EXHIBIT A
Contact:
Andy Oliver At THE FINANCIAL RELATIONS BOARD (212) 661-8030:
LEWIS P.R. Inc Analysts: Christie Mazurek, cmazurek@frb.bsmg.com
Tel: (619) 702-5571 General: Alison Ziegler, aziegler@frb.bsmg.com
Email: andyo@lewispr.com Media: Marty Gitlin, mgitlin@frb.bsmg.com
GENTIA SOFTWARE REPORTS RECORD LICENSE REVENUE IN SECOND QUARTER
LICENSE REVENUE INCREASES 42% OVER FIRST QUARTER, 122% OVER YEAR-AGO PERIOD
CONCLUDING $5.0 MILLION OF ADDITIONAL GENTIA FINANCING
BOSTON, MASS. - July 20, 2000 - Gentia Software (Nasdaq: GNTI), a leading
provider of intelligent analytical applications for enterprise-wide deployment,
today reported its results for the second quarter, ended June 30, 2000. Gentia
reported marginal net income for the second quarter of 2000. This compares with
net income of $0.2 million, or $0.02 per share, for the first quarter of 2000
and a net loss of $6.3 million, or ($0.62) per share, for the year-ago quarter.
Revenues for the second quarter of 2000 increased 20% to $8.0 million from $6.7
million in the first quarter of 2000 and increased 34% from $6.0 million in the
year-ago quarter. Total second quarter revenue included $5.2 million in license
revenue, representing growth of 42% and 122% over license revenue in the first
quarter of 2000 and the year-ago quarter, respectively.
"We are extremely pleased by the continued acceleration in license revenue
growth in our Enterprise Performance Management (EPM) division during the
quarter," said Steve Fluin, Gentia's Chief Executive Officer. "Our investment in
Gentia's market-leading Balanced Scorecard application is paying off with
significant new deals from operations including Barclays Capital, Liberty Life,
Infinion, Kimberly-Clark and new license revenues through the recently
established IBM (NYSE: IBM) channel."
On June 28, Gentia's THINKAnalytics subsidiary launched the THINKCRA(TM) suite
of integrated Customer Relationship Analytics applications at the DCI Conference
in Boston, MA. This leading-edge technology offers organizations the predictive
intelligence and analytical capabilities to analyze the data in CRM systems.
THINKCRA provides the necessary scalability, data integrity and
knowledge-sharing that is essential to successfully analyze the undeniable
interplay among customer attributes, the products they buy, the loyalty they
demonstrate and their impact on marketing initiatives.
"CRM Analytics is a market where we see significant opportunity for future
growth," added Fluin. "To date, the THINKCRA application suite, based on our
K.Wiz technology, has been very well received throughout the CRM industry and we
are aggressively capitalizing on our first mover advantage. During the quarter
we licensed our K.wiz platform to Norkom, a privately held CRA company, and we
also concluded our first direct sale for this application suite to ARC
International, a leading supplier of consumer glassware products in the United
States. In the quarters ahead, we expect to expand both our direct and indirect
sales and marketing efforts to achieve significant revenue growth. We are also
delighted to announce that our relationship with IBM has been extended and their
Global Services Division will be working closely with THINKAnalytics to
implement our THINKCRA application suite in joint customer situations. This will
create additional licensing opportunities as we move into the second half of the
year."
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Nick Bray, Gentia's Chief Financial Officer commented, "We have accelerated
growth in license revenue, while successfully maintaining Gentia's
profitability. The profits of the EPM division have been invested in launching
the THINKAnalytics business. Our early success with the THINKCRA application
suite warrants acceleration of this investment in the quarters ahead to
capitalize on what is universally recognized as a massive growth market. We are
in the process of raising $5.0 million from a placement of Gentia stock to
private investors. This income will be used to further develop our EPM
application suite and to provide general working capital needs. We are also in
the process of raising between $10-$12 million from a private placement of
THINKAnalytics stock. This placement is being managed by William Blair, our
Chicago-based investment bankers and is anticipated to be completed before the
end of quarter three. These funds will be used to accelerate our growth in the
Customer Relationship Analytics market sector."
"As a stand-alone business, excluding expenses related to THINKAnalyticS, our
EPM division would have reported net income of approximately $0.5 million, or
$0.04 per share, in the second quarter," continued Bray. "Our EPM division's
performance, which resulted in our fourth consecutive quarter of profitability,
enabled us to increase funding for the launch of our Customer Relationship
Analytics (CRA) business during the quarter. In addition, the EPM division's
continued development efforts delivered Wireless Scorecard, an extension to
Gentia's Balanced Scorecard application for strategy management and the
formation of an Application Service Provider (ASP) business for the delivery of
the Company's market-leading Balanced Scorecard application."
Fluin concluded, "We are excited by the opportunities available to the Company.
We will continue to grow our core EPM business by leveraging new sales and
delivery channels, such as the recently created ASP business. This will extend
the appeal of our market-leading EPM applications into the mid-market. In
addition, we will continue the expansion of our successful partnering and
channels model with organizations such as IBM and we will work to establish the
THINKAnalytics subsidiary with THINKCRA in the marketplace, bringing predictive
intelligence to the CRM industry."
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).
ABOUT THINKANALYTICS
THINKAnalytics Corporation, headquartered in Boston, MA, is a software vendor
that focuses on Customer Relationship Analytics (CRA). THINKCRA is
THINKAnalytics' packaged analytical application. It helps organizations
understand their customers by analyzing customer information buried in
front-office CRM and other corporate systems' data. It provides detailed,
actionable information in areas including customer segmentation, customer
loyalty, customer value and marketing effectiveness. THINKAnalytics is a wholly
owned subsidiary of Gentia Software (Nasdaq:GNTI).
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.
--FINANCIAL TABLES FOLLOW--
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GENTIA SOFTWARE PLC
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------------------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2000 1999 2000 1999
----------------------------------------------------------
US$ US$ US$ US$
Revenues:
License.............................................. $5,242 $2,366 $8,926 $4,660
Services and other................................... 2,761 3,586 5,740 7,243
----------- ----------- ----------- ------------
8,003 5,952 14,666 11,903
Cost of revenues:
License.............................................. 176 868 387 1,000
Services and other................................... 1,619 2,303 3,258 4,918
----------- ----------- ----------- ------------
1,795 3,171 3,645 5,918
Gross profit.............................................. 6,208 2,781 11,021 5,985
Operating expenses:
Sales and marketing.................................. 4,104 4,778 6,705 8,436
Research and development............................. 864 1,547 1,837 3,134
General and administrative........................... 863 1,025 1,574 2,014
Restructuring costs.................................. - 1,376 - 1,876
Goodwill amortization................................ 323 384 584 584
----------- ----------- ----------- ------------
Total operating expenses............. 6,154 9,110 10,700 16,044
Income/(loss) from operations............................. 54 (6,329) 321 (10,059)
Interest (expense)/income................................. (38) 28 (128) 69
----------- ----------- ----------- ------------
Income/(loss) before provision for income taxes........... 16 (6,301) 193 (9,990)
Provision for income taxes................................ - - - -
----------- ----------- ----------- ------------
Net income/(loss)......................................... $16 ($6,301) $193 ($9,990)
=========== =========== =========== ============
Basic earning per share................................... $0.00 ($0.62) $0.02 ($0.98)
Diluted earning per share................................. $0.00 ($0.62) $0.01 ($0.98)
Shares used to compute basic EPS..................... 12,044 10,214 11,388 10,205
Shares used to compute diluted EPS................... 14,758 10,214 13,897 10,205
--more--
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GENTIA SOFTWARE PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30 DECEMBER 31
2000 1999
---------------- ----------------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
US$ US$
ASSETS
Current assets:
Cash and cash equivalents $(1,142) $2,968
Accounts receivable, net of allowances 13,248 7,757
Trade account receivables 15,775 11,214
Less: Allowance for doubtful debt (2,527) (3,457)
Prepaid expenses and other current assets 1,136 559
Tax recoverable - -
------------- -------------
Total current assets 13,242 $11,284
Property and equipment, net 1,068 1,153
Purchased software, net of amortization of $870
(Dec 31, 1999 - $609) 1,739 2,000
Goodwill on acquisition, net of amortization of $2,608
(Dec 31, 1999 - $2,286) 5,360 3,831
------------- -------------
Total assets $21,409 $18,268
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of lease obligations $74 $46
Accounts payable 2,679 2,784
Accrued liabilities 1,951 2,624
Deferred revenues 3,918 3,259
Other accounts payable 917 1,289
Short Term loans 1,103 4,442
------------- -------------
Total current liabilities $10,642 $14,444
Non current liabilities:
Long-term portion of lease obligations 102 121
------------- -------------
Total Liabilities $10,744 $14,565
Shareholders' equity:
Ordinary shares 2,980 2,481
Additional paid-in capital 35,222 29,009
Retained (deficit) (26,502) (26,695)
Cumulative translation adjustment (1,035) (1,092)
------------- -------------
Total shareholders' equity $10,665 $3,703
------------- -------------
Total liabilities and shareholders' equity $21,409 $18,268
============= =============
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