Exhibit 99.1
Investor Relations: Peter Williams – pwilliams@saba.com – Tel. +1-650 581-2500
Saba Announces Second Quarter Fiscal 2006 Financial Results
Total Revenues Grow 57% and License Revenue Grows 54% Over Same Quarter Last Year
Redwood Shores, Calif., January 5, 2006– Saba (NASDAQ: SABA), a leading provider of human capital management (HCM) solutions, today reported financial results for its second quarter ended November 30, 2005.
Second Quarter Results
| • | | Total revenues in the second quarter of fiscal 2006 were $16.2 million, representing a 57% increase compared to $10.3 million in the same quarter last year. |
| • | | License revenue was $5.1 million, representing a 54% increase compared to $3.3 million in the same quarter last year. |
| • | | Maintenance and support revenue was $4.7 million, representing a 52% increase compared to $3.1 million in the same quarter last year. |
| • | | Revenue from Saba Consulting, OnDemand and Education services was $6.4 million representing a 67% increase compared to $3.9 million in the same quarter last year. |
| • | | Gross margins were 66% in the quarter compared to 69% in the same quarter of the prior fiscal year. |
| • | | On a GAAP basis, net profit was $0.01 per share, or $131,000, compared to a net loss of $0.04 per share, or $682,000, in the same quarter last year. |
| • | | Deferred revenue at November 30, 2005 was $13.1 million, a $1.4 million increase from $11.7 million at the end of the prior quarter. |
| • | | Cash and cash equivalents increased by $1.9 million to $13.7 million from $11.8 million in the prior quarter. |
| • | | Saba completed software deals for 21 customers in the quarter. |
“We are pleased with the financial results announced today and are entering the third quarter with a solid pipeline. We are well positioned to achieve our growth objectives for the remainder of the year, as we continue to see a strong and growing market opportunity,” said Bobby Yazdani, chairman and CEO of Saba. “Saba remains committed to delivering the most advanced HCM solutions to the market. Our planned acquisition of Centra will expand Saba’s solution, combining Centra’s collaborative learning technologies with Saba’s learning management suite to deliver the industry’s first complete enterprise learning software solution.”
Saba Highlights From the Second Quarter of Fiscal Year 2006
Select Wins: In the second quarter of fiscal 2006, Saba concluded software license agreements with new customers in North America, EMEA, Latin America and Australia. These new wins include: Cadbury Schweppes (Mexico), Edwards Lifesciences, Highmark, New York Life, Queensland Government (Australia), and STMicroelectronics.
Select Expansions: Many existing Saba customers also expanded the number of licenses for current Saba products, purchased licenses for additional components of Saba’s HCM suite and/or secured additional services. These customers include: Abbey, ABN AMRO, Allianz, Allina Health Systems, Banco Itaú, BMW, BUPA, CEMEX, Continental Airlines, Credit Suisse, CSS, Daimler Chrysler, Danish Ministry of Finance, Dell, Hitachi, Kumba Resources, Medtronic, Nissan, Northrop Grumman, Novartis, Petrobras, Philips Electronics, Renault, Royal Bank of Scotland, Shinsei Bank, Sonogal, Sprint, Telmex, Union Bank of California (UBOC), Visteon, Volkswagen de Mexico and Wilkinson.
Public Sector Momentum: Saba also marked a significant accomplishment as the total number of its government, aerospace and defense, energy and education users has topped 5 million. With more than 100 public sector customers, Saba brings broad and deep experience to its partnerships with these organizations. In the first nine months of 2005, for example, the U.S. Naval Education and Training Command (NETC) supported more than 2.3 million enrollments from its sailors, retirees, reservists, family members and the Navy’s civilian workforce.
Solution Enhancements: Introducing its Competency-Driven HCM Solution™, Saba became the first HCM provider to offer a comprehensive competency management solution. Saba resells, integrates and certifies competency libraries with Saba Enterprise 2005, its award-winning next-generation HCM software suite, enabling companies to make real-time, strategic business decisions based on employee skills and competencies. Saba’s Competency-Driven HCM Solution is a one-stop-shop solution combining proven competency-based HCM infrastructure, leading HCM competency libraries and certified competency methodologies.
Services Growth: Saba recognized key milestones in both its Saba OnDemand™ application management service and its consulting services. Saba’s OnDemand service more than doubled in the last year, with over 700,000 users hosted as of early September 2005. Likewise, usage of Saba Consulting services doubled in the Americas region during the same period, with nine out of ten new Saba customers using the service and approximately one out of four new customers embracing Saba’s Rapid Start service approach.
Acquisition: Saba and Centra (NASDAQ: CTRA) announced plans for Saba to acquire Centra, extending Saba’s market leadership within the enterprise learning software industry. Centra’s collaborative learning offering and Saba’s enterprise learning management suite are complementary and together provide the industry’s first complete enterprise learning solution. Combined, the two companies serve 1,100 customer organizations, including over 50 of the Fortune 100. The transaction has been approved unanimously by the Boards of Directors of both companies and is expected to close during the third quarter of Saba’s fiscal year ending May 31, 2006, subject to stockholder approval and other customary closing conditions.
Business Outlook
The following statements are based on current expectations as of the date of this release. These statements are forward-looking, and actual results may differ materially. Saba does not undertake to update these targets in any way or for any reason.
| | • | | On a standalone basis without giving effect to the Centra transaction, Saba anticipates revenue for its third quarter of fiscal 2006 (February 28, 2006) to be in the range of $16 million to $17 million. |
| | • | | On a standalone basis without giving effect to the Centra transaction, Saba anticipates GAAP net earnings per share for its third quarter of fiscal 2006 (February 28, 2006) to range from breakeven to a profit of $0.02. |
Conference Call
The Company will host a conference call on second-quarter results at 2:00 p.m. Pacific Time on Thursday, January 5, 2006. The call will be available via Web cast athttp://investor.saba.com or by dialing 1-612-332-0634.
A replay of the call will be available athttp://investor.saba.com or by calling +1-320-365-3844 and entering code 805177, after 5:30 p.m. Pacific Time on January 5, 2006 through January 19, 2006 at 11:59 p.m. Pacific Time.
Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding Saba’s business outlook, including anticipated revenue and per share earnings, and statements regarding Saba’s market position, momentum, sales pipeline, ability to achieve growth objectives, strong and growing market opportunity and ability to close the Centra acquisition. Saba’s actual results could differ materially from those expressed in any forward-looking statements. Risks and uncertainties Saba faces that could cause results to differ materially include risks associated with: Saba’s dependence on growth of the markets for Saba’s products, dependence on acceptance of Saba’s products by customers and channel partners, the success of Saba’s alliances, the ability of Saba to close and successfully integrate the Centra acquisition; fluctuation in customer spending, length of Saba’s sales cycle, competition, rapid technological change, dependence on new product introductions and enhancements and potential software defects. Readers should also refer to the section entitled “Risk Factors” on pages 26 through 34 of Saba’s Annual Report on Form 10-K dated August 29, 2005 and similar disclosures in subsequent Saba periodic SEC reports. The forward-looking statements and risks stated in this press release are based on information available to Saba today. Saba assumes no obligation to update them.
About Saba
Saba (NASDAQ: SABA) is a leading provider of integrated Human Capital Management (HCM) solutions. Saba enables The Aligned Enterprise™ by aligning goals, developing and motivating people, and measuring results — driving greater organizational performance.
More than 10 million current users in over 30 countries use Saba today. Customers include ABN AMRO, Alcatel, Bank of Tokyo-Mitsubishi, BMW, CEMEX, Cisco Systems, DaimlerChrysler, Dell, Deloitte Touche Tohmatsu, EDS, EMC Corporation, FedEx Kinko’s, Insurance Australia Group, Lockheed Martin, Medtronic, National Australia Bank, Novartis, Petrobras, Procter & Gamble, Scotiabank, Sprint, Standard Chartered Bank, Swedbank and the U.S. Army and U.S. Navy.
Headquartered in Redwood Shores, California, Saba has 20 offices worldwide. For more information, please visit www.saba.com or call (+1) 877-SABA-101 or (+1) 650-779-2791.
###
Saba, the Saba logo, and the marks relating to other Saba products and services referenced herein are either trademarks or registered trademarks of Saba Software, Inc. All other trademarks are the property of their respective owners.
Saba Software, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
| | | | | | | | |
| | | November 30,
2005
| | | May 31,
2005
| |
ASSETS | | | | | | | | |
| | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 13,714 | | | $ | 15,408 | |
Restricted cash | | | 140 | | | | 140 | |
Accounts receivable, net | | | 13,663 | | | | 15,187 | |
Prepaid expenses and other current assets | | | 1,915 | | | | 1,543 | |
| | |
|
|
| |
|
|
|
Total current assets | | | 29,432 | | | | 32,278 | |
| | |
Property and equipment, net | | | 937 | | | | 874 | |
Goodwill and other intangible assets | | | 19,768 | | | | 20,157 | |
Other assets | | | 858 | | | | 990 | |
| | |
|
|
| |
|
|
|
Total assets | | $ | 50,995 | | | $ | 54,299 | |
| | |
|
|
| |
|
|
|
LIABILITIES & STOCKHOLDERS’ EQUITY | | | | | | | | |
| | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 5,644 | | | $ | 4,975 | |
Accrued expenses | | | 5,527 | | | | 7,498 | |
Deferred revenue | | | 12,574 | | | | 12,406 | |
Current portion of debt and lease obligations | | | 4,557 | | | | 2,300 | |
| | |
|
|
| |
|
|
|
Total current liabilities | | | 28,302 | | | | 27,179 | |
| | |
Deferred revenue | | | 513 | | | | 51 | |
Accrued rent | | | 2,816 | | | | 2,839 | |
Debt and lease obligations, less current portion | | | — | | | | 3,396 | |
| | |
|
|
| |
|
|
|
Total liabilities | | | 31,631 | | | | 33,465 | |
| | |
Stockholders’ equity: | | | | | | | | |
Common stock | | | 73 | | | | 73 | |
Additional paid-in capital | | | 209,752 | | | | 209,566 | |
Treasury stock | | | (232 | ) | | | (232 | ) |
Accumulated deficit | | | (189,919 | ) | | | (188,428 | ) |
Accumulated other comprehensive loss | | | (310 | ) | | | (145 | ) |
| | |
|
|
| |
|
|
|
Total stockholders’ equity | | | 19,364 | | | | 20,834 | |
| | |
|
|
| |
|
|
|
Total liabilities and stockholders’ equity | | $ | 50,995 | | | $ | 54,299 | |
| | |
|
|
| |
|
|
|
Goodwill includes a preliminary allocation of the purchase price to acquired assets and assumed liabilities, and is subject to change.
Saba Software, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Three months ended
November 30,
| | | Six months ended
November 30,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
Revenues: | | | | | | | | | | | | | | | | |
License | | $ | 5,124 | | | $ | 3,318 | | | $ | 8,520 | | | $ | 5,840 | |
Services | | | 11,108 | | | | 7,019 | | | | 21,340 | | | | 13,810 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | | 16,232 | | | | 10,337 | | | | 29,860 | | | | 19,650 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Cost of revenues: | | | | | | | | | | | | | | | | |
Cost of license | | | 34 | | | | 97 | | | | 293 | | | | 176 | |
Cost of services | | | 5,505 | | | | 3,144 | | | | 10,547 | | | | 6,159 | |
Amortization of acquired developed technology | | | — | | | | — | | | | — | | | | 2 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total cost of revenues | | | 5,539 | | | | 3,241 | | | | 10,840 | | | | 6,337 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Gross profit | | | 10,693 | | | | 7,096 | | | | 19,020 | | | | 13,313 | |
| | | | |
Operating expenses: | | | | | | | | | | | | | | | | |
Research and development | | | 2,825 | | | | 2,415 | | | | 5,583 | | | | 4,780 | |
Sales and marketing | | | 6,093 | | | | 4,129 | | | | 11,563 | | | | 8,466 | |
General and administrative | | | 1,337 | | | | 1,184 | | | | 2,769 | | | | 2,316 | |
Amortization of purchased intangible assets | | | 170 | | | | — | | | | 340 | | | | — | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total operating expenses | | | 10,425 | | | | 7,728 | | | | 20,255 | | | | 15,562 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income (loss) from operations: | | | 268 | | | | (632 | ) | | | (1,235 | ) | | | (2,249 | ) |
Interest (expense) income and other, net | | | (111 | ) | | | (10 | ) | | | (222 | ) | | | (28 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income (loss) before provision for income taxes | | | 157 | | | | (642 | ) | | | (1,457 | ) | | | (2,277 | ) |
Provision for income taxes | | | (26 | ) | | | (40 | ) | | | (34 | ) | | | (82 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income (loss) | | $ | 131 | | | $ | (682 | ) | | $ | (1,491 | ) | | $ | (2,359 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Basic net income (loss) per share | | $ | 0.01 | | | $ | (0.04 | ) | | $ | (0.09 | ) | | $ | (0.16 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Diluted net income (loss) per share | | $ | 0.01 | | | $ | (0.04 | ) | | $ | (0.09 | ) | | $ | (0.16 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Shares used in computing basic net income (loss) per share | | | 17,523 | | | | 16,107 | | | | 17,407 | | | | 15,061 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Shares used in computing diluted net income (loss) per share | | | 18,082 | | | | 16,107 | | | | 17,407 | | | | 15,061 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
