Remedy Reports First Quarter Financial Results

Company to Trim Discretionary Spending and Headcount



Apr 24, 2001, 01:00 ET from Remedy Corporation

    MOUNTAIN VIEW, Calif., April 24 /PRNewswire Interactive News Release/ --
 Remedy(R) Corporation (Nasdaq: RMDY), a leading provider of Information
 Technology Service Management (ITSM) and Customer Relationship Management
 (CRM) solutions, today announced financial results for the first fiscal
 quarter ended March 31, 2001.  Revenues for the first quarter totaled $64.8
 million, with a pro forma net loss of $1.9 million, or a diluted loss per
 share of $0.06, excluding goodwill amortization and a one-time charge.
 Including goodwill amortization and a one-time charge relating to the
 previously announced discontinuation of the eProcurement product line, diluted
 loss per share was $0.21.
     "Until we see some stability return to IT spending patterns, we believe it
 is prudent to reduce our expense levels, while still investing for future
 growth," said Larry Garlick, Chairman and Chief Executive Officer.  "To that
 end, we will trim discretionary spending and reduce our headcount by
 approximately 7%. We anticipate these actions will save at least $5 million
 during Q2 with a one-time charge of around $2 million.  Our goal is to return
 to profitability in Q2, and with revenue for fiscal 2001 now forecasted to be
 in the $300 million range, we believe these actions, while painful, are
 necessary.  Our ongoing investments will focus on initiatives intended to
 drive future growth, with primary emphasis on continued training of our
 expanded sales organization, expansion of our Web-based technology and an
 unflagging commitment to superior customer support.  When recent economic
 uncertainties subside, we are confident that Remedy will be positioned for
 long-term success with our very broad installed base, our demonstrated return-
 on-investment and our rapid implementation times."
 
     A number of significant events have occurred at Remedy:
     -- High rankings in rigorous reports underscore the strength of Remedy's
        technology and the company's leadership in CRM and Help Desk:
        -- Forrester Research, Inc., a leading emerging-technology research
           firm, ranked Remedy's Customer Support within the top four vendors
           in its eBusiness TechRankings(TM) of Customer Service Applications.
        -- ISM, Inc., a leading CRM consulting firm, named Remedy to its 2001
           listing of the Top 15 CRM software packages.
     -- Remedy acquired Deodis, a European consulting entity.  This acquisition
        is key to meeting the growing demand for CRM and Asset Management
        consulting throughout Europe.
     -- Remedy shipped Remedy(R) Wireless to more than 200 companies including
        Sprint, 3M and Agilent Technologies.  Mobile employees can now use
        their cell phones to immediately access, update and manage critical
        business information.
     -- Remedy shipped Remedy(R) Sales Continuum(R) and Remedy(R) Link for Palm
        OS-based Handhelds so that workers can access critical corporate data
        stored in Remedy CRM and ITSM applications.
     -- Remedy repurchased 0.3 million shares of common stock at an average
        price of approximately $25 per share.
     -- Remedy added its 10,000th customer site.
 
     This announcement contains forward-looking statements that involve risks
 and uncertainties.  The Company's actual results may differ materially from
 the results described in such statements.  Factors that might cause such a
 difference include, but are not limited to, the pace of IT spending and
 general economic conditions, inability to quickly scale down costs and
 estimate one-time charges, continued training of the sales organization,
 expansion of Web-based technology, the ability to provide customer support and
 other factors discussed in the "Risk Factors" section of the Company's Report
 on Form 10-K filed with the Securities and Exchange Commission for the period
 ended December 31, 2000, copies of which are available on request from the
 Investor Relations department of the Company.
     The company will host a teleconference call Tuesday, April 24th,
 commencing at 2:30 PM PDT, to discuss the quarterly results. All interested
 parties may listen by tuning into the Web cast at www.streetfusion.com.  For
 additional information on the conference call, please call Remedy Investor
 Relations at 650-903-5258.
 
     About Remedy
     Remedy is a leading supplier of Information Technology Service Management
 (ITSM) and Customer Relationship Management (CRM) solutions, with Remedy
 products sold to more then 10,000 customer sites. Remedy's fast deployment
 programs and radical adaptability accelerate an organization's move to
 eBusiness as well as increasing the ability to continually differentiate from
 competitors. By focusing on internal and external service, Remedy's customers
 continually improve both their customer interactions and their internal
 operations to raise satisfaction and lower costs.   More information on
 Remedy, its products and its services is available on the company's Web site
 at www.remedy.com.
 
     Remedy, Remedy Corporation & Design, Remedy Wireless, Remedy Link, and
 Remedy Sales Continuum are trademarks of Remedy Corporation, Mountain View,
 California which may be registered or pending in certain jurisdictions.  All
 other trademarks are the property of their respective owners.
 
                               -Tables to Follow-
 
                               REMEDY CORPORATION
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
 
                                                  Three months ended March 31,
                                                         2001      2000
                                                          (Unaudited)
     Revenues:
       Products                                         $29,081   $35,420
       Maintenance and service                           35,674    26,512
         Total revenues                                  64,755    61,932
 
     Costs and expenses:
       Cost of product revenues                           1,915     2,402
       Cost of maintenance and service revenues          14,879    11,037
       Research and development                          15,540    11,286
       Sales and marketing                               33,753    25,772
       General and administrative                         4,096     3,239
 
     Total costs and expenses before goodwill, other
      intangible amortization and restructuring charges  70,183    53,736
 
     Pro forma income (loss) before goodwill, other
      intangible amortization and restructuring charges  (5,428)    8,196
 
     Interest income, net                                 2,751     1,674
 
     Pro forma income (loss) before provision for income
      taxes, goodwill, other intangible amortization and
      restructuring charges                              (2,677)    9,870
 
     Provision for income taxes                            (750)    3,158
 
     Pro forma net income (loss) before goodwill, other
      intangible amortization and restructuring charges ($1,927)   $6,712
 
     Goodwill and other intangible amortization, net of
      tax                                                 1,854     1,244
     Restructuring charges, net of tax                    2,443        --
 
     Net income (loss)                                  ($6,224)   $5,468
 
     PROFORMA DILUTED-Net income (loss) per common and
      common equivalent share before goodwill and other
      intangible amortization and restructuring charges  $(0.06)    $0.20
 
     DILUTED-Net income (loss) per common and common
      equivalent share                                   $(0.21)    $0.16
 
     DILUTED-Shares used in computing per share amounts  30,344    34,085
 
     BASIC-Net income (loss) per common share            $(0.21)    $0.18
 
     BASIC-Shares used in computing per share amounts    30,344    30,420
 
 
                               REMEDY CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                                       March 31,  December 31,
                                                         2001        2000
     Assets                                           (Unaudited)     (1)
     Current assets:
       Cash, cash equivalents and short-term
        investments                                    $218,483    $207,899
       Accounts receivable, net                          52,500      79,326
       Prepaid expenses and other current assets          5,480       5,861
       Deferred tax asset                                 7,157       7,157
         Total current assets                           283,620     300,243
     Property and equipment, net                         20,565      19,418
     Goodwill and other intangible assets, net           26,115      25,439
     Other non-current assets                               408         524
     Deferred tax asset - non-current portion             3,437       3,437
                                                       $334,145    $349,061
 
     Liabilities and Stockholders' Equity
     Current liabilities:
       Accounts payable                                  $2,656      $4,036
       Accrued compensation and related liabilities       7,257      10,293
       Income taxes payable                               1,841       3,616
       Other accrued liabilities                         20,425      20,942
       Deferred revenue                                  58,129      56,915
         Total current liabilities                       90,308      95,802
 
     Stockholders' equity                               243,837     253,259
                                                       $334,145    $349,061
 
     (1) Derived from audited financial statements
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X68389278
 
 

SOURCE Remedy Corporation
    MOUNTAIN VIEW, Calif., April 24 /PRNewswire Interactive News Release/ --
 Remedy(R) Corporation (Nasdaq: RMDY), a leading provider of Information
 Technology Service Management (ITSM) and Customer Relationship Management
 (CRM) solutions, today announced financial results for the first fiscal
 quarter ended March 31, 2001.  Revenues for the first quarter totaled $64.8
 million, with a pro forma net loss of $1.9 million, or a diluted loss per
 share of $0.06, excluding goodwill amortization and a one-time charge.
 Including goodwill amortization and a one-time charge relating to the
 previously announced discontinuation of the eProcurement product line, diluted
 loss per share was $0.21.
     "Until we see some stability return to IT spending patterns, we believe it
 is prudent to reduce our expense levels, while still investing for future
 growth," said Larry Garlick, Chairman and Chief Executive Officer.  "To that
 end, we will trim discretionary spending and reduce our headcount by
 approximately 7%. We anticipate these actions will save at least $5 million
 during Q2 with a one-time charge of around $2 million.  Our goal is to return
 to profitability in Q2, and with revenue for fiscal 2001 now forecasted to be
 in the $300 million range, we believe these actions, while painful, are
 necessary.  Our ongoing investments will focus on initiatives intended to
 drive future growth, with primary emphasis on continued training of our
 expanded sales organization, expansion of our Web-based technology and an
 unflagging commitment to superior customer support.  When recent economic
 uncertainties subside, we are confident that Remedy will be positioned for
 long-term success with our very broad installed base, our demonstrated return-
 on-investment and our rapid implementation times."
 
     A number of significant events have occurred at Remedy:
     -- High rankings in rigorous reports underscore the strength of Remedy's
        technology and the company's leadership in CRM and Help Desk:
        -- Forrester Research, Inc., a leading emerging-technology research
           firm, ranked Remedy's Customer Support within the top four vendors
           in its eBusiness TechRankings(TM) of Customer Service Applications.
        -- ISM, Inc., a leading CRM consulting firm, named Remedy to its 2001
           listing of the Top 15 CRM software packages.
     -- Remedy acquired Deodis, a European consulting entity.  This acquisition
        is key to meeting the growing demand for CRM and Asset Management
        consulting throughout Europe.
     -- Remedy shipped Remedy(R) Wireless to more than 200 companies including
        Sprint, 3M and Agilent Technologies.  Mobile employees can now use
        their cell phones to immediately access, update and manage critical
        business information.
     -- Remedy shipped Remedy(R) Sales Continuum(R) and Remedy(R) Link for Palm
        OS-based Handhelds so that workers can access critical corporate data
        stored in Remedy CRM and ITSM applications.
     -- Remedy repurchased 0.3 million shares of common stock at an average
        price of approximately $25 per share.
     -- Remedy added its 10,000th customer site.
 
     This announcement contains forward-looking statements that involve risks
 and uncertainties.  The Company's actual results may differ materially from
 the results described in such statements.  Factors that might cause such a
 difference include, but are not limited to, the pace of IT spending and
 general economic conditions, inability to quickly scale down costs and
 estimate one-time charges, continued training of the sales organization,
 expansion of Web-based technology, the ability to provide customer support and
 other factors discussed in the "Risk Factors" section of the Company's Report
 on Form 10-K filed with the Securities and Exchange Commission for the period
 ended December 31, 2000, copies of which are available on request from the
 Investor Relations department of the Company.
     The company will host a teleconference call Tuesday, April 24th,
 commencing at 2:30 PM PDT, to discuss the quarterly results. All interested
 parties may listen by tuning into the Web cast at www.streetfusion.com.  For
 additional information on the conference call, please call Remedy Investor
 Relations at 650-903-5258.
 
     About Remedy
     Remedy is a leading supplier of Information Technology Service Management
 (ITSM) and Customer Relationship Management (CRM) solutions, with Remedy
 products sold to more then 10,000 customer sites. Remedy's fast deployment
 programs and radical adaptability accelerate an organization's move to
 eBusiness as well as increasing the ability to continually differentiate from
 competitors. By focusing on internal and external service, Remedy's customers
 continually improve both their customer interactions and their internal
 operations to raise satisfaction and lower costs.   More information on
 Remedy, its products and its services is available on the company's Web site
 at www.remedy.com.
 
     Remedy, Remedy Corporation & Design, Remedy Wireless, Remedy Link, and
 Remedy Sales Continuum are trademarks of Remedy Corporation, Mountain View,
 California which may be registered or pending in certain jurisdictions.  All
 other trademarks are the property of their respective owners.
 
                               -Tables to Follow-
 
                               REMEDY CORPORATION
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
 
                                                  Three months ended March 31,
                                                         2001      2000
                                                          (Unaudited)
     Revenues:
       Products                                         $29,081   $35,420
       Maintenance and service                           35,674    26,512
         Total revenues                                  64,755    61,932
 
     Costs and expenses:
       Cost of product revenues                           1,915     2,402
       Cost of maintenance and service revenues          14,879    11,037
       Research and development                          15,540    11,286
       Sales and marketing                               33,753    25,772
       General and administrative                         4,096     3,239
 
     Total costs and expenses before goodwill, other
      intangible amortization and restructuring charges  70,183    53,736
 
     Pro forma income (loss) before goodwill, other
      intangible amortization and restructuring charges  (5,428)    8,196
 
     Interest income, net                                 2,751     1,674
 
     Pro forma income (loss) before provision for income
      taxes, goodwill, other intangible amortization and
      restructuring charges                              (2,677)    9,870
 
     Provision for income taxes                            (750)    3,158
 
     Pro forma net income (loss) before goodwill, other
      intangible amortization and restructuring charges ($1,927)   $6,712
 
     Goodwill and other intangible amortization, net of
      tax                                                 1,854     1,244
     Restructuring charges, net of tax                    2,443        --
 
     Net income (loss)                                  ($6,224)   $5,468
 
     PROFORMA DILUTED-Net income (loss) per common and
      common equivalent share before goodwill and other
      intangible amortization and restructuring charges  $(0.06)    $0.20
 
     DILUTED-Net income (loss) per common and common
      equivalent share                                   $(0.21)    $0.16
 
     DILUTED-Shares used in computing per share amounts  30,344    34,085
 
     BASIC-Net income (loss) per common share            $(0.21)    $0.18
 
     BASIC-Shares used in computing per share amounts    30,344    30,420
 
 
                               REMEDY CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                                       March 31,  December 31,
                                                         2001        2000
     Assets                                           (Unaudited)     (1)
     Current assets:
       Cash, cash equivalents and short-term
        investments                                    $218,483    $207,899
       Accounts receivable, net                          52,500      79,326
       Prepaid expenses and other current assets          5,480       5,861
       Deferred tax asset                                 7,157       7,157
         Total current assets                           283,620     300,243
     Property and equipment, net                         20,565      19,418
     Goodwill and other intangible assets, net           26,115      25,439
     Other non-current assets                               408         524
     Deferred tax asset - non-current portion             3,437       3,437
                                                       $334,145    $349,061
 
     Liabilities and Stockholders' Equity
     Current liabilities:
       Accounts payable                                  $2,656      $4,036
       Accrued compensation and related liabilities       7,257      10,293
       Income taxes payable                               1,841       3,616
       Other accrued liabilities                         20,425      20,942
       Deferred revenue                                  58,129      56,915
         Total current liabilities                       90,308      95,802
 
     Stockholders' equity                               243,837     253,259
                                                       $334,145    $349,061
 
     (1) Derived from audited financial statements
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X68389278
 
 SOURCE  Remedy Corporation