(BSNS WIRE) Critical Path Reports 91% Increase In Revenue, 196% Increase
Critical Path Reports 91% Increase In Revenue, 196% Increase in Active
Mailboxes And 169 New Customer Contracts
Business Editors
SAN FRANCISCO--(BUSINESS WIRE)--July 22, 1999--
4.2 Million Revenueable MailBoxes Reflects Growing
Demand for Outsourced Email Solution
Critical Path, Inc. (Nasdaq: CPTH), a leading provider of
business-to-business Internet messaging solutions for corporations,
Internet service providers (ISPs), Web hosting companies, and Web
portals, today announced financial results for the second quarter and
six months ended June 30, 1999. Revenue for the quarter was
$2,006,000, a significant increase over revenue of $66,000 in the same
quarter a year ago, and a 91% percent increase over revenue of
$1,049,000 in the first quarter of 1999.
"The outstanding growth Critical Path experienced this quarter
reflects the successful execution of an aggressive growth strategy,"
continued Hickey. "Critical Path continues to rapidly build our
customer base and the number of mailboxes served both domestically and
internationally. During the quarter, we signed long-term contracts
with more than 169 companies and organizations, including British
Telecom, CompuServe, Comcast, and Sina.com, China's largest portal.
Just after the close of the quarter we signed deals with Exodus and
Cable & Wireless."
"The fact that companies of this magnitude are choosing to
outsource their email with Critical Path is a real testament to the
benefits of our patent-pending technology and our leadership position
in the market," said Hickey.
At the close of the quarter, Critical Path had 4.2 million active
mailboxes, an increase of 196% from the previous quarter. Revenue per
mailbox was $0.26/mailbox per month compared with $0.32/mailbox per
month in the previous quarter. Cost per mailbox was $0.41 vs. $0.52 in
the previous quarter. "We are unique in that all of our mailboxes
provide revenue, which is both recurring and predictable," said
Hickey.
"In addition, we announced the acquisitions of Fabrik Connect and
dotOne Corporation and an agreement to acquire Amplitude Software --
these acquisitions position us well to capitalize on future
opportunities," said Hickey. "Not only will we gain these companies'
impressive customer lists and reseller relationships, more importantly
we will acquire advanced messaging technology, including resource
scheduling and calendaring. The ability to offer these new value-added
services will provide Critical Path with a key competitive advantage,
and will allow us to implement our innovative "midsource" strategy.
Midsourcing greatly expands our addressable market by allowing us to
serve customers that handle their own basic email, but now recognize
the need for more advanced applications."
According to Hickey, the Company will continue to evaluate and
make acquisitions that both enhance Critical Path's technology
leadership and add customers more economically than through organic
growth. "Current market dynamics call for a 'buy versus build'
strategy in order to fully leverage and further advance our first
mover and category leadership position in this sector," he said.
"Our performance for the quarter demonstrates the enormous,
emerging opportunity in the global Internet messaging services
market," said Doug Hickey, Critical Path's president and CEO. "We
truly are in the midst of a messaging revolution. Critical Path is
uniquely positioned to take advantage of this rapidly evolving
communications paradigm and lead the messaging revolution."
Financial Results
Revenue for the quarter was $2,006,000, a significant increase
over revenue of $66,000 in the same quarter a year ago, and a 91%
increase over revenue of $1,049,000 in the first quarter of 1999.
The net loss for the quarter, excluding stock and amortization
charges, was $6,850,000, or $0.21 per share, compared with a net loss,
excluding stock and amortization charges, of $1,504,000, or $0.43 per
share, in the comparable quarter a year ago. The loss in the previous
quarter, ended March 31, 1999, was $5.4 million, or $0.77 per share,
excluding stock and amortization charges. Including stock and
amortization charges, net loss for the quarter ended June 30, 1999 was
$16,321,000, or $0.49 per share.
Revenue for the first six months of 1999, including a non-cash,
non-recurring charge of $106,000 in the first quarter, was $3,055,000,
a significant increase over revenue of $136,000 in the first half of
1998. The net loss for the first six months of 1999, excluding stock
and amortization charges, was $12,219,000, or $0.61 per share,
compared with a net loss, excluding stock and amortization charges, of
$2,257,000, or $0.73 per share, in the same period of the prior year.
The company also reported that as of June 30, 1999, working
capital was $246 million. "Clearly, we have the financial resources to
carry out our growth plans and take advantage of the tremendous
opportunities in the global electronic messaging market," said Hickey.
About Critical Path, Inc.
Critical Path, Inc. (Nasdaq: CPTH) is a leading provider of
business-to-business Internet messaging solutions for corporations,
Internet service providers (ISPs), Web hosting companies, and Web
portals. Critical Path has built an industry-leading global
infrastructure with data centers connected to key Internet exchange
points, and currently reaches millions of end-users through its
customer relationships. Critical Path provides reliable, secure, and
scalable email, and a flexible suite of enhanced messaging services to
partners such as E*TRADE, CompuServe, Network Solutions, U S West,
Sprint, and ICQ. Critical Path is headquartered in San Francisco,
California, with offices in locations nationwide and in Germany and
the UK. More information on Critical Path can be found at www.cp.net.
Note to Editors: Critical Path is a service mark and the Critical
Path logo is a trademark of Critical Path, Inc. All other trademarks
are the property of their respective holders.
This press release contains forward-looking statements regarding
the company and its expectations which involve certain risks and
uncertainties. Factors that could cause the company's results to
differ materially from its expectations include: inability to convert
available mailboxes to real revenue; failure of acquisitions to close;
failure to expand our sales and marketing activities; unplanned system
interruptions and capacity constraints that could reduce our ability
to provide email services and harm our business and our reputation;
potential difficulties associated with strategic relationships;
ability to respond to rapid technological change of the Internet
messaging industry; competition; and problems related to managing the
company's expected growth. These and other risks and uncertainties are
described in more detail in the company's Critical Path's prospectus
dated June 1, 1999 and with filings with the Securities and Exchange
Commission (www.sec.gov).
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*T
CRITICAL PATH, INC.
Condensed Consolidated Balance Sheet
(unaudited)
(in thousands)
June 30, Dec. 31,
1999 1998
ASSETS
Current assets
Cash and cash equivalents $244,340 $ 14,791
Restricted cash 325 325
Accounts receivable, net 1,815 121
Prepaid expenses and other current assets 6,986 138
-------- --------
Total current assets 253,466 15,375
Notes receivable from officers 700 500
Property and equipment, net 15,629 4,687
Intangibles, net 19,050 --
Investments 17,489 --
Other assets 238 101
-------- --------
$306,572 $ 20,663
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 2,971 $ 423
Accrued compensation and benefits 888 426
Deferred revenue -- 500
Capital lease obligations, current 3,274 1,502
-------- --------
Total current liabilities 7,133 2,851
Capital lease obligations, long-term 4,717 2,454
-------- --------
Total liabilities 11,850 5,305
Shareholders' equity 294,722 15,358
-------- --------
$306,572 $ 20,663
======== ========
CRITICAL PATH, INC.
Condensed Consolidated Statement of Operations
(unaudited)
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
Net revenues (1) $ 2,006 $ 66 $ 3,055 $ 136
Cost of net
revenues (2) (3,977) (230) (6,337) (312)
-------- -------- -------- --------
Total net revenues (1,971) (164) (3,282) (176)
Operating expenses:
Sales and marketing 3,219 143 5,203 278
Research and development 1,430 404 2,809 677
General and administrative 2,691 886 4,241 1,193
Amortization of intangibles 550 -- 550 --
Stock-based expenses 8,162 201 19,819 644
-------- -------- -------- --------
Total operating
expenses 16,052 1,634 32,622 2,792
-------- -------- -------- --------
Loss from operations (18,023) (1,798) (35,904) (2,968)
Other income (expense):
Interest income 1,882 72 2,233 72
Interest expense (3) (180) (25) (244) (175)
-------- -------- -------- --------
Net loss $(16,321) $ (1,751) $(33,915) $ (3,071)
======== ======== ======== ========
Net loss per share
(basic and diluted) $ (0.49) $ (0.50) $ (1.70) $ (0.99)
======== ======== ======== ========
Shares used in per
share computations 32,977 3,530 19,994 3,109
======== ======== ======== ========
Stock-based charges
included:
(1) Net revenues -- 20 106 20
(2) Cost of net revenues 743 16 1,189 21
(3) Interest expense (16) (10) (32) (129)
CRITICAL PATH, INC.
Condensed Consolidated Financial Summary
(unaudited)
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
Net revenues $ 2,006 $ 66 $ 3,055 $ 136
============ ======== ======== ========
Net loss $ (16,321) $ (1,751) $(33,915) $ (3,071)
============ ======== ======== ========
Net loss per share $ (0.49) $ (0.50) $ (1.70) $ (0.99)
============ ======== ======== ========
Shares used in per
share computations 32,977 3,530 19,994 3,109
============ ======== ======== ========
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--30--as/sf*
CONTACT: Critical Path, Inc.
Stefanie Elkins, 415/344-5503
Email: selkins@cp.net
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS
INTERACTIVE/MULTIMEDIA/INTERNET COMED EARNINGS
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