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Taleo Announces Amendment to Financial Statements to Correct Previously Reported Accretion of Preferred Dividends Calculation
SAN FRANCISCO, Dec. 6 /PRNewswire-FirstCall/ -- Taleo Corporation (NASDAQ: TLEO) , the leading provider of on demand talent management solutions, today announced that the Company's previously issued financial statements for the years ended December 31, 2002, 2003 and 2004, and the interim financial statements for the quarters ended June 30, 2005 and September 30, 2005 will be restated to correct an error relating to the calculation of the dividends on the Company's preferred stock prior to its conversion on October 4, 2005. The decision was made by the Audit Committee of the Board of Directors, following consultation with and upon the recommendation of management, on December 4, 2005, after discovery and analysis of the error relating to the calculation of dividends on the Company's preferred stock as part of the Company's review of its reporting processes. Accreted dividends for the holders of Series C and Series D preferred stock were calculated on a simple interest basis instead of on a compound interest basis. As a result of the error, a total non-cash adjustment of approximately $1.6 million, covering the fiscal years 2001 to 2005, and the nine-month period ended September 30, 2005, will be reflected in the Company's financial statements. The error will result in an increase in the net loss attributable to Class A common stockholders and net loss per share attributable to Class A common stockholders for the respective periods. However, the error does not change the Company's previously reported revenue, operating income (loss), net loss, pro forma earnings per share on an as-converted basis, cash or assets for any of the periods in question. The Company does not believe the correction is material to investors for any of the individual periods being restated and the correction will not impact the Company's results for the fourth fiscal quarter ending December 31, 2005 or any future period. The effect of the error in each reporting period is shown in the financial statements attached hereto. The Company will amend its Registration Statement on Form 10 and its Quarterly Reports on Form 10-Q for the quarters ended June 20, 2005 and September 30, 2005 to include the corrected financial statements from this restatement. Conference Call Details In conjunction with this announcement, Taleo will host a conference call today at 8:00 a.m. (EST). To access this call, dial 800-289-0529 (domestic) or 913-981-5523 (international). A replay of this conference call will be available through December 13, 2005, at 888-203-1112 (domestic) or 719-457-0820 (international). The replay passcode is 4743361. A live webcast of this conference call will be available on the "Investor Relations" page of the Company's Web site, (http://www.taleo.com/) and a replay will be archived on the Web site as well. About Taleo Corporation Taleo Corporation delivers on demand talent management solutions that enable organizations of all sizes to recruit, assess and manage their workforces for improved business performance. Taleo's customers use its suite of solutions to improve their talent management processes to reduce the time and costs associated with these processes and to enhance the quality, productivity and satisfaction of their workforces. Taleo currently has more than 340 corporate customers with approximately 500,000 registered users who use our services to fill positions in almost 100 countries. Forward-looking Statements This press release contains forward-looking statements. For purposes of the Private Securities Litigation Reform Act of 1995 (the "Act") Taleo disclaims any intent or obligation to update these forward-looking statements, and claims the protection of the Safe Harbor for forward-looking statements contained in the Act. Actual results may differ materially from those projected in such forward-looking statements. Investors should consult Taleo's filings with the Securities and Exchange Commission for further information regarding these and other risks of the Company's business. TALEO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Nine Months Ended September 30, 2005
Originally As Increase
Reported Restated (Decrease)
Revenue:
Application $46,090 $46,090 $--
Consulting 11,277 11,277 --
Total revenue 57,367 57,367 --
Cost of revenue:
Application 12,201 12,201 --
Consulting 7,866 7,866 --
Total cost of revenue 20,067 20,067 --
Gross profit 37,300 37,300 --
Operating expenses:
Sales and marketing 16,641 16,641 --
Research and development 11,857 11,857 --
General and administrative 7,532 7,532 --
Restructuring charges 804 804 --
Total operating expenses 36,834 36,834 --
Operating income 466 466 --
Other (expense) income:
Interest income 295 295 --
Interest expense (2,757) (2,757) --
Foreign currency losses (810) (810) --
Total other expense (3,272) (3,272) --
Net loss before provision
for income tax (2,806) (2,806) --
Provision for income taxes -- -- --
Net loss (2,806) (2,806) --
Accretion of dividends and
issuance costs on
preferred stock (2,067) (2,596) 529
Net loss attributable to
Class A common stockholders $(4,873) $(5,402) $529
Net loss attributable to
Class A stockholders per
share - basic and diluted $(47.77) $(52.96) $5.19
Weighted average Class A
common shares:
Basic and diluted 102 102 --
TALEO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three Months Ended September 30, 2005
Originally As Increase
Reported Restated (Decrease)
Revenue:
Application $15,987 $15,987 $--
Consulting 3,916 3,916 --
Total revenue 19,903 19,903 --
Cost of revenue:
Application 4,126 4,126 --
Consulting 2,839 2,839 --
Total cost of revenue 6,965 6,965 --
Gross profit 12,938 12,938 --
Operating expenses:
Sales and marketing 5,471 5,471 --
Research and development 3,741 3,741 --
General and administrative 2,873 2,873 --
Total operating expenses 12,085 12,085 --
Operating income 853 853 --
Other (expense) income:
Interest income 138 138 --
Interest expense (2,120) (2,120) --
Foreign currency losses (488) (488) --
Total other expense (2,470) (2,470) --
Net loss before provision
for income tax (1,617) (1,617) --
Provision for income taxes -- -- --
Net loss (1,617) (1,617) --
Accretion of dividends and
issuance costs on
preferred stock (689) (877) 188
Net loss attributable to
Class A common stockholders $(2,306) $(2,494) $188
Net loss attributable to
Class A stockholders per
share - basic and diluted $(15.48) $(16.74) $1.26
Weighted average Class A
common shares:
Basic and diluted 149 149 --
TALEO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Six Months Ended June 30, 2005
Originally As Increase
Reported Restated (Decrease)
Revenue:
Application $30,103 $30,103 $--
Consulting 7,361 7,361 --
Total revenue 37,464 37,464 --
Cost of revenue:
Application 8,076 8,076 --
Consulting 5,026 5,026 --
Total cost of revenue 13,102 13,102 --
Gross profit 24,362 24,362 --
Operating expenses:
Sales and marketing 11,169 11,169 --
Research and development 8,117 8,117 --
General and administrative 4,659 4,659 --
Restructuring charges 804 804 --
Total operating expenses 24,749 24,749 --
Operating income (387) (387) --
Other (expense) income:
Interest income 157 157 --
Interest expense (637) (637) --
Foreign currency losses (322) (322) --
Total other expense (802) (802) --
Net loss before provision
for income tax (1,189) (1,189) --
Provision for income taxes -- -- --
Net loss (1,189) (1,189) --
Accretion of dividends and
issuance costs on
preferred stock (1,378) (1,719) 341
Net loss attributable to
Class A common stockholders $(2,567) $(2,908) $341
Net loss attributable to
Class A stockholders per
share - basic and diluted $(32.49) $(36.81) $4.32
Weighted average Class A
common shares:
Basic and diluted 79 79 --
TALEO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three Months Ended June 30, 2005
Originally As Increase
Reported Restated (Decrease)
Revenue:
Application $15,075 $15,075 $--
Consulting 4,232 4,232 --
Total revenue 19,307 19,307 --
Cost of revenue:
Application 4,027 4,027 --
Consulting 2,811 2,811 --
Total cost of revenue 6,838 6,838 --
Gross profit 12,469 12,469 --
Operating expenses:
Sales and marketing 5,764 5,764 --
Research and development 4,171 4,171 --
General and administrative 2,340 2,340 --
Total operating expenses 12,275 12,275 --
Operating income 194 194 --
Other (expense) income:
Interest income 117 117 --
Interest expense (501) (501) --
Foreign currency losses (227) (227) --
Total other expense (611) (611) --
Net loss before provision
for income tax (417) (417) --
Provision for income taxes -- -- --
Net loss (417) (417) --
Accretion of dividends and
issuance costs on
preferred stock (689) (869) 180
Net loss attributable to
Class A common stockholders $(1,106) $(1,286) $180
Net loss attributable to
Class A stockholders per
share - basic and diluted $(12.43) $(14.45) $2.02
Weighted average Class A
common shares:
Basic and diluted 89 89 --
TALEO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Year Ended December 31, 2004
Originally As Increase
Reported Restated (Decrease)
Revenue:
Application $49,010 $49,010 $--
Consulting 9,640 9,640 --
Total revenue 58,650 58,650 --
Cost of revenue:
Application 14,618 14,618 --
Consulting 8,276 8,276 --
Total cost of revenue 22,894 22,894 --
Gross profit 35,756 35,756 --
Operating expenses:
Sales and marketing 18,153 18,153 --
Research and development 16,010 16,010 --
General and administrative 7,161 7,161 --
Total operating expenses 41,324 41,324 --
Operating loss (5,568) (5,568) --
Other (expense) income:
Interest income 101 101 --
Interest expense (404) (404) --
Foreign currency losses 65 65 --
Total other expense (238) (238) --
Net loss before provision
for income tax (5,806) (5,806) --
Benefit from income taxes (11) (11)
Net loss (5,795) (5,795) --
Accretion of dividends and
issuance costs on
preferred stock (2,756) (2,756) 543
Net loss attributable to
Class A common stockholders $(8,551) $(9,094) $543
Net loss attributable to
Class A stockholders per
share - basic and diluted $(152.70) $(162.39) $9.69
Unaudited pro forma net loss
attributable to Class A
common stockholders per
share - basic and diluted $(0.47) $(0.47) $--
Weighted average Class A
common shares:
Basic and diluted 56 56 --
Unaudited pro forma
basic and diluted 12,390 12,390 --
TALEO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Year Ended December 31, 2003
Originally As Increase
Reported Restated (Decrease)
Revenue:
Application $36,029 $36,029 $--
Consulting 7,606 7,606 --
Total revenue 43,635 43,635 --
Cost of revenue:
Application 7,670 7,670 --
Consulting 6,462 6,462 --
Total cost of revenue 14,132 14,132 --
Gross profit 29,503 29,503 --
Operating expenses:
Sales and marketing 14,767 14,767 --
Research and development 10,998 10,998 --
General and administrative 4,726 4,726 --
Charge for in-process
research and development 150 150 --
Total operating expenses 30,641 30,641 --
Operating loss (1,138) (1,138) --
Other (expense) income:
Interest income 83 83 --
Interest expense (152) (152) --
Foreign currency losses (62) (62) --
Total other expense (131) (131) --
Net loss before provision
for income tax (1,269) (1,269) --
Provision for income taxes 89 89 --
Net loss (1,358) (1,358) --
Accretion of dividends and
issuance costs on
preferred stock (2,419) (2,744) 325
Net loss attributable to
Class A common stockholders $(3,777) $(4,102) $325
Net loss attributable to
Class A stockholders per
share - basic and diluted $(151.08) $(164.08) $13.00
Weighted average Class A
common shares:
Basic and diluted 25 25 --
TALEO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Year Ended December 31, 2002
Originally As Increase
Reported Restated (Decrease)
Revenue:
Application $20,753 $20,753 $--
Consulting 7,635 7,635 --
Total revenue 28,388 28,388 --
Cost of revenue:
Application 3,987 3,987 --
Consulting 6,504 6,504 --
Total cost of revenue 10,491 10,491 --
Gross profit 17,897 17,897 --
Operating expenses:
Sales and marketing 12,205 12,205 --
Research and development 6,460 6,460 --
General and administrative 3,372 3,372 --
Total operating expenses 22,037 22,037 --
Operating loss (4,140) (4,140) --
Other (expense) income:
Interest income 137 137 --
Interest expense (109) (109) --
Foreign currency losses (39) (39) --
Total other expense (11) (11) --
Net loss before provision
for income tax (4,151) (4,151) --
Provision for income taxes -- -- --
Net loss (4,151) (4,151) --
Accretion of dividends and
issuance costs on
preferred stock (2,326) (2,486) 160
Net loss attributable to
Class A common stockholders $(6,477) $(6,637) $160
Net loss attributable to
Class A stockholders per
share - basic and diluted $(1,079.50) $(1,106.17) $26.67
Weighted average Class A
common shares:
Basic and diluted 6 6 --
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