e8-k
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Securities And Exchange Commission
Washington, D. C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 24, 2001

Daleen Technologies, Inc.
(Exact Name of Registrant as Specified in Charter)

         
Delaware   0-27491   65-0944514
(State or Other Jurisdiction   (Commission File Number)   (I.R.S.Employer
          of Incorporation)       Identification No.)
     
1750 Clint Moore Road    
Boca Raton, Florida   33487
(Address of principal executive offices)   (Zip Code)

(561) 999-8000
(Registrant’s telephone number, including area code)

 

TABLE OF CONTENTS

Item 5 — Other Events.
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Operations
SIGNATURES

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Item 5 – Other Events.

Capsule Financial Information for the Three and Nine Months Ended September 30, 2001

     On October 24, 2001, Daleen Technologies, Inc., a Delaware corporation (the “Company”), reported its financial results for the three and nine months ended September 30, 2001. The Company reported revenue of $2.2 million and $10.8 million for the three and nine months ended September 30, 2001, respectively. Net loss for the third quarter, on an adjusted basis, was $7.3 million, or $0.33 per share. Net loss for the nine months ended September 30, 2001, on an adjusted basis, was $25.7 million, or $1.18 per share. See “Note on Adjusted Results of Operations” below for a description of the methods used to calculate net loss and net loss per share on an adjusted basis, including the goodwill impairment charge in the third quarter. Including the adjustments described in this note, the actual net loss per share for the three and nine months ended September 30, 2001, was $1.68 and $4.73, respectively.

     As of September 30, 2001, the Company had approximately $21 million in cash on hand.

     Following is certain capsule unaudited financial information with respect to the periods presented.

 

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Daleen Technologies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)

                         
            September 30   December 31
            2001   2000
           
 
Assets
                
Current assets:
                
   
Cash and cash equivalents
   $ 20,951     $ 22,268  
   
Restricted cash
     30       931  
   
Accounts receivable, net
     3,324       13,929  
   
Costs in excess of billings
     281       2,213  
   
Other current assets
     440       904  
 
    
     
 
     
Total current assets
     25,026       40,245  
Property and equipment, net
     5,218       10,146  
Goodwill and other intangibles, net
     7,553       44,726  
Other assets
     2,349       4,345  
 
    
     
 
     
Total assets
   $ 40,146     $ 99,462  
 
    
     
 
Liabilities and Stockholders’ Equity
                
Current liabilities:
                
   
Accrued payroll and other accrued expenses
     5,579       12,731  
   
Accounts payable
     1,145       2,968  
   
Billings in excess of costs
     1,292       1,466  
   
Deferred revenue
     1,374       2,944  
   
Other current liabilities
     20       1,061  
 
    
     
 
     
Total current liabilities
     9,410       21,170  
   
Long term portion of capitalized lease
     —       607  
 
    
     
 
     
Total liabilities
     9,410       21,777  
Total stockholders’ equity
     30,736       77,685  
 
    
     
 
       
Total liabilities and stockholders’ equity
   $ 40,146     $ 99,462  
 
    
     
 

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Daleen Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations
(in thousands except per share data)
(unaudited)

                                     
        Three Months Ended   Nine Months Ended
       
 
        September 30   September 30   September 30   September 30
        2001   2000   2001   2000
       
 
 
 
Revenue:
                                
 
License fees
   $ 418     $ 9,456     $ 3,193     $ 22,247  
 
Professional services and other
     1,787       4,569       7,601       12,220  
 
    
     
     
     
 
   
Total revenue
     2,205       14,025       10,794       34,467  
 
    
     
     
     
 
Cost of revenue:
                                
 
License fees
     1,236       201       1,604       586  
 
Professional services and other
     1,288       3,910       6,331       10,204  
 
    
     
     
     
 
   
Total cost of revenue
     2,524       4,111       7,935       10,790  
 
    
     
     
     
 
Gross margin
     (319 )     9,914       2,859       23,677  
Operating expenses:
                                
 
Sales and marketing
     1,826       4,061       8,781       9,896  
 
Research and development
     2,430       7,564       10,931       19,316  
 
General and administrative
     6,810       7,831       24,323       22,940  
 
Restructuring and impairment charges
     23,408       —       34,473       —  
 
    
     
     
     
 
   
Total operating expenses
     34,474       19,456       78,508       52,152  
 
    
     
     
     
 
Operating loss
     (34,793 )     (9,542 )     (75,649 )     (28,475 )
 
    
     
     
     
 
Total interest income and nonoperating income, net
     447       488       990       1,914  
 
    
     
     
     
 
Net loss
   $ (34,346 )   $ (9,054 )   $ (74,659 )   $ (26,561 )
 
Less: preferred stock dividends
     (2,447 )     —       (28,512 )     —  
 
    
     
     
     
 
Net loss applicable to common shareholders
   $ (36,793 )   $ (9,054 )   $ (103,171 )   $ (26,561 )
 
    
     
     
     
 
 
Net loss per share — basic and diluted
   $ (1.68 )   $ (0.42 )   $ (4.73 )   $ (1.23 )
 
    
     
     
     
 
Weighted average outstanding shares — basic and diluted
     21,870       21,755       21,823       21,635  
 
    
     
     
     
 
Adjustments to net loss for goodwill and other intangibles, stock compensation expense, restructuring and impairment:
                                
 
Goodwill, other intangibles, non-cash stock compensation expense, restructuring and impairment
     27,078       4,130       48,986       11,867  
 
    
     
     
     
 
Adjusted net loss (see note below):
     (7,268 )     (4,924 )     (25,673 )     (14,694 )
 
    
     
     
     
 
Adjusted net loss per share — basic and diluted
   $ (0.33 )   $ (0.23 )   $ (1.18 )   $ (0.68 )
 
    
     
     
     
 

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     Note on Adjusted Results of Operations: Net loss and net loss per share on an adjusted basis are computed by excluding amortization and the impairment of goodwill, non-cash stock compensation charges related to the issuance of certain stock options, restructuring and impairment charges and preferred stock dividends. The goodwill is related to the Company’s December 1999 acquisition of Inlogic Software Inc. and an impairment of goodwill was recorded in the third quarter of $23.4 million. The restructuring and impairment charges are related to the January 5 and April 10, 2001 restructuring actions. The preferred stock dividends relate to the beneficial conversion feature and warrant valuation recorded in connection with the Series F preferred stock offering. For the three and nine months ended September 30, 2001 these adjustments are approximately $29.5 million and $77.5 million, respectively. See “Information with Respect to Forward-Looking Statements” below.

INFORMATION WITH RESPECT TO FORWARD-LOOKING STATEMENTS

     Certain matters discussed in this report may be considered “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company and members of its management as well as the assumptions on which such statements are based. Prospective investors and stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include variance of quarterly operating results; not yet achieving profitability; liquidity and capital resources; competition; need to expand sales and distribution capabilities; lengthy sales cycles and timing of contract awards; general economic conditions, including the economic conditions affecting the Company’s existing and prospective customers; ability to attract and retain qualified employees; the Company's continued use of strategic relationships to implement and sell our products; managing growth; planned international operations; meeting customer expectations; general market conditions, and quality of software delivered. These and additional important factors to be considered are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2000, as amended, and in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001 and June 30, 2001, each as amended. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

             
        DALEEN TECHNOLOGIES, INC.
             
        By:   /s/ Jeanne Prayther
           
Dated:   October 24, 2001       Jeanne Prayther,
Acting Chief Financial Officer,
Secretary and Treasurer

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