Exhibit 99.1
| I-many Press Release | Press Release |
Company Contact
Kevin Harris
Chief Financial Officer
(732) 452-1515
Kharris@imany.com
I-many Releases Third-Quarter 2004 Results
Edison, NJ – October 26, 2004 –I-many, Inc. (NASDAQ:IMNY), the leader in real-time solutions for contract and transaction compliance management, reported financial results for the third quarter 2004.
Net revenues for the third quarter totaled $9.3 million, an increase of 14.1% versus $8.2 million reported in the second quarter of 2004 and an increase of 27.8% versus $7.3 million reported in the third quarter of 2003. License revenue of $2.4 million increased 130.1% from $1.0 million in the second quarter of 2004 and increased 95.0% from $1.2 million in the third quarter of 2003. Service revenue of $6.9 million decreased 2.8% from $7.1 million in the second quarter of 2004 and increased 14.2% from $6.1 million in the third quarter of 2003. The company also signed a subscription deal in the third quarter that is not counted in current revenue.
GAAP loss for the third quarter was $(0.02) per share versus $(0.16) in the third quarter 2003. On a pro forma basis, third quarter 2004 income per share was $.01 versus a pro forma loss per share of $(0.12) in third quarter 2003. Pro forma net income/(loss) per share differs from GAAP loss per share as it excludes impairment of goodwill and acquired intangible assets, amortization of acquired intangibles, depreciation expense, non-cash option and warrant charges, in process research and development and restructuring and other charges. A more detailed reconciliation of the differences between pro forma and GAAP results is included in the financial tables in this press release.
Quarter-end cash, restricted cash and short-term investments stood at $21.0 million as of September 30, 2004 versus $21.3 million as of June 30, 2004 and $25.1 million as of December 31, 2003.
I-many ceo and president A. Leigh Powell commented, “I-many’s Q3 performance clearly reflects our ability to grow revenues and drive profitability while simultaneously delivering results for our clients and investing in our future. With pro forma profitability now in excess of $1 million through the first nine months of 2004, we are well positioned to deliver full year pro forma profitability in 2004 and set our sights on GAAP profitability in 2005.” Mr. Powell concluded, “In addition to posting outstanding financial results in Q3, we are equally gratified to have added yet another new top 15 pharmaceutical client, Schering Corporation, as well as realizing license revenue from leading companies such as Johnson & Johnson, Duro
Bag, Accenture, and Wockhart. I-many is well positioned to lead the market for Enterprise Contract Management solutions with a clear focus on helping companies manage high value and high risk corporate commitments and compliance objectives.”
Significant achievements in the quarter:
| • | Sales in foodservice, telecom, consulting services, medical devices and pharmaceutical verticals. |
| • | Recorded significant increases in license revenues. |
| • | Finished the first nine months of 2004 below expense guidance with over $1 million of pro forma profits. |
| • | Added another new top 15 pharmaceutical client. |
Full Year 2004 Guidance:
The company is updating its revenue, expense and cash goals for fiscal year 2004, while lowering its guidance on expenses:
| • | Revenues of approximately $40 million versus $39.4 million last year; |
| • | Total GAAP operating expenses, including cost of revenue, of approximately $46 million versus $79.1 million for 2003; this is consistent with previous guidance of $47 million; |
| • | Total pro forma cash operating expenses of approximately $38.5 million versus $52.3 million for 2003 (pro forma cash operating expenses differ from GAAP operating expenses by excluding impairment of goodwill and acquired intangible assets, amortization of acquired intangibles, depreciation expense, non-cash option and warrant charges, in process research and development and restructuring and other charges estimated to be $7 million for the twelve months of 2004; see the financial tables following in this press release); this is improved vs. previous guidance of $40 million; |
| • | Cash, restricted cash and short-term investments of $19-$21 million at year-end; Previous guidance was $18-22 million at year end. |
Net revenues for the first three quarters of 2004 totaled $28.9 million, an increase of 1.0% versus $28.6 million reported in the first three quarters of 2003. License revenue of $8.3 million decreased 16.6% from $10.0 million in the first three quarters of 2003. Service revenue of $20.6 million increased 10.4% from $18.6 million in the first three quarters of 2003.
GAAP loss for the first three quarters was $(0.13) per share versus $(0.87) in the first three quarters of 2003. On a pro forma basis, 2004 earnings per share was $0.02 versus a loss per share of $(0.29) in the first three quarters of 2003. Pro forma net income/(loss) per share differs from GAAP loss per share as it excludes impairment of goodwill and acquired intangible assets, amortization of acquired intangibles, depreciation expense, non-cash option and warrant charges, in process research and development and restructuring and other charges. A more detailed reconciliation of the differences between pro forma and GAAP results is included in the financial tables in this press release.
Full Year 2005 Guidance:
The company is providing initial revenue, expense and cash goals for fiscal year 2005:
| • | Revenues of approximately $42 million to $46 million; |
| • | Total GAAP operating expenses, including cost of revenue, of approximately $44 million; |
| • | Total pro forma cash operating expenses of approximately $40 million to $42 million (pro forma cash operating expenses differ from GAAP operating expenses by excluding impairment of goodwill and acquired intangible assets, amortization of acquired intangibles, depreciation expense, non-cash option and warrant charges, in process research and development and restructuring and other charges; |
| • | Cash, restricted cash and short-term investments of $21-$23 million at year-end. |
I-many will hold a conference call tomorrow, Wednesday, October 27, 2004, at 10:00 a.m. Eastern Time. The call-in number is (800) 638-4930, passcode 45788763. The call is also being webcast and can be accessed at I-many’s web site atwww.imany.com.
Use of Non-GAAP Financial Information
To supplement our GAAP financial statements, the Company uses non-GAAP, or pro forma measures of operating results. This non-GAAP financial information is provided as additional information for investors and is not in accordance with or an alternative to GAAP. These adjusted results exclude certain costs, expenses, gains and losses, and we believe their exclusion can enhance an overall understanding of our past operational performance and also our prospects for the future. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of the operating performance of the Company as opposed to GAAP results, which may include non-recurring, infrequent or other non-cash charges associated with restructuring, amortization of purchased intangibles or impairment losses that are not material to the ongoing performance of the Company’s business. Company management uses these non-GAAP results as a basis for planning and forecasting core business activity in future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with generally accepted accounting principles in the United States.
About I-many
I-many (NASDAQ: IMNY) provides real-time solutions for contract and transaction compliance management. I-many solution suites manage the entire contract and transaction compliance lifecycle from creation to cash, maximizing revenue and delivering hard cost savings by actively monitoring and managing contracts and all associated transactions. For more information, visit the company at www.imany.com.
This news release contains forward-looking statements, and actual results may vary from those expressed or implied herein. Factors that could affect these results include: the risk of unforeseen technical or practical impediments to planned software development, which could affect the Company’s product release timetable; the possibility that current economic conditions will not improve as anticipated or will deteriorate; the possibility that extraordinary events outside the Company’s control could extend the length of the sales cycle for the Company’s products or make the market for the Company’s products more unpredictable; the risk that the Company’s historical dependence on the healthcare market will continue; the risk that the Company will not be successful in opening new markets for its products; and other risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission.
(tables follow)
I-MANY, INC.
Consolidated Condensed Balance Sheets
(in thousands)
September 30, 2004 | December 31, 2003 | |||||
| (Unaudited) | ||||||
Assets | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 15,534 | $ | 21,864 | ||
Restricted cash | 327 | 871 | ||||
Short-term investments | 4,528 | 2,019 | ||||
Accounts receivable | 9,050 | 10,057 | ||||
Other current assets | 1,030 | 819 | ||||
Total current assets | 30,469 | 35,630 | ||||
Property and equipment, net | 1,320 | 1,879 | ||||
Restricted cash | 659 | 377 | ||||
Other assets | 122 | 330 | ||||
Acquired intangible assets, net | 2,475 | 2,822 | ||||
Goodwill, net | 8,667 | 8,531 | ||||
Total assets | $ | 43,712 | $ | 49,569 | ||
Liabilities and Stockholders’ Equity | ||||||
Current liabilities: | ||||||
Accounts payable and accrued expenses | $ | 6,656 | $ | 7,472 | ||
Current portion of deferred revenue | 7,935 | 7,180 | ||||
Current portion of capital lease obligations | 327 | 709 | ||||
Total current liabilities | 14,918 | 15,361 | ||||
Deferred revenue, net of current portion | 271 | 3,816 | ||||
Capital Lease Obligations, net of current portion | 14 | 128 | ||||
Other long-term liabilities | 1,325 | 1,109 | ||||
Stockholders’ equity | 27,184 | 29,155 | ||||
Total liabilities and stockholders’ equity | $ | 43,712 | $ | 49,569 | ||
I-MANY, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
Net Revenues: | ||||||||||||||||
Product | $ | 2,393 | $ | 1,227 | $ | 8,341 | $ | 9,996 | ||||||||
Services | 6,914 | 6,056 | 20,551 | 18,624 | ||||||||||||
Total net revenues | 9,307 | 7,283 | 28,892 | 28,620 | ||||||||||||
Cost of revenue | 3,788 | 4,111 | 11,757 | 11,757 | ||||||||||||
Gross profit | 5,519 | 3,172 | 17,135 | 16,863 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 1,964 | 3,287 | 6,335 | 12,689 | ||||||||||||
Research and development | 2,759 | 4,169 | 8,879 | 12,840 | ||||||||||||
General and administrative | 1,068 | 1,291 | 3,921 | 4,533 | ||||||||||||
Depreciation | 233 | 438 | 664 | 1,408 | ||||||||||||
Amortization of acquired intangible assets | 378 | 331 | 1,087 | 1,656 | ||||||||||||
In-process research and development | 0 | 0 | 290 | 0 | ||||||||||||
Impairment of goodwill and acquired intangible assets | 0 | 0 | 0 | 16,786 | ||||||||||||
Restructuring and other charges | 62 | 359 | 1,371 | 2,188 | ||||||||||||
Total operating expenses | 6,464 | 9,875 | 22,547 | 52,100 | ||||||||||||
Loss from operations | (945 | ) | (6,703 | ) | (5,412 | ) | (35,237 | ) | ||||||||
Other income, net | 107 | 77 | 167 | 202 | ||||||||||||
Loss before income taxes | (838 | ) | (6,626 | ) | (5,245 | ) | (35,035 | ) | ||||||||
Benefit from income taxes | (82 | ) | 0 | (82 | ) | 0 | ||||||||||
Net loss | $ | (756 | ) | $ | (6,626 | ) | $ | (5,163 | ) | $ | (35,035 | ) | ||||
Basic and diluted net loss per common share | $ | (0.02 | ) | $ | (0.16 | ) | $ | (0.13 | ) | $ | (0.87 | ) | ||||
Weighted average shares outstanding | 41,575 | 40,451 | 41,076 | 40,424 | ||||||||||||
I-MANY, INC.
Reconciliation of GAAP Loss to Pro Forma Income (Loss)
(in thousands, except per share amounts)
(unaudited)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
GAAP net loss | $ | (756 | ) | $ | (6,626 | ) | $ | (5,163 | ) | $ | (35,035 | ) | ||||
Acquisition-related and other non-cash GAAP charges: | ||||||||||||||||
Amortization of acquired intangible assets | 378 | 331 | 1,087 | 1,656 | ||||||||||||
Depreciation expense | 233 | 438 | 664 | 1,408 | ||||||||||||
Non-cash option and warrant charges | 348 | 466 | 2,791 | 1,284 | ||||||||||||
Impairment of goodwill and acquired intangible assets | 0 | 0 | 0 | 16,786 | ||||||||||||
In-process research and development | 0 | 0 | 290 | 0 | ||||||||||||
Restructuring and other charges | 62 | 359 | 1,371 | 2,188 | ||||||||||||
Pro forma net income (loss) | $ | 265 | $ | (5,032 | ) | $ | 1,040 | $ | (11,713 | ) | ||||||
Proforma net income (loss) per common share | $ | 0.01 | $ | (0.12 | ) | $ | 0.02 | $ | (0.29 | ) | ||||||
Weighted average common shares outstanding | 45,866 | 40,451 | 46,263 | 40,424 | ||||||||||||
| (1) | Pro forma amounts exclude charges for: impairment of goodwill and acquired intangible assets, amortization of acquired intangible assets, depreciation expense, non-cash option and warrant charges, in-process research and development, and restructuring and other charges. |