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Centra Boasts Record Q4 Revenues

Centra Software, Inc. , the Lexington, Mass.-based provider of eLearning and collaboration software, yesterday announced results for the fourth quarter and full year ended December 31, 2001.

Signing a record 97 new customers, Centra's revenue climbed to $11.0 million in the fourth quarter, a 41 percent increase over the same period last year, and 20 percent sequential growth over the third quarter of 2001.

On a pro forma basis, excluding non-cash stock-based compensation expense, amortization of goodwill and other intangible assets, net loss for the fourth quarter of 2001 was $1.9 million, or $0.08 per share, compared to a pro forma net loss of $3.2 million, or $0.14 per share reported in the fourth quarter of 2000.

This was a significant improvement over the pro forma net loss of $3.3 million or $0.13 per share in the third quarter of 2001. Net loss for the fourth quarter of 2001 was $2.6 million, or $0.10 per share, compared with a net loss of $3.4 million, or $0.15 per share, for the same period last year.

Centra's 2001 fourth quarter gross margin increased to 84 percent, a 400 basis point improvement from the third quarter. The higher gross margin percent was attributed to increased margins on Centra's outsourced application service (ASP) and its professional services business during the fourth quarter.

"We had a solid fourth quarter as demand for Centra's solutions continued to grow, and as we continued to win the majority of the competitive evaluations that we participated in. In addition, we grew our market share by signing a record number of new customers in the fourth quarter, including most of the deals that were delayed by economic concerns in the third quarter," said Leon Navickas, Chairman and Chief Executive Officer.

"This past year we grew our international sales and our ASP business according to plan, extended our platform with the acquisition and successful integration of Mindlever, generated significant traction and momentum in sales of the Knowledge Products, and achieved Centra's first cash-flow positive quarter."

Software license revenue, which accounted for 69 percent of total revenue for the quarter, was $7.6 million, a 21 percent increase over the same period last year and an 18 percent increase over the prior quarter.

Services revenue for the quarter increased by 24 percent over the previous quarter to $3.4 million and Centra says was driven by increased demand over the second half of 2001 for the firm's ASP delivered products.

A highlight of Centras fourth quarter, announced at the beginning of the year, is its agreement to be acquired by SmartForce PLC. for about $284 million in stock in a stock merger.

The deal is expected to be completed during the second quarter of 2002 and that the acquisition will be one cent accretive to earnings per share for the second half of 2002.

In its financial outlook, Centra expects to report revenue in the range of $11.0 to $11.3 million for the first quarter of 2002 and anticipates a pro forma net loss, excluding non-cash stock-based compensation expense and other intangible assets, for the first quarter of 2002 to be $0.08 per share.

Target revenues for 2002 have been set in the range of $55 million to $60 million, representing annual revenue growth of approximately 50 percent over 2001. Gross margins for the year are expected to be in the range of 84 percent to 86 percent.

Based on its current assessment of market conditions and the firm's prospects, Centra forecasts achieving break even, on a pro forma basis, in the second quarter of 2002. The objective is to achieve earnings per share for 2002, on a pro forma basis, in the range of $0.10 to $0.13 per share.