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.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X73952076
 
 

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.