umTotal Systems, Inc., the business performance and learning technology industry’s largest single provider of technologies, processes and services, today announced its financial results for the third quarter ended September 30, 2004.
On a Generally Accepted Accounting Principles (GAAP) basis, revenue was $15.3 million in the third quarter of 2004 compared to $14.1 million in the second quarter of 2004 and $7.5 million in the third quarter of 2003. The net loss was $2.2 million or 11 cents per share compared to $4.1 million or 20 cents per share in the second quarter of 2004 and $1.4 million or 13 cents per share in the third quarter of 2003. SumTotal Systems was formed on March 18, 2004 by the merger of Docent, Inc., and Click2learn, Inc. and was accounted for as an acquisition of Docent by Click2learn. Therefore, the reported GAAP results reflect the performance of Click2learn until March 18, 2004, and for the merged company from March 18, 2004 forward.
Revenue for the third quarter on a non-GAAP basis was $16.2 million. This compares to $16.1 million in the second quarter of 2004 and $14.6 million in the third quarter of 2003. Net income on a non-GAAP basis was $0.1 million compared to a net loss of $0.5 million in the second quarter of 2004 and a net loss of $3.6 million in the third quarter of 2003. These non-GAAP financial measures exclude certain non-cash and cash items relating to the merger and related transactions, which are included in the GAAP results. The non-GAAP financial measures also include the full results of both Docent and Click2learn for the periods prior to the merger. The company believes this information, when used in conjunction with the GAAP results, may provide useful additional insight into the underlying operations of the company, but should not be considered superior to, or as a substitute for GAAP measures. A reconciliation of these numbers to the GAAP results is included in this release.
Cash, cash equivalents and short term investments at the end of the third quarter of 2004 totaled $35.5 million compared to $37.1 million at the end of the second quarter of 2004 and $34.8 million at the end of the first quarter of 2004.
“I’m particularly pleased that we continued to narrow our GAAP loss during the quarter,” said Andy Eckert, CEO of SumTotal Systems. “When we merged the two companies to form SumTotal, one of our highest priorities was achieving profitability. We are on track to achieve GAAP net income during 2005 while continuing to invest heavily in product development and customer support. SumTotal 7.0, due for general availability next month, represents a major step forward for our industry. To date, the reviews of 7.0 from our customers who are using it, and analysts who have reviewed it, have been phenomenal. It truly is a revolutionary product, and continues our track record as the industry’s innovator. Our technology leadership, when combined with our balance sheet, leading customer base, and global presence, clearly puts SumTotal as the company of choice for organizations seeking an enterprise-level partner for learning technology,” continued Eckert.
During the quarter, SumTotal highlights included: New corporate customer wins at Aetna, Sovereign Bank, Forzani Group Limited, NVIDIA, Fannie Mae, Petroleos Mexicanos (Pemex), Toshiba, and MayBank.Follow-on orders from clients such as Raytheon, Bank of Montreal, Wachovia, Affiliated Computer Services, Shell Canada, Toronto Dominion Bank Group, Vodafone, Southern Company, Symantec, M & T Bank, US Army and ColesMyer Limited. Further expansion of SumTotal’s strong global partner network with the addition of new partners including Webex, Stanix and eHigher Education in the United States, COSMO iNet in Korea and Humansoft in the Middle East and North Africa.The kick-off of the beta testing program for the SumTotal Enterprise Suite 7.0, the highly-anticipated next edition of the company’s market leading learning and business performance platform. Beta customers include such market leaders as Pfizer, Symantec, Seagate, Baker Hughes, Mercury, Motorola, US Army, Wachovia, Starwood Hotels and Bechtel, among others.The launch of the popular SumTotal “Legends” Web seminar series, featuring industry thought leaders Elliot Maisie, John Cone’, Gloria Gery, Geary Rummler and Paul Greene.
