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Gentia Press Release
Contact:
Andy Oliver
LEWIS P.R. Inc
Tel: (619) 702-5571
Email: andyo@lewispr.com At The Financial Relations Board (212) 661-8030:Analysts: Christie Mazurek, cmazurek@frb.bsmg.com
General: Alison Ziegler, aziegler@frb.bsmg.com
Media: Marty Gitlin, mgitlin@frb.bsmg.com
GENTIA SOFTWARE ANNOUNCES THIRD QUARTER RESULTS
LONDON, Oct. 30, 2000 - Gentia Software (Nasdaq:GNTI), a leading provider of intelligent analytical applications, today reported its results for the third quarter, ended September 30, 2000. Gentia reported an operating loss of $4.2 million for the third quarter of 2000, an allowance for doubtful accounts of $3.4 million and operating losses from thinkAnalytics, a wholly owned subsidiary, of $2.1 million, giving a total operating loss for the quarter of $9.7 million. This compares with marginal net income for the second quarter of 2000 and net income of $0.1 million for the year-ago quarter.
The Company reported revenues of $2.6 million for the quarter compared with $8.0 million for the previous quarter and $6.1 million for the year ago quarter. Costs for the third quarter totaled $6.9 million before the $3.4 million allowance for doubtful accounts. Costs of the thinkAnalytics subsidiary totaled $2.0 million. Total costs of $12.3 million compare with $8.0 million total costs for the previous quarter and $6.0 for the year ago quarter. Further investment in the Company's thinkAnalytics subsidiary accounted for the increase in costs. The Company decided to take the allowance for doubtful debt primarily as a precaution against operating difficulties experienced by a major European distributor.
"We are extremely disappointed with our quarter three results," commented Steve Fluin, Chief Executive Officer, Gentia Software. "We experienced significantly lower than expected revenues from both Europe and the United States as a result of poor sales execution, with a number of key deals being pushed out beyond quarter three. This reduction in revenue coincided with increased investment in our thinkAnalytics subsidiary."
Fluin continued, "We are confident that Gentia's strategy is sound, and have already taken steps to rectify the execution problems that contributed to our quarter three results.
Gentia also announced it had begun restructuring its operations to reduced costs and improve sales execution for 2001. The Company anticipates completing the restructure before the end of quarter four.
The Company also revealed that it expects to raise further equity during quarter four through a previously announced private placement of its thinkAnalytics subsidiary.
About Gentia Software
Gentia Software (Nasdaq: GNTI) is a leading supplier of intelligent analytical applications for enterprise performance management and customer relationship analytics. Its product suites sustain and improve business performance by improving the quality of customer interactions and driving strategy and performance management. Gentia incorporates unique technology and the world-class consulting expertise of partners including IBM, NCR and KPMG. Gentia offers the best-in-class solutions for Fortune 1,000 companies including Volvo, Sprint, Bell Atlantic, Credit Suisse First Boston and Motorola. For more information, visit www.gentia.com or call 1-8884GENTIA (United States), +44(0) 208 971 4000 (Europe).
About Think Analytics
thinkAnalytics Corporation, headquartered in Boston, MA, is the only software vendor dedicated to Customer Relationship Analytics (CRA). thinkAnalytics is a wholly-owned subsidiary of Gentia Software (Nasdaq: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.
GENTIA SOFTWARE PLC
Condensed Consolidated Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
Three months ended Nine months ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
US$ US$ US$ US$
Revenues:
License $ 467 $ 2,760 $ 9,393 $ 7,420
Services and other 2,117 3,367 7,857 10,610
2,584 6,127 17,250 18,030
Cost of revenues:
License 410 575 1,297 1,575
Services and other 1,359 1,523 4,616 6,441
1,769 2,098 5,913 8,016
Gross profit 815 4,029 11,337 10,014
Operating expenses:
Sales and marketing 7,859 2,134 14,315 10,570
Research and
development 1,156 948 2,743 4,082
General and
administrative 1,097 632 2,672 2,646
Restructuring costs -- -- -- 1,876
Goodwill amortization 374 260 957 844
Total operating
expenses 10,486 3,974 20,687 20,018
(Loss)/income from
operations (9,671) 55 (9,350) (10,004)
Interest (expense)/income (24) -- (152) 69
(Loss)/income before
provision for income taxes (9,695) 55 (9,502) (9,935)
Provision for income taxes -- -- -- --
Net (loss)/income ($ 9,695) $ 55 ($ 9,502) ($ 9,935)
Basic (loss)/earnings
per share ($ 0.79) $ 0.01 ($ 0.81) ($ 0.97)
Diluted (loss)/earnings
per share ($ 0.79) $ 0.01 ($ 0.81) ($ 0.94)
Shares used to
compute basic EPS 12,247 10,232 11,678 10,232
Shares used to
compute diluted EPS 12,247 10,560 11,678 10,560
GENTIA SOFTWARE PLC
Condensed Consolidated Balance Sheets
September 30 December 31
2000 1999
(unaudited) (unaudited)
(in thousands)
US$ US$
Assets
Current assets:
Cash and cash equivalents $ -- $ 2,968
Accounts receivable,
net of allowances 6,618 7,757
Trade account receivables 12,433 11,214
Less: Allowance for doubtful debt (5,815) (3,457)
Prepaid expenses and other
current assets 949 559
Total current assets $ 7,567 $ 11,284
Property and equipment, net 944 1,153
Purchased software, net of
amortization of $1,021
(Dec 31, 1999 - $609) 1,982 2,000
Goodwill on acquisition, net
of amortization of $2,831
(Dec 31, 1999 - $2,286) 5,135 3,831
Total assets $ 15,628 $ 18,268
Liabilities and shareholders' equity
Current liabilities:
Bank overdraft $ 1,893 $ --
Current portion of lease obligations 68 46
Accounts payable 2,911 2,784
Accrued liabilities 2,311 2,624
Deferred revenues 2,894 3,259
Other accounts payable 1,403 1,289
Short Term loans 1,092 4,442
Total current liabilities $ 12,572 $ 14,444
Non current liabilities:
Long-term portion of
lease obligations 102 121
Total Liabilities $ 12,674 $ 14,565
Shareholders' equity:
Ordinary shares 3,100 2,481
Additional paid-in capital 37,465 29,009
Retained (deficit) (36,198) (26,695)
Cumulative translation adjustment (1,413) (1,092)
Total shareholders' equity $ 2,954 $ 3,703
Total liabilities and
shareholders' equity $ 15,628 $ 18,268
CONTACT: Gentia Software
Nick Bray
+44 20 8971 4000
nbray@gentia.com
or
At The Financial Relations Board (212) 661-8030:
Analysts: Christie Mazurek, cmazurek@frb.bsmg.com
General: Alison Ziegler, aziegler@frb.bsmg.com
Media: Paul Del Colle, pdelcoll@frb.bsmg.com
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