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Onyx Software Q4 Earnings Breakeven

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Posted February 1, 2002 By internetnews.com Staff     Feedback

The Washington-based CRM software vendor and ASP approaches breakeven based on pro-forma earnings, with revenues down to $19.2 million from $35.7 million in 2000.

Onyx Software , the Bellevue, Wash. provider of customer relationship management (CRM) applications, Tuesday announced financial results for the quarter and year ended December 31, 2001.

Revenue for the fourth quarter of 2001 was $19.2 million, compared to $35.7 million in 2000. Net loss for the fourth quarter of 2001 was $10.1 million, or $0.23 per share, compared to a net loss of $2.8 million or $0.08 per share in 2000.

The fourth quarter 2001 net and operating losses include $8.1 million in restructuring and excess facilities charges, and $2.0 million in amortization of acquisition costs and stock compensation expense.

Pro-forma net loss for the fourth quarter of 2001, excluding the amortization of intangibles, stock compensation expense, restructuring-related costs and impairment of certain assets, was $0.2 million, or $0.00 per share, compared to a pro-forma net loss of $1.3 million, or $0.04 per share in the fourth quarter of 2000.

Fourth quarter 2001 license revenue of $6.6 million was higher than the $6.3 million in the third quarter of 2001. License revenue in the fourth quarter of 2000 was $22.3 million.

Overall gross margin increased to approximately 67 percent in the fourth quarter compared to 61percent in the third quarter of 2001. Service revenue gross margin rose to 53 percent in the fourth quarter from 46 percent in the third quarter of 2001, reflecting a higher proportion of maintenance revenues in the mix, and improved professional services utilization, compared to the Q3 levels.

The overall gross margin and service margin in the fourth quarter of 2000 was 77 percent and 47 percent , respectively. 2001:

Revenue for 2001 was $97.2 million, compared to $119.3 million in 2000. Net loss for 2001 was $95.5 million, or $2.37 per share, compared to a net loss of $4.7 million, or $0.13 per share in 2000.

The 2001 net and operating losses include $51.8 million in severance, excess facilities charges and impairments of fixed assets, as well as $15.4 million of amortization of acquisition costs and stock compensation expense.

Pro-forma net loss for 2001, excluding the amortization of intangibles, stock compensation expense, restructuring-related costs and impairment of certain assets, was $26.8 million, or $0.66 per share, compared to pro-forma net income of $0.9 million or $0.02 per share in 2000.

"Onyx met the challenge of a slowing economy in 2001," said Brent Frei, CEO of Onyx Software. "When global events increased the business challenge, Onyx responded by reiterating our resolve and redoubling our efforts. Having approached pro-forma breakeven this quarter, Onyx is focused on running a profitable business in 2002," he added.

On Monday Onyx announced a firm underwritten public offering of 5.725 million common shares at a price to the public of $3.50 per share, with estimated net proceeds to the Company of $18.5 million.

In addition, Onyx has granted Wells Fargo Securities, LLC, the sole underwriter for the offering, an option to purchase up to 600,000 shares of its common stock to cover over-allotments, if any.

In the fourth quarter, Onyx had 31 new customer wins, compared to 24 in the third quarter.

Customers selecting Onyx's CRM solution were across the financial services, healthcare and technology sectors and included: Credit Suisse Financial Services, American Express Retirement Services, Medstat Group, Smith & Nephew, Philips Professional Electronics, Softbank Commerce, and Netegrity.

The geographic distribution of fourth quarter revenue was 59 percent domestic and 41 percent international. Onyx direct sales provided 79 percent of license revenue, with the balance provided by partners.

"Onyx undertook joint engagements with IBM Global Services, Accenture, Avanade and Deloitte Touche Tomatsu during the quarter," Frei said. "Additionally, we continued to work closely with Microsoft."

Onyx recently signed an agreement with Deloitte Touche Tomatsu. The partnership will pursue government and healthcare opportunities which has already won London's Borough of Brent as a new customer.

In addition, Onyx also signed a reseller agreement with Unisys for the Latin America region and the firms Vertical Service Provider partner Metavante saw additional demand for their Onyx-based services, while TriZetto purchased additional licenses.

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