Documentum Reports First Quarter Results

Total Revenue Increases 7 Percent



Apr 19, 2001, 01:00 ET from Documentum, Inc.

    PLEASANTON, Calif., April 19 /PRNewswire/ --
 Documentum, Inc. (Nasdaq: DCTM), the leading enterprise content management
 provider, today announced financial results for the first quarter ended
 March 31, 2001.
     Revenue for the first quarter of 2001 was $45.3 million, a 7 percent
 increase over revenue of $42.2 million for the same period of 2000 and a
 23 percent decrease over the fourth quarter of fiscal 2000. Net loss for the
 first quarter of 2001 was $14.7 million, as compared to net income of
 $0.3 million reported for the same period last year and net income of
 $4.3 million for the fourth quarter of fiscal 2000. Earnings per share for the
 first quarter of 2001 was a loss of $0.40 per share, compared to earnings of
 $0.01 per share for the first quarter of 2000 and to earnings per share of
 $0.11 in the fourth quarter of fiscal 2000.
     "As reported in our preliminary earnings announcement on April 2, first
 quarter revenue was significantly below our expectations due to the US
 economic slowdown," said Jeffrey A. Miller, chairman and chief executive
 officer for Documentum, Inc. "In spite of this economic uncertainty, content
 management remains at the top of CIO's priority lists, signaling renewed
 market growth as the economy recovers. In the meantime, we have taken steps to
 balance our company between the short-term economic reality and our long-term
 market promise. These steps include reducing our workforce, suspending new
 hiring, tightly managing discretionary spending, and restructuring our
 resources to better align with our customers' needs. Recognizing the limited
 visibility provided by the current US economic climate, we are targeting a
 return to profitability in Q4 of this fiscal year."
     The company anticipates recording a restructuring charge in the second
 quarter of 2001 in the range of $4 to $7 million, which results from an
 approximate 12 percent reduction of its workforce.
     The company also announced that its Board of Directors has approved a
 voluntary stock option exchange program for its employees. Board members who
 are not employees of the Company will not be eligible to participate in the
 program.
     Under the program, Documentum employees will be given the opportunity to
 cancel outstanding stock options previously granted to them in exchange for
 new options to be granted at a future date. The exercise price of these new
 options will be set at the fair market value of the Company's common stock as
 of the new grant date, which is expected to occur later this year.
 
     Q1 Highlights
 
     -- For the second consecutive time, Documentum 4i eBusiness Platform
        ranked #1 overall content management platform by Forrester Research's
        eBusiness Tech Rankings.
     -- Added 61 new customers.
     -- Delivered on complete Editions strategy with launch of Documentum 4i
        Portal Content Management and B2B Content Management Editions this
        quarter.
     -- Executed enterprise content management strategy launch, delivering
        successful launch event that included key customers and strategic
        partners.
     -- Selected as Three-Star Charter Member of BEA Star Partner Program.
     -- Named InfoWorld Technology of the Year 2000 and received Business
        Impact Award in content management e-commerce category.
     -- For the second consecutive year, Documentum 4i eBusiness and WCM
        Editions received Product of the Year awards by Imaging & Document
        Solutions Magazine.
 
     For comparative purposes, except where noted, the quarterly earnings per
 share results for historical periods discussed have been revised to reflect a
 two-for-one stock split which occurred on November 14, 2000.
     In addition to historical information contained herein, this news release
 contains forward-looking statements that involve risks and uncertainties. The
 company's future actual results could differ materially from the
 forward-looking statements discussed herein as a result of contracts failing
 to close as expected, failure of contracts to meet revenue recognition rules,
 and other factors detailed in the company's Annual Report on Form 10-K.
 Factors that could cause or contribute to such differences include, but are
 not limited to, those discussed from time to time in the company's public
 reports filed with the Securities and Exchange Commission, such as those under
 "Risk Factors" included in the company's annual report on Form 10-K for the
 fiscal year ended December 31, 2000, and the company's quarterly reports on
 Form 10-Q for the quarters ended March 31, 2000, June 30, 2000, and September
 30, 2000. The company undertakes no obligation to update or revise these
 forward-looking statements.
 
     About Documentum
     Documentum is the industry's leading enterprise content management
 provider, automating the production, exchange and personalization of all types
 of content, making it easier for the Global 2000 to gain competitive advantage
 by connecting employees, business partners and customers, worldwide. Built on
 an Internet-scale, XML-enabled and standards-compliant platform, Documentum
 products manage Web content, power portals, enable collaborative commerce, and
 solve regulatory content challenges. Over 300 partners across all major
 industries, including high tech, pharmaceutical, healthcare, consulting
 services, government, manufacturing, financial services, automotive, retail,
 and consumer goods, build and implement specialized applications using
 Documentum's content management infrastructure. For more information, visit
 Documentum on the Web at www.documentum.com.
     NOTE:  Documentum and the documentum logo are trademarks or registered
 trademarks of Documentum, Inc. in the US and throughout the world.  All other
 company and product names are used for identification purposes only and may be
 trademarks of their respective owners.
 
                                Documentum, Inc.
                      Condensed Consolidated Balance Sheet
                                 (in thousands)
 
 
                                                    March 31,   December 31,
                                                         2001           2000
                                                   (unaudited)
 
                                 ASSETS
 
     Current assets:
       Cash and cash equivalents                      $46,544        $43,918
       Short-term investments                          53,042         59,217
       Accounts receivable, net of allowances          47,527         57,156
       Other current assets                            14,682         13,920
         Total current assets                         161,795        174,211
 
     Property and equipment, net                       34,705         35,667
     Other assets                                      11,646          8,582
                                                     $208,146       $218,460
 
 
 
                           LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
     Current liabilities:
       Accounts payable                                $3,516         $5,751
       Accrued liabilities                             34,665         42,281
       Deferred revenue                                29,176         21,073
       Current portion of capital lease obligation         --             65
         Total current liabilities                     67,357         69,170
 
     Stockholders' equity                             140,789        149,290
                                                     $208,146       $218,460
 
 
 
 
                                Documentum, Inc.
                Condensed Consolidated Statements of Operations
                (in thousands, except per share data; unaudited)
 
 
                                                        Three Months Ended
                                                             March 31,
                                                         2001           2000
 
     Revenue:
       License                                        $20,841        $24,958
       Service                                         24,409         17,214
         Total revenue                                 45,250         42,172
 
     Cost of revenue:
       License                                          1,680          1,907
       Service                                         12,940          8,457
         Total cost of revenue                         14,620         10,364
 
     Gross profit                                      30,630         31,808
 
     Operating expense:
       Sales and marketing                             28,651         18,526
       Research and development                         9,675          7,674
       General and administrative                       6,903          5,895
         Total operating expense                       45,229         32,095
 
     Loss from operations                            (14,599)          (287)
 
     Interest and other income, net                     1,191            782
     Income (loss) before income tax provision       (13,408)            495
 
     Provision for income taxes                         1,341            163
     Net income (loss)                              $(14,749)           $332
 
     Basic earnings (loss) per share                  $(0.40)          $0.01
     Diluted earnings (loss) per share                $(0.40)          $0.01
 
     Shares used to compute earnings
      (loss) per share
     Basic                                             37,327         34,446
     Diluted                                           37,327         38,828
 
 

SOURCE Documentum, Inc.
    PLEASANTON, Calif., April 19 /PRNewswire/ --
 Documentum, Inc. (Nasdaq: DCTM), the leading enterprise content management
 provider, today announced financial results for the first quarter ended
 March 31, 2001.
     Revenue for the first quarter of 2001 was $45.3 million, a 7 percent
 increase over revenue of $42.2 million for the same period of 2000 and a
 23 percent decrease over the fourth quarter of fiscal 2000. Net loss for the
 first quarter of 2001 was $14.7 million, as compared to net income of
 $0.3 million reported for the same period last year and net income of
 $4.3 million for the fourth quarter of fiscal 2000. Earnings per share for the
 first quarter of 2001 was a loss of $0.40 per share, compared to earnings of
 $0.01 per share for the first quarter of 2000 and to earnings per share of
 $0.11 in the fourth quarter of fiscal 2000.
     "As reported in our preliminary earnings announcement on April 2, first
 quarter revenue was significantly below our expectations due to the US
 economic slowdown," said Jeffrey A. Miller, chairman and chief executive
 officer for Documentum, Inc. "In spite of this economic uncertainty, content
 management remains at the top of CIO's priority lists, signaling renewed
 market growth as the economy recovers. In the meantime, we have taken steps to
 balance our company between the short-term economic reality and our long-term
 market promise. These steps include reducing our workforce, suspending new
 hiring, tightly managing discretionary spending, and restructuring our
 resources to better align with our customers' needs. Recognizing the limited
 visibility provided by the current US economic climate, we are targeting a
 return to profitability in Q4 of this fiscal year."
     The company anticipates recording a restructuring charge in the second
 quarter of 2001 in the range of $4 to $7 million, which results from an
 approximate 12 percent reduction of its workforce.
     The company also announced that its Board of Directors has approved a
 voluntary stock option exchange program for its employees. Board members who
 are not employees of the Company will not be eligible to participate in the
 program.
     Under the program, Documentum employees will be given the opportunity to
 cancel outstanding stock options previously granted to them in exchange for
 new options to be granted at a future date. The exercise price of these new
 options will be set at the fair market value of the Company's common stock as
 of the new grant date, which is expected to occur later this year.
 
     Q1 Highlights
 
     -- For the second consecutive time, Documentum 4i eBusiness Platform
        ranked #1 overall content management platform by Forrester Research's
        eBusiness Tech Rankings.
     -- Added 61 new customers.
     -- Delivered on complete Editions strategy with launch of Documentum 4i
        Portal Content Management and B2B Content Management Editions this
        quarter.
     -- Executed enterprise content management strategy launch, delivering
        successful launch event that included key customers and strategic
        partners.
     -- Selected as Three-Star Charter Member of BEA Star Partner Program.
     -- Named InfoWorld Technology of the Year 2000 and received Business
        Impact Award in content management e-commerce category.
     -- For the second consecutive year, Documentum 4i eBusiness and WCM
        Editions received Product of the Year awards by Imaging & Document
        Solutions Magazine.
 
     For comparative purposes, except where noted, the quarterly earnings per
 share results for historical periods discussed have been revised to reflect a
 two-for-one stock split which occurred on November 14, 2000.
     In addition to historical information contained herein, this news release
 contains forward-looking statements that involve risks and uncertainties. The
 company's future actual results could differ materially from the
 forward-looking statements discussed herein as a result of contracts failing
 to close as expected, failure of contracts to meet revenue recognition rules,
 and other factors detailed in the company's Annual Report on Form 10-K.
 Factors that could cause or contribute to such differences include, but are
 not limited to, those discussed from time to time in the company's public
 reports filed with the Securities and Exchange Commission, such as those under
 "Risk Factors" included in the company's annual report on Form 10-K for the
 fiscal year ended December 31, 2000, and the company's quarterly reports on
 Form 10-Q for the quarters ended March 31, 2000, June 30, 2000, and September
 30, 2000. The company undertakes no obligation to update or revise these
 forward-looking statements.
 
     About Documentum
     Documentum is the industry's leading enterprise content management
 provider, automating the production, exchange and personalization of all types
 of content, making it easier for the Global 2000 to gain competitive advantage
 by connecting employees, business partners and customers, worldwide. Built on
 an Internet-scale, XML-enabled and standards-compliant platform, Documentum
 products manage Web content, power portals, enable collaborative commerce, and
 solve regulatory content challenges. Over 300 partners across all major
 industries, including high tech, pharmaceutical, healthcare, consulting
 services, government, manufacturing, financial services, automotive, retail,
 and consumer goods, build and implement specialized applications using
 Documentum's content management infrastructure. For more information, visit
 Documentum on the Web at www.documentum.com.
     NOTE:  Documentum and the documentum logo are trademarks or registered
 trademarks of Documentum, Inc. in the US and throughout the world.  All other
 company and product names are used for identification purposes only and may be
 trademarks of their respective owners.
 
                                Documentum, Inc.
                      Condensed Consolidated Balance Sheet
                                 (in thousands)
 
 
                                                    March 31,   December 31,
                                                         2001           2000
                                                   (unaudited)
 
                                 ASSETS
 
     Current assets:
       Cash and cash equivalents                      $46,544        $43,918
       Short-term investments                          53,042         59,217
       Accounts receivable, net of allowances          47,527         57,156
       Other current assets                            14,682         13,920
         Total current assets                         161,795        174,211
 
     Property and equipment, net                       34,705         35,667
     Other assets                                      11,646          8,582
                                                     $208,146       $218,460
 
 
 
                           LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
     Current liabilities:
       Accounts payable                                $3,516         $5,751
       Accrued liabilities                             34,665         42,281
       Deferred revenue                                29,176         21,073
       Current portion of capital lease obligation         --             65
         Total current liabilities                     67,357         69,170
 
     Stockholders' equity                             140,789        149,290
                                                     $208,146       $218,460
 
 
 
 
                                Documentum, Inc.
                Condensed Consolidated Statements of Operations
                (in thousands, except per share data; unaudited)
 
 
                                                        Three Months Ended
                                                             March 31,
                                                         2001           2000
 
     Revenue:
       License                                        $20,841        $24,958
       Service                                         24,409         17,214
         Total revenue                                 45,250         42,172
 
     Cost of revenue:
       License                                          1,680          1,907
       Service                                         12,940          8,457
         Total cost of revenue                         14,620         10,364
 
     Gross profit                                      30,630         31,808
 
     Operating expense:
       Sales and marketing                             28,651         18,526
       Research and development                         9,675          7,674
       General and administrative                       6,903          5,895
         Total operating expense                       45,229         32,095
 
     Loss from operations                            (14,599)          (287)
 
     Interest and other income, net                     1,191            782
     Income (loss) before income tax provision       (13,408)            495
 
     Provision for income taxes                         1,341            163
     Net income (loss)                              $(14,749)           $332
 
     Basic earnings (loss) per share                  $(0.40)          $0.01
     Diluted earnings (loss) per share                $(0.40)          $0.01
 
     Shares used to compute earnings
      (loss) per share
     Basic                                             37,327         34,446
     Diluted                                           37,327         38,828
 
 SOURCE  Documentum, Inc.