STAMFORD, Conn., March 31 /PRNewswire-FirstCall/ -- Net Perceptions, Inc. today announced financial results for the quarter and fiscal year ended December 31, 2005. Net Perceptions reported $59,000 in revenues for the fourth quarter of 2005 and $118,000 in revenues for the fiscal year ended December 31, 2005, compared to $30,000 and $927,000 during the comparable periods of 2004. Net loss for the fourth quarter of 2005 was $131,000 or $0.00 per diluted share compared to a net loss of $356,000 or $0.01 per diluted share during the comparable period of 2004. Net income for the fiscal year ended December 31, 2005 was $207,000 or $0.01 per diluted share compared to a net loss of $61,000 or $0.00 per diluted share during the comparable period of 2004. This increase in net income was principally due to a reduction in general and administrative expenses and to a lesser extent non- recurring items including $118,000 of royalty revenue and a gain from the settlement of a litigation of $223,000.
As of December 31, 2005, Net Perceptions' cash, cash equivalents and marketable securities were $14.9 million (or $0.52 gross cash per share) compared to $14.4 million as of December 31, 2004. Gross cash per share at December 31, 2005 equals cash, cash equivalents and marketable securities of $14.9 million divided by 28.9 million common shares outstanding. Net Perceptions has provided this non-GAAP measure because it believes that it is useful to investors assessing the extent of Net Perceptions' assets available for redeployment. Net Perceptions is unaware of any comparable GAAP measure.
Net Perceptions estimates that it has available federal net operating loss carry-forwards of approximately $120.9 million and research and development credit carry-forwards of approximately $151,000 which expire in varying amounts beginning in the year 2011, to the extent not limited under Section 382 of the Internal Revenue Code.
Nigel Ekern, Net Perceptions' Chief Administrative Officer stated, "We continue our efforts to identify and evaluate suitable acquisition and merger opportunities as part of our strategy to redeploy our cash and utilize our net operating losses, to the extent available. Separately, in advance of a redeployment transaction, we are focused on closely managing our personnel- related and other general and administrative expenses associated with continuing to remain a public reporting company."
Net Perceptions does not currently intend to hold conference calls to discuss quarterly earnings releases unless and until it consummates an acquisition in connection with its redeployment strategy. At such time, management plans to resume holding quarterly conference calls to review earnings and Net Perceptions' operating performance.
Net Perceptions, formerly a provider of software business solutions, is seeking to redeploy its assets and use its cash, cash equivalent assets and marketable securities to enhance stockholder value.
This press release contains forward-looking statements within the meaning of the Securities Act of 1933 and the Exchange Act of 1934. Information in this release includes Net Perceptions' beliefs, expectations, intentions and strategies regarding Net Perceptions, its future and its products and services. Assumptions relating to the forward-looking statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risks including our inability to execute successfully our planned effort to redeploy our assets to enhance stockholder value and the unavailability of our net operating loss carry forward. Net Perceptions cannot guarantee its future performance. All forward-looking statements contained in this release are based on information available to Net Perceptions as of the date of this release and Net Perceptions assumes no obligation to update the forward-looking statements contained herein.
For further information regarding the risks and uncertainties in connection with Net Perceptions' business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Factors That May Affect Our Future Results" sections of Net Perceptions' filings with the Securities and Exchange Commission, including but not limited to, its most recent annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained at our web site at http://www.netperceptions.com/ or the SEC's web site at http://www.sec.gov/.
NET PERCEPTIONS, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2005 AND 2004
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
ASSETS
2005 2004
---- ----
CURRENT ASSETS:
Cash and cash equivalents $ 203 $ 14,444
Marketable securities 14,659 --
Prepaid expenses and other current assets 123 40
-------- ---------
Total current assets 14,985 14,484
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Other assets: 210 239
-------- --------
Total assets $ 15,195 $ 14,723
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued liabilities $ 354 $ 178
-------- ---------
Total current liabilities 354 178
------- --------
Note payable 2,533 2,517
-------- ---------
Total liabilities 2,887 2,695
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STOCKHOLDERS' EQUITY:
Preferred stock, $.0001 par value;
5,000 shares authorized; none issued -- --
Common stock, $.0001 par value; 100,000
shares authorized; 29,348 and 29,282 shares
issued and 28,918 and 28,574 outstanding
at December 31, 2005 and 2004, respectively 2 2
Additional paid-in capital 234,400 234,350
Unearned stock compensation (108) (135)
Accumulated other comprehensive loss (4) --
Accumulated deficit (221,982) (222,189)
--------- --------
Total stockholders' equity 12,308 12,028
--------- ---------
Total liabilities and stockholders'
equity $ 15,195 $ 14,723
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NET PERCEPTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
THREE MONTHS YEARS ENDED
ENDED DECEMBER 31, DECEMBER 31,
------------------ ----------------
2005 2004 2005 2004
---- ---- ---- ----
REVENUES:
Product $-- $ -- $ -- $405
Services, maintenance and royalty 59 30 118 522
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Total revenues 59 30 118 927
COST OF REVENUES:
Service, maintenance and royalty -- 4 -- 220
------------------ ----------------
Total cost of revenues -- 4 -- 220
------------------ ----------------
GROSS MARGIN 59 26 118 707
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OPERATING EXPENSES:
Research and development -- -- -- 250
General and administrative 276 332 553 2,428
Gain on sale of patents -- -- -- (1,800)
(Gain)/loss from litigation
settlement 1 -- (223) --
Restructuring related charges and
impairments -- -- -- (7)
------------------ ----------------
Total operating expenses 277 332 330 871
LOSS FROM OPERATIONS (218) (306) (212) (164)
INTEREST INCOME 142 66 454 172
INTEREST EXPENSE (13) (27) (68) (75)
OTHER INCOME (EXPENSE), NET (42) (89) 33 6
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NET INCOME/(LOSS) $(131) $(356) $ 207 $ (61)
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Net loss per common share:
Basic $ (0.00) $ (0.01) $ 0.01 $(0.00)
Diluted $ (0.00) $ (0.01) $ 0.01 $(0.00)
Weighted average shares
outstanding:
Basic 28,918 28,916 28,918 28,574
Diluted 28,918 28,916 33,438 28,574
NET PERCEPTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2005 2004
Cash flows from operating activities:
Net income (loss) $207 $(61)
Reconciliation of net income (loss) to net
cash provided by (used in) operating
activities:
Provision for doubtful accounts -- (22)
Amortization of debt issuance costs 29 49
Amortization of discount on notes payable 16 40
Stock based compensation 77 245
Restructuring related charges and impairments -- (7)
Amortization of discount on investments, net (174) --
Changes in assets and liabilities:
Accounts receivable -- 377
Prepaid expenses and other current assets (83) 441
Other assets -- 35
Accrued liabilities 176 (573)
Deferred revenue -- (380)
Other liabilities -- (30)
Net cash provided by operating activities 248 114
Cash flows from investing activities:
Purchases of short-term investments and
marketable securities (20,539) --
Sales and maturities of short-term
investments and marketable securities 6,050 --
Net cash used in investing activities (14,489) --
Cash flows from financing activities:
Proceeds from exercise of stock options
and warrants, net of stock repurchases -- 153
Proceeds from issuance of convertible
subordinate note, net of offering costs
of $288 -- 2,245
Net cash provided by financing activities -- 2,398
Net (decrease) increase in cash and cash
equivalents (14,241) 2,512
Cash and cash equivalents at beginning of year 14,444 11,932
Cash and cash equivalents at end of year $203 $14,444
