-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EKSl5RyyF4sUGLUNBSKGGMvzivUim3bCrWZtcVjds8gH8xMg/7bLceakBgCMyjUz dSlcjLx1L0kIvq6dKL/u2Q== 0000928385-01-501404.txt : 20010808 0000928385-01-501404.hdr.sgml : 20010808 ACCESSION NUMBER: 0000928385-01-501404 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010731 ITEM INFORMATION: Other events FILED AS OF DATE: 20010807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICROSTRATEGY INC CENTRAL INDEX KEY: 0001050446 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 510323571 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24435 FILM NUMBER: 1700193 BUSINESS ADDRESS: STREET 1: 1861 INTERNATIONAL DR CITY: MCLEAN STATE: VA ZIP: 22102 BUSINESS PHONE: 7038488600 MAIL ADDRESS: STREET 1: 1861 INTERNATIONAL DR CITY: MCLEAN STATE: VA ZIP: 22102 8-K 1 d8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): July 31, 2001 -------------- MICROSTRATEGY INCORPORATED -------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-24435 51-0323571 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 1861 International Drive, McLean, Virginia 22102 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (703) 848-8600 - --------------------------------------------------------------------- --------------------------------------------------------------------- (Former Name or Former Address, if Changed since Last Report) Item 5. Other Events. On July 31, 2001, the Registrant issued a press release announcing its financial results for the quarter ended June 30, 2001, and providing additional outlook and financial guidance information. A copy of this press release has been filed with this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference. EXHIBIT DESCRIPTION 99.1 Press Release regarding the Registrant's second quarter financial results, dated as of July 31, 2001. 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. MicroStrategy Incorporated (Registrant) By: /s/ Eric F. Brown ----------------------------------- Name: Eric F. Brown Title:President and Chief Financial Officer Date: August 3, 2001 EX-99.1 3 dex991.txt EXHIBIT 99.1 Exhibit 99.1 FOR IMMEDIATE RELEASE Contact: Marc Brailov MicroStrategy Incorporated (703) 770-1670 mbrailov@microstrategy.com - -------------------------- MicroStrategy Announces Second Quarter 2001 Results Reports Revenue of $49.2 Million and 77 Percent Improvement in Pro Forma Net Operating Results versus Prior Year Quarter VIENNA, Va., July, 31 2001 - MicroStrategy(R) Incorporated (NASDAQ: MSTR), a leading worldwide provider of business intelligence software, today announced that its pro forma financial results for the three-month period ending June 30, 2001, (the second quarter of its 2001 fiscal year) exceeded its own previously announced expectations for revenue and pro forma net operating results. The company reported revenues for the second quarter of 2001 of $49.2 million compared to $50.3 million in the second quarter of 2000. MicroStrategy reported a pro forma net operating loss, which excludes certain items, for the second quarter of 2001 of $9.8 million, or $0.12 per share, a 77 percent improvement from the second quarter of 2000. In the second quarter of 2000, MicroStrategy incurred a pro forma net operating loss, also excluding certain items, of $42.8 million, or $0.54 per share. For the second quarter of 2001, the core MicroStrategy business had a pro forma net operating loss of $4.9 million compared to a $15.7 million pro forma net operating loss in the first quarter of 2001. "MicroStrategy is pleased to announce our improved financial results for the second quarter. We have taken a major step forward this quarter toward achieving our goal of profitability," said Michael J. Saylor, MicroStrategy's Chairman and CEO. He continued: "The actual numbers are certainly important, but what's even more noteworthy are the positive factors producing the numbers. We've reduced costs due to a company-wide, top-to-bottom effort to engender more cost- efficient operations -- to do more with less. Our license revenues have held up during a severe technology-industry contraction and our MicroStrategy 7 software continues to garner positive reviews and attract business customers and partners, large and small, who recognize its wide utility for enhancing efficiency, productivity and customer relations. Our valued and dedicated employees continue to maintain a very high level of commitment as we work together toward our objectives." Highlights for the second quarter 2001 include: Added 102 New Customers New customers include: Associated Food Stores, Aventis Pasteur, Avon Products, Inc., Cbeyond Communications, Cryptologic, CVS /pharmacy, Luminate Corporation, New Roads, Novartis Pharmaceuticals, Premier, Inc., Public Procurement Office, Prescription Solutions, Raley's, Sara Lee Refrigerated Foods, Spartan Stores, Inc. and Visa International. Signed Agreements with 42 OEMs (Original Equipment Manufacturers) & Systems Integrators Agreements include: Active Decisions, Inc., Appian, Application Consulting Group, BAE Systems, Context Media, Deloitte and Touche, Digital Conexxions, Epsilon Data Management, Epylon, Ernst & Young Technologies, First Logic, IBeacon, Idea Integration, Insight Strategy, Iolap Incorporated, Myriad, Personify, Quaero, Siemens, Unica Corporation, Unyversys and Yellowbrick. Launched version 7.1 of MicroStrategy 7(TM) MicroStrategy continues to help organizations drive efficiency and productivity, make more effective business decisions and build customer loyalty and value. With version 7.1, MicroStrategy fortified its decade- long leadership in the OLAP (online analytical processing) market by adding scalable query and reporting features to the MicroStrategy 7 platform. These enhancements have made MicroStrategy 7, the Scalable Business Intelligence Platform Built for the Internet(TM), easier to use and integrate without compromising its exceptional analytical sophistication. Customers and partners can benefit from MicroStrategy 7's intuitive, Web- centric interface, improved application integration capabilities and additional tools to speed deployment. Finance Commentary - ------------------ "Total revenues in the second quarter 2001 were at the upper end of our expectations and we were able to increase license revenues versus the first quarter 2001 as a result of higher new customer acquisition rates and an increase in our average license transaction size," said Eric F. Brown, president and CFO of MicroStrategy. He continued: "We also improved our services operating margins and increased total gross profit versus the prior quarter. We continue to make significant improvements in our operating cost structure and reduced Q2 2001 cost of revenues and recurring operating expenses by approximately $18 million versus Q1 2001 as a result of our successful corporate restructuring. With our focus on core business intelligence software operations, we have significantly improved operating margins and efficiencies over the last four quarters. To put this in perspective, we reduced consolidated pro forma operational expenses in Q2 2001 by approximately $34 million compared to Q2 2000 while keeping revenues essentially constant." Outlook and Financial Guidance Information - ------------------------------------------ The following statements are subject to risks and uncertainties described at the end of this press release. Management offers the following guidance for consolidated operations of MicroStrategy, including its Strategy.com subsidiary, for the quarter ending September 30, 2001: Revenue is expected to be in the range of approximately $44 to $49 million. Pro forma results of operations, excluding special charges, are expected to be a loss of approximately $6 to $10 million. Pro forma earnings per share, excluding special charges, are expected to be a loss of approximately $0.07 to $0.12 per share. Management offers the following guidance for the operations of core MicroStrategy, excluding its Strategy.com subsidiary, for the quarter ending September 30, 2001: Revenue is expected to be in the range of approximately $42 to $46 million. Pro forma results of operations, excluding special charges, are expected to be a loss of approximately $3.5 to $6 million. Pro forma earnings per share, excluding special charges, are expected to be a loss of approximately $0.04 to $0.07 per share. Management offers the following guidance for the standalone operations of the Strategy.com subsidiary for the quarter ending September 30, 2001: Revenue is expected to be in the range of approximately $2 to $3 million. Pro forma results of operations, excluding special charges, are expected to be a loss of approximately $2.5 to $4 million. Pro forma earnings per share, excluding special charges, are expected to be a loss of approximately $0.03 to $0.05 per share. Management offers the following updated guidance for the full year 2001, which supersedes any previously announced guidance as to the Company's expectations for financial results for 2001: Consolidated revenue is expected to be in the range of approximately $180 to $200 million. Pro forma earnings per share, excluding special charges, are expected to be a loss of approximately $0.53 to $0.58 per share. The Company expects that the pro forma results of operations of the core business, excluding Strategy.com, will be breakeven by the end of 2001. The Company also expects that by the fourth quarter of 2001, its Strategy.com subsidiary will contribute, on a quarterly basis, a pro forma loss of approximately $0.05 per share or less to the consolidated earnings per share results. The attached summary of financial highlights compares the 2001 second quarter results to the same period last year. MicroStrategy will hold a conference call chaired by Michael Saylor today at 5:30 p.m. (EST). Investors can call (877) 597-9704, or for international (706) 634-6550, prior to 5:30 p.m. (EST). A replay will be available for 48 hours after the call at (800) 642-1687, or for international (706) 645-9291, with access code 1341169. Also, a live Webcast and replay can be accessed at the investor relation section of the MicroStrategy web site, www.microstrategy.com, --------------------- or from the StreetEvents site, www.streetevents.com. -------------------- About MicroStrategy Incorporated MicroStrategy is a leading provider of business intelligence software for Global 5000 organizations. Since 1990, the company has specialized in helping businesses transform their extensive operational data into actionable information. MicroStrategy's business intelligence platform gives organizations solutions to their query, reporting, and advanced analytical needs, and distributes insight to users via Web, wireless, and voice. MicroStrategy 7(TM) is the Scalable Business Intelligence Platform Built for the Internet(TM). Its pure-Web architecture provides Web reporting, security, performance and standards that are critical for deployment over the Web. Within intranets, the company's products provide employees with information to make better business decisions. In extranets, extended enterprises use MicroStrategy 7 to build stronger relationships by linking customers and suppliers via the Internet. MicroStrategy has approximately 1,300 enterprise-class customers including Lowe's Home Improvement Warehouse, AT&T Wireless Group, First Union Corporation and GlaxoSmithKline. MicroStrategy also has relationships with over 375 systems integrators, application development and platform partners including IBM, PeopleSoft, Compaq, Informatica and JD Edwards. MicroStrategy is listed on Nasdaq under the symbol MSTR. For more information on the company, or to purchase or demo MicroStrategy's software, please visit MicroStrategy's Web site at http://www.microstrategy.com. ---------------------------- ### MicroStrategy, MicroStrategy 7, MicroStrategy 7.1, and Scalable Business Intelligence Platform Built for the Internet are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries. Other product and company names mentioned herein may be the trademarks of their respective owners. This press release may include statements that may constitute "forward-looking statements," including its estimates of future business prospects or financial results and statements containing the words "believe," "estimate," "project," "expect" or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results of MicroStrategy Incorporated and its subsidiaries (collectively, the "Company") to differ materially from the forward-looking statements. Factors that could contribute to such differences include: the possibility that the conditions to the securities class action and shareholder derivative settlement agreements will not be satisfied; the Company's ability to secure financing for its current operations and long-term plans on acceptable terms; the ability of the Company to implement and achieve widespread customer acceptance of its MicroStrategy 7 software on a timely basis; adverse reaction by the Company's employees, investors, customers, vendors and lenders to the restatement of the Company's financial results or its future prospects; the Company's ability to recognize deferred revenue through delivery of products or satisfactory performance of services; continued acceptance of the Company's products in the marketplace; the timing of significant orders; delays in the Company's ability to develop or ship new products; market acceptance of new products; competitive factors; general economic conditions; currency fluctuations and other risks detailed in the Company's registration statements and periodic reports filed with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release. MICROSTRATEGY INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (unaudited)
Three Months Ended Six Months Ended June 30, June 30, ----------------------------- ------------------------------ 2001 2000 2001 2000 ---------- ---------- ---------- ---------- Revenues Product licenses $ 21,224 $ 21,829 $ 40,776 $ 47,840 Product support and other services 27,985 28,515 59,817 53,119 ---------- ---------- ---------- ---------- Total revenues 49,209 50,344 100,593 100,959 ---------- ---------- ---------- ---------- Cost of Revenues Product licenses 863 392 2,298 997 Product support and other services 14,143 21,776 32,757 37,537 ---------- ---------- ---------- ---------- Total cost of revenues 15,006 22,168 35,055 38,534 ---------- ---------- ---------- ---------- Gross profit 34,203 28,176 65,538 62,425 ---------- ---------- ---------- ---------- Operating Expenses Sales and marketing 21,074 38,343 49,538 79,855 Research and development 9,713 15,813 23,725 32,013 General and administrative 11,771 17,385 25,087 29,503 Restructuring costs and other special charges 43,103 - 43,103 - Amortization of intangible assets 4,249 4,242 8,498 8,148 ---------- ---------- ---------- ---------- Total operating expenses 89,910 75,783 149,951 149,519 ---------- ---------- ---------- ---------- Loss from operations (55,707) (47,607) (84,413) (87,094) Financing & Other Income (Expense) Net interest (651) 434 443 891 (Loss) gain on investments (233) (5,075) (1,330) 1,355 Provision for litigation settlement 24,941 - 34,606 - Minority interest (1,181) - (2,329) - Other (expense) income, net (419) 106 (509) 106 ---------- ---------- ---------- ---------- Total financing & other income (expense) 22,457 (4,535) 30,881 2,352 ---------- ---------- ---------- ---------- Loss before income taxes (33,250) (52,142) (53,532) (84,742) Provision for income taxes 48 - 337 250 ---------- ---------- ---------- ---------- Net loss (33,298) (52,142) (53,869) (84,992) Preferred stock dividends (1,681) (312) (3,839) (312) Gain on refinancing of Series A preferred stock 10,995 - 10,995 - Beneficial conversion feature (Note 1) 18,375 (19,375) 18,375 (19,375) ---------- ---------- ---------- ---------- Net loss attributable to common stockholders $ (5,609) $ (71,829) $ (28,338) $ (104,679) =========== ========== ========== ========== Basic and diluted loss per share $ (0.07) $ (0.90) $ (0.34) $ (1.32) =========== ========== ========== ========== Weighted average shares outstanding 83,253 79,757 82,239 79,321 =========== ========== ========== ==========
Note 1 - The beneficial conversion feature for the three and six months ended June 30, 2001 has been recorded on a preliminary basis pending a request for interpretive accounting guidance that the Company has submitted to the staff of the Securities and Exchange Commission. Adjusting entries relating to this item, if any, will be included in the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2001. Supplemental Data Pro Forma Net Operating Loss $ (9,818) $ (42,825) $ (33,560) $ (78,199) Pro Forma Net Operating Loss per share (basic & diluted) $ (0.12) $ (0.54) $ (0.41) $ (0.99)
Supplemental Pro Form Net Operating Loss data excludes charges for restructuring costs and other special charges, amortization of intangible assets, (loss) gain on investments, provision for litigation settlement, minority interest, preferred stock dividends, gain on refinancing of Series A preferred stock, beneficial conversion feature, and other non-recurring items. MICROSTRATEGY INCORPORATED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data)
June 30, December 31, 2001 2000 ----------- ------------ Assets (unaudited) (audited) Current assets Cash and cash equivalents $ 57,165 $ 67,685 Restricted cash 564 25,884 Short-term investments 3,396 1,085 Accounts receivable, net 34,374 49,061 Prepaid expenses and other current assets 9,503 11,158 Deferred tax assets, net 700 - --------- --------- Total current assets 105,702 154,873 Property and equipment, net 31,428 61,409 Long-term investments 250 5,271 Intangible assets, net of accumulated amortization of $26,668 and $18,170 respectively 25,791 34,300 Deposits and other assets 3,178 3,234 --------- --------- Total Assets $ 166,349 $ 259,087 ========= ========= Liabilities and Stockholders' Equity (Deficit) Current liabilities Accounts payable and accrued expenses $ 28,086 $ 35,025 Accrued restructuring costs 10,641 - Accrued compensation and employee benefits 16,721 26,929 Deferred revenue and advance payments 48,163 50,303 Working capital line of credit 6,066 - --------- --------- Total current liabilities 109,677 112,257 Deferred revenue and advance payments 22,307 31,260 Accrued litigation settlement 64,128 99,484 Other long-term liabilities 3,612 1,509 Accrued restructuring costs 3,986 - --------- --------- Total Liabilities 203,710 244,510 --------- --------- Series A redeemable convertible preferred stock 6,251 119,585 Series B redeemable convertible preferred stock (Note 1) 32,183 - Series C redeemable convertible preferred stock (Note 1) 25,552 - Series D redeemable convertible preferred stock (Note 1) 4,101 - Series E redeemable convertible preferred stock 6,592 - Redeemable convertible preferred stock of consolidated subsidiary 52,859 40,530 Stockholders' equity (deficit): Preferred stock undesignated; $.001 par value; 4,982 shares authorized; no shares issued or outstanding - - Class A common stock; $.001 par value; 330,000 shares authorized; 36,849 and 28,736 shares issued and outstanding, respectively 37 29 Class B common stock; $.001 par value; 165,000 shares authorized; 50,940 and 52,033 shares issued and outstanding, respectively 51 52 Additional paid-in capital 187,221 152,821 Deferred compensation (179) (624) Accumulated other comprehensive income 1,099 1,443 Accumulated deficit (353,128) (299,259) --------- --------- Total Stockholders' Equity (Deficit) (164,899) (145,538) Total Liabilities and Stockholders' Equity (Deficit) $ 166,349 $ 259,087 ========= =========
Note 1 - The carrying value of the Series B, C, and D redeemable convertible preferred stock as of June 30, 2001 has been recorded on a preliminary basis pending a request for interpretive accounting guidance that the Company has submitted to the staff of the Securities and Exchange Commission. Adjusting entries relating to this item, if any, will be included in the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2001. MICROSTRATEGY INCORPORATED Reconciliation of Net loss attributable to common stockholders to Pro forma net operating loss (Dollars in thousands, except per share data) (unaudited)
Three Months Ended Six Months Ended June 30, June 30, --------------------------- ------------------------ 2001 2000 2001 2000 --------------------------- ------------------------ Net loss attributable to common stockholders (5,609) (71,829) (28,338) (104,679) Restructuring costs and other special charges 43,103 - 43,103 - Amortization of intangible assets 4,249 4,242 8,498 8,148 (Loss) gain on investments 233 5,075 1,330 (1,355) Provision for litigation settlement (24,941) - (34,606) - Minority interest 1,181 - 2,329 - Preferred stock dividends 1,681 312 3,839 312 Gain on refinancing of Series A preferred stock (10,995) - (10,995) - Beneficial conversion feature (Note 1) (18,375) 19,375 (18,375) 19,375 Other non-recurring items (345) - (345) - Pro forma net operating loss $ (9,818) $ (42,825) $ (33,560) $ (78,199) ======== ========= ========= =========
Note 1 - The beneficial conversion feature for the three and six months ended June 30, 2001 has been recorded on a preliminary basis pending a request for interpretive accounting guidance that the Company has submitted to the staff of the Securities and Exchange Commission. Adjusting entries relating to this item, if any, will be included in the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2001. STRATEGY.COM CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands) (unaudited)
Three Months Ended Six Months Ended June 30, June 30, ---------------------- ---------------------- 2001 2000 2001 2000 ---------------------- ---------------------- Revenues Product licenses $ 946 $ 847 $ 1,862 $ 847 Product support and other services 1,103 297 2,622 410 -------- -------- -------- -------- Total revenues 2,049 1,144 4,484 1,257 -------- -------- -------- -------- Cost of Revenues Product licenses 43 - 429 - Product support and other services 3,605 1,182 7,337 1,389 -------- -------- -------- -------- Total cost of revenues 3,648 1,182 7,766 1,389 -------- -------- -------- -------- Gross profit (loss) (1,599) (38) (3,282) (132) -------- -------- -------- -------- Operating Expenses Sales and marketing 671 3,434 2,505 8,713 Research and development 1,870 4,686 5,419 8,956 General and administrative 1,112 3,768 2,700 5,603 Restructuring costs and other special charges 19,915 - 19,915 - -------- -------- -------- -------- Total operating expenses 23,568 11,888 30,539 23,272 -------- -------- -------- -------- Loss from operations (25,167) (11,926) (33,821) (23,404) Financing & Other Net interest 337 - 906 - -------- -------- -------- -------- Loss before income taxes (24,830) (11,926) (32,915) (23,404) Provision for income taxes - - -------- -------- -------- -------- Net loss (24,830) (11,926) (32,915) (23,404) Preferred stock dividends (1,181) - (2,329) -------- -------- -------- -------- Net loss attributable to common stockholders $(26,011) $(11,926) $(35,244) $(23,404) ======== ======== ======== ========
STRATEGY.COM CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (unaudited)
June 30, December 31, 2001 2000 -------- ------------ Assets Current assets Cash and cash equivalents $ 27,370 $ 34,482 Accounts receivable, net 125 1,140 Prepaid expenses and other current assets 1,010 1,908 -------- -------- Total current assets 28,505 37,530 Property and equipment, net 4,368 21,984 Intangible assets, net - 13 Deposits and other assets - 1,229 -------- -------- Total Assets $ 32,873 $ 60,756 ======== ======== Liabilities and Stockholders' Deficit Current liabilities Accounts payable and accrued expenses $ 2,114 $ 2,262 Accrued restructuring costs 909 - Accrued compensation and employee benefits 719 2,333 Due to MicroStrategy 915 3,742 Deferred revenue and advance payments 6,864 8,079 -------- -------- Total current liabilities 11,521 16,416 Deferred revenue and advance payments 4,952 5,177 Accrued restructuring costs 153 - -------- -------- Total Liabilities 16,626 21,593 -------- -------- Redeemable convertible preferred stock 52,859 40,531 Stockholders' Deficit (36,612) (1,368) -------- -------- Total Liabilities and Stockholders' Deficit $ 32,873 $ 60,756 ======== ========
MICROSTRATEGY INCORPORATED CONSOLIDATING STATEMENT OF OPERATIONS (Dollars in thousands, except per share data) (unaudited)
Three Months Ended June 30, 2001 -------------------------------------------------------------- Core Strategy.com Eliminations Consolidated ---------- -------------- -------------- -------------- Revenues Product licenses $ 20,278 $ 946 $ - $ 21,224 Product support and other services 26,882 1,103 27,985 --------- --------- --------- --------- Total revenues 47,160 2,049 - 49,209 --------- --------- --------- --------- Cost of Revenues Product licenses 820 43 863 Product support and other services 10,538 3,605 14,143 --------- --------- --------- --------- Total cost of revenues 11,358 3,648 - 15,006 --------- --------- --------- --------- Gross profit 35,802 (1,599) - 34,203 --------- --------- --------- --------- Operating Expenses Sales and marketing 20,403 671 21,074 Research and development 7,843 1,870 9,713 General and administrative 10,659 1,112 11,771 Restructuring costs and other special charges 23,188 19,915 43,103 Amortization of intangible assets 4,249 - 4,249 --------- --------- --------- --------- Total operating expenses 66,342 23,568 - 89,910 --------- --------- --------- --------- Loss from operations (30,540) (25,167) - (55,707) Financing & Other Income (Expense) Net interest (988) 337 (651) Loss on investments (233) - (233) Provision for litigation settlement 24,941 - 24,941 Minority interest - - (1,181) (1,181) Other (expense) income, net (419) - (419) --------- --------- --------- --------- Total financing & other income (expense) 23,301 337 (1,181) 22,457 --------- --------- --------- --------- Income (loss) before income taxes (7,239) (24,830) (1,181) (33,250) Provision for income taxes 48 - 48 --------- --------- --------- --------- Net income (loss) (7,287) (24,830) (1,181) (33,298) Preferred stock dividends (1,681) (1,181) 1,181 (1,681) Gain on refinancing of Series A preferred stock 10,995 - 10,995 Beneficial conversion feature (Note 1) 18,375 - 18,375 --------- --------- --------- --------- Net income (loss) attributable to common stockholders $ 20,402 $ (26,011) $ - $ (5,609) ========= ========= ========= ========= Basic and diluted loss per share $ (0.07) ========= Weighted average shares outstanding 83,253 ========= Note 1 - The beneficial conversion feature has been recorded on a preliminary basis pending a request for interpretive accounting guidance that the Company has submitted to the staff of the Securities and Exchange Commission. Adjusting entries relating to this item, if any, will be included in the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2001. Supplemental Data Pro Forma Net Operating Loss $ (4,903) $ (4,915) $ - $ (9,818) Pro Forma Net Operating Loss per share (basic & diluted) $ (0.12) Supplemental Pro Form Net Operating Loss data excludes charges for restructuring costs and other special charges, amortization of intangible assets, loss on investments, provision for litigation settlement, minority interest, preferred stock dividends, gain on refinancing of Series A preferred stock, beneficial conversion feature, and other non-recurring items.
MICROSTRATEGY INCORPORATED Reconciliation of Net loss attributable to common stockholders to Pro forma net operating loss (Dollars in thousands, except per share data) (unaudited)
Three Months Ended June 30, 2001 -------------------------------------------------------------- Core Strategy.com Eliminations Consolidated ---------- -------------- -------------- -------------- Net income (loss) attributable to common stockholders 20,402 (26,011) - (5,609) Restructuring costs and other special charges 23,188 19,915 - 43,103 Amortization of intangible assets 4,249 - - 4,249 Loss on investments 233 - - 233 Provision for litigation settlement (24,941) - - (24,941) Minority interest - - 1,181 1,181 Preferred stock dividends 1,681 1,181 (1,181) 1,681 Gain on refinancing of Series A preferred stock (10,995) - - (10,995) Beneficial conversion feature (Note 1) (18,375) - - (18,375) Other non-recurring items (345) - - (345) Pro forma net operating loss $ (4,903) $ (4,915) $ - $ (9,818) ========== ========== ========== ===========
Note 1 - The beneficial conversion feature has been recorded on a preliminary basis pending a request for interpretive accounting guidance that the Company has submitted to the staff of the Securities and Exchange Commission. Adjusting entries relating to this item, if any, will be included in the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2001. -----END PRIVACY-ENHANCED MESSAGE-----