Cotelligent Reports First Quarter Results

New Sales Force Builds Revenue Pipeline



Favorable Effects From December Restructuring Program



Improvement in AR Collections Increases Cash Balance Over Prior Quarter



Apr 24, 2001, 01:00 ET from Cotelligent, Inc.

    SAN FRANCISCO, April 24 /PRNewswire Interactive News Release/ --
 Cotelligent, Inc. (NYSE:   CGZ), a leading provider of end-to-end information
 technology (IT) solutions, today announced results for the first quarter ended
 March 31, 2001 as it continues to execute its repositioning strategy.
 
     Overview of Quarter
     As announced last quarter, the Company expected to experience declining
 revenues for the March 31, 2001 quarter principally due to the transition to a
 new sales force and general softness in demand.  As part of its strategy the
 Company is reorganizing its sales force with people more experienced in
 selling the Company's solutions and services.  The number of sales people
 employed by the Company at December 31, 2000, who are still with the Company
 today, is only 17.  Since January 1, 2001, the Company has hired an additional
 27 sales people.  The impact of these new sales people was immaterial during
 the quarter.  The Company expects to see the benefit of these new sales people
 in the second half of 2001.  Although revenues declined, revenue pipeline
 (engagements being discussed with prospective clients) showed positive signs.
     In addition, the Company implemented a restructuring program in the
 December 2000 quarter, including a reduction-in-force by approximately
 90 people.  Selling, general and administrative expenses decreased in the
 March 2001 quarter by $1.8 million (after elimination of one-time charges in
 the December 2000 quarter) due in part to the reduction-in-force program and
 tight control in overall spending.
     "The early signs of revenue pipeline activity is an indication that our
 actions to upgrade and invest in our sales and business development staff is
 producing positive prospects for future operating performance," said James R.
 Lavelle, Cotelligent's Chairman and Chief Executive Officer.  "As our recently
 hired sales people establish themselves in the field, we expect to see revenue
 pipeline continue to build and translate to increased revenues by the second
 half of this fiscal year.  In addition, the favorable effects of the
 December 2000 restructuring program and our tighter spending controls have
 contributed favorably to the bottom line while we rebuild our revenue stream.
 Our credit department has also improved the collection of our accounts
 receivable, more than offsetting the cash used for operations, resulting in
 slightly more cash at March 31, 2001 than at December 31, 2000.  This should
 provide us sufficient cash resources to work through what has been a difficult
 and challenging restructuring of the Company," Lavelle added.
 
     Financials
     The Company reported revenues for the quarter ended March 31, 2001 of
 $16.0 million, down from $27.3 million in the same period of the prior year.
 The loss from continuing operations in the quarter was $4.3 million compared
 to a net loss of $3.3 million for the same period of the prior year.  The loss
 per diluted share from continuing operations was $0.28 for the quarter,
 compared to $0.22 for the same period of the prior year.
     On a sequential quarter basis, revenues for the quarter ended
 March 31, 2001 were $16.0 million, down from $20.1 million for the quarter
 ended December 31, 2000.  The loss from continuing operations in the quarter
 was $4.3 million compared to $5.9 million for the quarter ended
 December 31, 2000 (exclusive of one-time charges for the impairment of
 long-lived assets and restructuring).
 
     Proxy Information
     The Company also announced that in a preliminary proxy filing with the
 Securities and Exchange Commission on Friday, April 20, 2001, the Company
 included a proposal to authorize the Board of Directors of the Company to
 initiate a reverse stock split up to four (4) to one (1).  The purpose of this
 proposal, if approved by the stockholders, is to provide the Company with
 maximum flexibility in its efforts to return to compliance with the New York
 Stock Exchange's continuing listing requirements.
     The Cotelligent Earnings Release Conference Call will be today, Tuesday,
 April 24, 2001 at 4:30 P.M. EDT.   The live call can be accessed via the
 Company's Web site at www.cotelligent.com or by dialing 888-868-9078 or
 973-633-6740. The replay of the call will be available on the Company's Web
 site for two weeks.
 
     About Cotelligent, Inc.
     Cotelligent (www.cotelligent.com) is a national consulting firm,
 delivering end-to-end information technology solutions that power
 forward-looking businesses.  Founded in 1996, Cotelligent's expertise lies in
 creating scalable, strategic business solutions driven by technology,
 intelligent resource planning and execution.  The Company's services range
 from strategic consulting and assessment, to enterprise solutions, to
 implementation of eBusiness and mBusiness platforms.  Cotelligent's clients
 come predominantly from traditional sectors within the financial services,
 technology, telecommunications and manufacturing industries.  Today,
 Cotelligent is a focused pure-play solution provider with a staff of
 approximately 600 technical consultants and operating staff.  Cotelligent's
 stock is traded on the New York Stock Exchange under the symbol CGZ.
 
     Safe Harbor Statement
     Except for historical information contained herein, the information
 contained in this news release includes forward-looking statements that
 involve certain risks and uncertainties that could cause actual results to
 differ materially from such statements. All forward-looking statements
 included in this release are based upon information available to Cotelligent
 as of the date thereof, and Cotelligent assumes no obligation to update any
 such forward-looking statements. Factors that could cause or contribute to
 such differences include, but are not limited to: the extent to which
 customers invest in IT infrastructures; the availability of qualified IT
 professionals; the rate of hiring, productivity and retention of
 revenue-generating personnel; changes in the pricing of Cotelligent's
 services; the timing and rate of entrance into new regional and international
 markets; the structure and timing of acquisitions or investments; the
 conditions relating to divestiture of the staff augmentation business; the
 possibility that technologies will not perform according to expectations; and
 general economic conditions. Please refer to the discussion of risk factors
 and other factors included in Cotelligent's Annual Report on Form 10-K for the
 year ended December 31, 2000, and other filings made with the Securities and
 Exchange Commission.
 
                       COTELLIGENT, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In thousands, except share data)
                                  (Unaudited)
 
                                                Three Months Ended March 31,
                                                     2001           2000
 
     Revenues                                      $16,022        $27,300
     Cost of services                               11,282         18,737
        Gross profit                                 4,740          8,563
     Selling, general and administrative expenses    8,859         11,486
     Depreciation and amortization of goodwill         676            853
     Operating loss                                (4,795)        (3,776)
     Other income(expense):
      Interest expense                                 (1)        (1,387)
      Interest income                                  485            107
      Other                                             46            (2)
        Total other income (expense)                   530        (1,282)
        Loss from continuing operations
         before income taxes                       (4,265)        (5,058)
     Income tax benefit                                 --          1,770
        Loss from continuing operations            (4,265)        (3,288)
     Operating income from discontinued
      operations net of income tax                     (6)          2,244
        Net loss                                  $(4,271)       $(1,044)
     Earnings per share:
      Diluted -
      Loss from continuing operations              $(0.28)        $(0.22)
     Income from discontinued operations                --           0.15
        Net income (loss)                          $(0.28)        $(0.07)
     Diluted weighted average number
      of shares outstanding                     15,349,060     15,001,429
 
                         COTELLIGENT, INC. AND SUBSIDIARIES
                       CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (In thousands)
 
                                                  March 31,     December 31,
                                                     2001           2000
                       ASSETS                    (Unaudited)
     Current assets:
      Cash and cash equivalents                   $ 26,600        $26,500
      Accounts receivable                           12,657         19,229
      Other current assets                           5,748          5,054
        Total current assets                        45,005         50,783
     Long term assets                               13,206         13,931
        Total assets                              $ 58,211        $64,714
 
        LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
      Current maturities of long-term
       liabilities debt                               $227           $212
      Other current liabilities                     14,633         17,064
        Total current liabilities                   14,860         17,276
     Long-term liabilities                           2,471          2,435
        Total liabilities                           17,331         19,711
        Total stockholders' equity                  40,880         45,003
        Total liabilities and
         stockholders' equity                      $58,211        $64,714
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X30977862
 
 

SOURCE Cotelligent, Inc.
    SAN FRANCISCO, April 24 /PRNewswire Interactive News Release/ --
 Cotelligent, Inc. (NYSE:   CGZ), a leading provider of end-to-end information
 technology (IT) solutions, today announced results for the first quarter ended
 March 31, 2001 as it continues to execute its repositioning strategy.
 
     Overview of Quarter
     As announced last quarter, the Company expected to experience declining
 revenues for the March 31, 2001 quarter principally due to the transition to a
 new sales force and general softness in demand.  As part of its strategy the
 Company is reorganizing its sales force with people more experienced in
 selling the Company's solutions and services.  The number of sales people
 employed by the Company at December 31, 2000, who are still with the Company
 today, is only 17.  Since January 1, 2001, the Company has hired an additional
 27 sales people.  The impact of these new sales people was immaterial during
 the quarter.  The Company expects to see the benefit of these new sales people
 in the second half of 2001.  Although revenues declined, revenue pipeline
 (engagements being discussed with prospective clients) showed positive signs.
     In addition, the Company implemented a restructuring program in the
 December 2000 quarter, including a reduction-in-force by approximately
 90 people.  Selling, general and administrative expenses decreased in the
 March 2001 quarter by $1.8 million (after elimination of one-time charges in
 the December 2000 quarter) due in part to the reduction-in-force program and
 tight control in overall spending.
     "The early signs of revenue pipeline activity is an indication that our
 actions to upgrade and invest in our sales and business development staff is
 producing positive prospects for future operating performance," said James R.
 Lavelle, Cotelligent's Chairman and Chief Executive Officer.  "As our recently
 hired sales people establish themselves in the field, we expect to see revenue
 pipeline continue to build and translate to increased revenues by the second
 half of this fiscal year.  In addition, the favorable effects of the
 December 2000 restructuring program and our tighter spending controls have
 contributed favorably to the bottom line while we rebuild our revenue stream.
 Our credit department has also improved the collection of our accounts
 receivable, more than offsetting the cash used for operations, resulting in
 slightly more cash at March 31, 2001 than at December 31, 2000.  This should
 provide us sufficient cash resources to work through what has been a difficult
 and challenging restructuring of the Company," Lavelle added.
 
     Financials
     The Company reported revenues for the quarter ended March 31, 2001 of
 $16.0 million, down from $27.3 million in the same period of the prior year.
 The loss from continuing operations in the quarter was $4.3 million compared
 to a net loss of $3.3 million for the same period of the prior year.  The loss
 per diluted share from continuing operations was $0.28 for the quarter,
 compared to $0.22 for the same period of the prior year.
     On a sequential quarter basis, revenues for the quarter ended
 March 31, 2001 were $16.0 million, down from $20.1 million for the quarter
 ended December 31, 2000.  The loss from continuing operations in the quarter
 was $4.3 million compared to $5.9 million for the quarter ended
 December 31, 2000 (exclusive of one-time charges for the impairment of
 long-lived assets and restructuring).
 
     Proxy Information
     The Company also announced that in a preliminary proxy filing with the
 Securities and Exchange Commission on Friday, April 20, 2001, the Company
 included a proposal to authorize the Board of Directors of the Company to
 initiate a reverse stock split up to four (4) to one (1).  The purpose of this
 proposal, if approved by the stockholders, is to provide the Company with
 maximum flexibility in its efforts to return to compliance with the New York
 Stock Exchange's continuing listing requirements.
     The Cotelligent Earnings Release Conference Call will be today, Tuesday,
 April 24, 2001 at 4:30 P.M. EDT.   The live call can be accessed via the
 Company's Web site at www.cotelligent.com or by dialing 888-868-9078 or
 973-633-6740. The replay of the call will be available on the Company's Web
 site for two weeks.
 
     About Cotelligent, Inc.
     Cotelligent (www.cotelligent.com) is a national consulting firm,
 delivering end-to-end information technology solutions that power
 forward-looking businesses.  Founded in 1996, Cotelligent's expertise lies in
 creating scalable, strategic business solutions driven by technology,
 intelligent resource planning and execution.  The Company's services range
 from strategic consulting and assessment, to enterprise solutions, to
 implementation of eBusiness and mBusiness platforms.  Cotelligent's clients
 come predominantly from traditional sectors within the financial services,
 technology, telecommunications and manufacturing industries.  Today,
 Cotelligent is a focused pure-play solution provider with a staff of
 approximately 600 technical consultants and operating staff.  Cotelligent's
 stock is traded on the New York Stock Exchange under the symbol CGZ.
 
     Safe Harbor Statement
     Except for historical information contained herein, the information
 contained in this news release includes forward-looking statements that
 involve certain risks and uncertainties that could cause actual results to
 differ materially from such statements. All forward-looking statements
 included in this release are based upon information available to Cotelligent
 as of the date thereof, and Cotelligent assumes no obligation to update any
 such forward-looking statements. Factors that could cause or contribute to
 such differences include, but are not limited to: the extent to which
 customers invest in IT infrastructures; the availability of qualified IT
 professionals; the rate of hiring, productivity and retention of
 revenue-generating personnel; changes in the pricing of Cotelligent's
 services; the timing and rate of entrance into new regional and international
 markets; the structure and timing of acquisitions or investments; the
 conditions relating to divestiture of the staff augmentation business; the
 possibility that technologies will not perform according to expectations; and
 general economic conditions. Please refer to the discussion of risk factors
 and other factors included in Cotelligent's Annual Report on Form 10-K for the
 year ended December 31, 2000, and other filings made with the Securities and
 Exchange Commission.
 
                       COTELLIGENT, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In thousands, except share data)
                                  (Unaudited)
 
                                                Three Months Ended March 31,
                                                     2001           2000
 
     Revenues                                      $16,022        $27,300
     Cost of services                               11,282         18,737
        Gross profit                                 4,740          8,563
     Selling, general and administrative expenses    8,859         11,486
     Depreciation and amortization of goodwill         676            853
     Operating loss                                (4,795)        (3,776)
     Other income(expense):
      Interest expense                                 (1)        (1,387)
      Interest income                                  485            107
      Other                                             46            (2)
        Total other income (expense)                   530        (1,282)
        Loss from continuing operations
         before income taxes                       (4,265)        (5,058)
     Income tax benefit                                 --          1,770
        Loss from continuing operations            (4,265)        (3,288)
     Operating income from discontinued
      operations net of income tax                     (6)          2,244
        Net loss                                  $(4,271)       $(1,044)
     Earnings per share:
      Diluted -
      Loss from continuing operations              $(0.28)        $(0.22)
     Income from discontinued operations                --           0.15
        Net income (loss)                          $(0.28)        $(0.07)
     Diluted weighted average number
      of shares outstanding                     15,349,060     15,001,429
 
                         COTELLIGENT, INC. AND SUBSIDIARIES
                       CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (In thousands)
 
                                                  March 31,     December 31,
                                                     2001           2000
                       ASSETS                    (Unaudited)
     Current assets:
      Cash and cash equivalents                   $ 26,600        $26,500
      Accounts receivable                           12,657         19,229
      Other current assets                           5,748          5,054
        Total current assets                        45,005         50,783
     Long term assets                               13,206         13,931
        Total assets                              $ 58,211        $64,714
 
        LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
      Current maturities of long-term
       liabilities debt                               $227           $212
      Other current liabilities                     14,633         17,064
        Total current liabilities                   14,860         17,276
     Long-term liabilities                           2,471          2,435
        Total liabilities                           17,331         19,711
        Total stockholders' equity                  40,880         45,003
        Total liabilities and
         stockholders' equity                      $58,211        $64,714
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X30977862
 
 SOURCE  Cotelligent, Inc.

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