I always have had hopes for the company.
Posted better than expected #'s
Thursday May 3, 4:10 pm Eastern Time
Press Release
Tumbleweed Communications Announces Q1 2001 Financial Results
REDWOOD CITY, Calif.--(BUSINESS WIRE)--May 3, 2001--Tumbleweed® Communications Corp. (Nasdaq:TMWD - news), a leading provider of mission-critical messaging software, today reported results for the first quarter ended March 31, 2001. Total revenue from products and services in the quarter was $4.0 million. Net operating loss, excluding restructuring and impairment charges, and certain non-cash expenses, was $13.3 million, or $.45 per basic and diluted share.
Net cash used for operations was $12.3 million in the first quarter of 2001. This includes a $2.4 million paydown of accrued expenses corresponding to fourth quarter 2000 and excludes non-recurring cash charges and capital expenditures in Q1. Tumbleweed's cash balance at March 31, 2001 was $58.0 million. The company expects its cash flow from operations to continue to improve in subsequent quarters based upon its guidance issued in January. Under this guidance, Tumbleweed's expected cash balance for 2001 year-end is estimated to be in excess of $35 million.
The company changed to a new model in January of this year that results in ratable revenue recognition for certain licenses and contracts. Under the new model, cash collections will precede revenue recognition resulting in growth of deferred revenue on the balance sheet over time. Therefore, Tumbleweed's results for the first quarter of this year and subsequent quarters are not comparable to previous quarters.
``We're pleased with our performance this quarter in light of the new economic environment,'' said Jeff Smith, chairman and CEO of Tumbleweed Communications Corp. ``The proactive actions we initiated in January have proven to be the right ones to position us to grow our business in 2001 and reach cash flow breakeven by Q4.''
``Our software solutions increase productivity for our customers, reduce their operating costs and provide a complete, scalable online communications platform that connects them securely to their customers and partners,'' said Doug Sabella, president and COO of Tumbleweed Communications Corp. ``In today's market environment, enterprises are looking for the compelling, cost-savings value proposition that we offer.''
``This year, we'll focus on growing our business and on meeting new and existing customer demand for Tumbleweed's best-of-breed software solutions,'' added Sabella. ``Given our limited visibility right now for the second half of the year, we will also manage our cost structure aggressively to achieve our financial goals.''
The company reiterated its prior guidance for future financial objectives that it issued on January 25, 2001. This guidance provides Tumbleweed's objectives with respect to revenue, gross margins and operating expenses for the remainder of 2001. The table is available on the company's website, www.tumbleweed.com and is also attached at the end of this press release.
Product & Customer Highlights
In Q1, Tumbleweed signed over 200 contracts with new and existing customers. Tumbleweed's installed base of over 900 customers worldwide includes enterprises from a dozen different sectors including financial services, healthcare, pharmaceutical, manufacturing, government and technology.
The company expanded its position in the financial services sector in the first quarter with Tumbleweed Secure Public Network(TM) (SPN(TM)). First Union, the sixth largest bank in the U.S., recently deployed Tumbleweed SPN(TM) to establish a secure email network and ensure online security for information exchanged with its banking partners. Tumbleweed software is deployed by over 300 banking, brokerage, credit card, insurance and mutual fund customers.
``We offer our customers a full suite of products that form the basis for a comprehensive messaging platform,'' added Smith. ``This year, we'll roll-out more value-added applications and products from our research and development pipeline that complement both our core MMS and IME platforms and give our customers the ability to continue to increase productivity within their organizations.''
In Q1, The Regence Group, an affiliation of BlueCross BlueShield health plans serving 3 million customers, deployed both Tumbleweed SPN and Tumbleweed Secure Redirect(TM) to allow it to communicate securely over the Internet with its providers, members and employer groups. Tumbleweed Secure Redirect is a solution that integrates Tumbleweed's two core platforms, MMS(TM) and IME(TM). Tumbleweed Secure Redirect is being used by healthcare providers to meet growing requirements under new federal government privacy regulations that protect healthcare patient data and it can be rapidly deployed by an organization.
Executive Management Change
The company announced today that Joseph Consul, Tumbleweed's current chief financial officer, will be stepping down on May 4, 2001. Jim Heisch, who has been a senior financial advisor to the company since early 2000, will expand his role and become Tumbleweed's acting CFO. Heisch is the former president and CEO of WorldTalk Corporation, which was acquired by Tumbleweed in January 2000. He brings 30 years of operating experience to Tumbleweed and has held various senior executive positions at VidaMed, Inc., SuperMac Technology and Businessland.
``Joe was a significant contributor to Tumbleweed in the early stages of growing our business and we wish him success in his future endeavors,'' said Smith. ``Jim has in-depth knowledge of our company and our markets. His significant financial and public company experience, combined with the operating experience and leadership of our new COO, Doug Sabella, positions Tumbleweed to make the successful transition to profitability.''
Q1 01 Financial Results
In the first quarter, the company recorded an impairment charge for goodwill and other intangibles of $51.0 million, reflecting revised estimates of expected future benefits from these assets and the significant change in the market capitalization of Tumbleweed. The company also recorded a restructuring charge of $8.9 million in the first quarter. The charge is related primarily to reductions in headcount and facilities, which were previously announced in January of 2001. The cash portion of the charge in the first quarter was $3.1 million.
Including the restructuring charge, impairment of goodwill and stock compensation expense, the company reported a net loss for the first quarter ended March 31, 2001 of $82.3 million, or $2.76 per basic and diluted share.
Conference Call Information
The Company will host a conference call with the investment community at 2 PM PT/5 PM ET to discuss its financial results. This call is being made available to all interested parties via a LIVE webcast on Tumbleweed's website at tumbleweed.com, under company heading, investor relations. A replay of the conference call will be available for 30 days at the Company's website or by telephone at 719/457-0820, confirmation code 552636.
Guidance Table Issued on January 25, 2001
ESTIMATES Q1 2001E Q2 2001E Q3 2001E Q4 2001E
Revenue
Range $3.5-$4.0 $7.0-$8.0 $9.0-$10.0 $12.5-$14.0
Gross Margin
Percentage Range 23-25% 62-64% 72-75% 72-75%
Operating
Expense Range $16.8-$17.0 $18.0-$18.2 $17.0-$18.0 $17.0-$18.0
About Tumbleweed Communications Corp.
Tumbleweed Communications (Nasdaq:TMWD - news) is a leading provider of mission critical messaging software that enables organizations to manage and secure online business communications and processes. Tumbleweed offers customers solutions to create secure communication networks, to centrally control and monitor the corporate communications stream and to create a foundation for automated preparation and secure Internet delivery of sensitive business information. Companies that rely on Tumbleweed Communications solutions include American Express, JP Morgan Chase & Co., Chevron, Datek Online, the European Union's Joint Research Council, FDA, John Deere, Merrill Lynch, Nike, Northern Trust, NTT, Salomon Smith Barney, Travelers, United Parcel Service, and seven of the world's largest postal services. Tumbleweed Communications was founded in 1993 and is headquartered in Redwood City, CA.
impressive companies that use their services.
American Express
FDA
GSA
Joint Research Centre
Dept of Energy
Columbia Management Company
Chase Manhattan Bank
Datek
Diners Club
First Union
ING Variable Annuities
Merrill Lynch
Prudential Securities
Salomon Smith Barney
Skandinaviska Enskilda Banken
UBS Warburg
Wachovia
The Regence Group
Travelers
Christian & Barton
Downey Brand
Fulbright & Jaworski
Heller Ehrman
Irell & Manella
Robinson & Cole
Sills Cummis Radin
Saul Ewing
Skadden, Arps
Winthrop Stimson
Catholic Healthcare West
FDA
Health First in Florida
Tufts Health Plan
Jacobs Engineering
John Deere
NIKE
Freightliner LLC
La Poste
NTT
Pitney Bowes
Prodamus Ltd.
UPS
U.S. Postal Service
Canada Post
tumbleweed.com
I think it is in a turnaround and should be on someones watch list.
I welcome all criticism
Don
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