CHORDIANT ANNOUNCES RECORD FIRST-QUARTER 2001 FINANCIAL RESULTS Wednesday 25 April 2001 PDF Print Records 160% Revenue Growth Year-over-Year; Begins Enterprise Implementations at Barclaycard and Royal Bank of Scotland Chordiant Software, Inc. (Nasdaq:CHRD), a leading developer of unified customer relationship management (CRM) solutions for companies with extreme customer demands, today announced its financial results for the first quarter ended March 31, 2001. Total net revenues for the first quarter of 2001 were $13.0 million, up 160% from the $5.0 million reported for the first quarter of 2000. First-quarter license revenues were $6.8 million, up 218% from $2.1 million year-over-year. Service revenues were $6.3 million, up 118% from $2.9 million a year earlier. First-quarter gross margin was 59 percent, compared with 32 percent year-over-year. First-quarter net loss on operations was $6.4 million, or a loss of $0.13 per share on a pro forma basis, compared with a net loss of $7.2 million, or a loss of $0.20 per share pro forma, for the same quarter of 2000. Net loss on operations excludes the effect of non-cash charges for the amortisation of deferred stock-based compensation and purchased in-process research and development, the amortisation of acquired intangible assets and integration-related costs associated with the acquisition of Prime Response, Inc., and currency translation gains and losses related to foreign subsidiaries. "In the first quarter, our acquisition of PrimeResponse made Chordiant a significantly larger and more competitive player in the global CRM market," said Sam Spadafora, chairman and chief executive officer of Chordiant. "We're pleased with the aggressive pace of the integration and the response of customers in the financial services, communications and consumer segments to our enhanced enterprise CRM platform and services. Also during the first quarter, we began six customer engagements, including enterprise implementations at Barclaycard and The Royal Bank of Scotland Group." Spadafora continued, "Through the past four quarters, we consistently exceeded our objectives for organic revenue growth, expense control, cash management, and progress toward profitability. Now, having broadened the base of the business through acquisition, we look forward to capitalising on our momentum as a leading provider of enterprise customer life cycle management solutions." "We are pleased with the continued strength of our balance sheet," added Steve Vogel, senior vice president and chief financial officer. "Cash, cash equivalents and short-term investments totalled $78.7 million at March 31. Total deferred revenue was $31.0 million, up from $10.8 million a year earlier and $30.0 million at December 31, 2000. Our balance sheet provides a measure of security in the current economic environment and supports our long-term growth prospects." Chordiant completed the acquisition of PrimeResponse, Inc. (Nasdaq:PRME) on March 27, 2001. In accordance with the purchase method of accounting, the two companies' first-quarter results of operations are consolidated for March 28-31, 2001. RECENT BUSINESS HIGHLIGHTS Recently, Chordiant: · Completed the acquisition of PrimeResponse and combined the two companies' worldwide operations and customer bases into a single entity with more than 430 employees and 100 Global 1000 accounts; · Began the integration of PrimeResponse marketing automation solutions with Chordiant's Intelligent Customer Interaction Management (ICIM) platform and Intelligent Business Services-including e-marketing, e-service, e-selling, and e-fulfilment-for enterprise-wide management of the entire customer life cycle; · Began a multi-million-dollar enterprise implementation at Barclaycard, the leading credit card issuer in Europe, for the execution of its new CRM strategy; · Also began an enterprise implementation at The Royal Bank of Scotland Group, one of the largest banks in Europe and the first PrimeResponse customer to adopt the Chordiant Unified CRM solution; · Commenced six engagements with customers, including General American Life Insurance, MetLife and Tesco Personal Finance; · Released Chordiant Unified CRM Solution v3.0 with Chordiant Unified Rules for consistent business policy management and real-time decision support across multiple channels and business units; · Signed a co-marketing agreement with Verbind, Inc. for the joint marketing of its real-time behavioural targeting system with the Chordiant Unified CRM Solution; · Strengthened its senior management team with the appointments of Steve Vogel as senior vice president and chief financial officer, Gary Daniels as senior vice president of worldwide engineering and Allen Swann as president of Chordiant International. ABOUT CHORDIANT SOFTWARE, INC. Chordiant Software (www.chordiant.com) delivers a Unified CRM Solution that provides an Intelligent Customer Interaction Management (ICIM) platform for enterprise-wide integration with existing systems and Intelligent Business Services including e-marketing, e-service, e-selling, and e-fulfilment, which embrace the customer's existing applications. Chordiant's solution is designed to meet the extreme customer demands of complex businesses serving millions of individuals in real time and across multiple lines of business, with the objectives of customer satisfaction, retention, growth, and lifetime value. Whether communicating via branch locations, Web, e-mail, telephone, or wireless access, the Chordiant Unified CRM Solution provides a real-time, single view of each customer and a consistent, personalised message for every interaction. It includes a comprehensive business process engine, which allows companies to implement best business practices across multiple touchpoints. Marketers and sales professionals can maximise their marketing investment through the creation, execution and refinement of sophisticated direct marketing initiatives that span both traditional and online channels. Chordiant empowers intelligent, high-value contacts designed to retain customers, grow revenues and drive profits during every customer interaction. Headquartered in Cupertino, California, Chordiant maintains regional offices in Boston; Chicago; Dallas; Denver; Manchester, New Hampshire; New York; Amsterdam; London; Frankfurt; Munich; Paris; and Melbourne. This news release includes "forward-looking statements" that are subject to risks, uncertainties and other factors that could cause actual results or outcomes to differ materially from those contemplated by the forward-looking statements. For this purpose, any statements contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Words such as "believes," "anticipates," "plans," "expects," "will," "would," and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the results of Chordiant, PrimeResponse or the combined company to differ materially from those indicated by these forward-looking statements, including, among others, potential difficulties in the assimilation of operations, strategies, technologies, methodologies, and products of the acquired company; the risk of loss of key personnel of the acquired company; diversion of management attention from other business concerns; and business risks including the risk of variations in quarterly operating results, significant current and expected additional competition, and the need to continue to expand product distribution and service offerings. Further information on potential factors that could affect the financial results of Chordiant, PrimeResponse or the combined company are included in risks detailed from time to time in Chordiant's and PrimeResponse's Securities and Exchange Commission filings, including Chordiant's Annual Report on Form 10-K filed on March 27, 2001; the joint proxy statement/prospectus filed by both Chordiant and PrimeResponse on February 28, 2001; Amendment No. 1 to the Form S-4 filed by Chordiant on February 26, 2001; PrimeResponse's final prospectus for its initial public offering filed on March 3, 2000; and Chordiant's final prospectus for its initial public offering filed on February 15, 2000. Also, statements in this news release related to the expected benefits of the transaction are subject to risks related to the timing and successful completion of technology and product development efforts; integration of the technologies and businesses of Chordiant and PrimeResponse; unanticipated expenditures; changing relationships with customers, suppliers and strategic partners; and other factors described in both the Securities and Exchange Commission filings listed above and other periodic reports filed by Chordiant with the Securities and Exchange Commission. Chordiant and the Chordiant logo are registered trademarks and Chordiant Unified CRM for Extreme Demands is a trademark of Chordiant Software, Inc. All other trademarks and registered trademarks are the properties of their respective owners. PLEASE CONTACT BRODEUR WORLDWIDE FOR FINANCIAL STATEMENTS. 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