Pegasystems Reports First-Quarter Financial Results
CAMBRIDGE, Mass.--May 15, 2000--Pegasystems Inc. (NASDAQ: PEGA), a leading provider of rules-based, Internet-architected electronic Customer Relationship Management (eCRM) software and solutions, today announced its first quarter 2000 financial results.
Total revenues were $18.0 million for the first fiscal quarter ended March 31, 2000, an increase of 20 percent from the $15.1 million recorded for the same period of 1999. License revenues totaled $6.1 million in the most recent quarter compared with $6.0 million for the same period last year. Services revenues for the quarter were $11.9 million, up 32 percent from $9.1 million for the first quarter of 1999. The Company reported that its net loss for the first quarter decreased to $1.4 million, or $0.05 per diluted share, versus a net loss of $6.7 million, or $0.23 per diluted share in the comparable period of 1999. The Company ended the quarter with $30.5 million of cash and cash equivalents.
"The fundamentals of our business remain strong and have resulted in another quarter with a net cash increase," stated James O'Halloran, Pegasystems' Chief Financial Officer.
Pegasystems President and COO Rick Jones said, "We made good progress during the quarter in improving the level of customer satisfaction, redoubling our efforts to meet our customers' needs. I believe that these efforts will lead to continued improvements in our business performance."
"During the first quarter, we made significant progress through internal research and development programs in creating an enhanced suite of Internet empowering capabilities that will allow customers to simplify time-consuming and complex Web-based interactions," said Alan Trefler, Pegasystems' Chairman and CEO. "With our vision of enterprise rules management, we intend to do for business process management what relational databases did for data management. The focus of our next generation technology will be to provide a framework for enterprise-wide rules management and decision-making through a series of rules-server products that we will be announcing shortly."
Pegasystems continues to deepen its relationship with its partners, including Broadvision, Management Data, EDS and Carreker-Antinori. Recently the Company:
-- Delivered a joint enterprise-wide exception management solution with Carreker-Antinori for Firstar Corporation. The CheckFlow Suite joint solution assists companies in combining traditional functions such as exception management with the new e-payment business model.
-- Held an e-Business seminar series with Broadvision, Tower Technology and PricewaterhouseCoopers.
-- Sponsored the "Rule Your Markets" executive conference with BroadVision and Palm, Inc. in April, which gave Fortune 1000 and dot-com senior executives an inside view about the business opportunities offered by the technological changes in the Internet economy.
-- Hosted a thought leadership symposium for Blue Cross Blue Shield plans with EDS.
-- Worked with BroadVision to demonstrate their integrated eCRM solution at the seventh International Call Center Summit.
Pegasystems continues to report success with customers and market recognition. Recently the Company:
-- Announced that its Internet-architected CRM solution had doubled the sales volume for Riggs Bank Call Center, which had installed Pegasystems' technology a year earlier.
-- Presented the success of Pegasystems' CRM solution for Guardian Life Services' three customer response call centers nationwide at the LOMA Systems Forum held in San Diego. Pegasystems' rules-based CRM solution handles more than 3,000 calls daily for Guardian.
-- Was recognized by TMC, a leading CRM publisher, with a CRM Excellence Award for Pegasystems' eCRM Foundation Template.
-- Strengthened the Company's recruiting and human resources efforts with the appointment of Carmelina Procaccini, a 20-year industry veteran, as Vice President of Human Resources.
Pegasystems' Consolidated Statement of Operations and Consolidated Balance Sheet are attached.
PEGASYSTEMS INC. Condensed Consolidated Balance Sheets (in thousands, except share-related amounts) March 31, December 31, 2000 1999 Assets Current assets: Cash and cash equivalents $ 30,545 $ 30,004 Trade and installment accounts receivable, net of allowance for doubtful accounts of $1,178 in 2000 and $1,026 in 1999 32,130 40,716 Prepaid expenses and other current assets 1,997 1,676 Total current assets 64,672 72,396 Long-term license installments, net 40,646 36,744 Equipment and improvements, net 7,533 8,335 Purchased software and other assets, net 6,925 7,516 Total assets $ 119,776 $ 124,991 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $ 12,021 $ 13,643 Deferred revenue 5,711 8,765 Current portion of capital lease obligations 202 198 Total current liabilities 17,934 22,606 Commitments and contingencies Deferred income taxes 1,000 1,000 Capital lease obligations, net of current portion 201 253 Other long-term liabilities 78 87 Total liabilities 19,213 23,946 Stockholders' Equity: Preferred stock, $.01 par value, 1,000,000 shares authorized; no shares issued and outstanding -- -- Common stock, $.01 par value, 45,000,000 shares authorized; 29,108,776 shares and 28,995,821 shares issued and outstanding in 2000 and 1999, respectively 291 290 Additional paid-in capital 89,849 88,941 Deferred compensation (14) (18) Stock warrant 2,897 2,897 Retained earnings 7,701 9,079 Other comprehensive income (161) (144) Total stockholders' equity 100,563 101,045 Total liabilities and stockholders' equity $ 119,776 $ 124,991 PEGASYSTEMS INC. Condensed Statements of Operations (in thousands, except per share amounts) Three Months Ended March 31, 2000 1999 Revenue: Software license $ 6,095 $ 6,020 Services 11,911 9,045 Total revenue 18,006 15,065 Cost of revenue: Cost of software license 585 586 Cost of services 8,582 8,798 Total cost of revenue 9,167 9,384 Gross profit 8,839 5,681 Operating expenses: Research and development 3,934 5,204 Selling and marketing 5,036 5,524 General and administrative 2,597 2,569 Total operating expenses 11,567 13,297 Loss from operations (2,728) (7,616) Installment receivable interest income 943 828 Other interest income, net 403 166 Other income (expense), net 28 (88) Income (loss) before provision for (1,354) (6,710) Income taxes Provision for income taxes 23 -- Net income (loss) ($ 1,377) ($ 6,710) Earnings (loss) per share: Basic ($ 0.05) ($ 0.23) Diluted ($ 0.05) ($ 0.23) Weighted average number of common and common equivalent shares outstanding: Basic 29,079 28,711 Diluted 29,079 28,711
Pegasystems (NASDAQ: PEGA) develops strategic applications for marketing, sales, service, and operations. Pega’s applications streamline critical business operations, connect enterprises to their customers seamlessly in real-time across channels, and adapt to meet rapidly changing requirements. Pega’s Global 3000 customers include many of the world’s most sophisticated and successful enterprises. Pega’s applications, available in the cloud or on-premises, are built on its unified Pega 7 platform, which uses visual tools to easily extend and change applications to meet clients’ strategic business needs. Pega’s clients report that Pega gives them the fastest time to value, extremely rapid deployment, efficient re-use, and global scale. For more information, please visit us at www.pega.com.
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The information contained in this press release is not a commitment, promise, or legal obligation to deliver any material, code or functionality. The development, release and timing of any features or functionality described remains at the sole discretion of Pegasystems, Pegasystems specifically disclaims any liability with respect to this information.
Lisa Pintchman Rogers
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