Verticalnet Eliminates 90% of Long-Term Debt, Increases Shareholders' Equity by $5.1 Million
Wednesday July 30, 1:25 pm ET
Company Announces Preliminary Second Quarter Results
MALVERN, Pa.--(BUSINESS WIRE)--July 30, 2003--Verticalnet, Inc. (Nasdaq:VERT - News), a leading provider of Strategic Sourcing and Supply Management solutions today announced that it had repurchased $6.4 million, or approximately 90%, of its outstanding long-term debt obligations. The Company also announced preliminary results for the quarter ended June 30, 2003 and forward revenue guidance for the year ending December 31, 2003. Verticalnet will announce complete financial results as of and for the period ended June 30, 2003 on August 13, after the market closes.
ADVERTISEMENT
Verticalnet repurchased $6.4 million of its 5 1/4% convertible subordinated debentures due September 2004, for total consideration of approximately $1.3 million in cash, 2,694,100 shares of Verticalnet common stock, and change of control warrants to purchase 305,120 shares of common stock that expire in September 2004. The debt repurchase reduces the outstanding balance of the Company's convertible subordinated debentures to $0.7 million.
The transaction announced today has a significant effect on Verticalnet's shareholders' equity. Verticalnet's shareholders' equity as of June 30, 2003 was $(0.4) million. On a pro forma basis to give effect to the debt repurchase announced today, shareholders' equity would have increased by $5.1 million to $4.7 million.
"The actions announced today demonstrate Verticalnet's continued commitment to improving our financial position," said Nathanael V. Lentz, President and CEO of Verticalnet. "The elimination of 90% of our long-term debt and the associated interest payments represents another significant step in financially repositioning Verticalnet for growth, enabling us to further focus our efforts on delivering high value solutions to our customers, intensifying our go-to-market efforts, and seizing strategic growth opportunities," Lentz continued.
Verticalnet also announced preliminary results for the quarter ended June 30, 2003. Based on preliminary information, revenues for the period were $2.2 million. Net loss was $1.2 million, or $(0.09) per share. For the full year ending December 31, 2003, Verticalnet expects revenue to be in the range of $10.0 to $11.0 million. The Company's forward-looking guidance may be impacted by various economic and other factors.
"Second quarter results were in line with our expectations, and our sales pipeline is growing as we see increased marketplace interest in our Spend Analysis and Supply Management solutions," stated Gene S. Godick, Verticalnet Executive Vice President and CFO. "During 2003, we have successfully restructured our financial position through the elimination of over $22.0 million in obligations while significantly reducing annualized operating expenses, providing us with an improved financial position from which to grow our business. We intend to continue to improve our balance sheet as opportunities become available to us," Godick continued. |
