SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 9, 2000
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GIGA INFORMATION GROUP, INC.
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EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER
Delaware File No. 0-21529 06-1422860
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(State or other (Commission (I.R.S Employer
jurisdiction or File Identification
organization) Number) Number)
139 Main Street
Cambridge, MA 02138
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 949-4900
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(former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
1. Filed herewith is a copy of the Giga Information Group, Inc. (the
"Company") Press Release, dated February 9, 2000, announcing its results
of operations for the quarter ended December 31, 1999 and the fiscal year
ended December 31, 1999. All normal recurring adjustments that are, in the
opinion of management, necessary for a fair presentation of the results of
operations for the periods presented have been included.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of business acquired:
Not applicable.
(b) Pro Forma financial information:
Not applicable.
(c) Exhibit:
(99) Press Release, dated February 9, 2000
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<PAGE>
SIGNATURES
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.
GIGA INFORMATION GROUP, INC.
By: /s/ Daniel M. Clarke
------------------------------------
Daniel M. Clarke
Senior Vice President and
Chief Financial Officer
Date: February 14, 2000
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<PAGE>
GIGA INFORMATION GROUP, INC.
FORM 8-K
CURRENT REPORT
EXHIBIT INDEX
Exhibit No. Description
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(99) Press Release, dated February 9, 2000
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GIGA
GIGA INFORMATION GROUP
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YOUR E-BUSINESSS ADVISOR
FOR IMMEDIATE RELEASE
FOR INFORMATION CONTACT:
Investors: Media:
Karen Vahouny David Kitchen
The Poretz Group Director, Public Relations
[email protected] [email protected]
1 (703) 506-1778 1 (781) 792-2606
Giga Information Group
139 Main Street
Cambridge, MA 02138
www.gigaweb.com
1 (617) 949-4900
GIGA INFORMATION GROUP REPORTS FOURTH QUARTER AND
1999 FINANCIAL RESULTS
E-BUSINESS ADVISORY DEMAND GENERATES RECORD REVENUES;
QUARTERLY NET LOSS PER SHARE CUT TO $0.32
CAMBRIDGE, Mass. (February 9, 2000) -- Giga Information Group (NASDAQ: GIGX)
today announced that continued increased demand for its e-Business research,
advisory and consulting services has resulted in record quarterly revenues of
$15.2 million for the fourth quarter of 1999. This represents an increase of 23%
over the prior year's fourth quarter. The Company also reported a significant
decrease in operating losses, from nearly $4.0 million in the fourth quarter of
1998 to $2.9 million in this year's fourth quarter.
Robert Weiler, chairman and chief executive officer of Giga Information Group,
notes, "This quarter was a bellwether for us, reflecting the success of our
e-Business strategy and the benefits of our cost-containment initiatives. We
look forward to continuing this progress during 2000, as we continue to take
steps to build our ePractices(TM) and Web Site Scorecard(TM) services and
improve the productivity of our sales force. Our goal is to achieve operating
profitability in the fourth quarter of 2000."
<PAGE>
The Company plans to hold an investor conference call at 10 a.m. Eastern
Standard Time on Thursday, February 10, 2000, to discuss the highlights of the
fourth quarter and full year. The phone number for U.S. callers is 888-455-9639;
for international callers, the number is 312-470-0116. The passcode for both is
"Success." The call will be replayed for one week; the replay number is
800-839-3420 (U.S.) and 402-998-1036 (international).
FOURTH QUARTER RESULTS
Revenues for the quarter ended December 31, 1999, were $15.2 million compared to
$12.3 million for the comparable quarter of last year. The operating loss
decreased 28 percent between periods, and the net loss decreased from $3.6
million, or $0.37 per share, in the fourth quarter of 1998 to $3.2 million, or
$0.32 per share, in the same quarter of this year.
The fourth quarter revenue results reflect a 35% increase in the Company's
continuous information services, which includes its core advisory services. The
increase in R&D expenses was due to the investment in the development of GigaWeb
3.0, which is expected to be launched in mid-February 2000.
Some of the highlights in the fourth quarter included:
o Launching the ePractices group to provide technology best practices
assessments, and signing up a number of prestigious customers for this
service
o Announcing a new product, Web Site Scorecard , which complements the
ePractices group and extends the Company's e-Business service offering to
a larger potential client base
o Centralizing and streamlining the sales force
o Achieving a client retention rate of 86%
FISCAL YEAR 1999
Revenues rose from $38.8 million in 1998 to $52.5 million in 1999--an increase
of 35%. The net loss decreased from $18.7 million, or $3.49 per share, last year
to $17.3 million, or $1.73 per share, this year.
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<PAGE>
The Company also reported that its Annualized Value at December 31, 1999, was
$58.1 million versus $43.8 million at December 31, 1998, representing a 33%
increase. Giga has defined Annualized Value as the cumulative annualized
subscription value of its continuous information services contracts in effect at
any given point in time. The Company also reported that it had increased the AV
per customer from $46,000 at the end of 1998 to $52,000 at the end of 1999.
ABOUT GIGA INFORMATION GROUP
Giga Information Group (NASDAQ: GIGX) provides objective research, advice and
continuous coaching on technology for e-Business. Giga's integrated suite of
offerings helps clients make strategic decisions about the technologies, people
and processes needed to excel in the new digital economy. Emphasizing close
interaction between analysts and clients, Giga delivers support with the speed
and scope necessary for e-Business.
Giga began providing services in April 1996 and now has a global client base
encompassing more than 1,000 organizations and over 118,000 licensed users. Its
enterprise clients include companies that use, sell and invest in technology.
Headquartered in Cambridge, Massachusetts, Giga has 10 other offices covering
the Americas and Europe. Giga is also represented by distributors in other areas
of the world. The Company's Web site can be accessed at http://www.gigaweb.com.
The Company's logo with the name Giga Information Group is a registered
trademark of Giga Information Group, Inc.
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Statements that are not historical fact may be considered forward-looking
statements (as defined in the Private Securities Litigation Reform Act of 1995)
that involve risks and uncertainties. Consequently, actual events or results may
differ materially from those expressed or implied by those set forth in such
forward-looking statements. Factors that could cause actual results to differ
materially include, but are not limited to, the Company's ability to attract and
retain highly skilled and experienced employees, ability to secure subscriptions
to its services and to achieve and sustain high renewal rates, ability to
effectively manage growth, ability to understand and anticipate market trends
and develop and offer new products and services, significant competition from
existing and new competitors, potential fluctuations in quarterly operating
results, continued market acceptance and demand of Giga services, dependence on
Internet infrastructure for access to GigaWeb and other risks as detailed from
time-to-time in the Company's filings with the Securities and Exchange
Commission. The Company undertakes no obligation to update any forward-looking
statements as a result of new information, unanticipated events, or otherwise.
*****************************************
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<PAGE>
GIGA INFORMATION GROUP, INC.
<TABLE>
<CAPTION>
CONSOLIDATED OPERATING RESULTS
(IN THOUSANDS, EXCEPT SHARE AND QUARTER ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------ -----------------------------
PER SHARE DATA) (UNAUDITED)
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Revenues:
Continuous Information Services $ 12,379 $ 9,146 $ 45,257 $ 31,789
Other, principally events 2,830 3,199 7,244 6,970
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Total revenues 15,209 12,345 52,501 38,759
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COSTS AND EXPENSES:
Cost of services 5,937 5,778 24,583 20,050
Sales and marketing 8,318 7,982 31,819 27,037
Research and development 621 147 2,073 1,187
General and administrative 2,622 2,062 9,130 6,789
Depreciation and amortization 584 348 1,893 1,468
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Total costs and expenses 18,082 16,317 69,498 56,531
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LOSS FROM OPERATIONS (2,873) (3,972) (16,997) (17,772)
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INTEREST INCOME 96 307 703 736
INTEREST EXPENSE (106) (43) (204) (1,255)
FOREIGN EXCHANGE GAIN/(LOSS) (288) 61 (768) 306
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LOSS FROM OPERATIONS BEFORE INCOME TAXES (3,171) (3,647) (17,266) (17,985)
INCOME TAX (BENEFIT)/CHARGE - - 62 36
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LOSS FROM CONTINUING OPERATIONS, BEFORE
EXTRAORDINARY ITEM (3,171) (3,647) (17,328) (18,021)
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EXTRAORDINARY ITEM, NET OF APPLICABLE TAXES
OF $0 (NOTE 1.) - - - (707)
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NET LOSS $ (3,171) $ (3,647) $ (17,328) $ (18,728)
============= =============== ============= =============
RESULTS PER COMMON SHARE:
HISTORICAL - BASIC AND DILUTED:
NET LOSS $ (0.32) $ (0.37) $ (1.73) $ (3.49)
============= =============== ============= =============
WEIGHTED AVERAGE NUMBER OF SHARES (NOTE 2.) 10,032,120 9,935,646 9,999,737 5,365,202
============= =============== ============= =============
</TABLE>
GIGA INFORMATION GROUP, INC.
NOTES TO CONSOLIDATED OPERATING RESULTS
NOTE 1. EXTRAORDINARY ITEM:
$707,000 of accretion was accelerated from future periods due to repayment
of notes on August 4, 1998. The accelerated accretion would have been
recognized ratably over the six month period ending February 1, 1999 had the
Company not completed its Initial Public Offering and retired the notes as
contractually required.
NOTE 2. COMPONENTS OF WEIGHTED AVERAGE COMMON SHARES:
<TABLE>
<CAPTION>
QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
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1998 1999 1998 1999
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<S> <C> <C> <C> <C>
Shares issued and outstanding at beginning of period 9,926,788 10,026,502 2,093,107 9,943,502
3,000,000 shares issued from Initial Public Offering - - 1,265,753 -
4,686,784 shares issued from conversion of preferred stock - - 1,913,235 -
Shares issued from exercise of warrants - - 19,594 11,437
Shares issued from exercise of stock options 8,858 5,618 73,513 44,798
------------- --------------- ------------- -------------
Total 9,935,646 10,032,120 5,365,202 9,999,737
============= =============== ============= =============
</TABLE>
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GIGA INFORMATION GROUP, INC.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET DATA
(IN THOUSANDS, EXCEPT SHARE DATA) DECEMBER 31, DECEMBER 31,
1999 1998
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<S> <C> <C>
ASSETS
Cash, cash equivalents and marketable securities $ 6,182 $ 21,057
Accounts receivable, net 21,199 15,017
Total current assets 37,529 45,452
Property and equipment, net 6,188 3,430
Total assets 44,195 49,213
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Deferred revenues $ 39,087 $ 29,470
Debt, current portion 527 461
Total current liabilities 51,282 39,363
Total liabilities 51,282 39,807
Total stockholders' equity (deficit) (7,087) 9,406
Total liabilities and stockholders' equity (deficit) 44,195 49,213
COMMON STOCK ISSUED AND OUTSTANDING 10,043,401 9,943,502
</TABLE>
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