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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 19, 2002

DALEEN TECHNOLOGIES, INC.

Delaware		0-27491		65-0944514
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S.Employer Identification No.)

902 Clint Moore Road, Suite 230 Boca Raton, Florida (Address of principal executive offices)		33487 (Zip Code)

(561) 999-8000
(Registrant’s telephone number, including area code)

 

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INFORMATION WITH RESPECT TO FORWARD-LOOKING STATEMENTS
SIGNATURES

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Item 5 – Other Events.

     Daleen Technologies, Inc. (“Daleen” or the “Company”), a global provider of high performance billing and customer care software solutions that manage the revenue chain, on July 19, 2002, reported its second consecutive quarter of revenue growth, while continuing to hold expense levels for the second quarter of 2002. The Company reported revenues of over $2.0 million for its second quarter of 2002. Net loss for the quarter was $2.3 million, or $0.10 per share, compared with a $2.8 million net loss, or $0.13 per share during the first quarter of 2002, and compared to a net loss of $18.0 million, or $2.02 per share in the second quarter of 2001.

     Second Quarter Highlights:

	•		Daleen recorded an increase in revenue from existing customers, including $700,000 in growth-related new license revenue from Integra Telecom, a provider of local, long-distance and Internet services for small and midsize businesses.
	•		Total expenses were $4.8 million for the second quarter of 2002, which included $745,000 in restructuring charges, compared to total expenses of $4.8 million for the first quarter of 2002, and compared to total expenses of $21.8 million for the second quarter of 2001. Total expenses in the second quarter of 2001 included restructuring charges of $4.8 million. The reduced level of expenses reflects the Company’s continued improvements in sustaining a lower cost of operations.
	•		Total expenses for the six months ended June 30, 2002 were $9.7 million, compared to $49.5 million for the same period in 2001. Total expenses for the six months ended June 30, 2002 and 2001 included $745,000 and $7.8 million of restructuring charges, respectively.
	•		The Company realized a gain of $391,000 in non-operating income on the sale of its subsidiary, PartnerCommunity, Inc.
	•		Daleen was recognized as a finalist in the Operational Excellence category of the 2002 Billing World Excellence Awards, which the telecom community has come to regard as an important acknowledgement of the best the industry has to offer.

     The Company has methodically reduced expenses and cash used to support operations over the previous eighteen months to bring its business in line with a severe downturn in overall market conditions and in order to reach profitability as quickly as possible. Daleen anticipates lower expense levels in the third quarter and a further reduction in its use of cash.

     Daleen’s key financial objectives include: increasing revenue in each of the coming quarters, maintaining operating expenses below $3.5 million per quarter and keeping cash used in the third quarter to below $2.5 million.

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Daleen Technologies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets
(in thousands)
Unaudited

						June 30				December 31
						2002				2001
Assets
Current assets:
		Cash and cash equivalents				$	7,203			$	13,093
		Restricted Cash					30				30
		Accounts receivable, net					1,939				2,885
		Other current assets					294				436
			Total current assets				9,466				16,444
Property and equipment, net							1,797				2,704
Other assets							1,712				2,045
			Total assets			$	12,975			$	21,193
Liabilities and Stockholders’ Equity
Current liabilities:
		Accrued payroll and other accrued expenses					1,831				3,733
		Accounts payable					212				678
		Billings in excess of costs					845				1,323
		Deferred revenue					697				1,013
			Total current liabilities				3,585				6,747
Minority Interest							—				184
Total stockholders’ equity							9,390				14,262
				Total liabilities and stockholders’ equity		$	12,975			$	21,193

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Daleen Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations
(in thousands except per share data)
Unaudited

				Three Months Ended												Six Months Ended
				June 30				March 31				June 30				June 30				June 30
				2002				2002				2001				2002				2001
Revenue:
	License fees			$	753				211				1,063				963				2,775
	Professional services and other				1,290				1,689				2,351				2,983				5,750
		Total revenue			2,043				1,900				3,414				3,946				8,525
Cost of revenue:
	License fees				63				36				321				98				368
	Professional services and other				608				1,003				1,608				1,614				5,043
		Total cost of revenue			671				1,039				1,929				1,712				5,411
Gross margin					1,372				861				1,485				2,234				3,114
Operating expenses:
	Sales and marketing				1,083				1,149				2,632				2,233				6,955
	Research and development				1,054				1,328				3,179				2,386				8,506
	General and administrative				1,250				1,333				5,639				2,583				8,936
	Amortization of goodwill and other intangibles				—				—				3,642				—				8,579
	Impairment of long lived assets				—				—				—				—				3,307
	Restructuring charges				745				—				4,771				745				7,764
		Total operating expenses			4,132				3,810				19,863				7,947				44,047
Operating loss					(2,760	)			(2,949	)			(18,378	)			(5,713	)			(40,933	)
Other income:
	Interest income and nonoperating income, net				118				147				373				268				619
	Gain on sale of subsidiary				391				—				—				391				—
		Total other income, net			509				147				373				659				619
Net loss				$	(2,251	)			(2,802	)			(18,005	)			(5,054	)			(40,314	)
	Less: preferred stock dividends				—				—				(26,065	)			—				(26,065	)
Net loss applicable to common shareholders				$	(2,251	)			(2,802	)			(44,070	)			(5,054	)			(66,379	)
Net loss applicable to common shareholders per share - basic and diluted				$	(0.10	)			(0.13	)			(2.02	)			(0.22	)			(3.05	)
Weighted average outstanding shares - basic and diluted					23,532				22,225				21,812				22,882				21,799

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INFORMATION WITH RESPECT TO FORWARD-LOOKING STATEMENTS

     Certain matters discussed in this report may be considered “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company and members of its management as well as the assumptions on which such statements are based. Prospective investors and stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include variance of quarterly operating results; not yet achieving profitability; liquidity and capital resources; competition; need to expand sales and distribution capabilities; lengthy sales cycles and timing of contract awards; general economic conditions, including the economic conditions affecting the Company’s existing and prospective customers; ability to attract and retain qualified employees; our continued use of strategic relationships to implement and sell our products; managing growth; planned international operations; meeting customer expectations; general market conditions, and quality of software delivered. These and additional important factors to be considered are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, and in the Company’s Quarterly Reports on Form 10-Q for the quarter ended March 31, 2002. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		DALEEN TECHNOLOGIES, INC
		By:		/s/ Jeanne Prayther
				Jeanne Prayther Chief Financial Officer, Secretary and Treasurer
Dated: July 19, 2002

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