Net loss for the quarter ended June 30, 2001 was $7.6 million or a loss of $0.26 per share compared to a net loss of $4.5 million, or a loss of $0.16 per share for the quarter ended June 30, 2000. Expenses in the quarter ended June 30, 2001, include $431,000 of severance costs related to restructuring in the marketing, sales and services organizations.

In contrast to last quarter, we saw a distinct pullback in IT department spending this first fiscal quarter, stated Craig Brennan, president and CEO, Brio Technology. Overall for Brio, this resulted in much lower than expected revenue for the quarter.

While all companies are being challenged in the current economic environment, Brio also faced internal factors that we feel contributed to the disappointing results, continued Brennan. In this quarter, we were focused on substantial internal improvements that we believe will positively affect our ability to execute in the future and improve our overall financial performance. While we are as impatient as anyone to see solid bottom-line results, these initiatives are designed to create a profitable business model for the long-term.

Brio expects to achieve financial improvements moving forward as a result of initiatives in these key areas:

Company-wide cost containment

With the challenging economic environment, Brio is squarely focused on reducing expenses and driving a profitable business model without damaging its ability to grow.

Sales organization changes

Brio’s sales organization changes not only address revenue and profit attainment but also methods to improve forecast accuracy, collections management, and pricing methodology. Additionally, last quarter, Brio introduced a new strategic accounts unit that will focus on sustainable long-term revenue streams by capitalizing on Brio’s knowledge base of key vertical industries, specifically High Technology Manufacturing, Financial Services, Telecommunications and Utilities, Public Sector and Education, and Process Manufacturing.

Management Team Additions

As separately announced today, Brio has recruited three new executives to strengthen its management team. The company has appointed Todd Davis, executive vice president of worldwide operations, James Guthrie as executive vice president, development, and Brian Gentile as executive vice president and chief marketing officer. These additions help to complete Brio’s new executive team.

New Customers & Partners help diversify revenue stream

Brio’s broad product appeal helped to continue to diversify the company’s revenue stream this quarter, despite the distinct weakness in Fortune 1000 spending. Several new public sector customer wins, along with key global systems integrator deals, provided important continued progress in satisfying the needs of key vertical market customers. New public sector customer wins included The Franchise Tax Board of the State of California, the U.S. Army Recruiting Command and the Chinese Re-Insurance Company. Strategic systems integrator wins also resulted from Brio’s channel partnering efforts including, among others, IBM, Accenture, and Deloitte Consulting. We’re pleased because our solutions are finding success in a number of core markets, said Don Beck, Brio’s executive vice president, worldwide sales, and perhaps even more pleased because some of this quarter’s deals came at the expense of our competitors. Greater insight into Brio’s next generation product and market strategy will be outlined at the company’s user conference, BRIO 2001, scheduled for October 14 – 17 in Las Vegas, Nevada.