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Printcafe: Q4 Loss on Sales of $11.3 Million: Mail-Well Licenses Auto-Count

Press release from the issuing company

PITTSBURGH, Feb. 4 -- Printcafe Software, Inc. today announced revenue of $11.3 million for its fourth quarter ended December 31, 2002, which equaled the $11.3 million of revenue recorded in the fourth quarter of 2001. Earnings before interest, taxes, depreciation, amortization, non-cash charges, other expense and restructuring charges (EBITDA) for the fourth quarter of 2002 were $316,000, compared to $167,000 computed on the same basis in the prior year period. The Company's pro forma net loss for the fourth quarter of 2002 was $678,000, or $(0.06) per share, compared to a pro forma net loss of $2.2 million in the fourth quarter of 2001, or $(0.20) per share. Pro forma net loss is calculated as follows: Quarter Ended Quarter Ended December 31, 2001 December 31, 2002 (in thousands, except share and per share amounts) Gross Profit (GAAP) 8,652 8,900 Less: Sales & marketing expense (3,848) (4,378) Research & development expense (2,948) (2,814) General & administrative expense (1,689) (1,392) EBITDA 167 316 Less: Interest & depreciation (2,336) (994) Pro forma net loss (2,169) (678) Pro forma net loss per share* (0.20) (0.06) *Calculated using number of shares outstanding (10,633,000) as of December 31, 2002 The Company's revenue for the year ended December 31, 2002 was $46.5 million, an 11% increase compared to the $41.9 million recorded in 2001. Gross margins improved to 78% during 2002 compared to 72% for 2001. EBITDA for the year ended December 31, 2002 was $1.0 million compared to an EBITDA loss of $8.7 million recorded in 2001. The Company's pro forma net loss for the year ended December 31, 2002 was $5.6 million, or $(0.53) per share, compared to a pro forma net loss of $17.8 million, or $(1.67) per share, for 2001. The Company reported a $9.5 million net loss attributable to common stock calculated in accordance with generally accepted accounting principles (GAAP) for the fourth quarter of 2002 compared to a net loss of $8.1 million in the prior year period. The fourth quarter of 2001 included income of $6.3 million related to an adjustment to the accretion of redeemable preferred stock of the Company that was outstanding at that time. The chart below provides a reconciliation of the pro forma operating results and the operating results reported under GAAP. Quarter Ended Quarter Ended December 31, 2001 December 31, 2002 in thousands, except per share amounts Pro forma net loss (2,169) (678) Adjustments - income (expense) Amortization of intangible assets (12,263) (7,353) Stock-based compensation (12) (498) Interest expense - debt origination costs - (939) Other income (expense) 13 (6) Accretion of redeemable preferred stock 6,294 - Net loss (GAAP) (8,137) (9,474) Net loss per share (GAAP) $(50.42) $(0.89) Weighted average shares outstanding (GAAP) 161 10,620 The Company completed its initial public offering (IPO) on June 21, 2002. Prior to this date, the Company had both preferred stock and common stock outstanding. In connection with the IPO, all of the outstanding shares of preferred stock converted to common stock, which increased the number of shares of common stock outstanding from 163,000 at March 31, 2002 (the last quarter end prior to the IPO) to 10,595,000 at June 30, 2002. The number of common shares outstanding on December 31, 2002 was 10,633,000. "Printcafe continues to be a leading provider of software solutions for the print supply chain. Despite very tough economic conditions, we were able to improve our bottom line this quarter over the same period in 2001 and deliver an 11% increase in revenue for the year," commented Marc Olin, Printcafe Chairman and Chief Executive Officer. "We continue to make positive strides by further improving organizational efficiency, expanding our sales geographically and by adding new customers." Q4 Highlights -- Acquired substantially all the assets and intellectual property of e-commerce solution provider printChannel, Inc. resulting in the addition of 100 new printer subscribers in the United States and Europe and 1,350 corporate websites. We anticipate integrating certain of the acquired technology with our next generation e-commerce solution. -- Extended our penetration of leading corporate print buyers, signing two significant new buy-side contracts. Commonwealth Bank of Australia, one of the largest financial institutions in Australia, and Cingular Wireless, the second largest wireless carrier in the U.S., selected Printcafe's EnterpriseSite solution to manage their print procurement. -- Mail-Well, Inc., one of the largest commercial printers in the United States, licensed our Auto-Count direct machine interface shop floor data collection technology across their enterprise. This further extends Mail-Well's commitment to using our software as their information technology platform. -- Extended our penetration of international markets. Headley Brothers of Ashford, Kent, UK, and Editorial Padilla, C.por A., Dominican Republic, leading commercial printers in their regions, licensed our Hagen OA enterprise resource planning (ERP) application which was recently enhanced with multi-language, multi-currency functionality to meet the needs of the international print market.