TenFold Announces Financial Results for Quarter And Year Ended December 31, 2000

Apr 11, 2001, 01:00 ET from TenFold Corporation

    SALT LAKE CITY, April 11 /PRNewswire/ --
 TenFold Corporation (Nasdaq: TENF), a provider of large-scale applications and
 the Universal Application(TM), today announced financial results for the
 quarter and year ended December 31, 2000.
     For the year ended December 31, 2000, revenues were $62.8 million compared
 to $92.4 million in 1999.  A net loss for 2000 of $(80.1) million, or
 $(2.29) per diluted share, compares to earnings of $5.9 million, or $0.16 per
 diluted share, for 1999.
     Fourth quarter 2000 negative revenues of $14.1 million compared to
 positive revenues of $33.9 million for the same period of 1999.  A net loss
 for the fourth quarter of 2000 of $54.6 million, or $1.55 per diluted share,
 compares to earnings of $1.9 million, or $0.05 per diluted share, for the same
 period of 1999.  In the fourth quarter of 2000, TenFold recognized a special
 charge of $4.8 million, which included restructuring and asset impairment
 charges for workforce reductions, office closures and idle equipment.
     "The disappointing year-end results reflect delivery challenges, a
 difficult sales environment, and a cost structure that anticipated high
 growth," said Nancy Harvey, president and CEO of TenFold Corporation since
 January 11, 2001.  "Over the last two quarters, we have made significant
 strides to fundamentally change our business model, delivery approach, and
 cost structure.  During this year, we expect to return to profitability and
 positive cash flow, and to establish a solid foundation for future growth."
     During the fourth quarter of 2000 and first quarter of 2001, the company
 reduced its workforce by approximately 46 percent and closed seven offices.
 With these restructurings, the company anticipates annualized cost savings of
 approximately $49 million.  The company ended the year with $13.9 million in
 cash.
     In a separate March 15 press release, TenFold announced the sale, by its
 wholly owned subsidiary Argenesis Corporation, of The LongView Group to
 Linedata Services, a European applications services provider to the financial
 services industry.  In 2000, The LongView Group accounted for revenues of
 approximately $12 million and operating expenses of approximately
 $13.5 million.  This sale also added $29 million in cash proceeds.
     "We are pleased to have consummated the first step of what we expect to
 become an important strategic partnership for TenFold and Linedata Services,"
 said Harvey.  "We look forward to exploring other such business relationships
 and new revenue-building opportunities."
 
     TenFold will host a conference call today at 5 p.m. ET to discuss the
 company's fourth quarter and year-end results.  To access the call, dial
 (877) 260-8900 or (612) 288-0340.  To access the conference call over the
 Internet, go the investor's FAQ section of TenFold's Web site at
 http://www.10fold.com/financials_start.html.  Web and telephone replays will
 be available from four hours after the call through April 18, 2001.  To access
 the telephone replay, dial (800) 475-6701 or (320) 365-3844 and enter the
 passcode "581905."
 
     About TenFold
     TenFold Corporation (Nasdaq: TENF) is a provider of the Universal
 Application(TM), an applications development platform, and large-scale
 applications for customers in communications, energy, financial services,
 healthcare, insurance, and other industries.  Using its patented Universal
 Application, TenFold delivers dynamic packaged applications that meet
 customers' needs in rapidly changing business environments, and that are
 flexible to adapt to changing needs over time.  For more information, call
 (800) TENFOLD or visit www.10fold.com.
 
     This release contains forward-looking statements that involve risks and
 uncertainties that may cause actual future events or results to differ
 materially from those described in the forward-looking statements.  These
 risks and uncertainties include: ability to generate sufficient cash flow;
 collectibility of final project payments; future customer revenue; increased
 employee and consultant costs due to project delays; limited operating
 history; ability to achieve cost reductions; customer complaints concerning
 our products and services, and the possibility of future additional
 complaints; shareholder complaints concerning alleged violation of securities
 laws, and the possibility of future additional complaints; possible
 de-listing; reduced comprehensive errors and omissions insurance coverage;
 attraction, training and retention of employees; variability of quarterly
 operating results; dependence on a small number of customers; customer's
 fulfillment of various responsibilities; completion of fixed-time, fixed-price
 contracts; risks associated with the functionality and timing of new product
 releases; longer than expected sales cycles; ability to accurately estimate
 resources required for new and existing projects; and changes in industry
 accounting guidance.  The forward-looking statements in this release address a
 variety of subjects, including for example, achievement of cost savings and
 return to profitability and positive cash flow.  Additional information
 concerning risks and uncertainties that could cause actual results to differ
 materially from those in the forward-looking statements is contained from time
 to time in documents filed by TenFold Corporation with the Securities and
 Exchange Commission, including but not limited to, the most recent report on
 Form 10-K.
 
 
                              TENFOLD CORPORATION
                          CONSOLIDATED BALANCE SHEETS
                       (in thousands, except share data)
 
                                                         December 31,
                                                     2000            1999
                                   Assets
     Current assets:
       Cash and cash equivalents                   $13,854         $58,247
       Accounts receivable (net of
        allowances for doubtful accounts
        of $7,338 and $725, respectively)            3,451          10,713
       Unbilled accounts receivable, (net
        of allowances for doubtful accounts
        of $2,949 and $0, respectively)                282           4,377
       Prepaid expenses and other assets               652             889
       Deferred income taxes                           612           2,650
       Income taxes receivable                         644              --
       Other assets (net of allowance
        of $236 and $0 respectively)                   256           1,080
          Total current assets                      19,751          77,956
 
       Restricted cash                               2,598             111
       Property and equipment, net                  20,234           9,810
       Assets held for sale                          2,944              --
       Due from stockholders, (net of
        allowances of $860, and $0 respectively)        40           1,000
       Other assets                                    770             216
       Goodwill and acquired intangibles, net       18,938          23,539
          Total assets                             $65,275        $112,632
 
            Liabilities and Stockholders' Equity
     Current liabilities:
       Accounts payable                             $9,769          $2,903
       Income taxes payable                            766           1,142
       Accrued liabilities                          12,043          16,836
       Deferred revenue                             35,853           9,066
       Current installments of obligations
        under capital leases                         3,381             926
       Current installments of notes payable         3,377           1,701
       Promissory note                                  --          12,000
       Other current liabilities                       899              --
          Total current liabilities                 66,088          44,574
 
     Long-term liabilities:
       Deferred income taxes                           612           2,754
       Obligations under capital leases,
        excluding current installments               3,498           1,175
       Notes payable, excluding
        current installments                         5,284           2,289
       Other long-term liabilities                   1,241              --
          Total long-term liabilities               10,635           6,218
 
     Stockholders' equity (deficit):
       Common stock, $0.001 par value:
       Authorized: 120,000,000 shares
        Issued and outstanding shares:
         35,735,858 shares at December 31, 2000
          and 34,806,602 shares at
          December 31, 1999                             36              35
       Additional paid-in capital                   66,170          62,672
       Notes receivable from stockholders,
        (net of allowances of $1,686, and
        $0 respectively)                              (429)         (1,155)
       Deferred compensation                        (2,132)         (5,611)
       Retained earnings (accumulated deficit)     (74,270)          5,872
       Accumulated other comprehensive
        income (loss)                                 (823)             27
          Total stockholders' equity (deficit)     (11,448)         61,840
     Total liabilities and
      stockholders' equity (deficit)               $65,275        $112,632
 
 
                              TENFOLD CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
 
                                   Three Months Ended         Year Ended
                                       December 31,           December 31,
                                    2000         1999        2000      1999
 
     Revenues:
       License                    $(3,890)     $23,660     $12,416    $47,088
       Services                   (10,231)      10,236      50,390     45,341
         Total revenues           (14,121)      33,896      62,806     92,429
 
     Operating expenses:
       Cost of revenues            15,921       10,510      61,994     30,460
       Sales and marketing          3,348        7,575      22,279     24,540
       Research and development     6,036        6,234      25,297     18,085
       General and administrative   9,219        2,329      25,548      5,231
       Amortization of goodwill
        and acquired intangibles    1,151        1,064       4,603      1,064
       Amortization of deferred
        compensation                  246          362       1,188      1,427
       In process research
        and development                --        2,000          --      2,000
       Special charges              4,810           --       4,810         --
         Total operating expenses  40,731       30,074     145,719     82,807
     Income (loss) from
       operations                 (54,852)       3,822     (82,913)     9,622
 
     Other income (expense):
       Interest and other income      765          697       3,268      1,521
       Interest expense              (268)        (291)     (1,116)      (540)
         Total other income, net      497          406       2,152        981
     Income (loss) before
       income taxes               (54,355)       4,228     (80,761)    10,603
     Provision (benefit)
       for income taxes               286        2,282        (619)     4,736
     Net income (loss)           $(54,641)      $1,946    $(80,142)    $5,867
 
     Accretion of Series A and
       B preferred stock               --           --          --       (391)
     Net income (loss) applicable
       to common stockholders    $(54,641)      $1,946    $(80,142)    $5,476
 
     Basic earnings (loss)
       per common share            $(1.55)       $0.06      $(2.29)     $0.19
     Diluted earnings (loss)
       per common share            $(1.55)       $0.05      $(2.29)     $0.16
 
     Weighted average common and
      common equivalent shares
      used to calculate earnings
      (loss) per share:
        Basic                      35,164       33,618      35,035     29,278
        Diluted                    35,164       37,953      35,035     34,384
 
 
           COMPUTATION OF BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
 
     The following table sets forth the computation of basic and diluted
 earnings (loss) per share (in thousands except, per share data):
 
                                    Three Months Ended        Year Ended
                                        December 31,          December 31,
                                       2000       1999      2000        1999
     Numerator:
       Numerator for basic earnings
        (loss) per share - net income
        (loss) available to common
        stockholders                 $(54,641)   $1,946    $(80,142)   $5,867
 
       Accretion of Series A and
        B preferred stock                  --        --          --      (391)
       Assumed dilution related to
        subsidiaries' earnings
        applicable to minority
        stockholders                       --        --          --        --
 
       Numerator for diluted
        earnings (loss) per share    $(54,641)   $1,946    $(80,142)   $5,476
 
     Denominator:
       Denominator for basic
        earnings (loss) per share
        - weighted average shares      35,164    33,618      35,035    29,278
 
       Employee stock options              --     4,335          --     5,106
 
       Denominator for diluted
        earnings (loss) per share      35,164    37,953      35,035    34,384
 
     Earnings (loss) per
      common share:
       Basic earnings (loss)
        per common share               $(1.55)    $0.06      $(2.29)    $0.19
       Diluted earnings (loss)
        per common share               $(1.55)    $0.05      $(2.29)    $0.16
 
 

SOURCE TenFold Corporation
    SALT LAKE CITY, April 11 /PRNewswire/ --
 TenFold Corporation (Nasdaq: TENF), a provider of large-scale applications and
 the Universal Application(TM), today announced financial results for the
 quarter and year ended December 31, 2000.
     For the year ended December 31, 2000, revenues were $62.8 million compared
 to $92.4 million in 1999.  A net loss for 2000 of $(80.1) million, or
 $(2.29) per diluted share, compares to earnings of $5.9 million, or $0.16 per
 diluted share, for 1999.
     Fourth quarter 2000 negative revenues of $14.1 million compared to
 positive revenues of $33.9 million for the same period of 1999.  A net loss
 for the fourth quarter of 2000 of $54.6 million, or $1.55 per diluted share,
 compares to earnings of $1.9 million, or $0.05 per diluted share, for the same
 period of 1999.  In the fourth quarter of 2000, TenFold recognized a special
 charge of $4.8 million, which included restructuring and asset impairment
 charges for workforce reductions, office closures and idle equipment.
     "The disappointing year-end results reflect delivery challenges, a
 difficult sales environment, and a cost structure that anticipated high
 growth," said Nancy Harvey, president and CEO of TenFold Corporation since
 January 11, 2001.  "Over the last two quarters, we have made significant
 strides to fundamentally change our business model, delivery approach, and
 cost structure.  During this year, we expect to return to profitability and
 positive cash flow, and to establish a solid foundation for future growth."
     During the fourth quarter of 2000 and first quarter of 2001, the company
 reduced its workforce by approximately 46 percent and closed seven offices.
 With these restructurings, the company anticipates annualized cost savings of
 approximately $49 million.  The company ended the year with $13.9 million in
 cash.
     In a separate March 15 press release, TenFold announced the sale, by its
 wholly owned subsidiary Argenesis Corporation, of The LongView Group to
 Linedata Services, a European applications services provider to the financial
 services industry.  In 2000, The LongView Group accounted for revenues of
 approximately $12 million and operating expenses of approximately
 $13.5 million.  This sale also added $29 million in cash proceeds.
     "We are pleased to have consummated the first step of what we expect to
 become an important strategic partnership for TenFold and Linedata Services,"
 said Harvey.  "We look forward to exploring other such business relationships
 and new revenue-building opportunities."
 
     TenFold will host a conference call today at 5 p.m. ET to discuss the
 company's fourth quarter and year-end results.  To access the call, dial
 (877) 260-8900 or (612) 288-0340.  To access the conference call over the
 Internet, go the investor's FAQ section of TenFold's Web site at
 http://www.10fold.com/financials_start.html.  Web and telephone replays will
 be available from four hours after the call through April 18, 2001.  To access
 the telephone replay, dial (800) 475-6701 or (320) 365-3844 and enter the
 passcode "581905."
 
     About TenFold
     TenFold Corporation (Nasdaq: TENF) is a provider of the Universal
 Application(TM), an applications development platform, and large-scale
 applications for customers in communications, energy, financial services,
 healthcare, insurance, and other industries.  Using its patented Universal
 Application, TenFold delivers dynamic packaged applications that meet
 customers' needs in rapidly changing business environments, and that are
 flexible to adapt to changing needs over time.  For more information, call
 (800) TENFOLD or visit www.10fold.com.
 
     This release contains forward-looking statements that involve risks and
 uncertainties that may cause actual future events or results to differ
 materially from those described in the forward-looking statements.  These
 risks and uncertainties include: ability to generate sufficient cash flow;
 collectibility of final project payments; future customer revenue; increased
 employee and consultant costs due to project delays; limited operating
 history; ability to achieve cost reductions; customer complaints concerning
 our products and services, and the possibility of future additional
 complaints; shareholder complaints concerning alleged violation of securities
 laws, and the possibility of future additional complaints; possible
 de-listing; reduced comprehensive errors and omissions insurance coverage;
 attraction, training and retention of employees; variability of quarterly
 operating results; dependence on a small number of customers; customer's
 fulfillment of various responsibilities; completion of fixed-time, fixed-price
 contracts; risks associated with the functionality and timing of new product
 releases; longer than expected sales cycles; ability to accurately estimate
 resources required for new and existing projects; and changes in industry
 accounting guidance.  The forward-looking statements in this release address a
 variety of subjects, including for example, achievement of cost savings and
 return to profitability and positive cash flow.  Additional information
 concerning risks and uncertainties that could cause actual results to differ
 materially from those in the forward-looking statements is contained from time
 to time in documents filed by TenFold Corporation with the Securities and
 Exchange Commission, including but not limited to, the most recent report on
 Form 10-K.
 
 
                              TENFOLD CORPORATION
                          CONSOLIDATED BALANCE SHEETS
                       (in thousands, except share data)
 
                                                         December 31,
                                                     2000            1999
                                   Assets
     Current assets:
       Cash and cash equivalents                   $13,854         $58,247
       Accounts receivable (net of
        allowances for doubtful accounts
        of $7,338 and $725, respectively)            3,451          10,713
       Unbilled accounts receivable, (net
        of allowances for doubtful accounts
        of $2,949 and $0, respectively)                282           4,377
       Prepaid expenses and other assets               652             889
       Deferred income taxes                           612           2,650
       Income taxes receivable                         644              --
       Other assets (net of allowance
        of $236 and $0 respectively)                   256           1,080
          Total current assets                      19,751          77,956
 
       Restricted cash                               2,598             111
       Property and equipment, net                  20,234           9,810
       Assets held for sale                          2,944              --
       Due from stockholders, (net of
        allowances of $860, and $0 respectively)        40           1,000
       Other assets                                    770             216
       Goodwill and acquired intangibles, net       18,938          23,539
          Total assets                             $65,275        $112,632
 
            Liabilities and Stockholders' Equity
     Current liabilities:
       Accounts payable                             $9,769          $2,903
       Income taxes payable                            766           1,142
       Accrued liabilities                          12,043          16,836
       Deferred revenue                             35,853           9,066
       Current installments of obligations
        under capital leases                         3,381             926
       Current installments of notes payable         3,377           1,701
       Promissory note                                  --          12,000
       Other current liabilities                       899              --
          Total current liabilities                 66,088          44,574
 
     Long-term liabilities:
       Deferred income taxes                           612           2,754
       Obligations under capital leases,
        excluding current installments               3,498           1,175
       Notes payable, excluding
        current installments                         5,284           2,289
       Other long-term liabilities                   1,241              --
          Total long-term liabilities               10,635           6,218
 
     Stockholders' equity (deficit):
       Common stock, $0.001 par value:
       Authorized: 120,000,000 shares
        Issued and outstanding shares:
         35,735,858 shares at December 31, 2000
          and 34,806,602 shares at
          December 31, 1999                             36              35
       Additional paid-in capital                   66,170          62,672
       Notes receivable from stockholders,
        (net of allowances of $1,686, and
        $0 respectively)                              (429)         (1,155)
       Deferred compensation                        (2,132)         (5,611)
       Retained earnings (accumulated deficit)     (74,270)          5,872
       Accumulated other comprehensive
        income (loss)                                 (823)             27
          Total stockholders' equity (deficit)     (11,448)         61,840
     Total liabilities and
      stockholders' equity (deficit)               $65,275        $112,632
 
 
                              TENFOLD CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
 
                                   Three Months Ended         Year Ended
                                       December 31,           December 31,
                                    2000         1999        2000      1999
 
     Revenues:
       License                    $(3,890)     $23,660     $12,416    $47,088
       Services                   (10,231)      10,236      50,390     45,341
         Total revenues           (14,121)      33,896      62,806     92,429
 
     Operating expenses:
       Cost of revenues            15,921       10,510      61,994     30,460
       Sales and marketing          3,348        7,575      22,279     24,540
       Research and development     6,036        6,234      25,297     18,085
       General and administrative   9,219        2,329      25,548      5,231
       Amortization of goodwill
        and acquired intangibles    1,151        1,064       4,603      1,064
       Amortization of deferred
        compensation                  246          362       1,188      1,427
       In process research
        and development                --        2,000          --      2,000
       Special charges              4,810           --       4,810         --
         Total operating expenses  40,731       30,074     145,719     82,807
     Income (loss) from
       operations                 (54,852)       3,822     (82,913)     9,622
 
     Other income (expense):
       Interest and other income      765          697       3,268      1,521
       Interest expense              (268)        (291)     (1,116)      (540)
         Total other income, net      497          406       2,152        981
     Income (loss) before
       income taxes               (54,355)       4,228     (80,761)    10,603
     Provision (benefit)
       for income taxes               286        2,282        (619)     4,736
     Net income (loss)           $(54,641)      $1,946    $(80,142)    $5,867
 
     Accretion of Series A and
       B preferred stock               --           --          --       (391)
     Net income (loss) applicable
       to common stockholders    $(54,641)      $1,946    $(80,142)    $5,476
 
     Basic earnings (loss)
       per common share            $(1.55)       $0.06      $(2.29)     $0.19
     Diluted earnings (loss)
       per common share            $(1.55)       $0.05      $(2.29)     $0.16
 
     Weighted average common and
      common equivalent shares
      used to calculate earnings
      (loss) per share:
        Basic                      35,164       33,618      35,035     29,278
        Diluted                    35,164       37,953      35,035     34,384
 
 
           COMPUTATION OF BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
 
     The following table sets forth the computation of basic and diluted
 earnings (loss) per share (in thousands except, per share data):
 
                                    Three Months Ended        Year Ended
                                        December 31,          December 31,
                                       2000       1999      2000        1999
     Numerator:
       Numerator for basic earnings
        (loss) per share - net income
        (loss) available to common
        stockholders                 $(54,641)   $1,946    $(80,142)   $5,867
 
       Accretion of Series A and
        B preferred stock                  --        --          --      (391)
       Assumed dilution related to
        subsidiaries' earnings
        applicable to minority
        stockholders                       --        --          --        --
 
       Numerator for diluted
        earnings (loss) per share    $(54,641)   $1,946    $(80,142)   $5,476
 
     Denominator:
       Denominator for basic
        earnings (loss) per share
        - weighted average shares      35,164    33,618      35,035    29,278
 
       Employee stock options              --     4,335          --     5,106
 
       Denominator for diluted
        earnings (loss) per share      35,164    37,953      35,035    34,384
 
     Earnings (loss) per
      common share:
       Basic earnings (loss)
        per common share               $(1.55)    $0.06      $(2.29)    $0.19
       Diluted earnings (loss)
        per common share               $(1.55)    $0.05      $(2.29)    $0.16
 
 SOURCE  TenFold Corporation