Cognos® Announces Reduced Expectations for Results of First Quarter Fiscal Year 2002 and Workforce Reduction
OTTAWA, ON, May 30, 2001—Cognos® Incorporated (Nasdaq: COGN; TSE: CSN) today announced reduced expectations for results of the Company`s first quarter of fiscal year 2002, which will close on May 31, 2001. While the quarter is not yet completed, the Company expects revenue for the quarter to be in the range of $106 million to $110 million, compared with revenue of $108.7 million for the same period last year.
Net results for the first quarter of fiscal 2002, excluding special charges, are expected to be between breakeven and a net loss of $4.0 million or ($0.04) per share. This compares with net income of $12.0 million, or $0.13 per share for the first quarter of the prior fiscal year.
Per share figures have been adjusted to reflect the two-for-one stock split in April 2000. All figures are stated in U.S. dollars and in accordance with U.S. GAAP.
Cognos also announced measures directed at reducing expenses in order to align the Company`s cost structure and operations to the current economic environment. These include a workforce reduction of approximately 300 people, or about 10 percent of the Company`s global staff, and reduced discretionary spending. The effect of the workforce reduction will be evenly distributed throughout the Company, both geographically and functionally, and is not expected to significantly affect any strategic programs. As a result of these measures, the Company will record a special charge of approximately $13.0 million (pre tax) or $0.10 per share in the first quarter.
"A decision like this is a difficult one because it affects our people, who I believe are the best in the industry," said Ron Zambonini, Cognos President and CEO. "However, I did state during my last remarks to the investment community in April that we would manage our operations prudently during this period of economic uncertainty, and this workforce reduction is an indication of this commitment. Even at this late stage of our quarter we felt it was imperative to proceed with this difficult but necessary action.
"We are confident that the fundamental value proposition of our solution, the long-term market opportunity, and the competitive positioning for Cognos remain firmly intact. Our objective is to emerge from this economic slowdown a much stronger company."
Cognos will hold a Webcast and conference call to present this current view of results for its first quarter fiscal 2002 at 8:30 a.m. Eastern Time this morning, May 30, 2001. The Webcast may be accessed at http://www.cognos.com/company/investor/events/053001.html. The conference call may be accessed at 416-640-1907.
The Company will issue first quarter fiscal year 2002 financial results and more detailed guidance for its second quarter and full fiscal year at its regularly scheduled Webcast and conference call on June 21, 2001.
Certain statements made in this press release that are not based on historical information are forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
This press release contains forward-looking statements relating to, among other things: the Company`s expectations concerning future revenues and earnings; the effect of reduced expenses on results; the effect of the workforce reduction on strategic programs; the effect of the current economic environment on the Company`s business and technology strategies; the Company`s ability to deliver business intelligence solutions that respond to changing market requirements; the future prospects of the Company`s current and future products, and the Company`s ability to compete in an intensely competitive marketplace.
These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause future results to differ materially from those in the forward-looking statements. Factors that may cause such differences include, but are not limited to: the impact of global economic conditions on the Company`s business and the Company`s ability to implement timely and appropriate remedial measures; the Company`s ability to select and implement appropriate business models and strategies; the Company`s ability to maintain revenue growth or to anticipate a decline in revenue from any of its products or services; fluctuations in its quarterly and annual operating results based on historical patterns, which may cause its stock price to fluctuate or decline; rapid technological change and new product introductions and enhancements in the business intelligence software market; the Company`s reliance on partners and other third party distribution channels to market and distribute its products; unauthorized use of the Company`s intellectual property; claims by third parties that the Company`s software infringes their intellectual property; the Company`s ability to compete in an intensely competitive marketplace; the risks inherent in international operations, such as currency exchange rate fluctuations; the Company`s ability to identify, hire, train, motivate and retain highly qualified management and other key personnel; the Company`s ability to identify, pursue and complete acquisitions which could divert management attention and financial resources and not produce desired business results; as well as the risk factors discussed in the Company`s most recent Annual Report on Form 10-K filed with the United States Securities and Exchange Commission. Readers should not place undue reliance on any such forward-looking statements, which speak only as of the date they are made. The Company disclaims any obligation to publicly update or revise any such statement to reflect any change in the Company`s expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
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