The restatement also reduced services revenues and bad debt expense in the first quarter of 2001 by $74,000 and $384,000 respectively, and consequently improved reported earnings by $310,000.

Revenue for the second quarter of 2001 was $28.9 million, up 5 percent from $27.6 million in the second quarter of 2000, a modest sequential quarter increase over the first quarter 2001 level. Reported operating results for the second quarter of 2001 were a loss of $13.7 million or a loss of $0.35 per share, compared with a loss of $738,000 or a loss of $0.02 per share in the second quarter of 2000.

Pro forma net loss for the second quarter of 2001, excluding the amortization of intangibles, stock-based compensation expense, restructuring-related costs and impairment of certain assets, was $7.7 million or a loss of $0.20 per share, compared to income of $560,000 or earnings of $0.01 per share in the second quarter of 2000.

Second quarter reported and pro forma results include bad debt expense of $1.6 million.

Revenue for the six month period ended June 30, 2001 was $57.2 million, up 13 percent from $50.8 million in the six month period ended June 30, 2000. Reported operating results for the six months ended June 30, 2001 were a loss of $29.4 million or a loss of $0.76 per share, compared with a loss of $1.2 million or a loss of $0.04 per share in the six months ended June 30, 2000.

Pro forma net loss for the six month period ended June 30, 2001, excluding the amortization of intangibles, stock-based compensation expense, restructuring-related costs and write-down of certain assets, was $19.9 million or a loss of $0.52 per share, compared with income of $1.3 million or earnings of $0.03 per share in the six month period ended June 30, 2000.

On July 24, 2001, Onyx postponed the earnings release previously scheduled for that date to conduct an investigation spurred by the Company’s discovery late in the earnings release cycle of an unauthorized side agreement. That investigation included a review of transactions from 1999, 2000 and the first six months of 2001. The investigation efforts were directed by Onyx Software’s audit committee of the Board of Directors, and carried out by the company’s outside law firm and its auditors with the full cooperation of the company. The restatement includes two definitive unauthorized side agreements and two possible unauthorized side agreements aggregating $797,000. In addition, upon completion of the investigation procedures and a thorough review of all the facts now available with the benefit of hindsight, the company believed it was appropriate to reverse three other transactions aggregating $1,417,000 – all of which have not been paid. These were all transactions in the fourth quarter of 2000 and resulted in a $2.2 million adjustment to revenues. The investigation found that both finance and executive management acted in good faith.

Revenue for the fourth quarter of 2000 previously reported as $37.9 million has been restated to $35.7 million. Reported operating results for the fourth quarter of 2000 previously reported as a net loss of $581,000, or a loss of $0.02 per share, has been restated to a net loss of $2.8 million or a loss of $0.08 per share.

Revenue for 2000 previously reported as $121.5 million has been restated to $119.3 million. Reported operating results for 2000 previously reported as a net loss of $2.5 million, or a loss of $0.07 per share, has been restated to a net loss of $4.7 million, or a loss of $0.13 per share.

Revenue for the first quarter of 2001 previously reported as $28.4 million has been restated to $28.3 million. Reported operating results for the first quarter of 2001 previously reported as a net loss of $16.0 million, or a loss of $0.42 per share, has been restated to a net loss of $15.7 million, or a loss of $0.42 per share.

SOURCE: COMPANY PRESS RELEASE