SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
GENTIA SOFTWARE PLC
Tuition House
St George's Road
Wimbledon
London SW19 4EU
United Kingdom
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
----------- ---------------
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
----------- ---------------
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
82- N.A.
Page 1 of 14 Pages
Exhibit Index Appears on Page 10
1
GENTIA SOFTWARE PLC
FORM 6-K
TABLE OF CONTENTS
Page
Financial Information:
Condensed Consolidated Balance Sheets as of March 31, 2000 (unaudited)
and December 31, 1999 (unaudited) 3
Condensed Consolidated Statements of Operations for the three months ended March 31, 2000 and 1999
(unaudited) 4
Condensed Consolidated Statements of Cash Flows for the three months
ended March 31, 2000 (unaudited) and 1999 (unaudited) 5
Notes to Condensed Consolidated Financial Statements (Unaudited) 6
Management's Discussion and Analysis of Financial Condition and Results of Operations. 7-9
Exhibit Index 10
Exhibit A. First Quarter Press Release 11
2
GENTIA SOFTWARE PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31 DECEMBER 31
2000 1999
---------------- ----------------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
US$ US$
ASSETS
Current assets:
Cash and cash equivalents ..................... $ 1,216 $ 2,968
Accounts receivable, net of allowances ........ 9,584 7,757
Trade account receivables .................. 12,968 11,214
Less: Allowance for doubtful debt ....... (3,384) (3,457)
Prepaid expenses and other current assets ..... 870 559
Tax recoverable ............................... -- --
-------- --------
Total current assets ..................................... 11,670 $ 11,284
Property and equipment, net .......................... 1,004 1,153
Purchased software, net of amortization of $739
(Dec 31, 1999 - $609) ............................ 1,870 2,000
Goodwill on acquisition, net of amortization of $2,416
(Dec 31, 1999 - $2,286) .......................... 3,700 3,831
-------- --------
Total assets ............................................. $ 18,244 $ 18,268
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of lease obligations .......... $ 83 $ 46
Accounts payable .............................. 2,186 2,784
Accrued liabilities ........................... 1,376 2,624
Deferred revenues ............................. 4,131 3,259
Other accounts payable ........................ 1,805 1,289
Short Term loans .............................. -- 4,442
-------- --------
Total current liabilities ................................ $ 9,581 $ 14,444
Non current liabilities:
Long-term portion of lease obligations ........ 102 121
-------- --------
Total Liabilities ........................................ $ 9,683 $ 14,565
Shareholders' equity:
Ordinary shares ............................... 2,869 2,481
Additional paid-in capital .................... 33,242 29,009
Retained (deficit) ............................ (26,519) (26,695)
Cumulative translation adjustment ............. (1,031) (1,092)
-------- --------
Total shareholders' equity ............................... $ 8,561 $ 3,703
-------- --------
Total liabilities and shareholders' equity ............... $ 18,244 $ 18,268
======== ========
See accompanying notes
3
GENTIA SOFTWARE PLC
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED
--------------------------------------------
MARCH 31, MARCH 31,
2000 1999
--------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED) (UNAUDITED)
US$ US$
Revenues:
License .................................... $ 3,684 $ 2,294
Services and other ......................... 2,979 3,657
-------- --------
6,663 5,951
Cost of revenues:
License .................................... 211 132
Services and other ......................... 1,639 2,615
-------- --------
1,850 2,747
Gross profit .................................... 4,813 3,204
Operating expenses:
Sales and marketing ........................ 2,603 3,658
Research and development ................... 973 1,589
General and administrative ................. 710 988
Purchased research and development .......... -- --
Restructuring costs ......................... -- 500
Goodwill amortization ....................... 260 199
-------- --------
Total operating expenses ............ 4,546 6,934
Income / (loss) from operations ................. 267 (3,730)
Interest (expense) / income ..................... (90) 41
-------- --------
Income / (loss) before provision for income taxes 177 (3,689)
Provision for income taxes ...................... -- --
-------- --------
Net income / (loss) ............................. $ 177 ($ 3,689)
======== ========
Basic income / (loss) per share ................. $ 0.02 ($ 0.36)
Diluted income / (loss) per share ............... $ 0.01 ($ 0.36)
Shares used to compute basic EPS ........... 10,719 10,178
Shares used to compute diluted EPS ......... 13,897 10,178
See accompanying notes
4
GENTIA SOFTWARE PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
------------------------------------------------
MARCH 31, 2000 MARCH 31, 1999
----------------- ----------------------
(IN THOUSANDS)
US$ US$
CASH FLOWS FROM OPERATING ACTIVITIES
Net income / (loss).................................................. $177 $(3,689)
Adjustments to reconcile net income/(loss) to net
cash (used in) operating activities:
Depreciation................................................ 168 286
Goodwill amortization....................................... 261 199
In-process research and development......................... -
Loss on disposal of assets.................................. 2 -
Loss on disposal of subsidiary.............................. - -
Changes in operating assets and liabilities:
Accounts receivable..................................... (1,754) 1,196
Provision for bad debts................................. (73) (251)
Prepaid expenses, recoverable taxes and otherassets..... (311) 15
Accounts payable........................................ (597) (178)
Accrued liabilities and other accounts payable.......... (734) (730)
Deferred revenues....................................... 872 322
----------------- ----------------------
Net cash (used in) operating activities....................................... (1,989) (2,830)
----------------- ----------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of acquisition......................................... - -
Proceeds on sale of property and equipment.................. - -
Proceeds on sale of subsidiary.............................. - -
Purchases of property and equipment......................... (21) (194)
----------------- ----------------------
Net cash used in investing activities......................................... (21) (194)
----------------- ----------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds on shares issued......................... 620 -
Short term loan repaid................................ (363) -
Generation (repayment) of capital lease obligations... 18 128
----------------- ----------------------
Net cash provided by financing activities............................... 275 128
----------------- ----------------------
Effect of exchange rate changes on cash........................ (17) (22)
----------------- ----------------------
Net (decrease) in cash......................................... (1,752) (2,918)
Cash at beginning of period.................................... 2,968 5,314
----------------- ----------------------
Cash at end of period.......................................... $1,216 $2,396
================= ======================
See accompanying notes
5
GENTIA SOFTWARE PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
Gentia Software plc (the "Company") is incorporated in England and Wales. The
Company is a leading supplier of analytical applications that enable clients to
maximize their competitive position through enterprise-wide deployment of
strategic management and predictive decision making solutions.
BASIS OF PRESENTATION
The consolidated financial statements are stated in United States dollars and
are prepared under United States generally accepted accounting principles.
INTERIM FINANCIAL INFORMATION
The financial information at March 31, 2000 and the results of operations for
the three months and twelve months ended March 31, 2000 are unaudited, but
include all adjustments which the Company considers necessary for a fair
presentation of the financial position at such date and the operating results
and cash flows for those periods. Results for the three month period ended March
31, 2000 are not necessarily indicative of results that may be expected for the
entire year. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with United States generally
accepted accounting principles have been condensed or omitted pursuant to the
Securities and Exchange Commission Rules and Regulations. In accordance with SOP
98-1, the Company has capitalized computer software obtained for internal use.
PRINCIPLES OF CONSOLIDATION
The accompanying financial statements consolidate the accounts of the Company
and its wholly and majority owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
FOREIGN EXCHANGE
The consolidated balance sheets of the Company and its foreign subsidiaries are
translated from their respective functional currencies to United States dollars
at period-end exchange rates and the statements of operations and cash flows at
average exchange rates for the relevant periods. Gains and losses resulting from
translation are accumulated as a separate component of shareholders' equity. Net
gains and losses resulting from foreign exchange transactions, which are not
material in any of the reporting periods, are included in the consolidated
statement of operations.
PER SHARE INFORMATION
Net income per share information is computed based on the weighted average
number of shares outstanding, as described in FAS 128.
2 LITIGATION
On January 25, 2000, the Company announced with Hyperion Solutions Corporation
that they had settled their patent lawsuit, which originated in April 1996. As a
result of the settlement, the Company has agreed to remove from its software
products the ability to select the number of dense dimensions that can be
employed in its databases, and will instead provide a pre-set default value. The
Company will supply software to its customers that will bring existing
installed-base applications into compliance with the terms of this settlement.
Other terms of the agreement are confidential.
From the knowledge the Company has about how its current customer base uses the
Company's products and services, the Company has concluded that the terms of the
settlement should have little or no impact. Customers using the Company's
software and services to implement business strategy, track operational
performance or build custom applications should not be compromised. The
settlement is not expected to affect the Company's financial results for the
most recent quarter or the fiscal year.
All legal costs associated with the litigation have been written off as
incurred.
6
GENTIA SOFTWARE PLC
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
THREE MONTHS ENDED MARCH 31, 2000 AND THREE MONTHS ENDED MARCH 31, 1999
REVENUES
Revenues were $6.7 million in the three months ended March 31, 2000, an increase
of approximately 12.0% compared to revenues of $6.0 million for the three months
ended March 31, 1999. The Company achieved license revenue growth of 60.6% with
an increase from $2.3 million for the three months ended March 31, 1999 to $3.7
million for the three months ended March 31, 2000. License revenue continues to
originate predominantly from the European and Rest of World operations.
Investment in the USA sales channel is expected to generate returns in the
following quarters.
Services and other revenues were $3.0 million in the three months ended March
31, 2000 a decrease of approximately 18.5% compared to $3.7 million for the
three months ended March 31, 1999. The decrease in service revenue on the first
quarter of last year can in part be attributed to the sale of our South African
and Australian operations earlier in the year, combined with the reduction of
direct professional services revenue as we focus on application specific, high
margin business. Services and other revenue comprised 44.7% of total revenues
for the three months ended March 31, 2000, compared to 61.5% for the three
months ended March 31, 1999. The change is attributable to an increase in
license revenue sales relative to total revenue.
GROSS PROFIT
Gross profit was $4.8 million or 72.2% of revenues for the three months ended
March 31, 2000, compared to $3.2 million or 53.8% revenues for the three months
ended March 31, 1999. The increase in gross margin is attributed to the higher
level of direct license fee sales and the improved gross margins achieved on
services and other revenue. Gross margins on services and other revenue
increased from 28.5% for the three months ended March 31, 1999 to 45.0% for the
same period in 2000. The increase is attributed to a focus on application
specific, high margin business in the professional services division as well as
the cost saving benefits from the restructuring of the support and maintenance
services division.
SALES AND MARKETING
Sales and marketing costs were $2.6 million in the three months ended March 31,
2000 compared to $3.7 million in the three months ended March 31, 1999. Sales
and marketing expenditure has decreased by $1.1 million as a direct result of
the strategic actions taken through the restructure program. The cost savings
were attributed to the elimination of duplicated resources, centralization of
corporate functions and the sale of the Australian and South African operations.
The Company has invested in the United States sales operation and the results of
this investment should be evidenced in the coming quarter.
RESEARCH AND DEVELOPMENT
Research and development costs were $1.0 million in the three months ended March
31, 2000, lower than the $1.6 million recorded in the three months ended March
31, 1999. The decrease in research and development costs can be attributed to
the costs savings as a result of a reduction in legal costs relating to the
Arbour dispute and the consolidation of research facilities. The current
research and development organization continues to focus on building the
analytical applications that surround the Scorecard combined with developing our
new Customer Relationship Analytic application. The Company's research and
development expenditure is predominantly incurred in pounds sterling.
GENERAL AND ADMINISTRATIVE
General and administrative costs were $0.7 million in the three months ended
March 31, 2000, compared to $1.0 million for the three months ended March 31,
1999. The reduction in costs can be attributed to the centralization of the
finance function in the United Kingdom with significant savings being made
through the closure of the facilities and termination of regional staff.
OTHER INCOME
7
Other income reduced from $41,000 in the three months ended March 31,1999 to an
expense of $90,000 for the three months ended March 31, 2000. The interest
incurred relates to the current short-term finance that was converted to equity
on March 4, 2000.
RESTRUCTURING COSTS AND PROVISION
The last provision for restructuring costs made by the Company was in the three
month period ended June 30, 1999. All significant costs relating to the
restructuring have now been incurred and limited provisions remain only for the
extended payment of senior executives. The remaining accruals are expected to be
fully utilized by the end of the second quarter of 2000 and the associated cash
costs will end within the same period.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2000, the Company had cash and cash equivalents of $1.2 million
compared to $3.0 million at December 31, 1999. In the three months ended March
31, 2000 the Company's operating activities consumed cash of $2.0 million
compared to $2.8 million in the three months ended March 31, 1999.
Net accounts receivable at March 31, 2000 were $9.6 million, an increase of
23.1% compared to $7.8 million at December 31, 1999. The increase is
attributable to recent maintenance billings, with the deferred revenues account
on the balance sheet increasing by $0.9 million and the effect of extended
payment terms on deals in the last two quarters of 1999.
Investing activities utilized $21,000 in the three months ended March 31, 2000
compared to the utilization of $194,000 in the three months ended December 31,
1999. Investing activities represent the purchase of property and equipment.
Financing activities generated $275,000 in the three months ended March 31, 2000
compared to $128,000 in the three months ended December 31, 1999. The increase
in funds from financing activities primarily represents net proceeds from the
exercising of staff options netted against the repayment of a short term loan.
Loan agreements totalling an aggregate of US$2.0 million entered into by the
Company with each of Robin W.I.Lodge, Marshall Services, Alan McGahan, and Rhone
Venture Capital Limited have been converted into shares of the Company at a
price of US$2.25 per share. In addition warrants have been issued in connection
with the loan agreements for the number of shares into which the loan may be
converted multiplied by 1.25, at the same conversion price.
Loan agreements totalling an aggregate of US$2.0 million entered into by the
Company with each of Finsbury Technology Trust PLC, Pulsar Technology Fund,
Grange Noominees Ltd. and Banco Nominees (Guernsey) Limited have been converted
into shares of the Company at a price of US$4.65 per share. In addition warrants
have been issued in connection with the loan agreements for the number of shares
into which the loan may be converted multiplied by 0.5, at the same conversion
price.
The Company's ability to satisfy its cash requirements for the remainder of the
year is dependent on meeting certain projected revenue targets, cash collection
targets, raising additional sources of short term finance and containing
operating expenses. The Company has, at times in the past, been unable to meet
similar targets, particularly license revenue targets. There can be no assurance
that the Company will meet its projected revenue targets and the failure of the
Company to do so (or to obtain additional sources of financing, which may not be
available on suitable terms to the Company, if at all) will have a material
adverse effect on the Company's business and financial condition and the value
of the Company's American Depositary Shares.
This Report contains "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. All statements, other than statements of
historical facts, included in this Report (or incorporated herein by reference)
regarding the Company's financial position and business strategy may constitute
forward-looking statements. Although the Company believes that the expectations
reflected in, and the assumptions underlying, such forward-looking statements
are reasonable, it can give no assurance that such expectations will prove to
have been correct. Important factors that could cause actual results to differ
materially from the Company's expectations are included in the documents filed
by the Company with the Securities and Exchange Commission, including the
matters contained in the caption "Business Factors" in the Company's most recent
Annual Report on Form 20-F. In light of the foregoing, readers of this Report
are cautioned not to place undue reliance on the forward-looking statements
contained or incorporated by reference herein.
8
The information contained in Exhibit 1 hereto, consisting of the registrant's
unaudited financial statements for the year ended December 31, 1999, has been
distributed to its security holders and is furnished to the Commission pursuant
to Rule 13a-16 under the Securities Exchange Act of 1934, as amended (the
"Act"). This report and the information furnished herewith shall not be deemed
to be "filed" for the purposes of Section 18 of the Act or otherwise subject to
the liabilities of that section.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused the Report to be signed on its behalf by the
undersigned, thereunto duly authorised.
GENTIA SOFTWARE plc
By: /s/ Nicholas P.S. Bray
Nicholas P. S. Bray
Chief Financial Officer
Date: May 31, 2000
9
EXHIBIT INDEX
Page
Exhibit A First Quarter Press Release - (2000) 11
10
EXHIBIT A
CONTACT:
Nick Bray AT THE FINANCIAL RELATIONS BOARD:
Chief Financial Officer For Analyst Info: Julie Creed (312) 640-6724
Gentia Software For General Info: Kelly Lofts (212) 661-8030
+44 181 971 4000 For Media Info: Jason Rando (212) 661-8030
CONTACT: AT THE FINANCIAL RELATIONS BOARD:
Andy Oliver Analysts: Christie Mazurek,
LEWIS P.R. Inc CMAZUREK@FRB.BSMG.COM
Tel: (619) 702-5571 General: Kelly Lofts, KLOFTS@FRB.BSMG.COM
Email: ANDYO@LEWISPR.COM Media: Paul Del Colle, PDELCOLL@FRB.BSMG.COM
GENTIA SOFTWARE REPORTS THIRD CONSECUTIVE PROFITABLE QUARTER
LICENSE REVENUE GROWTH OF 22% OVER 4Q99, 61% OVER THE YEAR-AGO QUARTER
GROWTH IN EPM BUSINESS FUNDS INVESTMENT IN NEW CRM ANALYTICS APPLICATIONS
BOSTON, MASS. - April 26, 2000 - Gentia Software (Nasdaq: GNTI), a leading
provider of intelligent analytical applications for enterprise-wide deployment,
today reported its results for the first quarter, ended March 31, 2000. Gentia
reported net income of $0.2 million, or $0.02 per share, for the first quarter
of 2000. This compares with net income of $0.1 million, or $0.01 per share, for
the fourth quarter of 1999 and a net loss of $3.7 million, or ($0.36) per share,
for the year-ago quarter.
Revenues for the first quarter of 2000 totaled $6.7 million compared with $6.1
million in the fourth quarter of 1999 and $6.0 million in the year-ago quarter.
Total first quarter revenue included $3.7 million in license revenue,
representing an increase of 22% and 61% over license revenue in the fourth
quarter of 1999 and the year-ago quarter, respectively.
"We are encouraged by the license revenue growth in our Enterprise Performance
Management (EPM) division, following increased investment in our worldwide sales
and marketing operation," said Steve Fluin, Gentia's Chief Executive Officer.
"Gentia's EPM business has now returned to industry standard operating margins
of 15% and is capitalizing on our prior investment in the Balanced Scorecard
market."
During the first quarter, Gentia announced thinkCRA-TM- , a revolutionary suite
of customer relationship analytical applications that for the first time will
add predictive intelligence and analytical capabilities to the CRM process.
Given the tremendous growth opportunity afforded by the expansive CRM market and
the Company's proprietary technology to increase the effectiveness of CRM
projects, Gentia formed a wholly owned subsidiary, ThinkAnalytics, to operate
its CRA business.
Gentia's successful turnaround of the Company and acceleration of growth in its
EPM business has enabled it to fund the start up of its CRA business while
maintaining profitability. The Company's CRA business is based on the K.Wiz
technology acquired by Gentia Software in 1998. Net income for the first quarter
of 2000 excluding expenses related to the CRA business would have totaled
approximately $1.0 million, or $0.08 per share.
"Costs incurred by the ThinkAnalytics business were more than off-set by the
earnings from our EPM business, enabling the Company to report a third
consecutive profitable quarter," said Nick Bray, Gentia's Chief Financial
Officer. "We are committed to increasing the profitability of Gentia as we grow
our CRA business."
"Sales growth has been our top priority during the last quarter," said Fluin.
"In particular, we continued to drive license growth throughout the world. With
our core EPM operations growth accelerating we are able to develop other
profitable growth opportunities by finding new ways to deliver our intelligent
technology."
Fluin concluded, "Moving forward, we will be focused both on expanding our EPM
opportunities and capitalizing on our first mover advantage with our thinkCRA
suite. We will continue to grow our core EPM business by leveraging new sales
and delivery channels, such as our newly created Application Service Provider
(ASP) business to extend the appeal of our market-leading EPM applications into
the mid-market. We will focus on successfully launching our new analytics suite
for CRM through the newly created ThinkAnalytics subsidiary. In addition, we
will continue the expansion of our successful partnering and channels model with
11
organizations such as IBM, NCR and KPMG. Finally, we will explore opportunities
to acquire synergistic organizations, such as ebi Solutions (announced
separately today), which can increase our market leverage and maximize our
profitability and growth potential."
Recent Gentia accomplishments included:
- Signed deals with 34 companies including, Barclays and Molnlycke
Health Care.
- Signed an agreement with NCR (NYSE: NCR), a recognized world leader in
data warehouse solutions, to deliver Balanced Scorecard solutions to
Customer Relationship Management and Data Warehousing customers. This
global agreement enables NCR to use Gentia's market leading Balanced
Scorecard application to provide a strategic management environment
for its Teradata based CRM solutions.
- Announced thinkCRA, a suite of Customer Relationship Analytical (CRA)
applications giving organizations the predictive intelligence to
interact with their customers more effectively and add value to the
Customer Relationship Management (CRM) process.
- Created the Intelligent Balanced Scorecard application. Gentia's
latest Balanced Scorecard application provides companies with strategy
planning and intelligent data analysis capabilities and ships with
support for Microsoft Windows 2000. The new intelligent application
makes enterprise-scale Balanced Scorecard use more pragmatic by
combining improved usability with Gentia's market-leading data
analysis capability.
- Awarded the designation of Balanced Scorecard Collaborative
Certified-TM-. As a certified application, Gentia's Balanced Scorecard
has met the requirements of the Balanced Scorecard Functional
Standards-TM-, the certification designed to eliminate confusion in
the marketplace by educating suppliers and buyers of the important
elements of a Balanced Scorecard management system.
- Formed an Application Service Provider (ASP) business for the delivery
of the Company's market-leading Balanced Scorecard application. This
new e-business will offer senior executives a full range of services
covering the implementation and life cycle of a Balanced Scorecard,
including rental or lease of Gentia Balanced Scorecard software,
standard industry Balanced Scorecard templates and third-party
implementation services. The new service is available immediately at
WWW.BALANCEDSCORECARD.COM
- Entered into a definitive agreement to acquire ebi Solutions, a
privately held provider of e-business applications and services. In
conjunction with the acquisition, Gentia has formed a new US-based
subsidiary, ThinkAnalytics Corporation, to focus on the delivery of
Customer Relationship Analytic applications, including the recently
announced product suite, thinkCRA. Integration of thinkCRA and ebi's
OASIS offers an advanced solution set encompassing the ability to
analyze both online and offline commerce. The result is an intelligent
and predictive solution that optimizes the ability to understand,
respond to and manage customer relationships.
ABOUT GENTIA SOFTWARE
Gentia Software (Nasdaq: GNTI) is a leading supplier of intelligent analytical
applications for enterprise performance management and customer relationship
management. Its product suites sustain and improve business performance by
improving the quality of customer interactions and driving strategy and
performance management. Gentia incorporates unique technology and the
world-class consulting expertise of partners including IBM, NCR, PWC and KPMG.
Gentia offers best-in-class solutions for Fortune 1,000 companies including
Volvo, Sprint, Bell Atlantic, Credit Suisse First Boston and Motorola. For more
information, visit www.gentia.com or call 1-888-4GENTIA (United States), +44
(0)20 8971 4000 (Europe).
THIS NEWS RELEASE CONTAINS STATEMENTS OF A FORWARD-LOOKING NATURE RELATING TO
THE FINANCIAL PERFORMANCE OF GENTIA SOFTWARE. SUCH STATEMENTS ARE BASED UPON THE
INFORMATION AVAILABLE TO MANAGEMENT AT THIS TIME, AND THEY NECESSARILY INVOLVE
RISK BECAUSE ACTUAL RESULTS COULD DIFFER MATERIALLY FROM CURRENT EXPECTATIONS.
AMONG THE MANY FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER FROM THOSE SET
FORTH IN THE COMPANY'S FORWARD-LOOKING STATEMENTS ARE CHANGES IN GENERAL
ECONOMIC CONDITIONS, ACTIONS TAKEN BY CUSTOMERS OR COMPETITORS, AND THE RECEIPT
OF MORE OR FEWER ORDERS THAN EXPECTED.
12
GENTIA SOFTWARE PLC
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED
--------------------------------------------
MARCH 31, MARCH 31,
2000 1999
------------------ ---- --------------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED) (UNAUDITED)
US$ US$
Revenues:
License....................................... $3,684 $2,294
Services and other.......................... 2,979 3,657
------------------ --------------------
6,663 5,951
Cost of revenues:
License......................................... 211 132
Services and other........................... 1,639 2,615
------------------ --------------------
1,850 2,747
Gross profit....................................... 4,813 3,204
Operating expenses:
Sales and marketing......................... 2,603 3,658
Research and development.................. 973 1,589
General and administrative................. 710 988
Purchased research and development.... - -
Restructuring costs......................... - 500
Goodwill amortization...................... 260 199
------------------ --------------------
Total operating expenses........ 4,546 6,934
Income / (loss) from operations............... 266 (3,730)
Interest (expense) / income.................... (90) 41
------------------ --------------------
Income / (loss) before provision for income taxes 177 (3,689)
Provision for income taxes - -
------------------ --------------------
Net income / (loss)............................. 177 ($3,689)
================== ====================
Basic income / (loss) per share............... $0.02 ($0.36)
Diluted income / (loss) per share............ $0.01 ($0.36)
Shares used to compute basic EPS......... 10,719 10,178
Shares used to compute diluted EPS...... 13,897 10,178
13
GENTIA SOFTWARE PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31 DECEMBER 31
2000 1999
---------------- ----------------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
US$ US$
ASSETS
Current assets:
Cash and cash equivalents.................................. $1,216 $2,968
Accounts receivable, net of allowances................... 9,584 7,757
Trade account receivables.............................. 12,968 11,214
Less: Allowance for doubtful debt.................... (3,384) (3,457)
Prepaid expenses and other current assets................ 870 559
Tax recoverable............................................... - -
------------- -------------
Total current assets........................................................ 11,670 $11,284
Property and equipment, net........................................ 1,004 1,153
Purchased software, net of amortization of $739
(Dec 31, 1999 - $609).............................................. 1,870 2,000
Goodwill on acquisition, net of amortization of $2,416
(Dec 31, 1999 - $2,286).......................................... 3,700 3,831
------------- -------------
Total assets................................................................. $18,244 $18,268
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of lease obligations....................... $83 $46
Accounts payable............................................. 2,186 2,784
Accrued liabilities............................................ 1,376 2,624
Deferred revenues............................................ 4,131 3,259
Other accounts payable...................................... 1,805 1,289
Short Term loans............................................. - 4,442
------------- -------------
Total current liabilities................................................... $9,581 $14,444
Non current liabilities:
Long-term portion of lease obligations................... 102 121
------------- -------------
Total Liabilities $9,683 $14,565
Shareholders' equity:
Ordinary shares............................................... 2,869 2,481
Additional paid-in capital................................... 33,242 29,009
Retained (deficit)............................................ (26,519) (26,695)
Cumulative translation adjustment........................ (1,031) (1,092)
------------- -------------
Total shareholders' equity................................................ $8,561 $3,703
------------- -------------
Total liabilities and shareholders' equity............................... $18,244 $18,268
============= =============
14
# # #