FORTEL Reports Second Quarter Fiscal 2001 Results

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

    FREMONT, Calif., April 24 /PRNewswire Interactive News Release/
 -- FORTEL Inc. (Nasdaq:   FRTL) today announced results for the second fiscal
 quarter ended March 31, 2001.  Total revenue was $3,965,000 compared to
 $4,091,000 for the same quarter of the prior year.  License and maintenance
 revenue of $3,720,000 for the quarter increased 9% from the same period in the
 prior year.  Net loss for the quarter was $2,050,000 or $0.07 per share
 compared to $3,072,000 or $0.12 per share for the same quarter of the prior
 year.  Weighted average shares outstanding were 29,934,000 in the current
 fiscal quarter and 25,978,000 in the prior year.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000620/FORTELOGO )
     "Although combined license and maintenance revenue increased 9% compared
 to the year-ago quarter, license revenue did not meet our projections, with
 most of the fall-off in the U.S. and due to the overall slowdown in the
 economy being reflected in budget constraints at our customers and prospects,"
 stated Asa W. Lanum, President and CEO.  "We continued to manage headcount and
 other expenses carefully during the quarter.  With first-half performance, it
 will be difficult to meet our previously-stated FY 2001 target to exceed last
 year's 47% software license and maintenance revenue growth.  We remain
 committed to our goal to breakeven this year and are positioned to achieve
 breakeven on a cash basis at $4,500,000 quarterly revenue and breakeven on a
 reported income basis at $5,000,000 quarterly revenue."
     Total revenue for the first six months of fiscal 2001 was
 $8,517,000 compared to $9,611,000 for the same period of the prior year.
 Software license and maintenance revenue increased 2% compared to the prior
 year.  Net loss for the six-month period was $3,622,000 or $0.12 per share
 compared to $3,988,000 or $0.16 per share for the same period of the prior
 year.  Weighted average shares outstanding were 29,573,000 for the first
 six months of the current year compared to 24,928,000 for the prior year.
 
     About SightLine software
     Success in the eBusiness era demands that customers receive secure, fast
 and efficient service levels from eBusiness infrastructures.  Yet the very
 nature of eBusiness applications presents a number of challenges.  They span
 the enterprise, and run on a variety of platforms and network domains that are
 constantly changing.  Legacy network and system management products offer
 platform-specific point solutions that in general are event driven (problems
 are reported after the fact, when customers have already experienced poor
 service).  Additionally, these point products cannot show the cause and effect
 relationships between components that can impact overall service levels.
     FORTEL's SightLine was developed to deal with the complexities inherent in
 assuring smooth and trouble-free eBusiness operations across heterogeneous
 multi-tiered applications.  Through powerful, end-to-end, analysis and
 correlation capabilities SightLine identifies information flows and critical
 paths, helping managers predict and address trouble spots before problems turn
 into crises.
 
     About FORTEL Inc.
     FORTEL provides the first real-time performance management solution that
 assures the end-to-end service-level goals of eBusiness.  FORTEL's SightLine
 suite is based on analysis and correlation software that has been applied and
 tuned for more than 10 years in the systems management performance arena by
 customers in finance and banking, defense management, manufacturing, retail
 services and government.  FORTEL counts among its customers many of the
 world's largest and most well known organizations and enterprises.  The
 Company is headquartered in Fremont, Calif., and can be contacted at
 510-440-9600 or by visiting its web site at www.FORTEL.com.
     Except for historical information contained in this press release, the
 foregoing contains forward-looking statements that involve risks and
 uncertainties.  Actual results may differ materially from those indicated by
 such forward-looking statements based on a variety of risks and uncertainties,
 including risks and uncertainties relating to factors such as the timely and
 successful development and market acceptance of our products, services and
 features, our ability to successfully attract and retain customers, our
 profitability targets and financial metrics, the number, size and duration of
 contracts, and software prices, activities of competitors, demand for our
 products, volume of business and general economic conditions.  The guidance
 contained in this press release is based on limited information available to
 the Company today, which is subject to change.  Although the guidance provided
 in this press release may change after today, the Company undertakes no
 obligation to revise or update these forward-looking statements after today.
 Further information about potential factors that could affect our financial
 results is included in our Quarterly Reports on Form 10-Q and most recent
 Annual Report on Form 10-K, which have been filed with the Securities and
 Exchange Commission.
     NOTE:  FORTEL and SightLine are trademarks of FORTEL Inc.
 
 
                                   FORTEL Inc.
 
                  CONSOLIDATED SUMMARY OF FINANCIAL STATEMENTS
 
                     Consolidated Statements of Operations
                      (In Thousands Except Per Share Data)
                                  (Unaudited)
 
                                    Three Months Ended      Six Months Ended
                                    3/31/01    3/31/00     3/31/01    3/31/00
 
     Net sales                      $ 3,965     $4,091      $8,517     $9,611
     Cost of goods sold                 931      1,508       2,234      3,350
     Research & development
       expenses                       1,019        701       2,036      1,352
     Selling, general and
       administrative expenses        4,015      4,906       7,776      8,757
         Operating loss              (2,000)    (3,024)     (3,529)    (3,848)
     Other expense                       50         48          93        140
     Net loss                       $(2,050)   $(3,072)    $(3,622)   $(3,988)
     Loss per common share            $(.07)     $(.12)      $(.12)     $(.16)
     Number of shares used in
       per share calculation         29,934     25,978      29,573     24,928
 
 
 
                          Consolidated Balance Sheets
                                 (In Thousands)
                                  (Unaudited)
 
                                                      Mar. 31,      Sept. 30,
                                                        2001           2000
     Assets:
     Current assets
       Cash and cash equivalents                         $909           $889
       Accounts receivable, net                         3,955          3,362
       Deferred and refundable taxes                        9            125
       Other current assets                               963          1,138
         Total current assets                           5,836          5,514
 
     Fixed assets, net                                    654            854
     Other assets, net                                  2,633          3,339
       Total assets                                   $ 9,123        $ 9,707
 
     Liabilities, redeemable common stock and
       warrants and shareholders' deficit:
     Current liabilities
       Accounts payable                               $ 3,337        $ 2,367
       Accrued liabilities                              1,098          1,076
       Short-term debt                                    757             --
       Deferred revenue                                 4,124          2,889
         Total current liabilities                      9,316          6,332
 
     Redeemable common stock and warrants                  --          5,301
 
     Shareholders' deficit
       Common stock                                    79,525         74,471
       Accumulated deficit                            (79,718)       (76,397)
       Total shareholders' deficit                       (193)        (1,926)
       Total liabilities, redeemable common stock and
        warrants and shareholders' deficit            $ 9,123        $ 9,707
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE FORTEL Inc.
    FREMONT, Calif., April 24 /PRNewswire Interactive News Release/
 -- FORTEL Inc. (Nasdaq:   FRTL) today announced results for the second fiscal
 quarter ended March 31, 2001.  Total revenue was $3,965,000 compared to
 $4,091,000 for the same quarter of the prior year.  License and maintenance
 revenue of $3,720,000 for the quarter increased 9% from the same period in the
 prior year.  Net loss for the quarter was $2,050,000 or $0.07 per share
 compared to $3,072,000 or $0.12 per share for the same quarter of the prior
 year.  Weighted average shares outstanding were 29,934,000 in the current
 fiscal quarter and 25,978,000 in the prior year.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000620/FORTELOGO )
     "Although combined license and maintenance revenue increased 9% compared
 to the year-ago quarter, license revenue did not meet our projections, with
 most of the fall-off in the U.S. and due to the overall slowdown in the
 economy being reflected in budget constraints at our customers and prospects,"
 stated Asa W. Lanum, President and CEO.  "We continued to manage headcount and
 other expenses carefully during the quarter.  With first-half performance, it
 will be difficult to meet our previously-stated FY 2001 target to exceed last
 year's 47% software license and maintenance revenue growth.  We remain
 committed to our goal to breakeven this year and are positioned to achieve
 breakeven on a cash basis at $4,500,000 quarterly revenue and breakeven on a
 reported income basis at $5,000,000 quarterly revenue."
     Total revenue for the first six months of fiscal 2001 was
 $8,517,000 compared to $9,611,000 for the same period of the prior year.
 Software license and maintenance revenue increased 2% compared to the prior
 year.  Net loss for the six-month period was $3,622,000 or $0.12 per share
 compared to $3,988,000 or $0.16 per share for the same period of the prior
 year.  Weighted average shares outstanding were 29,573,000 for the first
 six months of the current year compared to 24,928,000 for the prior year.
 
     About SightLine software
     Success in the eBusiness era demands that customers receive secure, fast
 and efficient service levels from eBusiness infrastructures.  Yet the very
 nature of eBusiness applications presents a number of challenges.  They span
 the enterprise, and run on a variety of platforms and network domains that are
 constantly changing.  Legacy network and system management products offer
 platform-specific point solutions that in general are event driven (problems
 are reported after the fact, when customers have already experienced poor
 service).  Additionally, these point products cannot show the cause and effect
 relationships between components that can impact overall service levels.
     FORTEL's SightLine was developed to deal with the complexities inherent in
 assuring smooth and trouble-free eBusiness operations across heterogeneous
 multi-tiered applications.  Through powerful, end-to-end, analysis and
 correlation capabilities SightLine identifies information flows and critical
 paths, helping managers predict and address trouble spots before problems turn
 into crises.
 
     About FORTEL Inc.
     FORTEL provides the first real-time performance management solution that
 assures the end-to-end service-level goals of eBusiness.  FORTEL's SightLine
 suite is based on analysis and correlation software that has been applied and
 tuned for more than 10 years in the systems management performance arena by
 customers in finance and banking, defense management, manufacturing, retail
 services and government.  FORTEL counts among its customers many of the
 world's largest and most well known organizations and enterprises.  The
 Company is headquartered in Fremont, Calif., and can be contacted at
 510-440-9600 or by visiting its web site at www.FORTEL.com.
     Except for historical information contained in this press release, the
 foregoing contains forward-looking statements that involve risks and
 uncertainties.  Actual results may differ materially from those indicated by
 such forward-looking statements based on a variety of risks and uncertainties,
 including risks and uncertainties relating to factors such as the timely and
 successful development and market acceptance of our products, services and
 features, our ability to successfully attract and retain customers, our
 profitability targets and financial metrics, the number, size and duration of
 contracts, and software prices, activities of competitors, demand for our
 products, volume of business and general economic conditions.  The guidance
 contained in this press release is based on limited information available to
 the Company today, which is subject to change.  Although the guidance provided
 in this press release may change after today, the Company undertakes no
 obligation to revise or update these forward-looking statements after today.
 Further information about potential factors that could affect our financial
 results is included in our Quarterly Reports on Form 10-Q and most recent
 Annual Report on Form 10-K, which have been filed with the Securities and
 Exchange Commission.
     NOTE:  FORTEL and SightLine are trademarks of FORTEL Inc.
 
 
                                   FORTEL Inc.
 
                  CONSOLIDATED SUMMARY OF FINANCIAL STATEMENTS
 
                     Consolidated Statements of Operations
                      (In Thousands Except Per Share Data)
                                  (Unaudited)
 
                                    Three Months Ended      Six Months Ended
                                    3/31/01    3/31/00     3/31/01    3/31/00
 
     Net sales                      $ 3,965     $4,091      $8,517     $9,611
     Cost of goods sold                 931      1,508       2,234      3,350
     Research & development
       expenses                       1,019        701       2,036      1,352
     Selling, general and
       administrative expenses        4,015      4,906       7,776      8,757
         Operating loss              (2,000)    (3,024)     (3,529)    (3,848)
     Other expense                       50         48          93        140
     Net loss                       $(2,050)   $(3,072)    $(3,622)   $(3,988)
     Loss per common share            $(.07)     $(.12)      $(.12)     $(.16)
     Number of shares used in
       per share calculation         29,934     25,978      29,573     24,928
 
 
 
                          Consolidated Balance Sheets
                                 (In Thousands)
                                  (Unaudited)
 
                                                      Mar. 31,      Sept. 30,
                                                        2001           2000
     Assets:
     Current assets
       Cash and cash equivalents                         $909           $889
       Accounts receivable, net                         3,955          3,362
       Deferred and refundable taxes                        9            125
       Other current assets                               963          1,138
         Total current assets                           5,836          5,514
 
     Fixed assets, net                                    654            854
     Other assets, net                                  2,633          3,339
       Total assets                                   $ 9,123        $ 9,707
 
     Liabilities, redeemable common stock and
       warrants and shareholders' deficit:
     Current liabilities
       Accounts payable                               $ 3,337        $ 2,367
       Accrued liabilities                              1,098          1,076
       Short-term debt                                    757             --
       Deferred revenue                                 4,124          2,889
         Total current liabilities                      9,316          6,332
 
     Redeemable common stock and warrants                  --          5,301
 
     Shareholders' deficit
       Common stock                                    79,525         74,471
       Accumulated deficit                            (79,718)       (76,397)
       Total shareholders' deficit                       (193)        (1,926)
       Total liabilities, redeemable common stock and
        warrants and shareholders' deficit            $ 9,123        $ 9,707
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X14363280
 
 SOURCE  FORTEL Inc.