Tangram Announces Fourth Quarter 2003 and Year-End Operating Results
Net Cash Provided by Operating Activities grows to $2.7 million in 2003 from
$290,000 in 2002
CARY, N.C., Feb. 12 /PRNewswire-FirstCall/ -- Tangram Enterprise Solutions,
Inc. (BULLETIN BOARD: TESI) , a leading provider of IT asset management
software and services, today announced operating results for the fourth quarter
and the year ended December 31, 2003.
For the year ended December 31, 2003, total revenues fell 8% to $10.6 million,
down from $11.6 million in 2002. Net loss for the year ended December 31, 2003
was $1.8 million, or ($0.09) per share. This compares to a net loss of $3.0
million, or ($0.15) per share, in 2002. Excluding the software impairment
charge, as discussed below, the company's net loss in 2003 was $112,000, or
($0.01) per share, compared to a net loss of $2.2 million, or ($0.11) per share
in 2002. For the year ended December 31, 2003, net cash provided by operating
activities improved significantly to $2.7 million, up from $290,000 for the year
ended December 31, 2002.
For the quarter ended December 31, 2003, the company reported total revenues of
$3.0 million, compared with $2.8 million in the fourth quarter of 2002, an
increase of 7%. Net loss for the fourth quarter of 2003 was $1.7 million, or
($0.08) per share, which includes a charge to operations of $1.7 million related
to an impairment charge for the Enterprise Insight product (due to limited sales
and strong competition). This compares with a net loss of $1.3 million, or
($0.06) per share, in the fourth quarter 2002. In 2002, the Company recognized
a $760,000 impairment charge for its investment in Enterprise Insight product as
such investment was judged to have experienced an other than temporary decline
in value. The software impairment charges are included in cost of revenue in
the accompanying statements of operations. Excluding the software impairment
charge in 2003 and 2002, the company's net earnings in the fourth quarter of
2003 were $68,000, or $0.00 per share, compared to a net loss of $491,000, or
($0.02) per share in the fourth quarter of 2002.
On December 4, 2003 Tangram announced that it had entered into an Agreement and
Plan of Reorganization with Opsware Inc., and TES Acquisition Corp., a
wholly-owned subsidiary of Opsware. Pursuant to this merger agreement, TES
Acquisition Corp. will be merged with and into Tangram, with Tangram continuing
as a wholly-owned subsidiary of Opsware. In the merger, all of Tangram's
outstanding debt will be satisfied through the issuance of Opsware common stock
to the debt holders, and all outstanding shares of Tangram's convertible
preferred stock and common stock will be exchanged for shares of Opsware common
stock at an exchange ratio set forth in the merger agreement. The value of the
transaction is $10 million, subject to certain adjustments and conditions
contained in the merger agreement. The merger with Opsware is expected to be
completed on February 20, 2004, subject to receiving the required shareholder
approval.
About Tangram Enterprise Solutions, Inc. (OTC:TESI.OB) (BULLETIN BOARD: TESI.OB)
Tangram Enterprise Solutions, Inc., is a leading provider of cohesive, automated
IT asset management software solutions and services for large and midsize
organizations across all industries, in both domestic and international markets. Tangram's core business strategy and operating philosophy center on delivering
world-class customer care, creating a more personal and productive IT asset
management experience through a phased solution implementation, tailored
solutions that support evolving customer needs, and leading-edge technical
position. Today, Tangram's solutions manage more than two million workstations,
servers, and other related assets. Tangram is a majority owned subsidiary of
Safeguard Scientifics, Inc. ( http://www.safeguard.com/ ) (NYSE:SFE), an
operating company that creates long-term value by taking controlling interest in
and developing its companies through superior operations and management. Safeguard operates businesses that provide business decision and life science
software-based product and service solutions. To learn more about Tangram, visit
http://www.tangram.com/ or call 1-800-4TANGRAM.
About Opsware Inc. (NASDAQ:OPSW) Opsware Inc., formerly Loudcloud, is the leading provider of data center
automation software, offering a complete solution for enterprises, government
agencies, and service providers looking to reduce costs and increase IT
efficiencies. The Opsware System uniquely combines process automation with
built-in operations knowledge on numerous technologies. Opsware was the
foundation of Loudcloud's software-powered managed services business and has
been proven to lower costs, accelerate change, and increase service quality. For
more information on Opsware Inc., please visit www.opsware.com .
Statements of Operations
(in thousands, except per share amounts) Three months Year ended
ended Dec. 31 Dec. 31
2003 2002 2003 2002
(unaudited) (unaudited)
Revenues
Licenses and product $1,228 $1,047 $3,555 $4,581
Services 1,798 1,780 7,079 6,999
Total revenues 3,026 2,827 10,634 11,580 Cost of revenues
Cost of licenses
and product 13 16 39 58
Cost of services 425 336 1,376 1,527
Amortization of
software cost 736 552 2,550 2,161
Software impairment 1,727 760 1,727 760
Total cost of revenues 2,901 1,664 5,692 4,506
Gross profit 125 1,163 4,942 7,074 Operating expenses
Sales and marketing985 907 3,547 4,879
General and
administrative 251 446 1,464 1,982
Research and development 430 281 1,232 1,499
Depreciation and
amortization 17 88 127 340
Restructuring charge - 582 - 906
Total operating expenses 1,683 2,304 6,370 9,606 Loss from operations (1,558) (1,141) (1,428) (2,532)
Other expenses, net (27) (42) (125) (180) Loss before income
taxes (1,585) (1,183) (1,553) (2,712)
Provision for
income taxes - -- - Net loss $(1,585) $(1,183) $(1,553) $(2,712) Per share calculation
Net loss $(1,585) $(1,183) $(1,553) $(2,712)
Less-preferred
stock dividend (74) (68) (286) (264) Net loss available to
common shareholders $(1,659) $(1,251) $(1,839) $(2,976) Loss per common share
Basic and diluted $(0.08) $(0.06) $(0.09) $(0.15) Weighted average number of common shares outstanding
Basic and diluted 19,802 19,802 19,802 19,739 **Weighted average number of common shares outstanding on a diluted basis for
the three-month periods ended December 31, 2003 and 2002 and the years ended
December 31, 2003 and 2002 does not include common stock equivalents because the
effect of inclusion of the exercise of stock options would be to reduce the loss
per common share.
Condensed Statements of Cash Flows
(in thousands) Twelve Months Ended Dec. 31
2003 2002
Operating Activities
Net loss $(1,553) $(2,712)
Adjustments to reconcile net loss
to net cash provided by operating
activities: 4,365 3,101
Cash provided by changes in
working capital items: (121) (99)
Net cash provided by operating activities 2,691 290
Net cash used in investing activities (1,073) (1,494)
Net cash (used in) provided by
financing activities (686) 1,300 Net increase in cash and cash equivalents $932 $96
Condensed Balance Sheets
(in thousands) Dec. 31, 2003 Dec. 31, 2002
Assets
Current assets:
Cash and cash equivalents $1,350 $418
Accounts receivable, net 2,965 2,671
Other 701 296
Total current assets 5,016 3,385 Property and equipment, net 135 100
Intangible assets and other, net 3,076 6,449 Total assets $8,227 $9,934 Liability and Shareholders' Equity
Current portion of long-term debt-shareholders $1,839 $ 467
Accounts payable and accrued expenses 1,540 1,060
Deferred revenue 3,295 3,281
Total current liabilities 6,674 4,808 Long-term debt-shareholders - 1,954
Other long-term liabilities 762 542 Total shareholders' equity 791 2,630 Total liabilities and stockholders' equity $8,227 $9,934 All product names are the registered trademarks of their respective
owners. DATASOURCE: Tangram Enterprise Solutions, Inc.
CONTACT: John N. Nelli, Chief Financial Officer of Tangram Enterprise Solutions, Inc., +1-919-653-1265, or Web site: http://www.tangram.com/ http://www.opsware.com/
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