SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): August 2, 2004
Daleen Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-27491 65-0944514
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
902 Clint Moore Road, Suite 230, Boca Raton, Florida 33487
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (561) 999-8000
Item 12. Results of Operations and Financial Condition
On August 2, 2004, Daleen Technologies, Inc. issued a press release
regarding its earnings for the second quarter ended June 30, 2004. A copy of the
press release is attached hereto.
The information in this Current Report on Form 8-K, including the
attached press release, shall not be deemed "filed" for the purposes of Section
18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to
the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, as amended, except as
shall be expressly set forth by specific reference in such a filing.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DALEEN TECHNOLOGIES, INC.
By: /s/ Gordon Quick
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Chief Executive Officer
Dated: August 2, 2004
FOR IMMEDIATE RELEASE
For additional information contact:
Teresa M. Gyulafia
Director of Marketing Communications
+ 1-561-981-2119
TGYULAFIA@DALEEN.COM
Daleen Reports Second Quarter Operating Results
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BOCA RATON, Fla. - August 2, 2004 - Daleen Technologies, Inc. (OTCBB: DALN.OB),
a global provider of licensed and outsourced billing and customer management,
operational support systems (OSS) and revenue assurance solutions for
traditional and next generation service providers, today reported that its net
loss for the second quarter of 2004 was $3.5 million, or $.07 per share, as
compared to $1.3 million*, or $.03 per share in the first quarter. Revenues were
$3.8 million for the second quarter of 2004, as compared to revenues of $4.3
million for the first quarter. The decrease in revenues was primarily due to
delays in anticipated contract signings and an overall lower level of new
business than expected. Total expenses for the second quarter, excluding costs
associated with the company's proposed investment and acquisition, were $5.3
million, compared to $5.4 million* in the first quarter. For the three months
ended March 31, 2004 and June 30, 2004, transaction costs were approximately
$185,000 and $2.0 million, respectively. The company's restricted cash decreased
by $159,000 in the second quarter from $506,000 at March 31, 2004, due to the
payment of insurance premiums that are the subject of a letter of credit
associated with the restricted cash.
"While our sales results were not up to our expectations this quarter, the
revenue shortfall appears to be more affected by the delay of customer decisions
rather than by a decrease in demand for our solutions," said Gordon Quick,
president and CEO of Daleen.
Second Quarter Highlights
o On May 7, Daleen announced investment agreements of $25 million and $5
million, respectively, with Quadrangle Capital and Behrman Capital, into
Daleen Holdings, Inc., a newly-formed holding company. Daleen Holdings will
acquire Daleen Technologies and Protek Telecommunications Solutions
Limited, a UK-based software company, combining the two organizations to
create a more diversified global service provider with billing, network
management, real-time inventory, revenue assurance, mediation, and event
management products. As part of this transaction, Daleen will become a
private company.
o Daleen signed a new license agreement for its Asuriti(TM) event management
software with an existing RevChain(R) customer to provide enhanced
mediation and event management capabilities across its customer base.
Asuriti will be integrated with the RevChain billing system to provide
greater control of and flexibility in managing operational data.
- more -
Daleen Reports Second Quarter Operating Results p 2 of 4
o Daleen reached new milestones in the implementation of its RevChain
software for ETB in Bogota, Colombia. With Phase I of the project
completed, Daleen has completed the tests and requirements to begin User
Acceptance Testing on Phase II.
o Total operating expenses for the second quarter were $7.3 million,
including approximately $2.0 million in costs that were directly associated
with Daleen's proposed investment transaction and acquisition. Excluding
these transaction-related costs, the company's operating expenses remain
consistent with or below previous quarters.
o Behrman Capital extended a $5.1 million bridge loan to Daleen to cover
costs related to the acquisition and to assist the company with its working
capital needs prior to the close of the transaction. To date, Daleen has
borrowed approximately $2.2 million against this loan. Of the total amount
borrowed, $1.1 million was used by Daleen to provide a bridge loan to
Protek for its working capital needs prior to the closing of the proposed
transaction.
* NOTE: As reported on Form 10-Q filed by Daleen on May 17, 2004 for the period
ended March 31, 2004.
About Daleen
Daleen Technologies, Inc. is a global provider of high performance billing and
customer care, OSS and revenue assurance software, with a comprehensive
outsourcing solution for traditional and next generation service providers.
Daleen's solutions utilize advanced technologies to enable providers to reach
peak operational efficiency while driving maximum revenue from products and
services. Core products include its RevChain(R) billing and customer management
software, Asuriti(TM) event management and revenue assurance software, and
BillingCentral(R) ASP outsourcing services. More information is available at
WWW.DALEEN.COM.
Information with Respect to Forward-Looking Statements. Statements in this
release 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. These include statements
regarding the intent, belief or current expectations of the Company and the
assumptions on which these statements are based. Prospective investors 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 risks
associated with the proposed investment and merger transactions; business
concentration; the Company's ability to continue as a going concern; the
Company's ability to successfully implement the transactions and its aggregation
strategy generally; the Company's inability to achieve profitability; the
consequences of any default on the SVB operating loan; customers' and potential
customers' market position and lack of financial resources; the costs and
success of the Company's international expansion; the ability of the Company to
develop and protect its intellectual property; the Company's relationship with
third party software vendors and service providers; competition; the Company's
ability to retain senior management and other key personnel; low price and
volatility of the Company's common stock and the impact of the delisting from
The Nasdaq SmallCap Market; the on-going securities class action against the
Company; claims related to liabilities associated with the Abiliti acquisition;
and the rights and preferences of the series F convertible preferred stock.
These factors and others are described in the Company's most recent SEC filings
including its most recently filed Form 10-K. The Company undertakes no
obligation to update the forward-looking statements in this news release.
###
(C)Daleen Technologies, Inc. All rights reserved. Daleen, the Daleen logo,
RevChain, Asuriti, BillingCentral, NetworkStrategies, and EventProcessor are
trademarks, or service marks, of Daleen Technologies, Inc. in the United States
and other countries. All other trademarks and registered trademarks are
property of their respective owners.
Daleen Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
Unaudited
June 30, December 31,
2004 2003
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Assets
Current assets:
Cash and cash equivalents $ 1,400 $ 2,497
Restricted Cash 347 561
Accounts receivable, net 2,839 1,002
ost in excess of billings
C 2,454 2,032
Other current assets 376 487
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Total current assets 7,416 6,579
Property and equipment, net 697 931
Goodwill 5,086 5,086
Other assets 310 430
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Total assets $ 13,509 $ 13,026
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable 400 148
Accrued payroll and other accrued expenses 4,175 2,267
Billings in excess of costs 150 97
Note payable 2,867 -
Deferred revenue 528 372
Other current liabilities 64 42
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Total current liabilities 8,184 2,926
Other long term liabilities - 5
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Total liabilities 8,184 2,931
Total stockholders' equity 5,325 10,095
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Total liabilities and
stockholders' equity $ 13,509 $ 13,026
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Daleen Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands except per share data)
Unaudited
Three Months Ended Six Months Ended
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June 30, March 31, June 30, June 30, June 30,
2004 2004 2003 2004 2003
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Revenue:
Professional services and other $ 3,150$ 3,667$ 3,982 $ 6,816$ 7,809
License fees 670 587 231 1,257 475
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Total revenue 3,820 4,254 4,213 8,073 8,284
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Cost of revenue:
Professional services and other 1,344 1,584 1,109 2,928 2,165
License fees - - 165 - 468
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Total cost of revenue 1,344 1,584 1,274 2,928 2,633
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Gross margin 2,476 2,670 2,939 5,145 5,651
Operating expenses:
Sales and marketing 825 734 831 1,559 1,732
Research and development 1,455 1,652 1,602 3,107 3,284
General and administrative 1,630 1,623 1,517 3,253 3,129
Proposed transaction costs 2,005 - - 2,005 -
Impairment charges - - 500 - 500
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Total operating
expenses 5,915 4,009 4,450 9,924 8,645
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Operating loss (3,439) (1,339) (1,511) (4,779) (2,994)
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Total interest income and nonoperating
expense, net (28) 36 99 9 163
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Net loss applicable to common shareholders $ (3,467)$ (1,303)$ (1,412) $ (4,770)$ (2,831)
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Net loss applicable to common
shareholders per share -
basic and diluted $ (0.07)$ (0.03)$ (0.03) $ (0.10)$ (0.06)
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Weighted average outstanding shares - basic
and diluted 46,923 46,858 45,829 46,891 45,829
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