[DELANO LOGO]
Exhibit 99.1
EMBARGOED FOR RELEASE FOR
6:30 A.M. EST, WEDNESDAY
OCTOBER 31, 2001
Contact: Thomas Hearne Contact: Andre Fuochi
Chief Financial Officer Media Relations Contact
Delano Technology Corporation Maverick Public Relations
T: 905-947-2136 T: 416-640-5519
E: thearne@delanotech.com E:andref@maverickpr.com
DELANO ANNOUNCES IMPROVED OPERATING RESULTS
KAPOOR BECOMES CEO
Toronto - October 31, 2001 - Delano Technology Corporation (NASDAQ: DTEC, TSE:
DLN) today announced a solid quarter in terms of operating performance -
including substantial revenue gains and pro forma operating profitability.
In fiscal Q2, ended September 30, 2001, Delano recorded nearly $4.0 million in
revenue, a 30% increase over Q1. The signing of several blue chip companies
drove the revenue increase.
"We are the fastest and lowest cost way for a business to get up-and-running
with a CRM solution," said Vikas Kapoor, the new CEO of Delano. "Delano's value
proposition plays well at any time, but particularly in today's down market, and
has allowed us to achieve revenue growth during a difficult period for the
software industry."
In addition, the company broke even on a pro forma operating cash basis. "We
made very tough restructuring choices in July that have helped Delano achieve
this positive result sooner than expected. We are now ready to invest to fuel
future growth, " continued Kapoor.
CEO Appointment
Delano's board also announced that Kapoor has become Delano's CEO. "Vikas has
the vision and experience to build a world-class company," said Dennis Bennie,
Chairman of Delano. "He knows Delano well through his work on our board and
brings deep operational strength to the running of the company."
Since July, the company has slashed costs and re-focused resources to position
Delano as the low-cost provider of customized CRM solutions. "A lot of hard work
remains to be done, but we are turning the corner and I am optimistic about our
outlook," said Kapoor.
"Delano's roots as a premier provider of email marketing solutions will serve us
well as that market continues to grow. I am eager to leverage that foothold and
position Delano as a broader provider of innovative marketing solutions, "
concluded Kapoor.
"Vikas is a superb strategic thinker and we have enormous confidence in his
vision for the future of the business," concluded Bennie.
Kapoor previously served as President and CEO of Walker Digital in Stamford, CT,
an incubator of marketing-oriented, internet-based businesses. Prior to that, he
co-founded and built the Mitchell Madison Group, a global consulting firm with
$200 million in revenues.
Kapoor has an undergraduate degree from Princeton and an MBA from Harvard
Business School, where he was a Baker Scholar.
Operating Results
Highlights of the company's operating results include:
- Pro forma net income, excluding the recovery of deferred stock-based
compensation, restructuring charges, asset impairment and depreciation
for the quarter was $30,000, compared to a pro forma net loss
(excluding the same items and in-process research and development) of
$7.3 million or ($0.24) per share for the same period in the prior
year and a pro forma net loss (excluding the same items) of ($0.32)
cents per share in the June 2001 quarter.
- Revenues in Q2 were nearly $4.0 million compared to revenues of $3.0
million in the June, 2001 quarter.
- The company had cash on hand of $12.4 million on September 30, 2001
and approximately $14 million as of October 30, 2001.
- The Company will add to its deferred stock-based compensation charge
in future quarters related to Kapoor's compensation package that
includes a grant of 4,230,000 common shares, which vest over 30 months
subject to accelerated vesting in certain circumstances.
Analysts and Investors Call
An analysts and investors conference call to discuss the details of this
announcement will take place on October 31, 2001 at 8:00 a.m. EST.
Dial in: (416) 695-5806
Live Web cast: www.delanotech.com/investors
A replay of the call will be available for one week, and will be accessible at
(416) 695-5800, access code 956521.
ABOUT DELANO TECHNOLOGY CORPORATION
Delano is a CRM software company that provides an enterprise with the most
flexible and effective way to intelligently manage the customer interactions
that maximize customer value and enhance corporate profitability. The company's
marketing and customer service applications combine advanced analytics with rich
interaction capabilities to enable marketing intelligent, two-way dialogues
between an enterprise and its customers. Delano's customers include
industry-leading new economy, Fortune 500 and Global 2000 enterprises including
Compaq, Charles Schwab, Warner Music Group, Nortel Networks, Ericsson, and i2
Technologies. The Company is headquartered in Toronto, Canada. For additional
information, contact Delano Technology Corporation, 302 Town Centre Boulevard,
Markham, ON, L3R OE8; www.delanotech.com
Delano is a trademark of Delano Technology International SRL. All other company
and product names mentioned are the trademarks or registered trademarks of their
respective companies.
This press release contains forward-looking statements, including statements
which are made pursuant to the safe harbor provisions of the Securities
Litigation Reform Act of 1995, regarding the Company's financial performance for
the quarter ended September 30, 2001 and regarding the Company's expected
financial performance for the following fiscal quarters, expected future
customer demand, the Company's ability to adapt to changing market conditions
and to compete and the Company's future cash requirements. These statements are
neither promises nor guarantees, but are subject to risks and uncertainties that
could cause actual results to differ materially from those contained in the
forward-looking statements, including without limitation risks relating to: the
change in the Company's limited operating history and its history of losses, the
Company's relatively fixed operating expenses, rapid technological change in the
Company's marketplace, the Company's dependence on sales of its e-Business
Interaction Suite and product enhancements, integration of the Company's recent
acquisitions, increased levels of competition with the Company's industry and
the level of demand for the Company's products and services. A more detailed
discussion of these and other important risk factors can be found in the
Company's filings with the SEC, including the Company's Form 10-K for the period
ending March 31, 2001 and the company's Form 10-Q for the period ending June 30,
2001. Readers should not place undue reliance on any such forward-looking
statements, which speak only as of the date they are made. The Company disclaims
any obligation to publicly update or revise any such statements to reflect any
change in Company expectations or in events, conditions, or circumstances on
which any such statements may be based, or that may affect the likelihood that
actual results will differ from those set forth in such forward-looking
statements.
###
DELANO TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS)
SEPTEMBER 30, MARCH 31,
2001 2001
-------- -----------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents.................................... $ 12,378 $ 34,209
Short-term investments....................................... -- 1,155
Accounts receivable trade.................................... 5,347 8,099
Prepaid expenses and other................................... 1,297 3,674
------------ -----------
Total current assets....................................... 19,022 47,137
Property and equipment.......................................... 3,324 11,300
Goodwill and identifiable intangibles, net ..................... -- 5,217
Other assets ................................................... 263 985
------------ -----------
Total assets.................................................... $ 22,609 $ 64,639
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities..................... $ 3,092 $ 8,960
Current portion of restructuring charge accrual.............. 2,813 2,411
Deferred revenue............................................. 704 1,975
Current portion of obligations under capital leases.......... 145 182
------------ -----------
Total current liabilities.................................. 6,754 13,528
Long-term liabilities:
Obligations under capital leases............................. -- 49
Restructuring accrual........................................ 2,516 1,121
------------ -----------
Total liabilities............................................... 9,270 14,698
Shareholders' equity:
Capital stock................................................ 222,331 230,647
Warrant...................................................... 496 496
Deferred stock-based compensation............................ (2,218) (8,464)
Accumulated other comprehensive losses....................... (340) (340)
Deficit...................................................... (206,930) (172,398)
------------- ------------
Total shareholders' equity................................. 13,339 49,941
------------ -----------
Total liabilities and shareholders' equity...................... $ 22,609 $ 64,639
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DELANO TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)
Three months ended Six months ended
September 30, September 30,
2001 2000 2001 2000
---------- ---------- ---------- ----------
Revenues:
License $ 2,058 $ 7,009 $ 3,259 $ 12,370
Service 1,902 1,025 3,737 1,682
-------- -------- -------- --------
Total revenues 3,960 8,034 6,996 14,052
-------- -------- -------- --------
Cost of revenues:
License 309 122 386 181
Service 1,041 1,169 2,868 1,970
-------- -------- -------- --------
Total cost of revenues 1,350 1,291 3,254 2,151
-------- -------- -------- --------
Gross profit 2,610 6,743 3,742 11,901
-------- -------- -------- --------
Operating expenses:
Sales and marketing 1,405 11,116 9,554 21,504
Research and development 1,315 3,856 6,247 6,176
General and administrative 467 1,142 1,902 2,140
Amortization (recovery) of deferred
stock-based compensation (925) 856 (2,144) 2,480
In process research and development -- 360 -- 360
Amortization of goodwill and identifiable
intangibles -- -- 287 --
Impairment of goodwill -- -- 4,930 --
Asset impairment 7,026 -- 7,026 --
Restructuring charges 6,654 -- 10,889 --
-------- -------- -------- --------
Total operating expenses 15,942 17,330 38,691 32,660
-------- -------- -------- --------
Operating loss (13,332) (10,587) (34,949) (20,759)
Interest and other income, net 218 1,384 563 2,926
Equity in loss of associated company (80) -- (146) --
-------- -------- -------- --------
Loss before income taxes (13,194) (9,203) (34,532) (17,833)
Income taxes -- -- -- --
-------- -------- -------- --------
Net loss (13,194) (9,203) (34,532) (17,833)
-------- -------- -------- --------
Basic and diluted loss per common share $ (0.35) $ (0.30) $ (0.92) $ (0.59)
======== ======== ======== ========
Shares used in computing basic and diluted
loss per common share (in thousands) 37,594 30,264 37,436 30,112
======== ======== ======== ========
Pro forma basic and diluted income (loss)
(excluding restructuring charges,
asset impairment, impairment and
amortization of goodwill and identifiable
intangibles, amortization (recovery) of
deferred stock-based compensation and
depreciation) $ 30 $ (7,288) $(11,831) $(13,918)
======== ======== ======== ========
Pro forma basic and diluted income (loss)
per common share (excluding restructuring
charges, asset impairment, impairment and
amortization of goodwill and identifiable
intangibles, amortization (recovery) of deferred
stock-based compensation and depreciation) $ 0.00 $ (0.24) $ (0.32) $ (0.46)
======== ======== ======== ========
DELANO TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLAR AMOUNTS IN THOUSANDS OF U.S. DOLLARS)
SIX MONTHS ENDED
SEPTEMBER 30,
2001 2000
------- -------
Cash provided by (used in):
Operating activities:
Loss for the period $(34,532) $(17,833)
Depreciation and amortization which does not involve cash 1,897 984
Amortization (recovery) of deferred stock-based compensation (2,144) 2,480
Impairment of goodwill 4,930 --
Equity in loss of associated company 146 --
Non-cash charges 7,001 360
Changes in non-cash operating working capital:
Accounts receivable trade 2,752 (4,699)
Prepaid expenses and other assets 2,352 (1,164)
Accounts payable and accrued liabilities (5,804) 3,998
Restructuring charge accrual 1,797 --
Deferred revenue (1,271) 80
------- -------
Net cash used in operating activities (22,876) (15,794)
Financing activities:
Issuance of common shares and warrants 74 1,061
Payment on notes payable -- (745)
Repayment of obligations under capital leases (88) (88)
------- -------
Net cash provided by (used in) financing activities (14)
Investing activities:
Sale of short-term investments 1,155 28,012
Additions to property and equipment (234) (8,124)
Cash used in acquisition -- (1,451)
Proceeds on sale of fixed assets 175 --
------- -------
Cash provided by investing activities 1,096 18,437
Effect of currency translation of cash balances (37) (37)
------- -------
Increase (decrease) in cash and cash equivalents (21,831) 2,834
Cash and cash equivalents, beginning of period 34,209 82,370
------- -------
Cash and cash equivalents, end of period $ 12,378 $ 85,204
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