Actuate Reports Second Quarter Financial Results; Q2 Pro Forma EPS of $0.02 and Sequentially Higher Operating Income

Business Wire, July 17, 2002

Business Editors/High Tech Writers

Actuate(R) Corporation (NASDAQ:ACTU), the Information Delivery market leader, today announced revenues and earnings for the second quarter of fiscal 2002. Revenues for the second quarter of 2002 totaled $27.5 million, compared with $32.5 million reported in the second quarter of 2001 and $28.8 million reported in the first quarter of 2002. Excluding the amortization of other intangibles and idle facility costs, pro forma income from operations in the second quarter of 2002 was $1.5 million. Pro forma diluted earnings per share were $0.02 for the second quarter of 2002 (See Table A), the same as the first quarter of 2002. Actual diluted earnings per share were $0.00 for the second quarter of 2002 (See Table B), also flat with the first quarter of 2002. Cash, cash equivalents and short-term investments increased $1.8 million in the second quarter of 2002 and days sales outstanding ended the quarter at 86 days, down 2 days from the first quarter of 2002.

"Although a downturn in corporate capital spending persists, we have managed our business for profitability," said Pete Cittadini, Actuate's president and chief executive officer. "We delivered pro forma earnings, generated positive cash flow and continued to acquire a large number of new customers. We will continue our unwavering focus on expense management and operating margin improvement even as we develop growth opportunities in this weak economic climate."

"We continue to receive very positive responses from the more than 200 customers who have purchased or upgraded to Actuate 6 since it became generally available in May," continued Cittadini. "Actuate 6 adds value by accessing application data and delivering information as high quality web pages and full function Excel spreadsheets that are easy to understand and ready to analyze. The increased scalability and standards-based integration capabilities of Actuate 6 helped facilitate the securing of new accounts and projects in Q2. With enhanced functionality such as support for server clusters and Web Services, Actuate 6 will help drive the expanded use of Information Delivery platforms by meeting the demands of information consumers throughout the enterprise and beyond."

Significant Q2 accomplishments for Actuate included the following:

-- Added 100 new customers;

-- Increased cash, cash equivalents and short-term investments by $1.8 million from March 31, 2002;

-- Increased services gross margin to 53% from 47% in Q1 2002;

-- Increased pro forma operating income to 5.5% of revenues and held EPS at $0.02;

-- Decreased days sales outstanding to 86 from 88 in Q1 2002.

In Q2, revenues from North American operations remained constant from Q1 2002 while international revenues declined as a percentage of total revenues to 26% from 29% in Q1 2002 and indirect revenues declined to about 30% of total revenues from 40% in Q1 2002.

During Q2, Actuate added 100 new customers, indicating both continued customer acceptance of the company's core products and increased recognition of the new line of e.Spreadsheet Server products. The company continued to expand its Global 2000 customer base across a wide variety of industry segments, particularly health care, electronics, publishing, pharmaceuticals and transportation. Customers making substantial initial commitments to Actuate in Q2 included Accountants, Inc., Choice Hotels International, DTE Energy, the Federal Aviation Administration, Fleet Credit Card Services, Massachusetts Financial Services, Pitt Ohio Express and Variant Leasing, among others.

Sizable repeat orders were received from American Express, Bank of America, Blue Cross Blue Shield, Citibank, Federal Reserve Bank, Lockheed Martin, Marriott International, UBS Paine Webber and Wachovia Bank, among other companies.

Internationally, Actuate won significant business from, among others, Am-Beo, BroDigit, Clerical Medical Investment Management, Deutsche Bank, PCA Life Insurance, Salomon Brothers, SER, Toshiba and Wiss Reinsurance.

About Actuate Corporation

Actuate Corporation is the leading provider of Information Delivery solutions for Global 2000 companies and packaged application software vendors. Actuate provides the most effective platform for retrieving business information from corporate databases and delivering interactive Web pages and Excel spreadsheets to customers, prospects, partners and employees. Its infrastructure software is the foundation for applications such as client reporting, key performance indicators, CRM and e-Procurement. Actuate content is seamlessly integrated into corporate Web sites and packaged applications and can be printed and used to exchange data with other applications. By instantly delivering personalized content from tens to millions of end-users - without downloads - companies using Actuate can increase revenue, reduce costs and improve customer service. Actuate has over 1,800 direct customers and over 250 OEM partners, including almost thirty percent of the Fortune 1000.