Primus Knowledge Solutions (NASDAQ:PKSI)
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Primus Reports 24% Revenue Growth in the Fourth Quarter and Second Consecutive
Profitable Quarter; 2003 Revenue Increases 20%
SEATTLE, Feb. 12 /PRNewswire-FirstCall/ -- Primus Knowledge Solutions, Inc.
today announced financial results for the fourth quarter and year ended December
31, 2003.
Revenue for the fourth quarter of 2003 was $8.8 million, an increase of
approximately 24% compared to $7.1 million for the third quarter of 2003, and an
increase of approximately 92% compared to $4.6 millionfor the fourth quarter of
2002. Total operating expenses for the fourth quarter of 2003 were $6.7
million, compared to $5.5 million for the third quarter of 2003 and compared to
$5.1 million for the fourth quarter of 2002. Net income for the fourth quarter
of 2003 was $528,000 or $0.02 per share, compared to net income of $379,000 or
$0.02 per share for the third quarter of 2003, and a net loss of $1.7 million or
$0.09 per share for the fourth quarter of 2002. Primus's consolidated operating
results include the results of Amacis Group Limited since December 22, 2003, the
date of acquisition.
For the year ended December 31, 2003, revenues were $25.1 million an increase of
20% compared to $20.9 million for the year 2002. Total operating expenseswere
$22.7 million for the year 2003, compared to $25.0 million (including a
restructuring charge of $1.2 million) for the year 2002. The net loss was $2.9
million or $0.15 per share for the year 2003, compared to a net loss for the
year 2002, including the cumulative effect of a change in accounting principle
recorded in the first quarter of 2002 of $2.3 million, of $11.2 million, or
$0.59 per share. The year 2002 loss before the cumulative effect of the change
in accounting principle was $9.0 million or $0.47 per share. Primus's
consolidated operating results for the year ended December 31, 2003 also include
the results of Broad Daylight, Inc. since September 3, 2003, the date of
acquisition.
As of December 31, 2003, Primus had cash of approximately $12.2 million compared
to $11.4 million at September 30, 2003.
"2003 was a successful year for Primus, we achieved excellent financial results,
delivering profitability in each of the final two quarters, while continuing to
invest in our world class products," said Michael Brochu, president and CEO of
Primus. "During the year we grew revenues, expanded our product offerings,
added new market-leading global customers and acquired two exceptional companies
as part of our strategy for accelerated growth. With our award-winning products,
dedicated and talented employees and blue chip customer base we enter 2004 with
great momentum."
Notable 2003 highlights include:
-- Growing sequential quarterly revenue by 24% in the fourth quarter and
annual revenue by 20%.
-- Finishing 2003 showing profitability in the final half of the year.
-- Adding new customers, including a significant wireless provider, a
leading provider of high performance network equipment, Altera
Corporation, Cap Gemini Ernst & Young, Genentech, Groupe Victoria,
Information Technology, Inc. (a FiServ company), Oce-USA, Primavera
Systems, Red Hat, Washington Mutual Bank, WebEx Communications and
others; as well as having repeat business with Airbus, Eastman Kodak,
Hewlett-Packard, IBM, MAPICS, Mentor Graphics, NextiraOne, Pervasive
Software and others.
-- Continuing to show our value to global enterprises by closing four
transactions in 2003 greater than $1 million. During the fourth
quarter of 2003, revenue from an enterprise sale to one customer
represented approximately 30% of total revenue. During the year ended
December 31, 2003, revenue from two customers represented approximately
29% of total revenue.
-- Completing the acquisition of Broad Daylight, Inc. in September. Broad
Daylight is recognized as a leader in the Web self-service market, and
further enhances Primus's self and assisted service products. Broad
Daylight also has a marquee customer base, including Kodak and
McDonalds.
-- Completing the acquisition of Amacis Group Limited in December. Amacis
is a recognized leader in the electronic communications management
market, a crucial element in a complete self and assisted service
product offering. Amacis brings Primus blue chip customers such as
Allied Irish Bank, Cable & Wireless, HSBC, Orange, Vertex Data Systems
and Yahoo.
-- Closing a $1 million transaction, during the fourth quarter with an
existing Primus customer for the recently acquired Amacis electronic
communications management solution.
-- Receiving the 2003 STAR Award for "Best Support Technology Vendor" from
the Service & Support Professionals Association (SSPA), the leading
industry association for IT support professionals.
-- Being awarded "Product of the Year" by Customer Interaction Solutions
magazine.
-- Continuing to build strong alliances, strategic partnerships and deeper
customer integrations with such companies as IBM, Siebel Systems,
Peoplesoft, Remedy, Amdocs/Clarify and Motive Communications.
-- Deploying Primus Enterprise Search in less than two weeks at one of the
premier North American wireless providers, utilizing natural language
search and scaling to fulfill the promise of self-service by delivering
answers to over half a million customer questions per month.
-- Deploying two-way Short Messaging Services and preparing to rollout
two-way Multi-media Messaging Service products to meet the channel
communication requirements for one of the largest European wireless
providers.
The Unaudited Condensed Consolidated Balance Sheet as of December 31, 2003 and
the Unaudited Condensed Consolidated Statements of Operations for the three and
twelve months ended December 31, 2003 presented herein include the preliminary
allocation of the purchase price (including estimated acquisition costs incurred
in the acquisition) of Amacis Group Limited. The estimated fair values of
assets acquired and liabilities assumed are based upon preliminary estimates and
may not be indicative of the final allocation of purchase price consideration.
Corporate Conference Call
Primus will host a conference call discussing its fourth quarter and year end
2003 results today at 5:00 p.m. EST (2:00 p.m. PST). Investors can access the
conference call by dialing 800-374-1745. Please call five minutes in advance to
ensure that you are connected prior to the presentation. A playback of the call
will be made available for two weeks, two hours after the completion of the call
and the call will also be available for playback via Primus's website at
http://www.primus.com/. Playback call numbers are 800-642-1687 for domestic
calls and 706-645-9291 for international calls. The pass code for the playback
is 5529648.
About Primus
Primus Knowledge Solutions develops award-winning software that enables
companies to provide a superior customer experience via contact centers, help
desks, Web self-service, and electronic communication channels. Primus
technology powers every interaction with knowledge to increase customer
satisfaction and reduce operational costs. Primus continues to receiveindustry
accolades for its robust product suite. In 2003, Primus received the STAR Award
for "Best Support Technology Vendor" from the Service & Support Professionals
Association (SSPA), was recognized for its trend-setting products and named one
of the "100 Companies that Matter in Knowledge Management" by KMWorld magazine,
and received the CRM Excellence Award from the editors of Customer Interaction
Solutions magazine. Global organizations such as Allied Irish Bank, The Boeing
Company, CompuCom, EMC, Ericsson, Inc., Fujitsu Limited, Inc., IBM, Eastman
Kodak Co., HSBC, Orange, Motorola, 3Com, and T-Mobile rely on Primus technology
to enhance their customer service and support initiatives. Visit
http://www.primus.com/ for more information.
NOTE: Primus and Primus Knowledge Solutions are registered trademarks of Primus
Knowledge Solutions, Inc. Other products and company names mentioned in this
press release may be the trademarks of their respective owners.
Any statements, expectations and assumptions contained in this press release
that do not describe historical facts, such as statements about the integration,
performance, use, and deployment of Primus products and anticipated future
results constitute forward-looking statements within themeaning of the Private
Securities Litigation Reform Act of 1995. There is no guarantee that these
results will actually occur. Any forward-looking statements contained in this
release are based on current expectations, are not guarantees of future
performance, and are subject to a number of risks and uncertainties. Factors
that could cause actual results to differ materially from current expectations
include the following: any adjustments to our reported financial results made in
connection with the final allocation of purchase price related to our 2003
acquisitions, our 2003 audit or our audit of the financial results of Amacis;
difficulties encountered in the integration of personnel and products from
recent acquisitions; difficulties encounteredin the integration, deployment, or
implementation of our products and customer's systems; failure in customer's
widespread adoption and use of our products; quality of customer's databases of
solutions; fluctuations in customer demand; use of the Web as a delivery vehicle
for customer support or eCRM solutions; risk resulting from new product
introductions and customer acceptance of new products; rapid technological
change; the risks associated with competition and the rapid consolidation of
competitors; continued growth in the use of the Internet; the ability of Primus
to manage its growth and integration efforts and the ability of Primus to
compete successfully in the future, as well as other risks identified in Primus'
Securities and Exchange Commission filings, including but not limited to those
appearing under the caption "Factors Affecting our Future Operating Results" in
Primus' Report on 10-K filed in March of 2003 and Forms 10-Q filed in May,
August and November of 2003.
Primus Knowledge Solutions, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
December 31, December 31,
2003 2002
Assets
Current assets:
Cash, cash equivalents and short-term
securities $12,154 $12,958
Accounts receivable, net 5,475 4,201
Prepaids and other assets 1,001 847
Total current assets 18,630 18,006
Property and equipment, net 1,415 2,268
Goodwill 11,785 --
Other intangible assets, net 3,609 --
Note receivable from related party -- 750
Deposits and other assets 224 236
Total assets $35,663 $21,260
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accruals $6,853 $4,174
Deferred revenue, excluding non current
portion 7,526 6,228
Total current liabilities 14,379 10,402
Deferred revenue, excluding current portion 1,271 --
Total shareholders' equity 20,013 10,858
Total liabilities and shareholders' equity $35,663 $21,260
Primus Knowledge Solutions, Inc.
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
Revenue:
License $4,674 $1,582 $10,730 $8,092
Service 4,113 2,981 14,321 12,850
Total revenue 8,787 4,563 25,051 20,942
Cost of revenue:
License 321 64 611 328
Service 1,190 1,110 4,725 4,697
Amortization of
purchased intangibles 54 -- 68 --
Total cost of revenue 1,565 1,174 5,404 5,025
Gross profit 7,222 3,389 19,647 15,917
Operating expenses:
Sales and marketing 2,659 2,629 10,434 11,519
Research and
development 2,164 1,582 7,788 7,856
General and
administrative 1,881 889 4,452 4,367
Restructuring charges -- (35) -- 1,227
Total operating expenses 6,704 5,065 22,674 24,969
Income (loss) from
operations 518 (1,676) (3,027) (9,052)
Other income (expense),
net (28) 14 170 202
Income (loss) before income
taxes and cumulative effect
of change in accounting
principle 490 (1,662) (2,857) (8,850)
Income tax benefit
(expense) 38 (17) (70) (111)
Income (loss) before
cumulative effect of change
in accounting principle 528 (1,679) (2,927) (8,961)
Cumulative effect of change
in accounting principle -- -- -- (2,281)
Net income (loss) $528 $(1,679) $(2,927) $(11,242)
Basic and diluted net
income (loss) per
common share:
Income (loss) before
cumulative effect of
change in accounting
principle $0.02 $(0.09) $(0.15) $(0.47)
Cumulative effectof
change in accounting
principle -- -- -- (0.12)
$0.02 $(0.09) $(0.15) $(0.59)
Weighted average shares
used in computing basic
net income (loss)
per common share 21,733,790 18,999,404 19,379,326 18,982,841
Weighted average shares
used in computing
diluted net income
(loss) per common
share 24,395,034 18,999,404 19,379,326 18,982,841
DATASOURCE: Primus Knowledge Solutions, Inc.
CONTACT: investors, +1-206-834-8341, or ,
or media, +1-206-834-8325, or , both of Primus Knowledge
Solutions, Inc.
Web site: http://www.primus.com/