Exhibit 99.1
Ariba Reports Results for the Third Quarter of Fiscal Year 2003
GAAP Net Loss Narrows to $0.01 Per Share
SUNNYVALE, Calif., July 22, 2003—Ariba, Inc. (Nasdaq: ARBA), the leading provider of Enterprise Spend Management (ESM) solutions, today announced results for the quarter ended June 30, 2003.
Total revenue for the third quarter of fiscal 2003 was $56.6 million, representing a decrease of 4 percent from $58.8 million for the third quarter of fiscal 2002. Software license revenue for the quarter was $21.3 million, a decrease of 21 percent from $26.9 million for the corresponding fiscal 2002 quarter, while maintenance and service revenue was $35.3 million, an increase of 11 percent as compared to $31.9 million for the year-ago quarter. Net loss on a GAAP basis for the third quarter of fiscal 2003 was $3.4 million, or a loss of $0.01 per share. For the corresponding quarter in fiscal 2002, net loss on a GAAP basis was $198.7 million, or a loss of $0.76 per share.
Net loss for the third quarter of fiscal 2003 included charges of $364,000 for stock-based compensation and $5.3 million for restructuring and lease abandonment costs. For the corresponding quarter in fiscal 2002, Ariba recorded charges of $141.3 million for amortization of goodwill and other intangible assets, $3.3 million for amortization of stock-based compensation, and $57.1 million for restructuring and lease abandonment costs.
New Customers Added; Existing Customers Expand Ariba Spend Management Footprint
“A number of macro factors made this one of the most challenging quarters of the last couple of years for us, and we witnessed what I would characterize as a pause in many of our sales cycles,” said Bob Calderoni, CEO, Ariba. “However, even in these difficult economic times, we neared GAAP profitability, added several new customers to our client base, and sold additional spend management solutions to existing customers.”
Ariba added several new customers in the third quarter, including The Goodyear Tire & Rubber Company, which invested in Ariba® Buyer™ to improve its global procurement processes, and AXA e-Services, the internal services company of AXA Group of France, which selected Ariba Buyer and Ariba® Enterprise Sourcing™. New name Ariba customers from the Asia Pacific region include One Steel, the largest manufacturer of steel long products and a leading metals distribution company in Australia, which selected Ariba Enterprise Sourcing and Ariba® Contracts™, and San Miguel Corporation, a leading food, beverage and packaging company in Asia, which selected the entire Ariba Spend Management solution set to transform its purchasing process company-wide.
Existing customers which expanded their Ariba Spend Management investment with the purchase of additional solutions last quarter include Avaya, a leading global provider of communications networks and services for businesses, which added Ariba Enterprise Sourcing, Ariba® Analysis™, Ariba Contracts and Ariba® Invoice™. BMW Group AG added Ariba Contracts, and Saks Incorporated chose Ariba Analysis, Ariba Contracts and Ariba Invoice. Towers Perrin selected Ariba Enterprise Sourcing, and PolyOne added Ariba® Travel & Expense™.
Latest Release of Ariba Spend Management Now Available
At the end of July, the latest release of the Ariba Spend Management solution set will be generally available. A focus of the upgraded solution set is the provision of new capabilities for services spend management, enabling companies to manage the complete services spend management process, covering a wide range of services categories from MRO to facilities. New capabilities around Ariba® Supplier Performance Management™ (SPM) are another highlight of the latest product release. Ariba SPM is designed to help companies maximize their spend management savings and to improve the collaborative relationship between buyers and suppliers.
Conference Call Information
Ariba will hold a conference call today at 3:00 p.m. PDT to discuss the quarterly results. To join the call, please dial (800) 891-2713 or (706) 634-5558. There will also be a live web broadcast available on the investor relations section of the company’s website at www.ariba.com or at www.vcall.com. A replay of this call will be available approximately 9:00 p.m. EDT today through July 30, 2003 by dialing (800) 642-1687 or (706) 645-9291 and entering the pass code 1664260.
About Ariba, Inc.
Ariba, Inc. is the leading Enterprise Spend Management (ESM) solutions provider. Ariba helps companies develop and leverage spend management as a core competency to drive significant bottom line results. Ariba Spend Management software and services allow companies to align their organizations with a spend-centric focus and deploy closed-loop processes for increased efficiencies and sustainable savings. Ariba representatives can be contacted at (650) 390-1000 or through the company’s website at www.ariba.com.
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Ariba and the Ariba logo are registered trademarks of Ariba, Inc. Ariba Spend Management, Ariba Analysis, Ariba Buyer, Ariba Category Management, Ariba Contracts, Ariba Travel & Expense, Ariba Workforce, Ariba Invoice, Ariba eForms, Ariba Enterprise Sourcing, Ariba Supplier Performance Management, Ariba Supplier Network, BPM Services, Power Sourcing, Total Spend Capture and PO-Flip are trademarks or service marks of Ariba, Inc.
Ariba Safe Harbor
Safe Harbor Statement under the Private Securities Litigation Reform Act 1995: Information and announcements in this release involve Ariba’s expectations, beliefs, hopes, plans, intentions or strategies regarding the future and are forward-looking statements that involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Ariba as of the date of the release, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to Ariba’s operating and financial results to differ materially from its current expectations include, but are not limited to: delays in development or shipment of new versions of Ariba’s products and services; lack of market acceptance of Ariba’s existing or future products or services; inability to continue to develop competitive new products and services on a timely basis; introduction of new products or services by major competitors; the ability to attract and retain qualified employees; difficulties in assimilating acquired companies; the impact of recent workforce reductions on Ariba’s operations; lengthening sales cycles and the deferrals of anticipated orders; declining economic conditions, including a recession; inability to control costs; changes in the company’s pricing or compensation policies; inability to successfully manage a reduction in the company’s workforce; significant fluctuations in our stock price; the outcome of legal proceedings relating to the restatement of our financial statements; the possibility that stockholders or regulatory authorities may initiate additional proceedings against Ariba and/or our officers and directors as a result of the restatements; and the level of professional fees and expenses incurred by Ariba in connection with its previously disclosed accounting review and associated regulatory and litigation proceedings. Factors and risks associated with our business, including a number of the factors and risks described above, are discussed in Ariba’s Form 10-K filed April 10, 2003 and in its Form 10-Q filed May 12, 2003.
Ariba Safe Harbor
Investor Contact: John Ederer, (650) 390-2742 or jederer@ariba.com
Media Contact: Louise Runkle, (650) 390-4204 or lrunkle@ariba.com
ARIBA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
| | | June 30, 2003
| | | September 30,
2002
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ASSETS | | | | | | | | |
Cash, cash equivalents and investments | | $ | 213,930 | | | $ | 245,251 | |
Restricted cash | | | 28,784 | | | | 30,282 | |
Accounts receivable, net | | | 11,595 | | | | 7,984 | |
Prepaid expenses and other assets | | | 11,828 | | | | 18,018 | |
Property and equipment, net | | | 22,965 | | | | 29,168 | |
Goodwill, net | | | 181,218 | | | | 176,451 | |
Other intangible assets, net | | | — | | | | 117,464 | |
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Total assets | | $ | 470,320 | | | $ | 624,618 | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
Accounts payable | | $ | 16,840 | | | $ | 15,187 | |
Accrued compensation and related liabilities | | | 24,996 | | | | 30,411 | |
Accrued liabilities | | | 36,057 | | | | 39,029 | |
Restructuring costs | | | 51,474 | | | | 62,069 | |
Deferred revenue | | | 117,816 | | | | 151,761 | |
Other liabilities | | | 53 | | | | 106 | |
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Total liabilities | | | 247,236 | | | | 298,563 | |
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Minority interests | | | 17,757 | | | | 15,027 | |
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Stockholders’ equity: | | | | | | | | |
Common stock | | | 537 | | | | 531 | |
Additional paid-in capital | | | 4,500,705 | | | | 4,497,288 | |
Deferred stock-based compensation | | | (327 | ) | | | (4,507 | ) |
Accumulated other comprehensive loss | | | (1,024 | ) | | | (1,412 | ) |
Accumulated deficit | | | (4,294,564 | ) | | | (4,180,872 | ) |
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Total stockholders’ equity | | | 205,327 | | | | 311,028 | |
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Total liabilities and stockholders’ equity | | $ | 470,320 | | | $ | 624,618 | |
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ARIBA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
| | | Three Months Ended June 30,
| | | Nine Months Ended June 30,
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| | | 2003
| | | 2002
| | | 2003
| | | 2002
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| | | | | | (As Restated)(1) | | | | | | (As Restated)(1) | |
Revenues: | | | | | | | | | | | | | | | | |
License | | $ | 21,288 | | | $ | 26,915 | | | $ | 79,486 | | | $ | 75,213 | |
Maintenance and service | | | 35,275 | | | | 31,907 | | | | 98,080 | | | | 95,713 | |
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Total revenues | | | 56,563 | | | | 58,822 | | | | 177,566 | �� | | | 170,926 | |
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Cost of revenues | | | 13,673 | | | | 11,562 | | | | 37,605 | | | | 33,799 | |
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Gross profit | | | 42,890 | | | | 47,260 | | | | 139,961 | | | | 137,127 | |
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Operating expenses: | | | | | | | | | | | | | | | | |
Sales and marketing | | | 19,199 | | | | 19,544 | | | | 60,320 | | | | 66,881 | |
Research and development | | | 13,123 | | | | 16,726 | | | | 40,955 | | | | 48,577 | |
General and administrative | | | 8,745 | | | | 8,842 | | | | 29,578 | | | | 26,491 | |
Amortization of goodwill and other intangible assets | | | — | | | | 141,291 | | | | 117,464 | | | | 424,509 | |
Business partner warrants | | | — | | | | — | | | | — | | | | 5,562 | |
Stock-based compensation | | | 364 | | | | 3,325 | | | | 1,836 | | | | 11,779 | |
Restructuring and lease abandonment costs | | | 5,350 | | | | 57,125 | | | | 5,350 | | | | 62,609 | |
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Total operating expenses | | | 46,781 | | | | 246,853 | | | | 255,503 | | | | 646,408 | |
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Loss from operations | | | (3,891 | ) | | | (199,593 | ) | | | (115,542 | ) | | | (509,281 | ) |
Other income, net | | | 1,186 | | | | 2,095 | | | | 4,512 | | | | 6,345 | |
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Net loss before income taxes | | | (2,705 | ) | | | (197,498 | ) | | | (111,030 | ) | | | (502,936 | ) |
Provision (benefit) for income taxes | | | (116 | ) | | | 1,000 | | | | 327 | | | | 2,995 | |
Minority interest in net income (loss) of consolidated subsidiaries | | | 858 | | | | 246 | | | | 2,335 | | | | (535 | ) |
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Net loss | | $ | (3,447 | ) | | $ | (198,744 | ) | | $ | (113,692 | ) | | $ | (505,396 | ) |
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Net loss per share—basic and diluted | | $ | (0.01 | ) | | $ | (0.76 | ) | | $ | (0.43 | ) | | $ | (1.96 | ) |
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Weighted average shares used in computing net loss per share—basic and diluted | | | 267,002 | | | | 260,180 | | | | 265,434 | | | | 258,184 | |
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| (1) | | Ariba’s condensed consolidated statements of operations for the three and nine month periods ended June 30, 2002 have been restated as discussed in our Securities and Exchange Commission (“SEC”) filings, including our annual report on Form 10-K for the year ended September 30, 2002 as filed on April 10, 2003 and our quarterly report on Form 10-Q/A for the three months ended June 30, 2002 as filed on April 11, 2003. |
