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BackWeb Reports Sequential Q4 Revenue ImprovementOperating Results Reflect Benefits of Q3 Restructuring; Enters 2003 with $23.8 Million ($0.60 Per Share) in CashSAN JOSE, Calif., – February 4, 2003 – BackWeb Technologies (Nasdaq: BWEB), a leading infrastructure provider that enables offline access to Web sites and enterprise portals, today announced financial results for its fourth quarter and fiscal year ended December 31, 2002. Eli Barkat, chairman and CEO of BackWeb Technologies, commented, "Despite a very challenging year in our legacy market and the overall IT industry, BackWeb remained focused on its long-term goals and made significant progress in 2002. We accomplished a strategic repositioning of our business into the Enterprise Portal market; we extended our core delivery technology to launch the industry's first offline Portal synchronization infrastructure product - BackWeb® ProactivePortal™ Server; we acquired our first ten customer wins for our ProactivePortal solution; we established and nurtured critical distribution relationships with leading portal vendors and secured strong endorsements from industry analysts; we executed cost cutting measures including a company-wide restructuring that reduced annualized costs by over $8 million (approximately 40%), while preserving our core engineering, field service, sales and marketing talent; and we maintained our solid capital position going forward." "The cost saving efforts were implemented smoothly and positioned BackWeb to enter 2003 with a clear strategic vision, unique product offerings and an appropriate cost structure. At the same time, enterprises seem to be awakening to the ROI to be derived from empowering their high-value mobile teams with offline access to portal applications and data while they are on the road." BackWeb experienced the first full quarter of cost benefits from the company-wide restructuring; benefits which will continue going forward. Principally reflecting these benefits, which included a 44% decrease in company-wide staffing, BackWeb reported a reduced net loss of $2.4 million, or $0.06 per share, for the fourth quarter of 2002, compared to a net loss of $6.0 million, or $0.15 per share, in the year ago period. Net revenue for the fourth quarter of 2002 was $1.3 million, a sequential increase over third quarter net revenue of $0.9 million, but below revenue of $4.4 million in the fourth quarter of 2001. Net revenue for the year ended December 31, 2002 was $6.3 million compared with $20.6 million in 2001. Excluding - in both periods – amortization of intellectual property, other intangibles and deferred stock compensation, the write-off of intellectual property and other intangibles, restructuring charges and the write down of an equity investment, BackWeb's net loss for 2002 was $16.7 million, or a loss of $0.42 per share, compared with a net loss of $25.6 million, or $0.67 per share, in 2001. Including the charges, BackWeb's 2002 net loss was $24.9 million, or a loss of $0.63 per share, compared with a net loss of $34.7 million, or $0.91 per share, a year ago. As of December 31, 2002, BackWeb had cash and short-term investments totaling $23.8 million ($0.60 per share), and no long-term debt. "Our fourth quarter performance was encouraging as we saw increasing interest in our product lines, especially our new offline infrastructure offering. Customers in the quarter included Kodak, Novartis, Hershey, and the International Monetary Fund. Though premature to characterize what we saw in the fourth quarter as a trend, we are seeing positive indicators that the marketplace is beginning to focus on the importance of enabling enterprise portals for offline access, as well as viewing the lack of this capability as a key productivity inhibitor," commented Eli Barkat. "Looking forward, we remain focused on fulfilling our ‘offline everywhere' vision by strengthening our partnership foothold, raising awareness of the value that can be derived from our offline solutions, delivering solid customer wins, increasing our technological barriers to entry via engineering and prudently leveraging our solid cash position." BackWeb also announced that it has hired Talmi Shafer as Vice President, Research and Development, replacing Yael Basher, who has retired. Talmi brings over 20 years of R&D management experience with several companies in the software industry, most recently as the vice president of Product Development for Verint Systems Inc., formerly Comverse Infosys, a leading provider of analytic software solutions for digital video security and surveillance, communications interception, and enterprise business intelligence. BACKWEB TECHNOLOGIES LTD Condensed Consolidated Statement of Operations (in thousands, except per share data
Note 1 Net loss per share excludes amortization, write-off of intellectual property and other intangibles, restructuring charge and write down of an equity investment. BACKWEB TECHNOLOGIES LTD Condensed Consolidated Balance Sheets (in thousands)
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