Hi everyone. Looks like NETO reported a pretty decent 4Q after close.
NetObjects, Inc. Announces Record Fourth Quarter and Fiscal Year-End 1999 Results
Fourth Quarter Core Business Revenues Increase 108 Percent
November 9, 1999 04:51 PM
REDWOOD CITY, Calif., Nov. 9 /PRNewswire/ -- NetObjects, Inc. NETO , a leading provider of e-business software and services for small business and enterprises, today announced financial results for its fourth quarter and fiscal year ended September 30, 1999.
The company reported record revenues for the fourth quarter of $5.8 million compared to revenues of $4.5 million for the same period last year, representing an increase of 30% year over year. Fourth quarter core business revenues increased 108% from $2.6 million in 1998 to $5.4 million in 1999. Net loss for the fourth quarter of fiscal year 1999 was $4.0 million or $(0.16) per share, excluding non-cash charges (which are accretion of discount on debt and interest charge on beneficial conversion feature of convertible debt) and stock based compensation charges, compared to a net loss of $5.3 million or $(2.82) per share for the same period last year. Including non-cash charges (defined above) and stock based compensation charges, net loss for the fourth quarter of fiscal year 1999 was $4.2 million or $(0.17) compared to a net loss of $5.5 million or $(2.91) per share for the same period last year.
The company reported record revenues for fiscal year 1999 of $22.2 million compared to revenues of $15.3 million for fiscal year 1998, representing an increase of 45% year over year. Net loss for the fiscal year was $17.3 million or $(1.54) per share, excluding non-cash charges (defined above) and stock based compensation charges compared to a net loss of $21.8 million or $(12.03) per share for fiscal year 1998. Including non-cash charges (defined above) and stock based compensation charges, net loss for fiscal year 1999 was $26.9 million or $(2.40), compared to a net loss of $22.2 million or $(12.26) per share for fiscal year 1998. For the full year, operating expense growth was held to 6%.
"We are pleased with our continued growth this quarter," said Samir Arora, NetObjects president and chief executive officer. "We grew our core business in the fourth quarter, which includes Software License Fees and Professional Service Revenue, a record 108 percent. We continued to grow our customer base and partnerships in the small business and enterprise markets and announced the formation of our new Small Business Online Division, which was accelerated by our acquisition of Sitematic. We've expanded our reach and broadened our product offering, which is reflected in our growth. Overall, we are proud of our achievements this quarter and pleased with the confidence our customers continue to place in us and our family of products and services," concluded Arora.
Corporate News
The Company completed a significant strategic event in early October with its acquisition of Sitematic. The Company believes this acquisition positions NetObjects as the first company to offer a unique combination of online and desktop web site applications to small businesses. This move revolutionizes the ease with which small businesses develop and grow their online business. In addition to the acquisition of Sitematic, the Company announced the formation of its new Small Business Online Division. The new division will focus on small businesses that do not yet have an Internet presence and do not have the internal resources or technical knowledge to get their business online.
Partnership News
-- Concentric Network Corporation CNCX will distribute NetObjects Fusion to new and existing ConcentricHost customers. Concentric will also be one of the first partners to offer NetObjects small business online, hosted services.
-- Deutsche Telekom, Strato and One & One, leading Internet Service Providers and hosting providers, are bundling NetObjects Fusion with their hosting services in Germany.
-- Vobis, a leading PC manufacturer and retailer in Europe, will bundle NetObjects Fusion with all its PCs sold in Germany.
-- Novell, Inc. NOVL began shipping NetObjects Fusion as part of the Novell(R) Small Business Suite, an easy-to-use, scalable, reliable and cost-effective network software solution for the growing small business market. NetObjects Fusion, as part of the Novell(R) Small Business Suite will be available worldwide.
Product News
-- NetObjects launched its eagerly awaited NetObjects Authoring Server Suite 2000 for collaborative intranet site building. Enhancements to the latest version provide powerful workflow management features that will dramatically streamline intranet site creation and management. Other new features include: instant messaging, automated task scheduling, versioning, change control, site histories, cross-site linking, cross-site shared assets, mirror publishing; providing increased control, security, ease-of-use and performance for its users.
-- NetObjects reached a significant milestone with the sale of over one million copies of NetObjects Fusion for the quarter.
About NetObjects
NetObjects, Inc., an IBM affiliate IBM , is a leading provider of e-Business solutions and services that enable small businesses and enterprises to build, deploy and maintain web sites on the Internet and corporate intranets.
Through its Small Business and Online Division, NetObjects is revolutionizing the ease with which small businesses develop and grow their online business. The NetObjects Sitematic online e-business building solution and NetObjects Fusion(R) software deliver complete online and desktop web site applications. The NetObjects Enterprise Division is enabling enterprise intranet teams to work together more efficiently to develop, manage and update business Web sites with its NetObjects Authoring Server Suite. In addition, NetObjects Professional Services provides intranet and extranet solutions to Fortune 2000 customers and provides training, which encompasses complete web education on NetObjects products, web marketing/traffic building, site implementation, graphics & companion products.
NetObjects has been ranked by Softletter 100, NewMedia 500 and as one of Fortune's 25 Very Cool Companies. Its products have won over 50 awards including Windows Magazine's Win 100 award, InfoWorld's Analyst Choice award, CNET's Internet Excellence award, PC Magazine's Editors Choice award and InternetWorld's Industry Award. More information about NetObjects and its products can be found at www.netobjects.com.
This press release contains forward-looking statements within the meaning of the federal securities laws. Such statements can be identified by the words "believes," "anticipates," "plans," "expects," and similar expressions. These forward-looking statements include, without limitation, statements about the market opportunities for web site building software and services, the Company's strategy, and competition. These forward looking statements do not constitute assurances regarding the Company's future operating results, including the impact of its acquisition of Sitematic Corporation upon its operations, cash flows, and financial condition. NetObject's actual results could differ materially from those expressed or implied by these forward-looking statements due to various factors, including the risk factors described in its most recently filed Form 10-Q and other periodic reports and documents that the Company have filed with the SEC pursuant to the Securities Exchange Act of 1934. The Company undertakes no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or relevant events occur in the future.
NOTE: NetObjects is a registered trademark, and NetObjects Fusion and NetObjects Authoring Server are trademarks of NetObjects, Inc. All other brand and product names may be trademarks or registered trademarks of their respective companies.
NETOBJECTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
3 Months Ended 12 Months Ended
September 30, September 30,
1999 1998 1999 1998
Revenues:
Software license fees $4,569 $2,608 $13,566 $9,703
Professional service revenue 863 -- 2,178 --
Software license fees
from IBM 374 416 3,689 2,700
Service revenues from IBM -- 1,436 2,782 2,867
Total revenues 5,806 4,460 22,215 15,270
Cost of revenues:
Software license fees 383 709 1,817 2,531
Professional service revenue 751 -- 2,295 --
Service revenues from IBM -- 1,284 2,113 2,562
Total cost of revenues 1,134 1,993 6,225 5,093
Gross profit 4,672 2,467 15,990 10,177
Operating expenses:
Sales and marketing 4,806 4,257 18,800 17,114
Research and development 3,026 2,201 9,358 10,231
General and administrative 1,315 951 4,314 3,575
Stock based compensation 155 100 559 227
Total operating expenses 9,302 7,509 33,031 31,147
Operating loss (4,630) (5,042) (17,041) (20,970)
Other income (expense)
Interest income (expense) 473 (359) (744) (1,000)
Accretion of discount on debt -- (67) (1,654) (201)
Interest charge on beneficial
conversion feature of
convertible debt -- -- (7,457) --
Total other income (expense) 473 (426) (9,855) (1,201)
Loss before income taxes (4,157) (5,468) (26,896) (22,171)
Income taxes 42 15 44 53
Net loss $(4,199) $(5,483) $(26,940) $(22,224)
Basic and diluted net loss
per share $(0.17) $(2.91) $(2.40) $(12.26)
Shares used to compute
basic and diluted net
loss per share 24,619 1,882 11,215 1,812
Net loss excluding
charges (A) (4,044) (5,316) (17,270) (21,796)
Net loss per share
excluding charges (A) $(0.16) $(2.82) $(1.54) $(12.03)
(A) Excludes stock-based compensation of $155 for the three-month period
ended September 30, 1999; excludes stock-based compensation of $559,
accretion of discount on debt of $1,654 and interest charge on
beneficial conversion feature of $7,457 for year ending
September 30, 1999. These charges were part of the debt which was
retired at the time of the IPO, which occurred in the period ending
June 30, 1999.
NETOBJECTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, September 30,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents $23,623 $459
Short-term investments 9,331 --
Accounts receivable, net 6,065 2,292
Prepaid expenses and other current assets 1,486 754
Total current assets 40,505 3,505
Property and equipment, net 2,204 1,640
Total assets $42,709 $5,145
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $2,489 $4,723
Accrued compensation 1,068 1,690
Other accrued liabilities 1,657 1,066
Deferred revenue from IBM -- 5,121
Other deferred revenues 988 169
Current portion of capital lease obligations 281 299
Short-term borrowings from IBM and
IBM Credit Corp. -- 20,666
Total current liabilities 6,483 33,734
Capital lease obligations, less current portion 54 336
Total liabilities 6,537 34,070
Stockholders' equity (deficit) 36,172 (28,925)
Total liabilities and stockholders' equity $42,709 $5,145 |
