- The Washington Times - Wednesday, February 7, 2001

MicroStrategy Inc. reported yesterday it had $224 million in revenue for 2000, a 48 percent increase over 1999 revenues of $151 million.

But the Vienna, Va.-based company, which makes software that analyzes corporate data on marketing and customer relationships, still lost $261,306 last year.

Yesterday's earnings report closes a difficult year for MicroStrategy that included layoffs and heavy fines from the Securities and Exchange Commission (SEC).

"I think the tide is turning. [Last year] was a challenging year … but I think we've weathered the challenges pretty well," Michael Saylor, MicroStrategy's founder and chairman, said in a conference call with investors.

Robert Tholemeier, an analyst with investment banker Wells Fargo Van Kasper, credits MicroStrategy with turning itself into a well-run company.

"Software companies are never out of the woods, but there's been a big transformation at MicroStrategy. They have turned themselves from a company with good technology and great vision to a company with great technology and vastly improved operations," Mr. Tholemeier said.

Mr. Saylor also said yesterday he will sell 15,000 shares of his stock in the company at market value each trading day over the next 24 months to raise money for the on-line university he has proposed.

Mr. Saylor owns 43 million shares of stock in the company.

"I remain strongly confident in the future prospects of MicroStrategy, as evidenced by the fact that I plan to be holding nearly 40 million shares a year from now," he said.

Mr. Saylor made the surprising announcement last year that he would give $100 million as a down payment to begin an on-line university that would offer a Harvard-quality education to anyone on the planet for free.

Chief Operating Officer Sanju Bansal also said he will sell up to $18 million worth of his investment in the company during the first quarter of 2001 to diversify his investment portfolio. Following the first quarter, Mr. Bansal plans to sell up to 5,000 shares a day for the remainder of the year.

This year, MicroStrategy will slow down its growth while also trying to boost revenue by 30 percent.

"We're looking at 2001 as a year [to get] back to basics," Mr. Saylor said.

He said the company won't hesitate to shut down unprofitable operations.

Mr. Saylor and two other executives agreed in December to pay $11 million to settle federal regulators' accusations of civil accounting fraud. Mr. Saylor, Mr. Bansal and former Chief Financial Officer Mark Lynch neither admitted to nor denied wrongdoing in the settlement with the SEC.

The SEC said the three overstated MicroStrategy's revenue and earnings from June 1998 through March 2000. While the company's financial reports showed net income during that time, they actually should have reported net losses, the regulators said.

In August, the company laid off 234 workers.

MicroStrategy was up 81 cents a share on the Nasdaq Stock Market yesterday, closing at $16.94 a share.

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