EXHIBIT 99.1
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: Claudine Cornelis (212) 661-8030
FOR IMMEDIATE RELEASE
GENTIA SOFTWARE REPORTS 1999 SECOND QUARTER RESULTS
NEW INVESTMENT SECURED TO FUND WORKING CAPITAL NEEDS
ROBIN LODGE APPOINTED NEW CHAIRMAN OF THE BOARD
RESTRUCTURING COMPLETE, RETURN TO PROFITABILITY ON TRACK
LONDON, JULY 22, 1999 -- Gentia Software (Nasdaq: GNTI), a leading provider of
intelligent analytical applications for enterprise-wide deployment, today
reported results for the second quarter ended June 30, 1999. Revenues for the
second quarter of 1999 totaled $6.0 million, compared with $6.0 million for the
first quarter of 1999 and $7.7 million for the second quarter of 1998.
Gentia reported a net loss of $6.3 million, or $0.62 per share, compared with a
net loss of $3.7 million, or $0.36 per share, in the first quarter of 1999 and a
net loss of $1.9 million, or $0.19 per share, in the second quarter of 1998. The
net loss for the most recent quarter includes one-time charges of $3.1 million,
comprised of a previously announced restructuring charge of $1.4 million and a
$1.7 million allowance for doubtful accounts. Although the restructuring charge
is slightly higher than the projected $1.0 million, Gentia has taken additional
cost reductions to bring operating costs in line with current revenue levels.
Further restructuring charges are not anticipated, and the Company believes it
will return to profitability during the second half of 1999.
Gentia also announced today that it has secured a letter of intent regarding an
equity investment that it feels confident will fund its working capital needs
for the foreseeable future. In connection with the investment, Robin Lodge has
been appointed to the position of non-executive Chairman of the Board. Mr. Lodge
has replaced Paul Rolph who has left the Company to pursue other interests.
Mr. Lodge brings more than 27 years of experience in the computer systems market
to Gentia, and holds several non-executive directorships of other public and
private companies. He also brings to the Board considerable experience in the
information systems industry.
"I am very pleased to report that the reorganization of the Company that
commenced at the end of 1998 is now complete," commented Steve Fluin, Chief
Executive Officer. "We have significantly lowered our cost structure by reducing
the head count from 202 at the end of 1998 to 139 at the beginning of the third
quarter of 1999. We have also refocused our efforts to drive revenue growth in a
highly efficient manner. Our Balanced Scorecard, ProfitImpact and core Gentia
products are second to none, and existing prospects for Gentia's predictive
intelligence applications are very exciting. Every day, as we move past Y2K
issues, more and more companies are exploring how to best use IT expenditures in
order to gain competitive advantages. Gentia's product innovation positions it
to meet this demand, which we believe is evidenced by our growing world-class
customer list, as well as the recent investment commitment in our Company."
The Gentia market model includes partnering with leading companies to combine
domain expertise with its enterprise software to create best-in-class solutions.
Partnerships already in place include:
- - Renaissance
- - GartnerGroup
- - Arthur Andersen
- - Bell Atlantic
"We are strongly positioned to benefit from predicted market growth with our
existing products, services and partners," continued Fluin. "In addition to
deals signed during the second quarter with major companies including Swiss
Reinsurance and Schmitz
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Cargobull, we also expanded strategic alliances with consultancy firms such as
Arthur Andersen, Renaissance, KPMG and Ernst & Young, ensuring that we continue
to attract major companies in the second half of 1999."
MOST RECENT DEVELOPMENTS
- - Closed major deals during the quarter with Posten Sverige AB, Saudi Aramco,
Swiss Reinsurance, and Schmitz Cargobull.
- - Released K.wiz-TM- 2.0 with Accelerated Database (ADB). ADB is a unique
patented compression technology, which allows K.wiz to handle vast amounts
of data and deliver a superior response time.
- - Announced a development project with K.wiz Solutions to integrate the
machine learning and compression technology from the K.wiz data mining
framework with GentiaDB. The project will result in the first integrated
platform for Intelligent Applications with embedded predictive analysis
capability. Additionally, we closed deals during the quarter with two
customers who intend to integrate K.wiz with their Balanced Scorecard
solutions.
- - Launched Gentia TrafficOptimizer in partnership with Bell Atlantic. The new
software application equips network engineers, strategic planners and
administrators with a powerful tool to analyze network usage.
- - Appointed new distributors in South Africa and Asia, as well as added a new
Vice President ROW (rest of world) to the executive management team.
ABOUT THE COMPANY
Gentia Software is the leading supplier of analytical applications that enable
clients to maximize their competitive position through enterprise-wide
deployment of strategy management, performance measurement and operational
analysis solutions. By leveraging the only networked Business Intelligence
solution designed for enterprise-wide deployment, Gentia enables a new class of
analytical applications, such as the Balanced Scorecard, which ensure
information delivery to key decision-makers' desktops and browsers throughout an
enterprise. Gentia Software's worldwide client list of more than 500 customers
includes JP Morgan and Company, Volvo, McDonald's Restaurants, Fortis, Swiss
Reinsurance and Sun Microsystems. The Company has headquarters in Boston and
London and operates in more than 20 countries worldwide. For additional
information about Gentia, visit the Company's Web site at WWW.GENTIA.COM or call
1-888-4GENTIA or 1-781-224-0750. To receive additional information via fax at no
charge, dial 1-800-PRO-INFO and enter code 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,
1999 1998 1999 1998
-------- -------- -------- --------
US$ US$ US$ US$
Revenues:
License ................................ $ 2,366 $ 4,779 $ 4,660 $ 7,657
Services and other ..................... 3,586 2,960 7,243 5,999
-------- -------- -------- --------
5,952 7,739 11,903 13,656
Cost of revenues:
License ................................ 868 472 1,000 547
Services and other ..................... 2,303 2,045 4,918 3,827
-------- -------- -------- --------
3,171 2,517 5,918 4,374
Gross profit ................................ 2,781 5,222 5,985 9,282
Operating expenses:
Sales and marketing .................... 4,778 4,175 8,436 8,290
Research and development ............... 1,547 2,034 3,134 3,673
General and administrative ............. 1,025 1,021 2,014 2,103
Restructuring costs ..................... 1,376 -- 1,876 --
Goodwill amortization .................. 384 128 584 230
-------- -------- -------- --------
Total operating expenses 9,110 7,358 16,044 14,296
Loss from operations ........................ (6,329) (2,136) (10,059) (5,014)
Other income ................................ 28 215 69 461
-------- -------- -------- --------
Loss before provision for income taxes ...... (6,301) (1,921) (9,990) (4,553)
Provision for income taxes .................. -- -- -- --
-------- -------- -------- --------
Net loss .................................... ($6,301) ($1,921) ($9,990) ($4,553)
-------- -------- -------- --------
-------- -------- -------- --------
Basic loss per share ........................ ($0.62) ($0.19) ($0.98) ($0.47)
Diluted loss per share ...................... ($0.62) ($0.19) ($0.98) ($0.47)
Shares used to compute basic EPS ....... 10,214 9,869 10,205 9,753
Shares used to compute diluted EPS ..... 10,214 9,869 10,205 9,753
--More--
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GENTIA SOFTWARE PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
1999 1998
-------- --------
(UNAUDITED) (AUDITED)
US$ US$
ASSETS
Current assets:
Cash and cash equivalents ..................... $ 1,166 $ 5,314
Accounts receivable, net of allowances $4,704
( Dec 31, 1998 - $3,801) ................... 6,941 10,565
Prepaid expenses and other current assets ..... 898 1,363
Tax recoverable ............................... -- 212
-------- --------
Total current assets ............................... $ 9,005 $ 17,454
Property and equipment, net .......................... 1,880 2,192
Goodwill on acquisition, net of amortization of $2,373
(Dec 31, 1998 - $1,789) .......................... 6,353 6,902
-------- --------
Total assets ............................................. $ 17,238 $ 26,548
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of lease obligations .......... $ 88 $ 78
Accounts payable .............................. 2,774 2,203
Accrued liabilities ........................... 4,728 3,778
Deferred revenues ............................. 4,446 4,754
Other accounts payable ........................ 1,406 1,766
-------- --------
Total current liabilities ........................... $ 13,442 $ 12,579
Non current liabilities:
Deferred taxation ............................. -- --
Long-term portion of lease obligations ........ 153 59
-------- --------
Total Liabilities ........................................ $ 13,595 $ 12,638
Shareholders' equity:
Ordinary shares ............................... 2,454 2,445
Additional paid-in capital .................... 28,885 28,881
Retained (deficit) ............................ (26,827) (16,837)
Cumulative translation adjustment ............. (869) (579)
-------- --------
Total shareholders' equity ............................... $ 3,643 $ 13,910
-------- --------
Total liabilities and shareholders' equity ............... $ 17,238 $ 26,548
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