BILLERICA, Mass., Feb. 18 /PRNewswire/ -- Peritus Software Services, Inc.
(OTC Bulletin Board: PTUS), a provider of solutions for software maintenance,
today announced financial results for the fourth quarter and year ended
December 31, 1998.
For the three months ended December 31, 1998, revenue decreased 60%
to $5.7 million from $14.2 million in the three months ended December 31,
1997. For the year ended December 31, 1998, revenue decreased 21% to
$31.5 million from $39.7 million in the year ended December 31, 1997. The
revenue decrease was primarily attributable to reductions in license revenue
of 90% and 56% for the quarter and year, respectively.
For the three months ended December 31, 1998, including charges totaling
$2.1 million for restructuring and asset impairment, the Company's net loss
decreased 92% to $5.3 million from $68.4 million for the three months ended
December 31, 1997. The 1997 results included a charge of $70.8 million
associated with the acquisition of Millennium Dynamics, Inc. (MDI). Excluding
charges related to the MDI acquisition, restructuring and asset impairment,
the Company's net loss was $3.2 million for the fourth quarter of 1998 versus
net income of $2.4 million for the fourth quarter of 1997. The Company
announced the details of its fourth quarter restructuring on December 2, 1998
and the $1.2 million charge recorded was consistent with the estimated amount.
The Company also announced in December that it would review its property,
plant and equipment to determine if any adjustment was required. The Company
completed its review and the fourth quarter results include a write-down of
$0.9 million to the carrying value of its property, plant and equipment
primarily related to excess computer equipment and furniture.
For the year ended December 31, 1998, including charges totaling
$11.1 million for restructuring and asset impairment, the Company's net loss
decreased 60% to $26.7 million from $67.5 million for the year ended December
31, 1997. Excluding charges related to the MDI acquisition, restructuring and
asset impairment, the Company's net loss was $15.5 million for the year
1998 versus net income of $3.3 million for the year 1997.
Commenting on the results, Dominic Chan, President and CEO said: "Our
fourth quarter loss, although disappointing, is within the range we announced
in early December. We continue to focus on improving our business as well as
exploring strategic alternatives."
The Company stated that its ability to continue to finance operations is
dependent upon its achieving a cash flow breakeven position and/or obtaining
additional sources of financing. As disclosed in the Company's most recent
Quarterly Report on Form 10-Q, there can be no assurance that the Company will
achieve a cash flow breakeven position or that it will be able to raise
additional financing.
Finally, the Company announced that it has retained Covington Associates
to render financial advisory and investment banking services in connection
with exploring strategic alternatives including the potential sale of the
Company.
About Peritus
Peritus Software Services, Inc. is a quality provider of software
maintenance solutions that boost the productivity, quality, and performance of
IT systems. Using unique technologies and processes, Peritus transforms
software maintenance into an efficient, cost-effective practice. Offerings
include Software Asset Maintenance (SAM) tools and services for long-term
software management, and Renovation Quality Evaluation (RQE) tools and
services for Independent Verification and Validation of Year 2000 renovations.
Founded in 1991, Peritus Software Services (OTC Bulletin Board: PTUS) is
headquartered in Billerica, MA. Visit our web site at http://www.peritus.com.
This press release may contain certain forward-looking statements, which
involve risks and uncertainties. The Company's actual results may differ
materially from the results discussed in such statements. Certain factors
that could cause actual results to differ materially from those discussed in
such forward-looking statements include the risks described in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997, as amended,
the Quarterly Report on Form 10-Q for the quarter ended September 30, 1998,
and other public filings made by Peritus with the Securities and Exchange
Commission, which factors are incorporated herein by reference.
Peritus is a registered trademark and Software Asset Maintenance is a
service mark of Peritus Software Services, Inc.
PERITUS SOFTWARE SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share-related data)
Three Months Year
Ended Ended
December 31, December 31,
1998 1997 1998 1997
Revenue:
Outsourcing services $2,240 $2,905 $9,925 $11,447
License 842 8,511 9,444 21,255
Other services 2,641 2,800 12,163 7,007
Total revenue 5,723 14,216 31,532 39,709
Cost of revenue:
Cost of outsourcing
services 1,744 2,689 7,577 9,536
Cost of license 111 260 1,631 690
Cost of other services 1,474 1,752 9,110 5,357
Total cost of revenue 3,329 4,701 18,318 15,583
Gross profit 2,394 9,515 13,214 24,126
Operating expenses:
Sales and marketing 2,889 3,249 13,244 8,864
Research and
development 1,333 2,746 8,528 8,324
General and
administrative 1,449 1,459 7,466 4,312
Impairment of long-lived
assets 924 -- 5,218 --
Restructuring charges 1,188 -- 5,906 --
Write-off of acquired
in-process R&D -- 70,800 -- 70,800
Total operating
expenses 7,783 78,254 40,362 92,300
Loss from operations (5,389) (68,739) (27,148) (68,174)
Interest income, net 45 466 485 948
Loss before gain on sale of majority-
owned subsidiary, income taxes
and minority interest in majority-
owned subsidiary (5,344) (68,273) (26,663) (67,226)
Gain on sale of majority-owned
subsidiary -- -- (11) --
Provision for estimated
income taxes -- 156 25 260
Minority interest in
majority-owned subsidiary -- (11) (4) 4
Net loss (5,344) (68,418) (26,673) (67,490)
Accrual of dividends on Series
A and B preferred stock -- -- -- 675
Accretion to redemption value
of redeemable stock -- -- -- 57
Net loss available to
common stockholders $(5,344) $(68,418) $(26,673) $(68,222)
Net loss per common share:
Basic $(0.33) $(4.93) $(1.65) $(7.03)
Diluted $(0.33) $(4.93) $(1.65) $(7.03)
Weighted average common shares outstanding:
Basic 16,344 13,868 16,177 9,708
Diluted 16,344 13,868 16,177 9,708
PERITUS SOFTWARE SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
December 31, December 31,
1998 1997
Assets
Cash and cash equivalents $3,378 $11,340
Short-term investments 500 3,000
Accounts receivable, net 3,720 12,627
Costs and estimated earnings in excess of
billings on uncompleted contracts 951 2,547
Prepaid expenses and other current assets 816 710
Total current assets 9,365 30,224
Property and equipment, net 3,848 3,859
Intangible and other assets, net 510 5,787
$13,723 $39,870
Liabilities and Stockholders' Equity
Accounts payable $462 $1,650
Billings in excess of costs and estimated
earnings on uncompleted contracts 435 976
Deferred revenue 1,890 2,818
Other accrued expenses and current liabilities 4,773 3,849
Total current liabilities 7,560 9,293
Long-term liabilities 1,353 572
Total liabilities 8,913 9,865
Stockholders' equity 4,810 30,005
$13,723 $39,870
SOURCE Peritus Software Services, Inc.
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Related links:
http://www.peritus.com
Company News On-Call:
http://www.prnewswire.com/comp/123089.html or fax,
800-758-5804, ext. 123089
CONTACT:
John Giordano, Chief Financial Officer of
Peritus Software Services, Inc., 978-670-0800,
jgiordano@peritus.com
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