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FILING PURSUANT TO RULE 425 OF
THE SECURITIES ACT OF 1933 AND
RULE 14(a)-12 OF THE SECURITIES
EXCHANGE ACT OF 1934
FILER: EXCALIBUR TECHNOLOGIES CORPORATION
SUBJECT COMPANY: EXCALIBUR
TECHNOLOGIES CORPORATION
NO. 0-9747
The following is a script first used on May 24, 2000 during a conference call
concerning the First Quarter Financial Results of Excalibur Technologies
Corporation.
Excalibur Technologies
First Quarter Financial Results Conference Call
Wednesday May 24, 2000
8:30 a.m. EST
Conference Call Phone Number: (212) 346-6400
Excalibur Executive Conference Room (703) 917-9324
Reservation Number: 15175458
Chairpersons of Call: Pat Condo and Jim Buchanan
8:15 a.m. Primary Operator will call Jim Buchanan and Pat Condo at (703) 917-
9324. The operator will make sure they can hear all participants
clearly and verify the title of the call, names of the speakers and
their respective titles. She will stay on the line and give a
countdown so the participants know how much time is left before the
call begins. The operator will stay on for the duration of the call
and will continuously monitor sound quality.
8:30 a.m. Operator will ask Excalibur if they are ready to begin the call. If
Excalibur needs a few more minutes, the operator will tell the
callers to stand by.
When Excalibur tells the operator to begin the call, the operator
will ask for 10 seconds of quiet while she connects all callers and
starts the tape.
IT IS IMPERATIVE THAT NO ONE SPEAKS DURING THE TEN SECONDS,
AS ALL CALLERS WILL HEAR THE DISCUSSION.
The Operator will begin the call:
Operator: "Ladies and gentlemen, thank you for standing by. Welcome to the
Excalibur Technologies Corporation first quarter financial results conference
call. At this time all participants are in a listen only mode. Later we will
conduct a question and answer session in interactive mode. At that time, if you
have a
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question, you will need to press the "1" followed by the "4" on your push-button
phone. (As a reminder, this conference is being recorded today, May 24th, 2000.)
I would now like to turn the conference over to Mr. Pat Condo, president and
chief executive officer of Excalibur Technologies and Mr. Jim Buchanan, chief
financial officer. Gentlemen, please go ahead."
Introduction
Pat: Good morning everyone and welcome to Excalibur Technologies' financial
results conference call for the first quarter ending April 30, 2000. I'm Pat
Condo, president and chief executive officer of Excalibur. With me today is Jim
Buchanan our chief financial officer.
We believe Q1 was particularly successful not only because it represents another
solid quarter of financial and operational performance, but also because we
signed and announced on May 1, an agreement with Intel Corporation to combine
existing Excalibur operations with Intel's Interactive Media Services division
to form a new company. In today's call, we'll discuss both of these items,
starting with a review of our quarterly financial results and company
performance, followed by the Excalibur/Intel agreement. At the close of our
call, we'll respond to questions in an interactive format. If your question is
not addressed on the call today, please feel free to call our Investor Relations
Department at (703) 760-4077.
Now, let me ask Jim to review the first quarter results.
Jim: Thanks Pat...Good morning everyone...before we begin please note that...
During this call, we the management of Excalibur, may make comments about our
future expectations, plans and prospects, which could constitute forward-looking
statements within the meaning of the Private Securities Litigation Act of 1995.
Actual results may differ materially from our expectations as the result of
various important factors, including but not limited to, the success of our
relationships with strategic partners, Excalibur's ability to continue to
develop competitive products and make timely product releases and the rapidly
changing marketplace. Risk factors are reported in Excalibur's Form 10-K for
the year ended January 31, 2000 and other filings with the SEC.
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Revenue Analysis/Review
We're pleased to report another quarter of financial results that were in line
with our expectations. Overall, we increased revenues 21% compared to the
quarter a year ago. This increase is driven by growth in our existing customer
base and partnerships, and by new licensing agreements.
Our total revenue for the first quarter was $9.4 million compared to $7.8
million for the same quarter last year. Software revenue was $7.5 million, an
increase of 15% over last year. Maintenance revenue was $1.9 million, a 52%
increase compared to last year. I should note here that revenue from one of our
maintenance contracts provided about $400 thousand in maintenance revenue in the
first quarter and is a non-recurring item. Excluding this contract, maintenance
revenue for the first quarter this year was approximately $1.5 million, or 21%
higher than the first quarter last year.
Total expenses for the first quarter were $11.1 million, up from $9.2 million in
the first quarter of last year, an increase of 21%. The increase in operating
expenses is primarily due to increased spending in sales and marketing. Cost of
software revenues increased 12% to $1.1 million in the first quarter this year.
The increase was driven by higher software revenues. Cost of maintenance
revenues in the first quarter decreased 23% over the same quarter last year, as
a result of changes implemented in the fourth quarter of last year that
streamlined the customer support organization and reduced overall costs. The
gross margin percentage improved in the first quarter this year to 83% compared
to 80% in the first quarter last year.
Sales and marketing expense was $5.6 million in the first quarter, an increase
of 43% over the first quarter last year. The increase is attributable to growth
in personnel as well as marketing program expenses. As you'll recall, we
embarked on an aggressive advertising and brand recognition campaign in the
first quarter, placing ads in the Wall Street Journal and Fortune magazine.
These expenses are reflected in the first quarter figures and we believe we are
beginning to see positive effects from those promotions. Research and
development expenses were $2.7 million, an increase of 8% over last year.
General and administrative expenses increased 4% from the first quarter last
year to $1.3 million.
Other income for the first quarter was about $94 thousand. This puts the net
loss for the quarter at $1.7 million, or $0.11 per common share, compared to a
net loss of $1.9 million or $0.14 per common share in the first quarter last
year.
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As you may know, we target and sell our software into three basic market
segments. The first is the intranet or knowledge management market, the second
is Internet e-businesses and on-line content providers and the third is the OEM
market. This quarter, 28% of our license revenue came from intranet sales, 44%
from online services, and 28% from OEMs. Consistent with our expectations, the
mix of business from the online services segment increased from about 29% of
license revenue on average for the last fiscal year to the 44% figure in the
first quarter this year.
Now turning to the results by product line. The Applications Group develops and
markets the RetrievalWare family of text products. Total revenue from the
Applications Group in the first quarter was $8.7 million, an increase of 27%
over the first quarter last year. The Applications Group had net income of $0.6
million in the first quarter compared to a net loss, excluding special charges,
of $0.2 million last year. The Media Services Group develops and markets the
Screening Room suite of products. Total revenue from the Media Services Group
was $0.7 million in the first quarter this year compared to $0.9 million in the
same quarter a year ago. The Media Services Group incurred a net loss of $2.3
million in the first quarter of this year compared to a net loss of $1.3 million
last year.
The business plan for the Media Services Group has been focused on licensing
Screening Room through a network of application service providers. As we have
discussed previously with you, we targeted strategic partnerships in this area
that could provide distribution coupled with an equity financing arrangement.
Obviously, from our recent announcement, finalizing the agreement with Intel
commanded the majority of our attention during the first quarter. As a
consequence, we did not aggressively pursue other ASP relationships and first
quarter revenues for the Media Services Group were somewhat lower than we
otherwise would have expected. Nevertheless, we believe the agreement we
announced with Intel is one that will provide a very strong opportunity for
business.
Our cash balance at the end of the first quarter is $10.8 million, compared to
the balance of $11.1 million at April 30, 2000. So, in looking at the cash flow
for the first three months, we used about $300,000 in cash, which was on par
with our expectations.
Q1 was noteworthy for its operational successes. I want to touch on a few
significant Q1 events and follow up on a couple of items from prior quarters
before turning the call back over to Pat.
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In this first quarter, we added support for six additional languages to
Excalibur RetrievalWare. RetrievalWare now provides comprehensive search
features across more languages than any other vendor, including support for
multi-byte international data. These enhancements give Excalibur customers
unprecedented language handling capability and affirm our continued commitment
to advanced text retrieval solutions.
We also announced an upgrade release of Screening Room, Version 2.2, which
provides substantial enhancements for video ingestion and capture, added
scalability options, new user interfaces and published APIs for enhanced user
customization. Regular product releases, such as this one, reflect our ongoing
commitment to product R&D and product development, and our desire to maintain
our product advantage in the marketplace. Indicative of this advantage are the
awards and honors Excalibur receives each year, the most recent of which is the
Platinum 2000 Award for Best Asset Management Product that AV Video Multimedia
Producer Magazine bestowed on Excalibur Screening Room earlier this year.
We secured several new customers during Q1 while expanding sales to existing
corporate and government organizations. Notable customer agreements and
highlights during the quarter include:
. We received a major payment from Found.com. As you'll recall, Found.com
enlisted Excalibur as a technology and corporate partner in its e-
tailing venture designed to combine the best of e-commerce with brick-
and-mortar retail. In the first quarter, Excalibur realized about $1.7
million in revenues from this agreement. Our agreement calls for
additional service fees of approximately $0.7 million that will be
recognized as services are rendered. The contract also contains an
option for Found.com to extend the license by paying royalties on a
percent of revenue basis.
. We also expanded our agreement with Parametric Technology. Parametric
licensed RetrievalWare to embed it in Parametric's web-based
collaboration
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portal application called Windchill. During the first quarter, PTC
expanded the terms of the agreement, adding additional languages and
additional platforms.
. We signed a new agreement with the international law firm, Clifford
Chance, who selected RetrievalWare to power their intranet which is
accessible by some 6,500 lawyers and others around the world. Accuracy,
scalability and advanced language capabilities were deciding factors in
Clifford Chance's decision to use Excalibur RetrievalWare to manage its
vast international knowledge base.
Other significant agreements and upgrades in the quarter include LA Times,
Cognos, NIH, Xerox, Novartis, Williams Communications and others. Overall, we
now have approximately 80 companies using Excalibur products to power online
information services and applications.
As we continue looking to the future, we see widening market opportunities for
all of Excalibur products and services. Both the text and video markets are
expanding and problems such as accuracy and scalability are essential criteria
that corporations and online service providers use when choosing the right
technologies to power their business. Our products are built for these demanding
environments and we're seeing increased business as a result. We feel our
current business is a solid foundation upon which the new company will build.
Since the announcement with Intel, we've frequently been asked about how our
current customers and prospects have reacted to the proposed agreement. Interest
in the new company is strong. We've talked with many organizations, not only in
our customer base, but also among our prospects. We're having discussions about
new business opportunities that probably wouldn't have been possible without
this announcement. The announcement has given us better visibility and more
credibility than we've ever had before. Many have expressed enthusiasm and
interest in what the new company will offer, how the new company's services can
benefit them, and when we anticipate the full scope of offerings from the new
company will be available. We've explained that the
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next three months will be a transitional quarter for us as we plan for putting
the two organizations together, and that the new company offerings, of
necessity, will not be available until after the transaction closes - well into
the second half of this year. Right now, its not possible to determine what
impact, if any, this may have on Excalibur's business in the meantime. There are
many positive aspects, but the announcement could have the effect of pushing
some of our business later into the year as some prospects may defer their
purchase decisions until they can evaluate the full extent of our product and
service offerings. Also, the planning of the integration of the two companies
and the closing of this transaction is going to take a lot of management's time
and attention. We will do our best to close the transaction as soon as possible
and look forward to what we believe will be an exciting future for the Company.
Now, let me turn this back over to Pat. Pat?
Pat Condo: Thanks, Jim.
I'd like to spend a few minutes now reviewing our agreement with Intel
Corporation and sharing with you our excitement and enthusiasm over the
potential of this new company. As you know, on May 1 we jointly announced a
major agreement with Intel Corporation to form a new company that will enable
owners of branded high-value content, such as sports and entertainment material,
to produce and securely sell their audio and video content over the Internet.
The new company will offer a compelling, one-stop solution with key Internet
technologies.
Of course, the transaction is subject to regulatory review, Excalibur
stockholder approval and other normal closing conditions; however, all other
necessary corporate approvals have been obtained by Excalibur and Intel. We
expect to complete this transaction and launch the new company in the third
quarter of this year. Ron Whittier, a 30-year Intel veteran, will resign his
position as senior vice president of Intel to become chairman of the board and
CEO of the new company. I will become president and COO.
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Under the terms of the agreement, Excalibur Technologies will combine its entire
business operations with Intel's Interactive Media Services division, which is
composed of three operating units that include over 60 people, 10 patents & 45
technology licenses and several customers, many with multiyear agreements. In
addition Intel will contribute $150 million in cash to the new company. In
exchange for these contributions, Intel will receive 60 percent of the new
company's equity. Intel will take a 49 percent position in the voting stock of
the new company and the balance of its investment in non-voting stock. Excalibur
stockholders and present option holders will receive 40 percent ownership in the
new company in exchange for their Excalibur stock. Excalibur shareholders will
receive one share of stock in the new company for each share they hold of
Excalibur.
We believe enormous opportunity sits behind this move. Kagan and Associates, a
respected media industry research firm, estimates the interactive media services
segment will be a $16 billion market by 2004. This $16 billion market represents
revenues derived from an array of sources including encoding services, logging
and indexing software, ad insertion services, asset management software,
security , services and so on. Yet, we believe no one is addressing this
opportunity the way it should be addressed - with a one-stop, comprehensive
solution covering virtually all facets of the interactive segment. This is
precisely the solution the new company intends to provide and will uniquely
possess the technologies and wherewithal TO provide.
A number of factors are driving the rapid emergence of and demand for
interactive web media. First is the continued penetration of broadband
distribution not only in the U.S., but also throughout the world. By 2002,
industry analysts IDC estimate 20% of U.S. Internet homes will have broadband
connections, and the number of Internet homes worldwide with broadband
capability will exceed twenty million. Second, as broadband penetration grows,
content providers will seek to exploit it through richer, more interactive web
media such as sports, film and music. This in turn will create demand for
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fatter and fatter distribution pipes as consumers demand even richer and more
interactive experiences, and content owners respond by continuously seeking to
enhance and enrich their content with ever-more-bandwidth-intensive
capabilities.
The anticipated growth in broadband services is validated by the demand we
already see for streaming media. To date, more than 150 million users have
downloaded streaming media software, and, according to industry analysts IDC,
the use of streaming media grew by 80% between 1998 and 1999. Already, some 45
million people stream media every month, and content providers are responding
affirmatively to this growing demand - two-thirds of news and entertainment
sites stream audio and more than half stream video. Moreover, the number of
corporations utilizing streaming media technology is expected to more than
double between 1999 and 2001.
Yet, despite this rapid growth in rich media availability and the expansion of
broadband distribution capability, no comprehensive solution currently exists
that enables content owners to bring their high-value, branded assets to the web
efficiently, securely and profitably. Our opportunity with the new company is
to provide a one-stop source for that capability, to enable branded media
content to be made available over the Internet by providing the secure
infrastructure content owners need to generate an attractive rate of return on
their valuable branded content. Our initial focus will be on premier branded
content providers, such as sports organizations, movie producers and music
publishers, and then expand over time into other vertical segments. In the end,
our mission is to be THE leading supplier of interactive media services to the
Internet economy.
To seize this opportunity and secure our position as a leading player in the
interactive services segment, we are combining all of Excalibur's existing
business with Intel's Interactive Media Services business to form a new,
successor enterprise. This new company, made up of the combined Excalibur/Intel
contributions, will operate independently and be publicly-traded. Excalibur
will contribute its entire operations to the new company, including:
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. Technologies for video and image content management;
. Advanced technologies and solutions for text indexing, search and
retrieval;
. More than 230 people;
. Leading industry partnerships; and
. Its established business operations representing more than 400 customers
worldwide and a growing business base that generated some $38 million
last year.
Intel will contribute its entire Interactive Media Services division to the new
company, including:
. Extensive relationships with media and entertainment industry companies;
. Broad technical capabilities in video and data integration, content
security and content protection;
. Subst antial intellectual property assets including 10 patents and more
than 45 technology licenses from Intel Corporation;
. Human resources in key technical areas, with more than 60 Intel
professionals, concentrated in the areas of software development and
engineering, receiving offers to join the new company;
. The three Internet-focused business units that comprise Intel's
Interactive Media Services division;
. A base of significant customers in key market segments targeted by the
new company;
. An experienced management team focused on interactive internet services;
and
. Active participation in collaborative programs with other Intel
divisions such as the Intel Architecture Labs, Intel Online Services and
Intel Capital.
In addition, Intel will contribute $150 million cash to the new company.
Viewed in the aggregate, then, the new company will possess the combined
resources it needs to be a market leader in the interactive media services
segment, including:
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. A broad set of industry relationships;
. Deep technological competence resulting from nearly a decade of relevant
R&D;
. Ten patents and more than 45 technology licenses from Intel;
. Excalibur's video and text content management capabilities;
. Approximately 300 employees worldwide across a balanced spectrum of
functional areas;
. An experienced management team with demonstrated capabilities in both
technology and business;
. Sales channels with access to over 400 customers and the senior
management of major media outlets;
. A significant time-to-market advantage both in technology and in
aggregating services;
. Approximately $160 million in working capital; and
. Significant ties to Intel Hosting, Intel Capital and Intel development
labs
Our strategy for the new company is to continue not only growing the existing
Excalibur products business, but also to expand it through the interactive media
services business. We envision strong synergies between the products and
services businesses as each business encourages demand for the other. For
example, Over 60% of Excalibur's current customers are in the Media,
Entertainment and Broadcasting businesses. Another 20% are building interactive
websites. We believe Excalibur products customers over the next few years will
naturally transition to products-plus-outsourced-services customers as
enterprise content repositories continue to grow, as new, bandwidth-intensive
data types, such as video and rich documents, become essential, commonplace
assets, and as infrastructures reach capacity or strain under the added burden.
Similarly, we see services customers deploying our products at their premises
over time as enablers of their local multimedia content management solutions.
Our new interactive media services will extend the products business by
providing controls for branded content interactions on the Web. It will be
positioned between
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content providers, such as sports leagues and entertainment companies, at one
end of the spectrum, and content delivery companies at the other end of the
spectrum. Content will be packaged for distribution from 56k to broadband,
targeting edge distributors like Intel's recently formed IMS group, Akamai and
Digital Island, who in turn will send the content to last mile connections, such
as AOL, Excite At Home Cable and others, for use over PCs, set top boxes and
wireless devices. The new company will provide all of the infrastructure branded
content owners need to package, protect and profitably deliver content over the
Web.
So, for example, a sports league, which we are in active discussions with,
could:
. Have their video content captured, indexed, annotated and archived.
. That content is now searchable and editable online. It can be augmented
with integrated interactive content such as players statistics or
historical data, and pre-processed into thematic packages (such as
Michael Jordan's slam dunks and other NBA highlights, DiMaggio's 56-game
hitting streak, or Super Bowl highlights);
. Then the content can be protected with the advanced Intel tamper
resistant software, packaged for various distribution channels (56k thru
broadband), formatted for external eCommerce support and edge-
distributed for enhanced Internet performance; and finally
. The content packages can be made available for distribution as on-demand
subscriber-only access, Pay-Per-View access, or advertiser-supported
access.
And, all of this will be available as a service delivered from a hosted
environment.
The new company will strive to make money in several ways as this model is
implemented :
. First, we will continue to license software as applications to end users
and OEMs, including the added capability to distribute the acquired
Intel software through these channels.
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. Second we will seek to offer services where all of the new company's
software is integrated into one platform and available either on a
monthly fee basis or as a revenue share model with subscribers.
. Third, we will seek to offer to customers of either our services or our
products a comprehensive web service for customized design, integration
and consulti ng.
. And fourth, we will continue to charge for enhancements and upgrades to
the software.
In summary, the new company will seek to offer a comprehensive, end-to-end
interactive media solution. And while organizations may compete against us for
some part of this end-to-end solution, NO competitor, in our view, offers a
complete solution.
We are extremely enthusiastic and optimistic about this new company. By merging
Excalibur operations with Intel's Interactive Media Services division through
this agreement, the new company will have the people, the technology, the
resources, the customers, the associations and the vision to win a leading
position in the next - and perhaps even the final - major market to emerge on
the Internet - the Interactive Media Services market.
Now, before opening this up for our interactive Q&A session, we'll address
questions of common shareholder interest submitted in advance.
Q1. What happens to the current Excalibur products business?
A1. As we noted earlier, our strategy for the new company is not only to
continue growing the existing Excalibur products business, but also to build
on it through the interactive media services business on the Web. We see
Excalibur products customers naturally transitioning to products-plus-
outsourced-services as the size and complexity of their content assets
outstrip the capacity of their infrastructures. Similarly, we see services
customers deploying our products at their premises over time as enablers of
local multimedia content management.
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Q2. Who will the new company compete against?
A2. No company of which we're aware offers the full range of products and
services the new company will offer. However, companies such as Virage,
Verity, and Intertrust will compete for segments of the new company
business.
Q3. What's the process for forming the new company?
A3. The process consists of four major components. First, Excalibur and Intel
continue work on the integration plan for the organizations. Second, and
simultaneously, we file our proxy/registration statement outlining the
specific transaction details with the SEC. We expect that the SEC will have
comments on the proxy/registration statement. Third, the filing, once
approved by the SEC, is distributed to Excalibur shareholders and shareholder
approval is sought. And fourth, upon shareholder approval, Excalibur
Technologies shares are tendered for shares in the new company on a 1 for 1
basis.
Q4. What guidance can you provide on the new company?
A4. We're still in the process of planning for the merger of the organizations
and we're currently working on revising our business plan. Once we're
comfortable with a combined view of the new company, we'll begin providing
information to the public.
Q5. Why did Excalibur take the balance of the Found.com payment in cash?
A5. As you may recall from our prior calls, our agreement with Found.com
stipulated that Found.com had the option to pay the balance owed under our
agreement either in cash or in the form of preferred stock. Found.com
elected to pay most of their remaining balance in cash.
************************questions*****************************
At this point, I would like to ask the operator to begin the interactive portion
of the question and answer session.
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Operator: "Ladies and gentlemen, we will now begin the interactive portion of
the question and answer session. To ask a question, please press the "1"
followed by the "4" on your push-button phone. You will hear a three tone
prompt acknowledging your request and your questions will be polled in the order
they are received. After you have stated your question, your line will be
placed back into listen only. If your question has been answered and you would
like to withdraw your polling request, you may do so by pressing the "1"
followed by the "3" on your push-button phone. If you are using a speakerphone,
please pick up your handset before pressing the numbers. One moment please for
the first question."
[The operator will introduce each question:]
Operator: "Mr. Doe, please state your company name, followed by your question."
NOTE: Excalibur needs to keep track of time, and cue the operator that
you would like to conclude the call by saying, "We have time for
five/two/one more questions."
Please cue the operator when your conversation with each caller has ended so
that the operator can connect the next caller to ask a question. (i.e. "Next
question...") Also, if you need to review documents in order to prepare your
answer to a question, please let callers know by saying, "One moment please" to
avoid silence.
When there are no more questions, the operator will say, "If there are any
additional questions, please press the "1" followed by the "4" at this time.
After all questions, the operator will say, "Mr. Condo, there are no further
questions at this time. Please continue."
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Pat: That concludes our third quarter financial results conference call. If
your question was not addressed in this session, please call our investor
relations department who will coordinate the answer, or you may fax your
question to (703) 761-1990, or you can e-mail it to [email protected]. Thank you
all for participating.
Operator: "Ladies and Gentlemen, that does conclude our conference for today.
You may all disconnect and thank you for participating."
Excalibur and Intel plan to file a proxy statement/prospectus and other relevant
documents concerning the merger with the Securities and Exchange Commission (the
"Commission"). For a description of the direct or indirect interests in the
transactions concerning the solicitation, we refer you to this proxy
statement/prospectus.
WE URGE INVESTORS AND STOCKHOLDERS TO READ THE PROXY STATEMENT/PROSPECTUS AND
ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE COMMISSION BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. Investors and stockholders will be able to
obtain free copies of these documents at the Commission's website at
www.sec.gov. and upon oral or written request to Excalibur Technologies
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Corporation, 1921 Gallows Road, Suite 200, Vienna, Virginia 22182, Attention:
Investor Relations (telephone number (703) 761-3700.
INVESTORS AND STOCKHOLDERS SHOULD READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY
BEFORE MAKING A DECISION CONCERNING THE MERGER.
Intel, Excalibur and their respective officers and directors may be deemed to be
participants in the solicitation of proxies from Excalibur stockholders with
respect to the transactions contemplated by the merger agreement. Information
concerning the participants in the solicitation will be set forth in the proxy
statement/prospectus when it is filed with the Commission.
This document contains forward-looking statements, which are based upon current
expectations or beliefs, as well as a number of assumptions about future events.
The reader is cautioned not to put undue reliance on these forward-looking
statements, as these statements are subject to numerous factors and
uncertainties, including without limitation, business and economic conditions
and growth, continued success in technological advances, costs related to the
proposed merger, the inability to obtain governmental approval of the proposed
merger, substantial delay in the expected closing of the merger and the risk
that the business of the Interactive Media Services division of Intel and
Excalibur's businesses will not be integrated successfully, any of which may
cause actual results to differ materially from those described in the
statements. In addition to the factors discussed above, other factors that could
cause actual results to differ materially are discussed in Intel's and
Excalibur's most recent Form 10-Q and Form 10-K filings with the Commission.
