 516,641 915,359
Depreciation and
amortization 706,988 1,286,286 1,700,119 1,793,655
-------- -------- -------- --------
Total Operating
Expenses 4,215,477 5,559,185 13,406,949 12,152,649
-------- -------- -------- --------
Loss from operations (4,043,892)(5,463,109)(12,851,243)(11,731,111)
-------- -------- -------- --------
Other Income:
Interest income 139,460 640,811 639,427 1,507,731
Net gains (losses) on
sales of marketable
securities and other
assets 5,874 (4,010,612) 16,397 19,041,604
-------- -------- -------- --------
Total Other Income
(expense) 145,334 (3,369,801) 655,824 20,549,335
-------- -------- -------- --------
(Loss) income before
income tax benefit (3,898,558)(8,832,910)(12,195,419) 8,818,224
Income tax benefit
(expense) - 2,166,740 1,904,882 (3,781,923)
-------- -------- -------- --------
Net (loss) income ($3,898,558)($6,666,170)($10,290,537)$5,036,301
=========== ========== ============ ==========
(Loss) income per
common share--
Basic ($0.23) ($0.40) ($0.60) $0.31
=========== ========== ============ ==========
(Loss) income per
common share--
Diluted ($0.23) ($0.40) ($0.60) $0.28
=========== ========== ============ ==========
Weighted average
common shares
outstanding
- Basic 17,321,849 16,730,228 17,278,033 16,366,321
=========== ========== ============ ==========
Weighted average
common shares
outstanding
- Diluted 17,321,849 16,730,228 17,278,033 17,767,036
=========== ========== ============ ==========
CONTACT: BarPoint.com Public Relations:
BarPoint.com, Deerfield Beach
Patricia Sotolongo, 954/949-7171
pr@barpoint.com
or
BarPoint.com Investor Relations:
Morgen-Walke Associates, New York
Jack Cohen / Jonathan Schaffer
212/850-5600
jcohen@morgenwalke.com
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KEYWORD: FLORIDA NEW YORK
INDUSTRY KEYWORD: SOFTWARE
TELECOMMUNICATIONS
INTERNET
RETAIL
COMPUTERS/ELECTRONICS
EARNINGS
CONFERENCE
CALLS
SOURCE:
BarPoint.com
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