Q4 2000 Results Will Include Restructuring Expense
SAN MATEO, Calif., Dec. 18 /PRNewswire/ -- Eloquent, Inc. (Nasdaq: ELOQ),
the leader in Web-based rich media business communications solutions, today
announced that it is restructuring to better align itself with future market
opportunities brought about by its new product introductions and the recent
formation of a strategic partnership with Microsoft. Beginning January 1,
2001, the company will be organized into two business units, the Software
Business Unit and the Content Business Unit. The move is expected to
significantly reduce Eloquent's expenses and cash burn rate. It will also
result in a headcount reduction of approximately forty-five percent.
Software Business Unit to Provide Rich Media Publishing Platform
The Software Business Unit will support enterprise content creation,
management, and delivery software by providing a rich media publishing
platform. The unit is designed to leverage Eloquent's recently released
Eloquent Communications Server (ECS 6.1), as well as its ESC 6.0. "The ECS
6.1 provides companies with a communications vehicle that can be used to
deliver a full range of corporate messages, including inexpensive,
personalized, rich media presentations," said Eloquent's CEO, Cliff Reid.
"The software unit will provide an effective level of customization from our
professional services group and will enable us to focus on our strategic
partnership with Microsoft."
Microsoft and Eloquent announced on October 24, 2000 that the two
companies had formed a strategic agreement to develop a comprehensive
end-to-end enterprise communications solution for the management and delivery
of streaming media. The Eloquent Communications server transforms Windows
Media-based rich media content so that knowledge workers can search and
navigate it to locate the specific information they seek. Steve Ballmer,
president and CEO of Microsoft, demonstrated the Microsoft Windows Media
Producer with the Eloquent's ECS 6.1 at Streaming Media West in San Jose,
California, on December 12, 2000.
"We also look forward to exercising our option to acquire Rebop Media,"
commented Mr. Reid, "which we believe will occur in the first half of 2001 and
will give us a 'live' solution that will be powerful when combined with our
existing on-demand solutions for a new full solution offering. In fact, as
time goes by, we expect live input to become a primary source of content."
Content Business Unit to Focus on Strategic Customers
The Content Business Unit will combine content production and hosted
delivery. It will continue to provide Eloquent's strategic customers with
turnkey, outsourced production and delivery of rich media content, including
synchronized video, audio, graphics, text, reference documents, URLs, and
other media objects. Eloquent's web-based collaborative publishing technology
allows customers to participate in the production of their business content.
Restructuring Impact on Q4 2000 and Q1 2001 Results
As a result of the restructuring, headcount will be reduced from the
current level of approximately 176 employees to less than 100 employees. With
associated reductions in space cost and other expenses, the negative cash flow
in the first quarter of 2001 is expected to be reduced to approximately $3.5
million to $4 million. This is down from the expected negative cash flow from
operations of approximately $ 8.5 million in the December 2000 quarter, and
down from the negative cash flow of $8.3 million in the September 2000
quarter.
In the December quarter 2000, we expect revenue to be in the range of
$2.0 million to $2.5 million. In the March quarter 2001, we expect revenue
to be in the range of $2.3 million to $2.8 million. We believe that in the
subsequent quarters of 2001 revenue will increase with the advent of our new
products and our partnership with Microsoft.
We expect the December quarter 2000 net loss, excluding stock-based
compensation charges, to be approximately $8.5 million, or approximately
$0.50 per share, before the one-time charge resulting from the restructuring.
The one-time restructuring charge is expected be in the range of $5 million to
$6 million, or $0.30 per share to $0.35 per share, and will be recognized in
the December 2000 quarter. Of this charge approximately half is cash related
and half is non-cash related for non-performing assets such as leasehold
improvements.
"We are cutting spending to support our present level of revenue, and we
intend to keep the organization in-line with the revenue growth," said John
Curson, CFO of Eloquent Inc. "We believe we have a great opportunity in this
market. With the lower cash burn rate, and with approximately $37 million of
cash and no bank debt, we believe we have positioned ourselves to seize that
opportunity."
Following this release during a conference call at 2:00 p.m. PDT, Chief
Executive Officer Cliff Reid and Chief Financial Officer John Curson will
present an overview of the restructuring and the new guidance for the December
quarter 2000 and the March quarter 2001. To listen to the call, please dial
888-243-0812 or 703-736-7293 at least 5 minutes prior to the start.
Interested parties have the opportunity to listen to the conference call live
on the Internet at http://www.vcall.com and the Webcast will be available at that
address for 90 days. A replay of the call will be available through December
26 by dialing 703-925-2435, code #4855983.
About Eloquent, Inc.
Eloquent (Nasdaq: ELOQ) is the leader in Web-based rich media business
communications solutions. Eloquent products and services quickly and
effectively transfer knowledge to large audiences over the Web using
synchronized on-demand video, audio, text, graphics and interactivity.
Eloquent solutions improve an organization's ability to deploy knowledge
quickly. They reduce time-to-market, increase customer satisfaction, and
enable on-demand strategic communications that drive top-line
performance -- at a fraction of the cost of traditional methods. Eloquent's
full service solution offering includes Web-based player and server software,
content production facilities, content and application hosting, and a complete
professional services offering. Eloquent's open architecture integrates
easily with industry-leading technologies, enterprise applications, and other
digital content. Eloquent's worldwide customer base includes over 2 million
users across more than 250 companies.
For more information, please visit the company's Web site at
http://www.eloquent.com .
Statements in this press release may contain forward-looking statements
within the meaning of the Federal securities laws and are subject to the safe
harbors created thereby. The following are among the factors that could
cause actual results to differ materially from the forward-looking statements:
the level of market acceptance for our products and services; the timing
and size of customer orders; the variable length of our sales cycle; and the
restructuring of our business units described above and associated changes in
personnel. Forward-looking statements contained in this press release should
be considered in light of these factors and those factors discussed from time
to time in the company's public reports filed with the Securities and Exchange
Commission, such as those discussed under "Risk Factors" in the company's
registration statement on form S-1, declared effective by the SEC in February
2000, and those discussed in the company's form 10-Q for the quarter ended
September 30, 2000.
Eloquent and the Eloquent logo are trademarks of Eloquent, Inc. All other
trademarks are the property of their respective owners.
SOURCE Eloquent, Inc.
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Related links:
http://www.eloquent.com
CONTACT:
John Curson, Chief Financial Officer of
Eloquent, Inc., 650-294-6500, or email, Jcurson@eloquent.com; or
Analysts, Allison Parker, General, Pam Roberts, or Financial
Media, Chris Wood of Financial Relations Board, 415-986-1591
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