SAN FRANCISCO (February 4, 2004) – Critical Path, Inc. (Nasdaq: CPTH), a global provider of digital communications software and services, today announced financial results for the fourth quarter and year ended December 31, 2003.
Revenues for the fourth quarter of 2003 were $20.0 million, up 23% from $16.2 million in the third quarter of 2003. Cash operating expenses, which exclude amortization, depreciation and restructuring charges, were $23.4 million, as compared to $21.8 million in the third quarter of 2003.
Based on Generally Accepted Accounting Principles (GAAP) in the United States, net loss attributable to common shares for the fourth quarter of 2003 was $18.1 million, or $0.89 per share, compared to $18.6 million, or $0.92 per share in the third quarter of 2003.
Earnings before interest, taxes, depreciation and amortization, adjusted to exclude special charges (Adjusted EBITDA), amounted to a loss of $3.5 million in the fourth quarter of 2003, compared to an Adjusted EBITDA loss of $5.6 million in the third quarter of 2003.
“We are very pleased to see our revenues up from the previous quarter,” said William McGlashan, Jr., chairman and chief executive officer of Critical Path. “We saw continued business from existing customers such as Wind, ENI, Telecom Italia Media, O2, SK Communications and Banca Intesa and gained new customers such as the German Army and several telecommunications carriers in Europe and South America.”
Revenues for fiscal year 2003 were $72.3 million, compared with $87.1 million in 2002. Cash operating expenses, excluding special charges, amortization and depreciation, were $94.8 million, compared with $108.8 million in 2002.
GAAP net loss attributable to common shares for the year was $74.6 million, or $3.73 per share, compared with a net loss attributable to common shares of $131.8 million, or $6.78 per share, in 2002.
Adjusted EBITDA, excluding special charges, for the year amounted to a loss of $22.5 million, compared with an Adjusted EBITDA loss of $21.7 million in 2002.
As of December 31, 2003, the Company’s cash and cash equivalents totaled $19.0 million as compared with its September 30, 2003 balance of $18.2 million. During the quarter the Company raised $10 million in proceeds through a financing with General Atlantic Partners and repaid $2.6 million of its line of credit facility with Silicon Valley Bank. Subsequent to the quarter, the Company raised an additional $15 million through a financing with Apex Capital and Passport Capital.
Regulation G
The Company uses both GAAP and non-GAAP metrics to measure its financial results. It utilizes two primary non-GAAP metrics: cash operating expenses and Adjusted EBITDA. The most directly comparable GAAP measures are revenues and net income (loss), respectively. Management believes that, in addition to GAAP metrics, these non-GAAP metrics assist the Company in measuring its cash-based performance. In addition, management believes these non-GAAP metrics are useful to investors because they remove unusual and nonrecurring charges that occur in the affected period and provide a basis for measuring the Company's financial condition against other quarters. Since the Company has historically reported non-GAAP results to the investment community, management also believes the inclusion of non-GAAP measures provides consistency in its financial reporting. However, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The calculations for cash operating expenses and Adjusted EBITDA are in the Alternative Measurement Reconciliation table below.
Conference Call
Critical Path will host a conference call on Wednesday, February 4, 2004, to discuss the financial results for the fourth quarter of 2003. Those who would like to participate in this conference call should dial 877?231?3543 (in USA) or +1 706?634?1329 (international) prior to 4:50pm EST. The conference call and its replay will also be available via Web cast from the Company's Web site, www.criticalpath.net. A telephone replay of the conference call will be available for seven days following the call. To access the replay, please dial 800?642?1687 (in USA) or +1 706?645?9291 (international) and give the passcode 5229892. The Web cast and this earnings release will be available on the Company’s Web site for twelve months following the conference call.
Ernst van der Ploeg
Regional Sales Director
for Critical Path BENELUX
+31 (0) 6 512 77060 phone
+31 (0) 6 105 48013 fax
A Global Leader in Digital Communications Software and Services