EX-99.2 5 f76536ex99-2.txt EXHIBIT 99.2 EXHIBIT 99.2 FOR IMMEDIATE RELEASE CONTACTS: INVESTOR MEDIA Vishal Makhijani Steve Diamond Inktomi Corp. Inktomi Corp. 650-653-2800 650-653-2877 vishalm@inktomi.com sdiamond@inktomi.com INKTOMI REPORTS FOURTH QUARTER AND FISCAL 2001 RESULTS ENTERPRISE TRACTION CONTINUES WITH NEW CUSTOMER WINS CASH CONSUMPTION REDUCED BY 60 PERCENT FROM PRIOR QUARTER FOSTER CITY, Calif., October 18, 2001 - Inktomi Corp. (NASDAQ: INKT) today reported financial results for the fourth fiscal quarter and year ended September 30, 2001. Revenues for the quarter ended September 30, 2001 totaled $39.0 million as compared to revenues of $39.6 million for the quarter ended June 30, 2001 and pro forma revenues of $74.8 million for the quarter ended September 30, 2000. Pro forma revenues for the fiscal year ended September 30, 2001 totaled $191.5 million as compared to pro forma revenues of $208.5 million for the fiscal year ended September 30, 2000. Pro forma net loss for the quarter ended September 30, 2001 was $16.5 million, or $0.13 per share as compared to a pro forma net loss of $21.4 million or $0.17 per share for the quarter ended June 30, 2001 and pro forma net income of $6.5 million or $0.05 per share for the quarter ended September 30, 2000. Pro forma net loss for the fiscal year ended September 30, 2001 was $61.7 million or $0.49 per share as compared to pro forma net income of $8.5 million or $0.07 per share for the fiscal year ended September 30, 2000. Pro forma amounts exclude results of operations from Inktomi's divested Commerce business, non-cash employee stock compensation, amortization of goodwill INKTOMI REPORTS FOURTH QUARTER AND FISCAL 2001 RESULTS PAGE 2 and certain one-time charges including a charge for the write-down of intangible assets, the write-down of certain investments in equity securities and restructuring costs. Net loss for the quarter and fiscal year ended September 30, 2001, in accordance with generally accepted accounting principles, was $45.0 million or $0.35 per share and $296.5 million or $2.36 per share, respectively. Inktomi Network Products business, comprised of industry-leading solutions for network caching, content distribution and media broadcasting, contributed $21.0 million in revenue for the quarter. Inktomi Search Solutions, which includes general Web search and related services and enterprise search, contributed $18.0 million in revenue. The company ended the quarter with $213.5 million in cash and short-term investments, of which $129.0 million is classified as long-term restricted cash. "Over the past year, we have managed the business through a significant downturn in the global economy while also directing the company's resources into new markets," said David Peterschmidt, president and CEO of Inktomi. "While the business environment remains challenging, I believe we have the products, partners, strategy and team to strengthen our market position and be poised to become profitable over the coming year." The quarter was marked by a reduction in cash consumption and strong days sales outstanding. The company used $16.2 million in cash and short-term investments in the quarter as compared to $42.1 million in the quarter ended June 30, 2001 reflecting cost control measures, working capital management, reduced headcount and the absence of -- MORE-- INKTOMI REPORTS FOURTH QUARTER AND FISCAL 2001 RESULTS PAGE 3 non-recurring payments made in prior quarters. The company also completed its recently announced restructuring and headcount reduction of 18 percent of its workforce, which the company believes will further reduce pro forma operating expenses in the quarter ending December 31, 2001. Days sales outstanding, or average days required to collect accounts receivable, at September 30, 2001 was 52 days as compared to 55 days at June 30, 2001 and 58 days at September 30, 2000. In the quarter ended September 30, 2001, Inktomi added new customers, shipped industry-leading appliances through OEM partners and continued to make strides into the enterprise market. The Inktomi Network Products business demonstrated the strength of its installed base with continuing business from leading companies such as AOL, Bank of America, Digital Island and Williams Communications. Inktomi also added new customers in the fourth quarter including the Army National Guard, CUNA Mutual Group and Toyota for its enterprise product offerings. In the quarter, Inktomi OEM hardware partners Compaq, Dell, F5 Networks, Hewlett-Packard and 3Com began shipping server-based appliances powered by Inktomi's leading network caching and streaming media products. Inktomi Search Solutions continued to add enterprise customers as marquee global corporations selected Inktomi to power their intranets and corporate Web sites. In the quarter, Deutsche Bank, the Smithsonian, Sony and the U.S. Customs Service selected Inktomi Enterprise Search to add powerful search capabilities to their Web sites and corporate intranets. Repeat business from Exxon-Mobil, Merck, Nokia, the U.S. Air -- MORE-- INKTOMI REPORTS FOURTH QUARTER AND FISCAL 2001 RESULTS PAGE 4 Force and Volvo also contributed to the quarter's revenues. Inktomi also signed contract renewals with AOL and MSN for Web search services. Inktomi has provided pro forma condensed consolidated results of operations for the quarter and year ended September 30, 2001 and 2000 based on its historical reporting format. In addition, Inktomi has provided consolidated results of operations in accordance with generally accepted accounting principles for the quarter and year ended September 30, 2001 and 2000 that reflect Inktomi's new revenue and cost of revenue classification methodology. Inktomi will hold a conference call and an audio Webcast today at 1:30 p.m. PST (4:30 p.m. EST) with David Peterschmidt and Jerry Kennelly, chief financial officer, to discuss additional details of Inktomi's fourth quarter and annual results. The Webcast can be accessed at www.inktomi.com/webcast. ABOUT INKTOMI Based in Foster City, Calif., Inktomi develops and markets network infrastructure software essential for global enterprises and service providers. Inktomi's business is divided into Network Products, comprised of industry-leading solutions for network caching, content distribution, media broadcasting, and wireless technologies; and Search Solutions, which include general Web search and related services, and enterprise search. Inktomi's customer and strategic partner base includes companies such as America Online, AT&T, Compaq, Dell, Hewlett-Packard Company, Intel, Merrill Lynch, Microsoft, Nokia, Sun Microsystems and Yahoo! The company has offices in North America, Asia and Europe. -- MORE-- INKTOMI REPORTS FOURTH QUARTER AND FISCAL 2001 RESULTS PAGE 5 ### This announcement contains forward-looking statements regarding Inktomi's future financial and operating results. These statements are based on current expectations and are subject to a number of risks and uncertainties. Actual results for future periods could differ materially from those projected in any forward-looking statements. Factors that could affect the financial and operating results of Inktomi generally include our substantial dependence on caching, content distribution and media products; the uncertainty of market acceptance of these products; need to broadly penetrate the enterprise market; need to expand our sales and distribution capabilities, internally and through alliances; substantial competition; dependency on a small number of portal customers in the Web search business; the rapidly changing business environment; changing buying patterns of our customers and potential customers; need to develop, acquire and release new products and technologies; and risks associated with acquisitions, dispositions, strategic alliances, international operations and product release dates. For more information and additional risk factors, see "Factors Affecting Operating Results" contained in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 13, 2001 and in other reports filed by Inktomi with the Securities and Exchange Commission. Inktomi expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any statements to reflect any change in Inktomi's expectations or any change of events, conditions or circumstances on which any such statements are based. Copyright (C) 2001 INKTOMI CORPORATION. All Rights Reserved. Inktomi and the tri-colored cube logo are all trademarks or registered trademarks of Inktomi Corporation. All other company and product names referenced herein are the trademarks or registered trademarks of their respective holders. INKTOMI CORPORATION UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)

FOR THE THREE FOR THE TWELVE MONTHS ENDED MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------- ------------------------- 2001 2000* 2001 2000* --------- --------- --------- --------- Revenues Network products $ 20,984 $ 56,821 $ 114,114 $ 152,850 Portal services 18,029 18,000 77,386 55,673 --------- --------- --------- --------- Total revenues 39,013 74,821 191,500 208,523 Operating expenses Cost of revenues 7,525 9,669 31,945 27,431 Sales and marketing 27,528 38,336 136,153 115,472 Research and development 16,668 15,535 71,810 48,399 General and administrative 5,529 6,034 23,646 18,933 --------- --------- --------- --------- Total operating expenses 57,250 69,574 263,554 210,235 --------- --------- --------- --------- Operating income (loss) (18,237) 5,247 (72,054) (1,712) Other income, net 1,924 4,287 11,274 15,906 --------- --------- --------- --------- Pretax income (loss) (16,313) 9,534 (60,780) 14,194 Provision for income taxes (145) (3,054) (940) (5,682) --------- --------- --------- --------- Net income (loss) per share $ (16,458) $ 6,480 $ (61,720) $ 8,512 ========= ========= ========= ========= Earnings per share Basic net income (loss) per share $ (0.13) $ 0.06 $ (0.49) $ 0.08 ========= ========= ========= ========= Diluted net income (loss) per share $ (0.13) $ 0.05 $ (0.49) $ 0.07 ========= ========= ========= ========= Shares outstanding Shares used in calculating basic net income (loss) per share 127,487 116,997 125,608 113,030 ========= ========= ========= ========= Shares used in calculating diluted net income (loss) per share 127,487 132,318 125,608 125,529 ========= ========= ========= =========

Pro forma excludes all Commerce Division activity, acquisition-related costs, purchased in-process research and development, amortization of intangibles and other assets, impairment of intangibles and other assets, restructuring costs, impairment of investments, and amortization of deferred compensation. For the quarter ended September 30, 2001, a total of $28,568 was excluded from the Pro Forma Condensed Consolidated Statement of Operations. * These amounts give retroactive effect to the acquisition of FastForward Networks in October 2000. This transaction was accounted for as a pooling of interests. INKTOMI CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)

FOR THE THREE FOR THE TWELVE MONTHS ENDED MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------- ------------------------- 2001 2000* 2001 2000* --------- --------- --------- --------- Revenues Licenses $ 17,772 $ 51,724 $ 106,737 $ 135,796 Services 9,230 13,454 40,538 36,294 Web search 12,011 14,143 51,287 52,127 --------- --------- --------- --------- Total revenues 39,013 79,321 198,562 224,217 Cost of revenues Licenses 1,951 2,914 7,277 6,449 Services 2,878 4,647 18,245 13,952 Web search 5,574 6,755 24,655 21,774 --------- --------- --------- --------- Total cost of revenues 10,403 14,316 50,177 42,175 Gross Profit 28,610 65,005 148,385 182,042 Operating expenses Sales and marketing 26,496 40,494 138,069 123,046 Research and development 16,368 19,161 77,925 59,714 General and administrative 6,112 6,132 24,581 19,121 Amortization of intangibles and other assets 16,557 13,182 70,426 13,182 Impairment of intangibles and other assets 2,600 -- 44,915 -- Restructuring 7,282 -- 12,531 -- Purchased in-process research and development -- 4,400 430 4,400 Acquisition-related costs -- -- 19,497 3,999 --------- --------- --------- --------- Total operating expenses 75,415 83,369 388,374 223,462 --------- --------- --------- --------- Operating loss (46,805) (18,364) (239,989) (41,420) Impairment of investments -- -- (65,895) -- Other income, net 1,924 4,287 10,340 15,906 --------- --------- --------- --------- Pretax loss (44,881) (14,077) (295,544) (25,514) Provision for income taxes (145) (1,031) (938) (1,826) --------- --------- --------- --------- Net loss $ (45,026) $ (15,108) $(296,482) $ (27,340) ========= ========= ========= ========= Earnings per share Basic and diluted net loss per share $ (0.35) $ (0.13) $ (2.36) $ (0.24) ========= ========= ========= ========= Shares outstanding Shares used in calculating basic and diluted net loss per share 127,487 116,997 125,608 113,030 ========= ========= ========= =========

* These amounts give retroactive effect to the acquisition of FastForward Networks in October 2000. This transaction was accounted for as a pooling of interests. Certain prior period balances have been reclassified to conform to the current period presentation. INKTOMI CORPORATION UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data)

SEPTEMBER 30, SEPTEMBER 30, 2001 2000* ------------- -------------- ASSETS Current assets Cash and cash equivalents $ 18,518 $ 41,879 Short-term investments 65,995 176,632 --------- --------- Total cash, cash equivalents and short-term investments 84,513 218,511 Accounts receivable, net 22,449 50,633 Prepaid expenses and other current assets 5,915 7,895 --------- --------- Total current assets 112,877 277,039 Restricted Cash 128,957 119,616 Investments in equity securities 1,381 117,898 Property and equipment, net 76,101 85,055 Intangibles and other assets 263,807 319,648 --------- --------- Total assets $ 583,123 $ 919,256 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 7,979 $ 10,101 Accrued liabilities 58,646 38,816 Deferred revenue 34,610 53,774 Current portion of notes payable 2,500 5,307 Current portion of capital lease obligations 1,470 3,713 --------- --------- Total current liabilities 105,205 111,711 Notes payable, less current portion 4,231 1,261 Capital lease obligations, less current portion 1,418 2,487 Other liabilities 288 735 --------- --------- Total liabilities 111,142 116,194 Stockholders' equity Common Stock, $0.001 par value; 1,500,000 authorized at September 30, 2001 and 2000, respectively; 129,110 and 126,649 outstanding at September 30, 2001 and 2000, respectively 129 127 Additional paid-in capital 897,241 894,844 Deferred compensation and other (20,824) (46,514) Accumulated other comprehensive income (loss) (2,545) 60,143 Accumulated deficit (402,020) (105,538) --------- --------- Total stockholders' equity 471,981 803,062 --------- --------- Total liabilities and stockholders' equity $ 583,123 $ 919,256 ========= =========

* These amounts give retroactive effect to the acquisition of FastForward Networks in October 2000. This transaction was accounted for as a pooling of interests. Certain prior period balances have been reclassified to conform to the current period presentation.