Tangram Announces Third Quarter 2003 Results CARY, N.C., Oct. 29
/PRNewswire-FirstCall/ -- Tangram Enterprise Solutions, Inc.
(BULLETIN BOARD: TESI) , the global leader for automated IT asset
management, today announced operating results for the third
quarter, ending September 30, 2003. "Our net cash position for the
quarter and for the last nine months has shown strong and steady
improvement, but more importantly, we have some nice profitability
figures for the third quarter," said Norm Phelps, President and CEO
of Tangram. "We are very pleased that the cost containment
initiatives we put in place last year are showing significant
results this year, particularly in reduced operating expenses and
improved profitability." For the quarter ended September 30, 2003,
the company reported total revenues of $2.73 million, compared with
$3.03 million in the comparable period in 2002, which is down ten
(10) percent from 2002 however an improvement of five (5) percent
over the second quarter of 2003. The quarter ended with cash and
cash equivalents at $1.41 million on September 30, 2003, a three
hundred thirty-seven (337) percent increase from the beginning of
the year. Total operating expenses declined over twenty-eight (28)
percent to $1.50 million from $2.09 million in the same quarter of
2002. Net income for the third quarter of 2003 was $134,000, up
from net income of $19,000, for the third quarter of 2002. "For the
last several quarters we have focused our energies on improving our
business in spite of the downturn in technology spending. While the
technology market is still soft we are pleased with the increases
in our service revenues over the previous three quarters and
particularly pleased with the enthusiasm in the market for our
unified Insight solution," said Ron Nabors, Tangram's Senior Vice
President and Chief Marketing Officer. "We continue to invest in
new products that will bring high value to our customers and
further differentiate Tangram from our competitors." For the nine
months ended September 30, 2003, the company reported total
revenues of $7.61 million, compared with $8.75 million in the
comparable period in 2002. Net income for the nine-month period
ending on September 30, 2003 was $32,000 versus a Net loss of $1.53
million for the same nine-month period in 2002. Operating expenses
for the nine months period ending September 30, 2003 were $4.69
million, down from $7.30 million in the nine-month period ended
September 30, 2002. Net cash provided by operating activities
improved to $2.51 million for the nine months ended September 30,
2003, compared to $764,000 in the nine-month period ended September
30, 2002. This press release contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 (statements that
are not historical facts and relate to future performance) that
involve risks and uncertainties. These forward-looking statements
are not guarantees of the future performance of Tangram and actual
results may vary materially from the results and expectations
discussed in this press release or in any other forward-looking
statements made by or on behalf of the company. Such
forward-looking statements, including statements about the timing
or occurrence of the rebound in spending in the IT asset management
market space, expense control, product revenue opportunities, and
growth and profitability expectations, are based upon information
available to management as of today's date. There can be no
assurance that Tangram will be able to succeed or capitalize upon
the opportunities in the asset management market. Tangram's
quarterly and annual revenues and operating results are subject to
a number of factors that make estimating its future operating
results extremely uncertain and difficult to predict, particularly
in the current downturn in technology spending. These factors
include: uncertain economic and stock market conditions that could
affect the company's business; unanticipated discovery of bugs or
other technical problems that could impact market acceptance of
Enterprise Insight(R) or Asset Insight(R); competitive forces in
the asset management markets in which Tangram participates;
Tangram's reliance on key personnel to guide its efforts; and other
risks identified and described in more detail in Tangram's SEC
filings, including its Form 10-K for the year ended December 31,
2002 and subsequent filings with the SEC. While Tangram may elect
to update forward-looking statements at some point in the future,
the company specifically disclaims any obligation to do so, even if
estimates change. About Tangram Tangram Enterprise Solutions, Inc.,
is the leading provider of cohesive, automated IT asset management
software 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, providing tailored solutions that support evolving
customer needs, and maintaining a 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
creating 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. Statements of
Operations (unaudited) (in thousands, except per share amounts)
Three Months Ended Nine Months Ended September 30 September 30 2003
2002 2003 2002 Revenues Licenses and product $ 892 $1,408 $2,327
$3,534 Services 1,840 1,626 5,281 5,219 Total revenues 2,732 3,034
7,608 8,753 Cost of revenues Cost of licenses and product (3) 10 26
41 Cost of services 369 369 951 1,192 Amortization of software cost
700 513 1,814 1,609 Total cost of revenues 1,066 892 2,791 2,842
Gross profit 1,666 2,142 4,817 5,911 Operating expenses Sales and
marketing 818 1,195 2,562 3,971 General and administrative 357 522
1,213 1,536 Research and development 308 277 802 1,217 Depreciation
and amortization 16 82 110 252 Restructuring charge -- 16 -- 325
Total operating expenses 1,499 2,092 4,687 7,301 Income (loss) from
operations 167 50 130 (1,390) Other expense, net (33) (31) (98)
(138) Income (loss) before income taxes 134 19 32 (1,528) Provision
for income taxes -- -- -- -- Net income (loss) $ 134 $ 19 $ 32
$(1,528) Per share calculation Net income (loss) $ 134 $ 19 $ 32
$(1,528) Less-preferred stock dividend (72) (66) (212) (197) Net
loss available to common shareholder $ 62 $ (47) $ (180) $(1,725)
Loss per common share Basic and diluted $ 0.00 $(0.00) $(0.01) $
(0.09) Weighted average number of common shares outstanding Basic
and diluted** 19,802 19,802 19,802 19,717 ** Weighted average
number of common shares outstanding on a diluted basis for the
three and nine-month periods ended September 30, 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) Nine Months Ended September 30 2003 2002 (unaudited)
(unaudited) Operating Activities Net income (loss) $ 32 $ (1,528)
Adjustments to reconcile net loss to net cash provided by operating
activities: 1,997 1,913 Cash provided by changes in working capital
items: 479 379 Net cash provided by operating activities 2,508 764
Net cash used in investing activities (866) (1,317) Net cash (used
in) provided by financing activities (650) 501 Net increase
(decrease) in cash and cash equivalents $ 992 $ (52) Condensed
Balance Sheets (in thousands) September 30, 2003 December 31, 2002
(unaudited) (audited) Assets: Current assets: Cash and cash
equivalents $ 1,410 $ 418 Accounts receivable, net 1,232 2,671
Other 290 296 Total current assets 2,932 3,385 Property and
equipment, net 106 100 Intangible assets and other, net 5,386 6,449
Total assets $ 8,424 $ 9,934 Liability and Shareholders' Equity:
Current portion of long-term debt-shareholder $ 1,823 $467 Accounts
payable and accrued expenses 802 1,060 Deferred revenue 2,622 3,281
Total current liabilities 5,247 4,808 Long-term debt-shareholders 0
1,954 Other long-term liabilities 727 542 Total shareholders'
equity 2,450 2,630 Total liabilities and stockholders' equity $
8,424 $ 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, +1-919-653-1265, ; Brian Strombotne,
+1-919-859-3666, , or John D. Wagner, +1-919-859-3666, , both of
Wagner Public Relations, for Tangram Enterprise Solutions Web site:
http://www.tangram.com/ http://www.safeguard.com/
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