SkillSoft Reaches Final Settlement With NETg
The agreement entered into by the parties also settles a patent infringement claim brought by NETg against SkillSoft in 2001.
Under the terms of the settlement agreement, SkillSoft will pay NETg $22 million in July 2003 and $22 million in July 2004. SkillSoft has also agreed not to make certain specific modifications to its information technology courses for a limited period of time. In exchange, SkillSoft and the employees named in the trade secret suit and affiliated defendants, have received a complete release from any liability based on or arising from the alleged use of any alleged NETg intellectual property.
“This settlement agreement allows SkillSoft to move forward without the continued disruption and uncertainty that accompanies this type of litigation,” said SkillSoft Chief Executive Officer and President Chuck Moran. Moran emphasized that SkillSoft and the employees named in the litigation continue to deny any wrongdoing, but that the company determined that it was in the best interests of SkillSoft, its shareholders and its customers to put the litigation, the cost of the cases, the threat of an unpredictable jury trial, potentially significant claimed damages, and the prospect of possible injunctive relief, to rest once and for all. “The settlement allows the company to redirect the attention, energy and financial resources expended on the litigation to producing and delivering to our customers what we think are the best technology-based e-Learning solutions available today,” said Moran.
As a result of the settlement and related matters and the GoTrain acquisition, SkillSoft is changing its earnings expectations for this fiscal year. The company’s prior target was for a loss of $(0.22) to $(0.23) per basic and diluted share. The primary effect of the settlement will be a one-time charge in the second quarter and amortization expense with respect to the settlement, as well as a reduction in expected levels of interest income due to lower cash balances after making the settlement payment. The company will also have the benefit of a reduction in its general and administrative expense due to the elimination of planned future costs of litigating the case. Finally, SkillSoft has included the amortization expense of the acquired GoTrain assets in the revised target. The net effect of all of these items is that the company currently expects that its net loss for fiscal 2004 will be between $(0.66) to $(0.67) per basic and diluted share.
The company’s outlook excludes the potential negative impact of the resolution of any other litigation matters, as well as the potential impact of any future acquisitions, including potential non-recurring acquisition related expenses and the amortization of any purchased intangibles and deferred compensation charges resulting from an acquisition transaction.
The company currently anticipates that its cash position at the end of fiscal 2004 (January 31, 2004), assuming our normal level of receivables DSOs, will be between $50 million and $55 million. This estimate also assumes no borrowings are outstanding under the company’s $25 million line of credit.
SkillSoft is a leading global provider of comprehensive, multi-modal e-learning content and software products for business and information technology professionals. Multi-modal learning (MML) solutions offer powerful tools to support and enhance the speed and effectiveness of both formal and informal learning processes. MML solutions integrate SkillSoft’s in-depth courseware, learning management platform technology and support services to meet customers’ learning needs.
SkillSoft brings to market a wide variety of IT, professional effectiveness, and business resources designed to meet immediate information needs, increase employee productivity and promote ongoing critical skills development in increasingly dynamic work environments. These resources include:
– Business Skills library, with more than 1,900* course titles.
– IT Skills and Certification library, with more than 1,800* course
titles and support for more than 70* certification exams.
– More than 4,000** unabridged books available through Books24x7’s ITPro,
BusinessPro, and FinancePro library collections.
SkillSoft partners with technology leaders to develop instructionally sound, standardized content that delivers rich, comprehensive learning and performance support experiences across the heterogeneous technology environments common in most global organizations.
* As of February 2003
** As of June 23,2003
Safe Harbor for Forward-Looking Statements
This release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements. Factors that could cause or contribute to such differences include difficulties in integrating the organizations of SmartForce and SkillSoft, competitive pressures, changes in customer demands or industry standards, adverse economic conditions, loss of key personnel, litigation and other matters disclosed under the heading “Risk Factors” in SkillSoft’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2003, as filed with the Securities and Exchange Commission. The forward-looking financial information provided by the Company in this press release represents the Company’s estimates as of July 21, 2003. We anticipate that subsequent events and developments will cause the Company’s estimates to change. However, while the Company may elect to update this forward-looking financial information at some point in the future, the Company specifically disclaims any obligation to do so. This forward-looking information should not be relied upon as representing the Company’s estimates of its future financial performance as of any date subsequent to the date of this release.