Evolve Reports Third Fiscal Quarter 2001 Financial Results
Apr 24, 2001, 01:00 ET from Evolve Software, Inc.
EMERYVILLE, Calif. April 24 /PRNewswire Interactive News Release/ --
Evolve(R) (Nasdaq: EVLV), a leading provider of eBusiness solutions that
optimize the service chain, today announced financial results for the third
fiscal quarter of 2001. Evolve reported revenues of $11.26 million for the
quarter ended March 31, 2001, a 22 percent increase over revenue of $9.26
million for the quarter ended Dec. 31, 2000, and a 221 percent increase
compared with the same period last year.
Solutions revenue, principally consisting of software licenses and
implementation services, was $8.85 million up 37 percent from the previous
quarter. Subscriptions revenue, consisting of application and maintenance
subscriptions was at $2.42 million, down 14 percent from the previous quarter.
Gross margin increased by 8 percentage points, from 51 to 59 percent
compared to the second fiscal quarter ended December 31, 2000.
Pro forma operating loss for the quarter, which excludes stock-based
charges and amortization of intangible assets, was $13.82 million compared to
$13.00 million for the previous quarter. Pro forma net loss for the quarter
was $13.38 million or $0.39 per share including a one-time restructuring
charge, compared to $12.02 million or $0.36 per share for the previous
quarter.
"In our third quarter as a public company, we are proud of our strong and
successful results in this tough economic climate," said John Bantleman,
President and CEO of Evolve. "Evolve's performance further demonstrates the
acceptance of our solutions among a diversified customer base. We continue to
believe in the strategic value that our solution offers, the massive market
opportunity in front of us and our ability to capitalize on this opportunity."
Highlights of the quarter include:
-- Evolve signed industry leaders as customers in the quarter including
Autodesk, Blue Martini, Nortel, Cognos and Siemens;
-- Evolve's first ASP customer, Exodus, increased significantly its
commitment to Evolve by converting to a seven-figure perpetual license
with maintenance deal;
-- Released Evolve ServiceSphere 3.1 to increase our competitive edge in
global service chain solutions;
-- Launched a new product, Portfolio Manager, to drive strategic business
management in corporate IT departments;
-- Opened an India Development Center in Chennai. The center became
operational in March 2001;
-- Two of Evolve's marquee customers -- EDS and Sun Microsystems -- went
live on ServiceSphere. Internationally, Sweden-based global e-services
firm ICON Medialab (Stockholm: ICON) also went live on ServiceSphere.
More than 70 percent of Evolve's customers are now live with the
ServiceSphere solution; and
-- Evolve ServiceSphere won the Crossroads 2001 A-List "Best of PSA"
Award, and secured top ratings for the second consecutive year in the
SPEX evaluation. SPEX is a subsidiary of the leading industry analyst
firm META Group.
Evolve has started to implement a partner-centric services model, called
the Evolve Service Alliance, as it diversifies its customer base toward Global
2000 organizations. As a result of this strategic move, coupled with the
focus on increasing gross margins and targeting profitability on schedule in
Q1, CY2002, Evolve has implemented a strategic restructuring plan. This
restructuring plan will result in a workforce reduction of nearly 30 percent
by June 30. A large segment of the workforce reduction will come from the
services organization, as Evolve moves to increase the involvement of its
Service Alliance partners in providing implementation and support services to
Evolve customers. Simultaneously, Evolve is moving several key employees from
its services operations into its engineering organization.
"Given current macroeconomic factors, it is important that we take
aggressive and prudent measures to focus the company on our core business
values and build on the foundation of our future success -- research and
development," added Bantleman. "By aggressively developing our Service
Alliance program, Evolve can focus on generating high-margin software revenue,
while continuing to deliver a rapid return on investment to customers. By
better leveraging our partners we can more easily extend our reach into new
markets, achieve profitability on schedule and maintain our market leadership
position." The Evolve Service Alliance program today includes such partners
as KPMG Consulting, Darwin Partners, HeadStrong, TechSpan, and EPI-USE.
Separately, CFO Doug Sinclair will depart Evolve at the end of this
quarter to return to his home country of Scotland for an extended stay.
Sinclair has been with Evolve since April 2000. During his tenure he helped
lead Evolve through a successful IPO last August and developed a solid finance
team. Over the course of the quarter, Sinclair will be transitioning his
responsibilities to Ken Bozzini, Vice President of Finance and Corporate
Controller. Bozzini, who has been with Evolve since September 1999, earned
his CPA while working at Price Waterhouse and obtained his MBA from University
of California, Berkeley.
Evolve has scheduled a conference call to discuss its earnings for the
third quarter of fiscal 2001 at 2:00 p.m. PDT today, April 24, 2001. The call
will be broadcast live at http://www.evolve.com/investor/earnings.html. A
replay of the call will be available at the same URL beginning at 5:00 pm PDT
today.
About Evolve
Evolve provides solutions for integrating and streamlining the core
business processes that are critical to service organizations: managing
project opportunities, resources and service delivery. We call it Connecting
the Service Chain(TM).
More than 100 leading organizations have chosen Evolve, including the
professional service divisions of product-based companies like E.piphany,
Ericsson, Exodus, Novell, Siemens, and Sun Microsystems; professional service
firms such as EDS; and the IT departments of large corporations including
Fleet Capital Leasing. Evolve is headquartered in Emeryville, Calif. (San
Francisco Bay area), and has offices throughout North America, in the UK and
India. Additional information is available at www.evolve.com or
1-888-2EVOLVE.
Safe Harbor Statement
Except for the historical information contained herein, this press release
contains forward-looking statements that involve risks and uncertainties,
including but not limited to statements regarding Evolve's financial outlook,
our ability to increase our revenues and reduce our operating expenses, our
projected profitability targets, the size of our potential market opportunity,
and our position as a technology leader. The success of future operating
results may differ materially from the results discussed or forecasted in the
forward-looking statements due to factors that include, without limitation,
the uncertainty of continued market demand for PSA solutions and future
customer adoption of our products, any inability to maintain our market
position, our inability to predict whether we can rapidly diversify our
customer base away from e-business consultancies, any future declines in
corporate IT spending which may result in deferrals or cancellations of orders
for our products, any insolvency or financial difficulties encountered by our
customers which may adversely impact our cash collections and reduce our
revenues, any difficulties we encounter in reducing our operating expenses as
quickly as we expect, any failure by our third-party service partners to
assume implementation and customer support functions and meet customer
expectations and any failure by us to expand the our relationships with such
partners, risks associated with developing and maintaining new versions of our
products, and the risk that customers may not achieve the benefits anticipated
from our solutions. Evolve undertakes no obligation to update publicly any
forward-looking statements to reflect new information, events or circumstances
after the date of this release. Investors are encouraged to review Evolve's
filings with the Securities and Exchange Commission for a discussion of
additional factors that could affect Evolve's future performance.
Evolve, the Evolve logo, ServiceSphere, "Connecting the Service Chain,"
and "Evolve. Connect. Thrive." are registered trademarks or trademarks of
Evolve Software, Inc.
EVOLVE SOFTWARE, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(in thousands, except per share amounts)
Three months ended Nine months ended
March 31, March 31,
2001 2000 2001 2000
(unaudited)
Revenues:
Solutions $8,846 $2,331 $20,332 $3,748
Subscriptions 2,417 1,178 7,145 1,848
Total revenues 11,263 3,509 27,477 5,596
Cost of revenues 4,593 1,524 13,071 2,890
Gross profit 6,670 1,985 14,406 2,706
Operating expenses:
Sales and marketing 10,444 7,357 32,501 12,082
Research and development 6,971 2,701 14,843 6,248
General and administrative 3,080 1,597 8,283 3,253
Total operating expenses 20,495 11,655 55,627 21,583
Operating loss (13,825) (9,670) (41,221) (18,877)
Other income:
Interest income and expense, net 538 267 2,306 488
Other income and expense, net (92) -- (77) (2)
Interest and other income and
expense, net 446 267 2,229 486
Net loss $(13,379) $(9,403) $(38,992) $(18,391)
Basic and diluted net loss per
share $(0.39) $(0.51) $(1.17) $(1.17)
Weighted average common shares
outstanding (b) 33,976 18,361 33,216 15,690
(a) These pro forma condensed consolidated statements of operations
exclude the effects of stock-based charges, the amortization of
goodwill and other intangible assets, the write-off of in-process
technology and the beneficial conversion feature of Series I
redeemable convertible preferred stock.
(b) The pro forma weighted average common shares for the nine months ended
March 31, 2001 gives effect to: a) the initial public offering as if
it had occurred at the beginning of the period, b) the issuance of
Series I preferred stock as if it had occurred at the beginning of the
period and c) the assumed conversion of the redeemable convertible
preferred stock and warrants into common stock as of the date of
issuance. The pro forma weighted average common shares for the three
and nine months ended March 31, 2000 assumes the conversion of the
redeemable convertible preferred stock and warrants into common stock
as of the date of issuance.
EVOLVE SOFTWARE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
March 31, June 30,
2001 2000
ASSETS (unaudited) (audited)
Current assets:
Cash, cash equivalents and short-term
investments $33,005 $18,660
Accounts receivable, net 10,157 3,952
Prepaid expenses and other current assets 2,804 2,273
Total current assets 45,966 24,885
Property and equipment, net 14,182 8,830
Restricted cash -- 2,000
Deposits and other assets 1,903 1,213
Note receivable from related party 100 100
Goodwill and other intangible assets, net 19,607 26,952
$81,758 $63,980
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities $14,248 $12,432
Deferred revenue 8,288 7,093
Current portion of long-term obligations 708 762
Notes payable 1,485 --
Total current liabilities 24,729 20,287
Long-term obligations 3,800 4,810
Total liabilities 28,529 25,097
Redeemable convertible preferred stock -- 79,514
Stockholders' equity (deficit) 53,229 (40,631)
$81,758 $63,980
EVOLVE SOFTWARE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three months ended Nine months ended
March 31, March 31,
2001 2000 2001 2000
(unaudited)
Revenues:
Solutions $8,846 $2,331 $20,332 $3,748
Subscriptions 2,417 1,178 7,145 1,848
Total revenues 11,263 3,509 27,477 5,596
Cost of revenues 4,593 1,524 13,071 2,890
Gross profit 6,670 1,985 14,406 2,706
Operating expenses:
Sales and marketing 10,444 7,357 32,501 12,082
Research and development 6,971 2,701 14,843 6,248
General and administrative 3,080 1,597 8,283 3,253
Stock-based charges 3,863 7,172 20,505 11,045
In-process technology write-off -- 3,126 -- 3,126
Amortization of goodwill and other
intangible assets 2,660 -- 8,045 --
Total operating expenses 27,018 21,953 84,177 35,754
Operating loss (20,348) (19,968) (69,771) (33,048)
Other income:
Interest income and expense, net 538 267 2,306 488
Other income and expense, net (92) -- (77) (2)
Interest and other income and expense,
net 446 267 2,229 486
Net loss (19,902) (19,701) (67,542) (32,562)
Beneficial conversion feature of
Series I preferred stock -- -- 5,977 --
Net loss attributable to common
stockholders $(19,902) $(19,701) $(73,519) $(32,562)
Basic and diluted net loss per
share $(0.59) $(7.04) $(2.51) $(13.56)
Weighted average common shares
outstanding 33,976 2,800 29,301 2,402
CONTACT: Doug Sinclair, Chief Financial Officer of Evolve, 510-428-6000;
or Investor Relations, Erica Mannion, or Financial Media, Halie Weissman, both
of Market Street Partners, 415-658-4123, for Evolve.
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SOURCE Evolve Software, Inc.
EMERYVILLE, Calif. April 24 /PRNewswire Interactive News Release/ --
Evolve(R) (Nasdaq: EVLV), a leading provider of eBusiness solutions that
optimize the service chain, today announced financial results for the third
fiscal quarter of 2001. Evolve reported revenues of $11.26 million for the
quarter ended March 31, 2001, a 22 percent increase over revenue of $9.26
million for the quarter ended Dec. 31, 2000, and a 221 percent increase
compared with the same period last year.
Solutions revenue, principally consisting of software licenses and
implementation services, was $8.85 million up 37 percent from the previous
quarter. Subscriptions revenue, consisting of application and maintenance
subscriptions was at $2.42 million, down 14 percent from the previous quarter.
Gross margin increased by 8 percentage points, from 51 to 59 percent
compared to the second fiscal quarter ended December 31, 2000.
Pro forma operating loss for the quarter, which excludes stock-based
charges and amortization of intangible assets, was $13.82 million compared to
$13.00 million for the previous quarter. Pro forma net loss for the quarter
was $13.38 million or $0.39 per share including a one-time restructuring
charge, compared to $12.02 million or $0.36 per share for the previous
quarter.
"In our third quarter as a public company, we are proud of our strong and
successful results in this tough economic climate," said John Bantleman,
President and CEO of Evolve. "Evolve's performance further demonstrates the
acceptance of our solutions among a diversified customer base. We continue to
believe in the strategic value that our solution offers, the massive market
opportunity in front of us and our ability to capitalize on this opportunity."
Highlights of the quarter include:
-- Evolve signed industry leaders as customers in the quarter including
Autodesk, Blue Martini, Nortel, Cognos and Siemens;
-- Evolve's first ASP customer, Exodus, increased significantly its
commitment to Evolve by converting to a seven-figure perpetual license
with maintenance deal;
-- Released Evolve ServiceSphere 3.1 to increase our competitive edge in
global service chain solutions;
-- Launched a new product, Portfolio Manager, to drive strategic business
management in corporate IT departments;
-- Opened an India Development Center in Chennai. The center became
operational in March 2001;
-- Two of Evolve's marquee customers -- EDS and Sun Microsystems -- went
live on ServiceSphere. Internationally, Sweden-based global e-services
firm ICON Medialab (Stockholm: ICON) also went live on ServiceSphere.
More than 70 percent of Evolve's customers are now live with the
ServiceSphere solution; and
-- Evolve ServiceSphere won the Crossroads 2001 A-List "Best of PSA"
Award, and secured top ratings for the second consecutive year in the
SPEX evaluation. SPEX is a subsidiary of the leading industry analyst
firm META Group.
Evolve has started to implement a partner-centric services model, called
the Evolve Service Alliance, as it diversifies its customer base toward Global
2000 organizations. As a result of this strategic move, coupled with the
focus on increasing gross margins and targeting profitability on schedule in
Q1, CY2002, Evolve has implemented a strategic restructuring plan. This
restructuring plan will result in a workforce reduction of nearly 30 percent
by June 30. A large segment of the workforce reduction will come from the
services organization, as Evolve moves to increase the involvement of its
Service Alliance partners in providing implementation and support services to
Evolve customers. Simultaneously, Evolve is moving several key employees from
its services operations into its engineering organization.
"Given current macroeconomic factors, it is important that we take
aggressive and prudent measures to focus the company on our core business
values and build on the foundation of our future success -- research and
development," added Bantleman. "By aggressively developing our Service
Alliance program, Evolve can focus on generating high-margin software revenue,
while continuing to deliver a rapid return on investment to customers. By
better leveraging our partners we can more easily extend our reach into new
markets, achieve profitability on schedule and maintain our market leadership
position." The Evolve Service Alliance program today includes such partners
as KPMG Consulting, Darwin Partners, HeadStrong, TechSpan, and EPI-USE.
Separately, CFO Doug Sinclair will depart Evolve at the end of this
quarter to return to his home country of Scotland for an extended stay.
Sinclair has been with Evolve since April 2000. During his tenure he helped
lead Evolve through a successful IPO last August and developed a solid finance
team. Over the course of the quarter, Sinclair will be transitioning his
responsibilities to Ken Bozzini, Vice President of Finance and Corporate
Controller. Bozzini, who has been with Evolve since September 1999, earned
his CPA while working at Price Waterhouse and obtained his MBA from University
of California, Berkeley.
Evolve has scheduled a conference call to discuss its earnings for the
third quarter of fiscal 2001 at 2:00 p.m. PDT today, April 24, 2001. The call
will be broadcast live at http://www.evolve.com/investor/earnings.html. A
replay of the call will be available at the same URL beginning at 5:00 pm PDT
today.
About Evolve
Evolve provides solutions for integrating and streamlining the core
business processes that are critical to service organizations: managing
project opportunities, resources and service delivery. We call it Connecting
the Service Chain(TM).
More than 100 leading organizations have chosen Evolve, including the
professional service divisions of product-based companies like E.piphany,
Ericsson, Exodus, Novell, Siemens, and Sun Microsystems; professional service
firms such as EDS; and the IT departments of large corporations including
Fleet Capital Leasing. Evolve is headquartered in Emeryville, Calif. (San
Francisco Bay area), and has offices throughout North America, in the UK and
India. Additional information is available at www.evolve.com or
1-888-2EVOLVE.
Safe Harbor Statement
Except for the historical information contained herein, this press release
contains forward-looking statements that involve risks and uncertainties,
including but not limited to statements regarding Evolve's financial outlook,
our ability to increase our revenues and reduce our operating expenses, our
projected profitability targets, the size of our potential market opportunity,
and our position as a technology leader. The success of future operating
results may differ materially from the results discussed or forecasted in the
forward-looking statements due to factors that include, without limitation,
the uncertainty of continued market demand for PSA solutions and future
customer adoption of our products, any inability to maintain our market
position, our inability to predict whether we can rapidly diversify our
customer base away from e-business consultancies, any future declines in
corporate IT spending which may result in deferrals or cancellations of orders
for our products, any insolvency or financial difficulties encountered by our
customers which may adversely impact our cash collections and reduce our
revenues, any difficulties we encounter in reducing our operating expenses as
quickly as we expect, any failure by our third-party service partners to
assume implementation and customer support functions and meet customer
expectations and any failure by us to expand the our relationships with such
partners, risks associated with developing and maintaining new versions of our
products, and the risk that customers may not achieve the benefits anticipated
from our solutions. Evolve undertakes no obligation to update publicly any
forward-looking statements to reflect new information, events or circumstances
after the date of this release. Investors are encouraged to review Evolve's
filings with the Securities and Exchange Commission for a discussion of
additional factors that could affect Evolve's future performance.
Evolve, the Evolve logo, ServiceSphere, "Connecting the Service Chain,"
and "Evolve. Connect. Thrive." are registered trademarks or trademarks of
Evolve Software, Inc.
EVOLVE SOFTWARE, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(in thousands, except per share amounts)
Three months ended Nine months ended
March 31, March 31,
2001 2000 2001 2000
(unaudited)
Revenues:
Solutions $8,846 $2,331 $20,332 $3,748
Subscriptions 2,417 1,178 7,145 1,848
Total revenues 11,263 3,509 27,477 5,596
Cost of revenues 4,593 1,524 13,071 2,890
Gross profit 6,670 1,985 14,406 2,706
Operating expenses:
Sales and marketing 10,444 7,357 32,501 12,082
Research and development 6,971 2,701 14,843 6,248
General and administrative 3,080 1,597 8,283 3,253
Total operating expenses 20,495 11,655 55,627 21,583
Operating loss (13,825) (9,670) (41,221) (18,877)
Other income:
Interest income and expense, net 538 267 2,306 488
Other income and expense, net (92) -- (77) (2)
Interest and other income and
expense, net 446 267 2,229 486
Net loss $(13,379) $(9,403) $(38,992) $(18,391)
Basic and diluted net loss per
share $(0.39) $(0.51) $(1.17) $(1.17)
Weighted average common shares
outstanding (b) 33,976 18,361 33,216 15,690
(a) These pro forma condensed consolidated statements of operations
exclude the effects of stock-based charges, the amortization of
goodwill and other intangible assets, the write-off of in-process
technology and the beneficial conversion feature of Series I
redeemable convertible preferred stock.
(b) The pro forma weighted average common shares for the nine months ended
March 31, 2001 gives effect to: a) the initial public offering as if
it had occurred at the beginning of the period, b) the issuance of
Series I preferred stock as if it had occurred at the beginning of the
period and c) the assumed conversion of the redeemable convertible
preferred stock and warrants into common stock as of the date of
issuance. The pro forma weighted average common shares for the three
and nine months ended March 31, 2000 assumes the conversion of the
redeemable convertible preferred stock and warrants into common stock
as of the date of issuance.
EVOLVE SOFTWARE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
March 31, June 30,
2001 2000
ASSETS (unaudited) (audited)
Current assets:
Cash, cash equivalents and short-term
investments $33,005 $18,660
Accounts receivable, net 10,157 3,952
Prepaid expenses and other current assets 2,804 2,273
Total current assets 45,966 24,885
Property and equipment, net 14,182 8,830
Restricted cash -- 2,000
Deposits and other assets 1,903 1,213
Note receivable from related party 100 100
Goodwill and other intangible assets, net 19,607 26,952
$81,758 $63,980
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities $14,248 $12,432
Deferred revenue 8,288 7,093
Current portion of long-term obligations 708 762
Notes payable 1,485 --
Total current liabilities 24,729 20,287
Long-term obligations 3,800 4,810
Total liabilities 28,529 25,097
Redeemable convertible preferred stock -- 79,514
Stockholders' equity (deficit) 53,229 (40,631)
$81,758 $63,980
EVOLVE SOFTWARE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three months ended Nine months ended
March 31, March 31,
2001 2000 2001 2000
(unaudited)
Revenues:
Solutions $8,846 $2,331 $20,332 $3,748
Subscriptions 2,417 1,178 7,145 1,848
Total revenues 11,263 3,509 27,477 5,596
Cost of revenues 4,593 1,524 13,071 2,890
Gross profit 6,670 1,985 14,406 2,706
Operating expenses:
Sales and marketing 10,444 7,357 32,501 12,082
Research and development 6,971 2,701 14,843 6,248
General and administrative 3,080 1,597 8,283 3,253
Stock-based charges 3,863 7,172 20,505 11,045
In-process technology write-off -- 3,126 -- 3,126
Amortization of goodwill and other
intangible assets 2,660 -- 8,045 --
Total operating expenses 27,018 21,953 84,177 35,754
Operating loss (20,348) (19,968) (69,771) (33,048)
Other income:
Interest income and expense, net 538 267 2,306 488
Other income and expense, net (92) -- (77) (2)
Interest and other income and expense,
net 446 267 2,229 486
Net loss (19,902) (19,701) (67,542) (32,562)
Beneficial conversion feature of
Series I preferred stock -- -- 5,977 --
Net loss attributable to common
stockholders $(19,902) $(19,701) $(73,519) $(32,562)
Basic and diluted net loss per
share $(0.59) $(7.04) $(2.51) $(13.56)
Weighted average common shares
outstanding 33,976 2,800 29,301 2,402
CONTACT: Doug Sinclair, Chief Financial Officer of Evolve, 510-428-6000;
or Investor Relations, Erica Mannion, or Financial Media, Halie Weissman, both
of Market Street Partners, 415-658-4123, for Evolve.
MAKE YOUR OPINION COUNT - Click Here
http://tbutton.prnewswire.com/prn/11690X73952076
SOURCE Evolve Software, Inc.
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