Newgen Results Corporation Reports Third Quarter 2000 Results
26 October 2000
Newgen Results Corporation Reports Third Quarter 2000 Results; Core Business Database Marketing Gross Margin Increased to 51%
Business/Technology EditorsSAN DIEGO--Oct. 25, 2000--Newgen Results Corporation , a leading provider of Customer Relationship Management (CRM) and e-CRM services to automotive dealerships, today announced results for the three and nine months ended September 30, 2000.
For the three months ended September 30, 2000, total revenues rose to $19.1 million, from $14.2 million in the same quarter a year ago. Income from operations increased to $2.6 million, from $1.5 million compared to the third quarter of 1999. Newgen's reported net income was $1.7 million, or $0.15 per share (diluted) for the third quarter 2000, compared to $1.9 million, or $0.18 per share (diluted) for the same quarter last year. Newgen's adjusted net income for the third quarter 2000 on a fully taxed basis was $1.7 million or $0.15 per share (diluted) compared to $1.2 million or $0.11 per share (diluted) in the same quarter a year ago.
For the nine months ended September 30, 2000, total revenues rose to a record $58.9 million, from $39.9 million in the same period a year ago. Income from operations increased to $6.1 million, from $3.2 million for the first nine months of 1999. Newgen's reported net income was $6.4 million, or $0.57 per share (diluted) for the first nine months of 2000, compared to $3.6 million, or $0.38 per share (diluted) for the same period last year. Newgen's adjusted net income for the first nine months of 2000 on a fully taxed basis was $4.6 million or $0.41 per share (diluted) compared to $2.1 million, or $0.23 per share (diluted) in the first nine months of 1999.
As previously disclosed, Newgen decided to retain its entire interest in Carabunga.com, a wholly-owned subsidiary that provides targeted marketing promotions to dealers. For the third quarter of this year, Newgen's earnings per share, on a fully taxed basis, reflects a loss of approximately $0.05 per share related to the operations of Carabunga.com.
Gerald Benowitz, Chairman, President and CEO of Newgen said, "Newgen continues to see strong growth in its core business, consisting primarily of the RESULTS product and related services, which reached record levels this quarter. Our successful launch of Connections, coupled with the enhanced program that we are proposing for Ford Motor Company, demonstrates that dealers will allow us to activate more names in their database once they see that it helps them maximize the lifetime value of their customers."
Benowitz continued, "We believe the long-term potential for Newgen Management Services and Carabunga.com is significant and the addition of these services gives Newgen a competitive edge in the marketplace. We are committed to being the premier provider of CRM and e-CRM services to the automotive industry."
Sam Simkin, Senior Vice President and Chief Operating Officer said, "We continue to improve our core business by increasing the leverage of our RESULTS product. As a result, our operating margin increased to 14% in the third quarter of 2000, compared to 11% for the same period last year."
Newgen Results Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
Database Marketing
Services $18,303,464 $12,656,016 $57,002,298 $35,190,837
Consulting Services 786,953 1,515,165 1,934,848 4,675,914
----------- ------------ ----------- -----------
Total Revenues 19,090,417 14,171,181 58,937,146 39,866,751
----------- ------------ ----------- -----------
Cost of Revenues:
Cost of Database
Marketing Services 8,530,126 6,820,511 29,436,022 19,380,567
Cost of Consulting
Services 862,505 1,285,604 2,332,343 3,999,208
Installation Costs 381,619 338,276 1,257,172 1,088,233
----------- ------------ ----------- -----------
Total Cost of
Revenues 9,774,250 8,444,391 33,025,537 24,468,008
----------- ------------ ----------- -----------
Gross Profit 9,316,167 5,726,790 25,911,609 15,398,743
Operating Costs:
Selling, General
and Administrative 5,174,553 3,038,407 15,036,726 9,365,916
Technology and
Product Development 1,202,730 1,154,084 3,405,344 2,807,006
Amortization of
Goodwill and
Acquisition-Related
Costs 350,038 -- 1,418,556 --
Total Operating Costs 6,727,321 4,192,491 19,860,626 12,172,922
----------- ------------ ----------- -----------
Income from Operations 2,588,846 1,534,299 6,050,983 3,225,821
Other Income
(Expense), Net 223,421 382,607 1,650,157 352,224
------------ ------------ ----------- -----------
Income, Before Taxes 2,812,267 1,916,906 7,701,140 3,578,045
Provision For
Income Taxes 1,124,907 10,250 1,303,157 10,250
------------- ------------ ----------- -----------
Net Income(1) 1,687,360 1,906,656 6,397,983 3,567,795
Adjustment for
Accretion of
Redeemable Convertible
Preferred Stock: -- -- -- (486,807)
------------ ------------ ----------- -----------
Income Applicable
to Common
Stockholders $ 1,687,360 $ 1,906,656 $ 6,397,983 $ 3,080,988
=========== ========== =========== ==========
Basic Income per Share $0.16 $0.19 $0.62 $0.45
=========== ========== =========== ==========
Diluted Income
per Share $0.15 $0.18 $0.57 $0.38
=========== ========== =========== ==========
Shares Used in
Basic per Share
Calculation 10,428,286 10,015,372 10,251,283 6,817,070
=========== ========== =========== ==========
Shares Used in
Diluted per
Share Calculation 11,520,829 10,802,259 11,273,955 9,386,220
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(1) For each of the periods, except for quarter ended September 30,
2000, net income and per share amounts do not include a full tax
provision that is reflective of the Company's future expected rate.
Had the Company so provided for income taxes, net income would have
been as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
Income, Before Taxes $ 2,812,267 $ 1,916,906 $ 7,701,140 $ 3,578,045
Income Taxes 1,124,907 766,762 3,080,456 1,431,218
Net Income $ 1,687,360 $ 1,150,144 $ 4,620,684 $ 2,146,827
=========== =========== ========== ==========
Diluted Income
per Share $ 0.15 $ 0.11 $ 0.41 $ 0.23
=========== =========== ========== ==========
Newgen Results Corporation and Subsidiaries
Consolidated Condensed Balance Sheets
(Unaudited)
September 30, December 31,
2000 1999
------------- ------------
Assets
Current Assets:
Cash, Cash Equivalents and
Short-term Investments $16,434,972 $23,267,877
Accounts Receivable, Net 17,309,092 9,471,175
Prepaids and Other Current Assets 3,116,588 972,301
---------- ----------
Total Current Assets 36,860,652 33,711,353
Property and Equipment, Net 9,036,842 5,719,542
Goodwill, Net 10,924,320 11,444,279
Other Assets 2,862,487 219,337
----------- -----------
Total Assets $59,684,301 $51,094,511
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $5,129,975 $4,395,736
Accrued and Other
Current Liabilities 3,139,481 2,059,773
Current Portion of Equipment
Loan Payable 199,902 --
Current Portion of Capital Leases 820,050 976,429
--------- ---------
Total Current Liabilities 9,289,408 7,431,938
Long-term Liabilities 921,311 1,315,962
Stockholders' Equity 49,473,582 42,346,611
---------- ----------
Total Liabilities and
Stockholders' Equity $59,684,301 $51,094,511
============ ===========