<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
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SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
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CONTINUUS SOFTWARE CORPORATION
(NAME OF SUBJECT COMPANY)
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CONTINUUS SOFTWARE CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, $0.001 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
21218R 10 4
(CUSIP NUMBER OF CLASS OF SECURITIES)
JOHN R. WARK
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CONTINUUS SOFTWARE CORPORATION
9401 JERONIMO ROAD
IRVINE, CALIFORNIA 92618
(949) 830-8022
(NAME, ADDRESS, AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICE AND
COMMUNICATIONS ON BEHALF OF PERSON(S) FILING STATEMENT)
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COPIES TO:
D. BRADLEY PECK, ESQ.
COOLEY GODWARD LLP
4365 EXECUTIVE DRIVE, SUITE 1100
SAN DIEGO, CALIFORNIA 92121
(858) 550-6000
|X| CHECK THE BOX IF THE FILING RELATES SOLELY TO PRELIMINARY COMMUNICATIONS
MADE BEFORE COMMENCEMENT OF A TENDER OFFER.
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Date: October 25, 2000
WEDNESDAY OCTOBER 25, 9:29 AM EASTERN TIME
PRESS RELEASE
CONTINUUS SOFTWARE REPORTS THIRD QUARTER 2000 FINANCIAL RESULTS
IRVINE, Calif.--(BUSINESS WIRE)--Oct. 25, 2000--Continuus Software Corp.
(Nasdaq: CNSW), the leading provider of eAsset Management solutions, Wednesday
reported financial results for the third quarter ended Sept. 30, 2000.
Total revenue for the third quarter was $11.0 million, a 22% sequential increase
over revenue of $9.0 million for the second quarter of 2000 and a 13% increase
over revenue of $9.7 million for the same period in 1999. The loss from
operations for the third quarter on a pro forma basis, excluding stock
compensation, the amortization of goodwill and other costs associated with the
acquisition of Pagoda Corp. and $171,000 of reorganization costs was $1.8
million, or $.17 per diluted share, compared with a loss of $3.8 million, or
$.36 per diluted share for the second quarter of 2000 and compared with income
from operations of $372,000, or $.04 per diluted share, for the same period last
year.
The total net loss for the third quarter was $4.6 million, or $.43 per diluted
share. Included in the net loss for the quarter is a $1.5 million write-down in
the carrying value of our investment in Project 1918, Inc, an early stage
Internet company.
For the nine months ended Sept. 30, 2000, total revenue increased 12% year over
year to $29.9 million, compared with $26.7 million for the same period a year
ago. Net loss for the nine months ended Sept. 30, 2000 was $11.3 million, or
$1.08 per diluted share, compared with a net loss of $140,000, or $0.04 per
diluted share, for the same period a year ago.
Continuus also announced today that it has entered into a definitive merger
agreement with Telelogic AB, the leading Swedish-based supplier of solutions for
real-time software development and requirements management. Pursuant to the
merger agreement Telelogic will commence a cash tender offer for all outstanding
shares of Continuus at $3.46 per share. Continuus will host a conference
call/webcast on Wednesday, October 25 at 2:00 p.m. Pacific Daylight Time to
discuss its third quarter results and the merger agreement. The dial-in number
to access this call is 888/303-1409. From international locations, dial
212/271-4760. A taped replay of the call will be available starting
approximately one hour after the calls' conclusion until Friday, October 27 at
9:00 a.m. PDT. To access the replay, dial 800/633-8284 and enter the passcode
1670-7216. To access the webcast, go to Continuus' Web site at
www.continuus.com. An archived webcast replay will also be available.
John Wark, president and CEO of Continuus, commented: "This was our largest ever
revenue quarter, with 33 new customers and 90 existing customers expanding their
deployment of Continuus technologies. We also successfully shipped new versions
of our ChangeSynergy and KnowledgeSynergy product lines, along with an
integration of our CMSynergy solution with IBM's Visual Age for Java, which is
used heavily in ecommerce application development environments by our
Telecommunications and Financial customers. The merger with Telelogic
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will allow us to leverage these capabilities alongside the strong Telelogic
product lines, into the merged companies' joint customer bases and target
markets. Our customers will benefit from a financially stronger supplier with
more global resources."
About Continuus
Continuus Software Corp. is the leading provider of eAsset Management solutions.
eAsset Management enables organizations to develop, enhance, deploy and more
effectively manage their teams building Internet and enterprise software and
content-based systems. Continuus products enable organizations to improve the
quality of their eAssets and to reduce the time it takes to deliver Internet and
software applications. Continuus offers eAsset Management solutions, consisting
of Continuus CM Synergy, Continuus WebSynergy, Continuus ChangeSynergy, and
Continuus KnowledgeSynergy, designed to support the collaborative development,
management, approval and deployment of the most complex and demanding software,
Internet applications and Web content.
The company also offers professional services through the eAsset Foundation that
include consulting, training and maintenance services to facilitate successful
implementation of their eAsset Management solutions. Continuus has licensed its
products to more than 550 customers, 1,000 sites and 50,000 users worldwide.
For more information on Continuus: in the United States, call 949/830-8022; in
Canada, call 613/751-4499; in the United Kingdom, call 44.1344.788.100; in
Germany, call 49.89.54.8880; in France, call 33.1.69.59.1616; in Australia call
61.2.9904.6033, or visit its Web site at www.continuus.com.
This news release contains certain forward-looking statements that are based
largely on Continuus Software's current expectations and are subject to a number
of risks and uncertainties. Actual results and events could differ significantly
from those discussed in the forward-looking statements. These risks and
uncertainties include those associated with the proposed acquisition of
Continuus Software by Telelogic, fluctuation in our revenue and financial
performance, the development of new products and technologies, including
Continuus eAsset Management solutions, the emerging markets for our products,
and intense competition in our markets, as well as other risks and uncertainties
described from time to time in our filings with the Securities and Exchange
Commission, including our most recent Annual Report on Form 10-K and our most
recent Quarterly Report on Form 10-Q.
This announcement is not an offer to purchase nor a solicitation of an offer to
sell shares. The tender offer for the outstanding shares of Continuus common
stock described in this announcement has not yet commenced. At the time the
offer is commenced, Telelogic will file a tender offer statement with the SEC
and Continuus will file a solicitation/recommendation statement with respect to
the offer. Investors and security holders of both Telelogic and Continuus are
urged to read each of the tender offer statement and the
solicitation/recommendation statement referenced in this news release when it
becomes available because it will contain important information about the
transaction.
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Investors and security holders may obtain a free copy of the tender offer
statement and the solicitation/recommendation statement when it is available and
other documents filed by Telelogic and Continuus with the SEC at the SEC's Web
site at www.sec.gov.
The tender offer statement and the solicitation/recommendation statement and
these other documents may also be obtained free from Telelogic and Continuus.
CONTINUUS SOFTWARE CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months Ended Nine months Ended
September 30, September 30,
----------------------- -----------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
License fees $ 5,976 $ 5,304 $ 15,966 $ 14,304
Services 4,977 4,348 13,901 12,399
Total revenues 10,953 9,652 29,867 26,703
Cost of revenues:
License fees 260 152 835 470
Services 2,945 2,230 8,591 6,375
Amortization of
technology rights 260 0 608 0
Total cost of revenues 3,465 2,382 10,034 6,845
Gross Profit 7,488 7,270 19,833 19,858
Operating Expenses:
Sales and marketing 6,027 4,565 17,396 12,803
Research and development 2,559 1,438 6,920 4,007
General and administrative 1,144 895 3,556 2,413
Other compensation costs,
goodwill and other
amortization 543 57 1,253 155
Total operating expenses 10,273 6,955 29,125 19,378
Income (loss) from
operations (2,785) 315 (9,292) 480
Other expense, net (1,788) (34) (1,931) (612)
Net loss before income
taxes (4,573) 281 (11,223) (132)
Income taxes provision (3) (1) (50) (8)
Net loss $ (4,576) $ 280 $(11,273) $ (140)
Net loss per share
Basic $ (0.43) $ 0.04 $ (1.08) $ (0.04)
Diluted $ (0.43) $ 0.03 $ (1.08) $ (0.04)
Weighted average shares outstanding
Basic 10,715 6,888 10,471 3,426
Diluted 10,715 10,188 10,471 3,426
</TABLE>
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CONTINUUS SOFTWARE CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
September 30, 2000 December, 31 1999
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(unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 6,112 $11,570
Investments in securities 0 9,125
Accounts receivable,net 10,361 8,940
Prepaid and other current
assets 1,149 1,321
Total current assets 17,622 30,956
Property and equipment, net 5,569 2,154
Goodwill and other
intangible assets, net 9,602 107
Other assets 1,766 757
Total Assets $34,559 $33,974
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 2,801 $ 1,662
Accrued liabilities 5,191 5,554
Deferred revenue 5,427 4,961
Current portion of capital
leases obligations 203 488
Total current liabilities 13,622 12,665
Long-term liabilites:
Note payable 6,000 6,000
Capital lease obligations,
less current portion 129 261
Total liabilities 19,751 18,926
Total Stockholders' Equity 14,808 15,048
Total Liabilities and
Stockholders' Equity $34,559 $33,974
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Contact:
Morgen-Walke Associates Inc.
Jim Byers, Danielle Scheg (investors)
415/296-7383
Pete DeLauzon (media)
415/296-7383
or
Continuus Software Corporation
Steve Johnson, Chief Financial Officer
949/885-2555
or
Continuus Software Corporation
Geri L. Schanz, Director of Marketing Communications
949/885-2512
4.
