EXHIBIT 99.1
CONTACT: Tom Donnelly Jacqueline Hanson
Chief Financial Officer Director, Corporate
Net Perceptions, Inc. Communications
952-842-5400 Net Perceptions, Inc.
[email protected] 952-842-5063
[email protected]
NET PERCEPTIONS ANNOUNCES FOURTH QUARTER, 2001 GUIDANCE
MINNEAPOLIS - (October 25, 2000) - Net Perceptions, Inc. (Nasdaq: NETP)
announced in a conference call yesterday that it has developed internal
sales goals for the quarter beginning on October 1, 2000, that range from
$8 million to $9 million, and for the full year 2001 of $45 million to $60
million, reflecting compound quarterly growth of 15% to 20% on a sequential
basis.
The company also provided guidance for anticipated pro forma operating or
cash-based results. Non-cash charges associated with amortization of
intangibles and stock compensation expense are noted separately.
For the fourth quarter of 2000 the company said it expects:
o License gross margins to remain relatively flat, with a modest
improvement in service and maintenance gross margins, resulting in
blended gross margins that will be up modestly on a sequential basis
over the third quarter.
o Expenses on an operating basis to be relatively flat with the third
quarter, due in part to a $500,000 cash charge associated with its
restructuring that was announced last week.
o To record an additional non-cash restructuring charge of about
$500,000, bringing the total non-cash charges, which include
amortization of intangibles and stock compensation expense, to
approximately $8.4 million for the fourth quarter.
o Sales and marketing expenses as a percent of total revenue to be down
4% to 5%, research and development expenses to be down 10% to 12% and
general and administrative expenses to be down 2% to 3% compared to
the third quarter.
o Total cash used for the quarter to be $10 million to $12 million
including capital expenditures.
Looking forward into 2001, the company said it expects:
o To aggressively strive for profitability and is now targeting the
fourth quarter of 2001.
o Product gross margins to remain in the 94% to 96% range. Service and
maintenance gross margins are expected to improve 2% to 3%
sequentially over the next five quarters.
o Goals for operating expenses, as a percent of total revenue, over the
next five quarters will be to reduce general and administrative costs
to the 13% to 17% range, to reduce sales and marketing to the 45% to
50% range, and to reduce R&D to the 23% to 28% range.
o Total cash used for the year to be approximately $18 million to $23
million.
o Non-cash charges to be about $7.8 million dollars per quarter.
o Weighted average shares outstanding to grow by approximately 50,000
shares per quarter over the next five quarters.
"We've covered a lot of ground in the last four years and are proud of the
progress we've made," said Tom Donnelly, Net Perceptions chief financial
officer. "Looking forward, with our more aggressive focus on large
multi-channel retailers and Fortune 1000 companies, and the changes we're
making to align with those business needs, we plan to aggressively regain
the traction we had through the first two quarters of 2000."
ABOUT NET PERCEPTIONS
Net Perceptions, a leading provider of precision merchandising and
personalization infrastructure software, is the innovator and preeminent
supplier of software solutions that allow companies to translate knowledge
into profitable business action. Its Commerce Solutions and Knowledge
Solutions products enable companies to capitalize on business information
and optimize product assortments, pricing, customer relationships and
intellectual capital. Customers include market leaders such as Best Buy,
Hudson's Bay, JC Penney, J.P. Morgan, Kmart, Procter and Gamble and
Walgreen's. The company is based in the United States and has offices in
six other countries. For more information visit
http://www.netperceptions.com or call 800-466-0711.
NET PERCEPTIONS AND THE NET PERCEPTIONS LOGO ARE REGISTERED TRADEMARKS OF
NET PERCEPTIONS, INC. ALL OTHER TRADEMARKS ARE THE PROPERTY OF THEIR
RESPECTIVE OWNERS. THIS NEWS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS
THAT INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES. AMONG THE IMPORTANT
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
INDICATED BY SUCH FORWARD-LOOKING STATEMENTS ARE THE COMPANY'S LIMITED
OPERATING HISTORY, DELAYS IN PRODUCT DEVELOPMENT, DEVELOPMENT OF THE
INTERNET MARKET, CHANGES IN PRODUCT PRICING POLICIES, COMPETITIVE
PRESSURES, AND THE RISK FACTORS DETAILED FROM TIME TO TIME IN THE COMPANY'S
PERIODIC REPORTS AND REGISTRATION STATEMENTS FILED WITH THE U.S. SECURITIES
AND EXCHANGE COMMISSION.
