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Corio Reports Strong Results, New Execs

San Carlos, Calif.-based enterprise ASP Corio Inc. Thursday night reported strong financial results for the quarter, with lower operating costs and higher revenues; and appointed three new VPs, including a new CFO.

Application management services revenue, consisting principally of monthly fees from hosting arrangements, reached $8.1 million in the second quarter, up from $2.8 million in the same period of the previous year – a 190-percent increase. Professional services and other revenues, for the same periods, which represent 30 percent of total revenue, declined to $3.4 million from $7.6 million, though overall revenue was still up, from $10.4 million in Q2 last year to $11.5 million last quarter.

Corio expects to report $10.5 million in revenue for Q3, $11.5 million for Q4 and $47 million for the 2001 fiscal year. Operating loss per-share was $0.34 for Q2, and is expected to be $0.36 and $0.33 for the next two quarters, with a $1.42 loss per share expected for the year.

Corio reduced its cash burn in Q2 to $11.2 million, down from $15 million in Q1, so if Corio continues on the same path, its $105 million in cash and equivalents should carry the company through 10 more quarters, up from 8 quarters at the previous burn rate.

Corio achieved these results in part by culling of its non-paying customer base. "We've been very aggressive in terminating customers who have not fulfilled their financial obligations to us. We like to think we're through the customer churn," President and CEO George Kadifa said in an analyst call Thursday.

During the quarter, Corio cut its workforce by 15 percent to 350, and eliminated one facility, moves expected to save $12 million annually. Kadifa noted that Corio carries less debt than some of its competitors, with only $15.5 million total debt. "As a result, we're not subject to the same restraints as companies with a large debt balance," he said.

Corio has also been signing larger customers, including Ingersoll-Rand, a leading diversified industrial firm, and Quadrem, a mining, minerals and metals eMarketplace. This effort has doubled the average monthly recurring revenue per customer from $20,000 in Q2 last year to $40,000 last quarter.

In addition to its financial results, Corio also announced three new executive appointments.

Barbara J. Posch has been appointed to the position of senior VP and chief financial officer of Corio. Posch has served as VP of finance of the company since January 2000 and has had substantial responsibility for building and managing the company's finance team. Posch replaces Eric Keller, who served the company as CFO since February 2000. Keller announced in May that he would leave the company to pursue other interests once a replacement was found.

Arthur Chiang, Corio's senior VP of corporate development, will take on additional responsibility for legal matters and investor relations. Since joining Corio in 1999, Chiang has been a key player in establishing and implementing Corio's business model in addition to leading several corporate development initiatives.

Jeff Lucchesi has been appointed senior VP of worldwide operations for Corio, replacing Brad Boston, who is leaving Corio to become CIO of Cisco. Since joining the company in March 2000, Lucchesi has led the growth and development of Corio's hosting operations.