Record Revenue, Contract Momentum, and Inlogic Acquisition Position Company
For Growth in 2000
BOCA RATON, Fla., Jan. 26 /PRNewswire/ -- Daleen Technologies, Inc. (Nasdaq: DALN), a leading provider of e-business infrastructure solutions for the digital economy, today announced financial results for its fourth quarter and year ended December 31, 1999.
Fourth Quarter Highlights
-- Inlogic Software acquisition expands e-business market position
-- Revenue increased 507% from prior year quarter and 24% over third
quarter 1999
-- License revenue represented 61% of total revenue compared to 34% in
fourth quarter 1998
-- Gross margin was 69% compared to 12% in fourth quarter 1998
-- Fourth consecutive quarter of record contract awards, including four
DSL wins
-- Delivered new Application Service Provider (ASP) market package on
schedule
-- Completed IPO and received total proceeds of $54.4 million
Daleen reported total revenue of $7.5 million for its fourth quarter 1999, a 507% increase over revenue of $1.2 million for the comparable quarter in the prior year. Net loss for the quarter, on an adjusted basis, was $2.2 million, or $0.11 per share, a 42% improvement over the $3.7 million net loss, or $0.30 per share, pro forma, for the same period in 1998. See "Note on Adjusted Results of Operations" below for a discussion of the calculations of net loss and net loss per share.
For the year ended December 31, 1999, Daleen reported revenue of $20.7 million, a 296% increase over revenue of $5.2 million in 1998. Net loss for the year, on an adjusted basis, was $8.3 million, or $0.57 per share, compared to a net loss of $12.2 million, or $1.22 per share, pro forma, last year.
In October 1999, Daleen completed its initial public offering of 4.1 million shares, followed by the underwriters' exercise of their over- allotment option for 615,000 shares. Total proceeds to the company from these transactions were $54.4 million.
Operating Results
(in thousands, except per share amounts and percentages)
Three months ended Year ended December 31, Percent December 31, Percent 1999 1998 Change 1999 1998 Change Total revenue $7,526 $1,239 507% $20,725 $5,231 296% Adjusted net loss (2,152) (3,707) (42)% (8,283) (12,169) (32)% Adjusted net loss per share (0.11) (0.30) (63)% (0.57) (1.22) (53)%
(A) Adjusted net loss presentations exclude acquisition-related charges
and stock compensationexpense (as more fully discussed below under
"Note on Adjusted Results of Operations").
(B) Adjusted net loss amounts for 1998 are on a pro forma basis which
include the effects of theconversion of preferred stock to common as
a result of the initial public offering.
"We are delighted with our overall performance. Our strong fourth quarter results are reflective of the market's acceptance of our products and serve as a testament to the dedication of our management team and employees," said James Daleen, chairman and chief executive officer. "As our financial and business results demonstrate, we exceeded our stated fourth quarter objectives of continuing momentum in contract awards; further increasing visibility of recurring revenue; and extending our strategic marketing alliances to expand our global delivery capacity and increase our plug and play integration capabilities."
Contract Momentum Drives Record Revenue
During the fourth quarter, Daleen continued its consecutive quarterly growth in new contracts for its BillPlex(R) software solution. These contract awards, including four digital subscriber line (DSL) providers, were in the following customer categories: integrated communications providers, Internet-based data services providers and service bureaus.
"The performance we achieved is a result of the company's expertise and focus on its target market. Once again, we will continue to focus on enhancing our existing market packages and developing new packaged solutions, which we believe will extend our momentum and position as a leader in the industry. Our new contract wins will provide further revenue visibility into future quarters," commented Daleen.
"Among the reasons cited for selecting BillPlex are its flexibility, scalability and open design through industry-standard application programming interfaces, as well as our pre-configured market packages which reduce both implementation time and cost," said Daleen.
Inlogic Acquisition Expands Daleen's Product Offering
On December 16,1999, Daleen Technologies acquired Inlogic Software. This transaction expanded Daleen's leading customer management and billing offering through the addition of Web-enabled customer care and electronic bill presentment and payment (EBPP), together with business-to-business gateway solutions. "Key strategic benefits of this acquisition include enhancing our ability to deliver a comprehensive e-business solution; broadening our market opportunities; expanding our research and development, sales and implementation resources; and positioning us to be a leading provider of e-business infrastructure solutions for the digital economy," stated Daleen. "I am also pleased with the progress of our post-integration activities."
This transaction resulted in a one-time charge of $6.3 million related to the write-off of in-process research and development expense for Inlogic. The acquisition, which closed on December 16, 1999, was accounted for as a purchase transaction. All of Inlogic's outstanding shares and options were exchanged for 2.385 million newly-issued shares and options of Daleen, valued at approximately $65 million.
Outlook for 2000
The year ahead presents many opportunities for Daleen. The company's goals include:
-- Increasing revenue and market share;
-- Leveraging Inlogic's products into the combined customer base and sales
funnel;
-- Establishing sales and marketing presence in Europe;
-- Extending strategic marketing alliances to expand global delivery
capacity;
-- Expanding its satisfied customer base;
-- Enhancing its scalable, software-based business model; and
-- Delivering e-business infrastructure solutions to ICPs.
About Daleen Technologies
Founded in 1989, Daleen is a leading provider of e-business infrastructure solutions for the digital economy. Daleen's software solutions provide mission critical support to businesses who offer voice, data, web and applications hosting services over packet and circuit-switched networks. The company distributes its eBusiness, OSS gateway, service activation and BillPlex(R) products throughout the world via Business Alliance Partners and other leading certified systems integrators including AMS, Business Edge, Cap Gemini, Danet, Ernst & Young and Unisys. Daleen is an active participant and provides leadership in industry forums such as the Ordering and Billing Forum (OBF), Internet Protocol Data Record (IPDR) working group and the Application Service Provider (ASP) Consortium. In addition to its Boca Raton, FL headquarters, Daleen has regional offices located throughout the United States and Canada. For additional information regarding Daleen's products and services, visit the company web site at www.daleen.com .
Note on Adjusted Results of Operations: Net loss and net loss per share on an adjusted basis are computed by excluding (i) acquisition-related charges, and (ii) non-cash stock compensation-related charges related to stock options. The acquisition-related charges were incurred in connection with the company's acquisition of Inlogic and include the write-off of Inlogic's in-process research and development and the amortization of goodwill and other intangibles. These non-cash charges for the three months ended December 31, 1999, and for the year total approximately $7 million. The stock compensation-related charges relate to stock options issued in connection with this acquisition, along with certain option grants made by the company during the second and third quarters of 1999. Such amounts total approximately $100,000 for the three months and the year ended December 31, 1999.
Statements in this release including Daleen Technologies' future performance, business objectives, sales prospects, investments, product plans and intended results from marketing alliances are forward-looking statements. These statements are based on assumptions about a number of factors and involve risks and uncertainties that could cause actual results to differ materially from what appears in this release. Key factors include the company's dependence on the continued market acceptance of its products and services, the company's success in winning new customer contracts, productivity of the company's operating organizations, the company's ability to effectively integrate the operations of Inlogic with its own operations, customer and industry analyst perceptions of the company and its vision, technology and future prospects, continued ability to enhance its existing product offerings, challenges associated with recruiting, training, retaining and integrating significant increases in new personnel, ability to establish, maintain and effectively implement relationships with strategic marketing alliances, and the ability to capture significant market share. Readers are encouraged to review the additional risks and important factors described in the company's SEC filings.
DALEEN TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
Three months ended Twelve months ended Dec. 31, Dec. 31, Dec. 31, Dec. 31, 1999 1998 1999 1998 (unaudited) Revenue: License fees $4,569 419 12,404 1,879 Professional services and other 2,957 820 8,321 3,352 Total revenue 7,526 1,239 20,725 5,231 Cost of revenue: License fees 56 2 64 3 Professional services and other 2,306 1,090 7,721 4,239 Total cost of revenue 2,362 1,092 7,785 4,242 Gross profit 5,164 147 12,940 989 Operating expenses: Sales and marketing 1,973 532 4,342 2,435 Research and development 3,162 1,768 9,348 6,653 Purchased in-process research and development 6,347 -- 6,347 -- General and administrative 3,923 1,738 9,572 4,824 Total operating expenses 15,405 4,038 29,609 13,912 Operating loss (10,241) (3,891) (16,669) (12,923) Total nonoperating income 1,051 184 1,329 754 Net loss (9,190) (3,707) (15,340) (12,169) Accretion of preferred stock -- (65) (122) (65) Net loss applicable to common stockholders $(9,190) (3,772) (15,462) (12,234) Net loss applicable to common stockholders per share - basic and diluted $(0.48) (1.16) (1.06) (3.78) Weighted average shares - basic and diluted 18,967 3,240 14,548 3,240 Pro forma data: (unaudited) Pro forma net loss applicable to common stockholders -- $(3,707) -- (12,169) Pro forma net loss applicable to common stockholders per share - basic and diluted -- $(0.30) -- (1.22) Pro forma weighted average shares - basic and diluted -- 12,362 -- 9,994
Note: The pro forma amounts include the effects of the conversion of
preferred stock to common stock as a result of the company's
initial public offering.
DALEEN TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
December 31, December 31, 1999 1998 Cash and securities $61,978 6,476 Total current assets 70,242 8,357 Total assets 133,498 11,025 Total current liabilities 14,424 3,125 Total stockholders' equity 119,074 (13,897)
