Smartforce Announces First Quarter Results

Company To Immediately Implement Restructuring Plan to Restore Profitability.

SmartForce, the world's largest e-Learning company, today announced financial results for the first quarter ended 31 March 2002.

For the first quarter of 2002, the Company posted revenues of $43.0 million, within the $42 to $43 million range previously announced. Net loss before amortization of acquired intangibles and one-time charges in connection with the termination of the Company’s proposed merger with Centra, was $14.9 million, or a loss of $0.26 per share, which is also consistent with the previously announced range of a loss of $0.26 to $0.27 per share.

These results were in line with the expected first quarter results that the Company previously announced on 2 April 2002. The Company also announced today that it is implementing a detailed restructuring plan to return to profitability. Under the plan, SmartForce will reduce its staff by 421 people, or approximately 20% of its workforce.

The Company has also identified substantial non-headcount related cost savings, which are also being pursued without delay. As previously announced, the Company expects to record a substantial restructuring charge during the second quarter in connection with the headcount reductions, facilities consolidation and other activities under the new operating plan. The Company estimates that the charge will be approximately $30 million.

"Our company, our industry, and enterprise software generally, face a challenging market environment,” said Greg Priest, Chairman and Chief Executive Officer of SmartForce. “SmartForce is the world’s leading corporate e-Learning company, but we did not get where we are by taking half measures in the face of business challenges. Our cost base is simply too high for current market realities. At the same time, we have both the need—and, in light of recent events, the opportunity—to renew the Company’s focus on our core business strategies. Although we face real challenges, if we execute well in the face of them, we can emerge leaner, stronger and more focused. We are, in short, fully committed to take the steps that must be taken to ensure that we retain and build upon our position of market leadership and return to profitability.”

April 19th, 2002