SeeBeyond Announces First Quarter 2005 Financial Results; License Reve

    Business Editors/High-Tech Writers

    MONROVIA, Calif.--(BUSINESS WIRE)--April 25, 2005--SeeBeyond (Nasdaq:SBYN), provider of the world's first fully integrated composite application network suite for advanced integration and composite application solutions, today reported final results for the period ended March 31, 2005.
    Total revenue for the first quarter ended March 31, 2005 was $37.3 million compared to $34.4 million in the first quarter of the prior year. License revenue for the first quarter 2005 was $13.7 million compared to $10.9 million for the prior year's first quarter, a 26% year-over-year increase.
    Net loss calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for the quarter ended March 31, 2005 was $2.6 million, or $(0.03) per share compared to a net loss of $5.8 million, or $(0.07) per share in the prior year's first quarter.
    The Company ended the first quarter 2005 with total cash and cash equivalents of $73.6 million and DSO of 78 days.
    "Unfortunately, several significant license deals were delayed and did not close in the first quarter. We were also disappointed in overall sales execution, and have taken appropriate action to improve alignment between sales and senior management," said Carv Moore, president and COO of SeeBeyond. "However, new account activity is promising for the coming quarters, and we look forward to steady improvement in 2005 with a focus on cost control, license revenue growth and ensuring customer success with ICAN 5."
    "Despite a tough first quarter, SeeBeyond remains the visionary leader in the integration space and continues to drive technology evolution," added Jim Demetriades, founder and CEO of SeeBeyond. "As evidenced by several seven-figure deals this quarter, we continue to see leading organizations realize the value that an enterprise-scale integration and composite application development suite can play in driving ROI from existing investments."

First Quarter 2005 Highlights:

-- The following customers represent new and existing business in the first quarter: Baylor University, Blue Cross Blue Shield of Massachusetts, Department of Human Services - Victoria Australia, Dun and Bradstreet, EDS, Lombardier Informatica, Menlo Logistics, Pfizer, Phoenix Wealth Management, Sydney Water Corporation and University of Chicago.

-- The following key announcements were issued during the quarter, exemplifying the Company's technology leadership and the increasing customer adoption of the SeeBeyond ICAN Suite:

-- CenterPoint Energy deployed SeeBeyond ICAN 5 for real-time visibility and enhanced system performance.

-- Hill Physicians Medical Group launched largest private online EMR deployment in the U.S. leveraging SeeBeyond ICAN 5.

-- The Cleveland Clinic Foundation seamlessly transitioned its clinical interfaces to the SeeBeyond ICAN 5 platform.

-- SeeBeyond unveiled new composite applications to enable Clinical Transformation including Claims Lifecycle Management (CLM), Patient Bed Management, and Business Process Improvement and Workflow.

-- SeeBeyond is poised to support the U.S adoption of a nationwide interoperable health information network with its 'Blueprint for National Healthcare Infrastructure'. This is based on several international initiatives leveraging SeeBeyond technology to enable national healthcare infrastructures including The United Kingdom, Luxembourg, Ireland, France and Australia.

-- SeeBeyond and Sun Microsystems showcased improved operational efficiencies across the Supply Chain via its joint SOA-based RFID demonstration.

-- Blue Cross Blue Shield of Massachusetts teamed with SeeBeyond to address the value of cross-enterprise business process visibility.

    Financial Outlook:

    SeeBeyond projects second quarter 2005 revenue to be approximately $37 to $42 million, with expected earnings per share in the range of $(0.03) to $0.02.
    The Company will review its first quarter 2005 financial performance today at 2:00 PM Pacific Daylight Time / 5:00 PM Eastern Daylight Time. The toll-free dial-in number for the call from within the U.S. and Canada is (800) 640-9765; international callers may dial (847) 413-4837. A simulcast of the conference call will be available on www.streetevents.com, and a rebroadcast following the completion of the call at www.seebeyond.com. An audio replay of the call will be available after the call until May 2nd at midnight EDT. The toll-free dial-in number for the replay from within the U.S. and Canada is (877) 213-9653; international callers may dial (630) 652-3041 using the access code: 11469271.

    About SeeBeyond

    With more than 15 years of software innovation and real-world experience in integrating systems across global organizations, SeeBeyond (Nasdaq:SBYN) delivers the industry's first fully integrated platform for the development and deployment of composite applications. The SeeBeyond(R) Integrated Composite Application Network (ICAN) Suite helps organizations rapidly assemble and deploy enterprise-scale end-user composite applications built on existing systems and infrastructure to dramatically improve business operations. SeeBeyond has more than 2,000 customers worldwide, including Blue Cross Blue Shield of Massachusetts, BHP Billiton, The Cleveland Clinic, The Dial Corporation, DuPont, Florida Power & Light, Fluor Daniel, Fujitsu, General Motors, Halliburton, Hertz Corporation, HP, Pfizer, Samsung, Sprint and Sutter Health. For more information, please visit www.seebeyond.com.

    SeeBeyond is a registered trademark of SeeBeyond Technology Corporation in the United States and select foreign countries. SeeBeyond Integrated Composite Application Network Suite is a trademark of SeeBeyond Technology Corporation. The absence of a trademark from this list does not constitute a waiver of SeeBeyond Technology Corporation's intellectual property rights concerning that trademark. All other brands or product names are trademarks of their respective owners.

    Forward-Looking Statements

    This news release includes statements that are not historical in nature and as such are intended to be forward looking statements for purposes of the safe harbor provided by the Securities Litigation Reform Act. These statements, including those related to projected revenue and projected net income per share levels for the second quarter of 2005, sales to new customers in future periods, and SeeBeyond's efforts to control costs, increase license revenue and ensure customer success in future periods, are statements based on SeeBeyond's current expectations, assumptions, estimates and projections, its industry and its future prospects. These statements are predictions, and actual events and results may differ materially from those forward-looking statements based on certain risks, including risks related to general economic conditions and, in particular, information technology spending; our sales cycle; our dependence on licensing revenue from our Business Integration Suite; our dependence on our strategic relationships with systems integrators and others; our international operations; market acceptance of SeeBeyond products and services, including SeeBeyond's ICAN Suite, and the potential release of competitive products, among other factors. The forward-looking statements contained in this news release are also subject to other risks and uncertainties, including those more fully described in the Company's filings with the Securities and Exchange Commission including its Annual Report filed on Form 10-K for the year ended December 31, 2004, and its quarterly reports on Form 10-Q. SeeBeyond does not undertake to update any forward-looking statements.

SeeBeyond Technology Corporation CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)

Three Months Ended March 31, ------------------ 2005 2004 -------- -------- Revenues: License $13,749 $10,880 Services 9,657 10,510 Maintenance 13,902 13,047 -------- --------

Total revenues 37,308 34,437

Cost of revenues: License 333 277 Services and maintenance 10,710 10,179 -------- --------

Total cost of revenues 11,043 10,456 -------- --------

Gross profit 26,265 23,981 -------- --------

Operating expenses: Research and development 10,011 9,740 Sales and marketing 13,707 15,004 General and administrative 5,161 4,609 Amortization of sales and marketing warrants - (14) Amortization of stock-based compensation 1 97 -------- --------

Total operating expenses 28,880 29,436 -------- --------

Loss from operations (2,615) (5,455) Interest and other income (expense) net 286 (213) Interest expense (29) (72) -------- -------- Loss before tax provision (2,358) (5,740) Provision for income taxes 223 43 -------- --------

Net loss $(2,581) $(5,783) ======== ========

Basic and diluted net loss per share $(0.03) $(0.07) ======== ========

Number of shares used in calculating basic and diluted net loss per share 85,358 84,053 ======== ========

SeeBeyond Technology Corporation CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data)

March 31, Dec. 31, 2005 2004 ----------- --------- Assets: (unaudited) Current assets: Cash and cash equivalents $73,566 $73,148 Accounts receivable, net 32,399 37,995 Prepaid expenses and other current assets 3,682 3,680 ----------- ---------

Total current assets 109,647 114,823 Property and equipment, net 11,661 12,728 Goodwill 1,391 1,391 Other assets 2,075 2,152 ----------- ---------

Total assets $124,774 $131,094 =========== =========

Liabilities and stockholders' equity: Current liabilities: Accounts payable $6,041 $6,739 Accrued employee compensation and related expenses 12,813 13,861 Accrued expenses 3,838 5,808 Deferred revenues 35,000 36,537 Capital lease payable - current portion 497 748 ----------- ---------

Total current liabilities 58,189 63,693

Capital lease payable 24 28 ----------- --------- Total liabilities 58,213 63,721

Commitments and contingencies Stockholders' equity: Common stock, $.0001 par value - 200,000,000 shares authorized; 88,414,444 shares issued and 85,785,492 shares outstanding as of March 31, 2005 and 87,559,663 shares issued and 84,930,711 shares outstanding as of December 31, 2004 8 8 Additional paid-in capital 228,615 226,481 Treasury stock (6,510) (6,510) Accumulated other comprehensive loss 625 990 Accumulated deficit (156,177) (153,596) ----------- ---------

Total stockholders' equity 66,561 67,373 ----------- ---------

Total liabilities and stockholders' equity $124,774 $131,094 =========== =========

SeeBeyond Technology Corporation CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (In thousands) (Unaudited)

Three Months Ended March 31, ------------------ 2005 2004 -------- -------- Cash flows from operating activities: Net loss $(2,581) $(5,783) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Loss on disposal of fixed assets 5 - Depreciation and amortization 1,135 1,250 Provision for doubtful accounts receivable 173 383 Amortization of sales and marketing warrants - (14) Amortization of stock-based compensation 1 97 Changes in assets and liabilities: Accounts receivable 5,423 9,662 Prepaid expenses and other current assets (2) 93 Accounts payable (698) 1,426 Accrued compensation and related expenses (1,048) (2,838) Accrued expenses (1,970) (576) Deferred revenues (1,537) 455 -------- --------

Net cash (used in) provided by operating activities (1,099) 4,155

Cash flows from investing activities: Purchases of property and equipment (73) (900) Other 77 73 -------- --------

Net cash provided by (used in) investing activities 4 (827)

Cash flows from financing activities: Net repayments on bank lines of credit - (788) Repayments of capital lease obligation (255) (61) Proceeds from issuance of common stock pursuant to employee stock option plan 2,133 1,290 Payments for purchase of common stock - (644) -------- --------

Net cash provided by (used in) financing activities 1,878 (203)

Effect of exchange rate changes on cash and cash equivalents (365) 500 -------- --------

Net increase in cash and cash equivalents 418 3,625 Cash and cash equivalents at beginning of the period 73,148 70,135 -------- --------

Cash and cash equivalents at end of the period $73,566 $73,760 ======== ========

--30--IK/sf*

CONTACT: SeeBeyond Barry Plaga, 626-408-3100 (Executive VP & CFO) bplaga@seebeyond.com Andrea Williams, 415-874-3053 (VP, Investor Relations) awilliams@seebeyond.com Kristi Rawlinson, 214-373-1519 (Dir. of Public Relations) krawlinson@seebeyond.com

KEYWORD: CALIFORNIA INDUSTRY KEYWORD: SOFTWARE NETWORKING EARNINGS CONFERENCE CALLS SOURCE: SeeBeyond Technology Corporation

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