Exhibit 99.1
Ariba Reports Results for the Second Quarter of Fiscal Year 2004
Strategic Acquisitions, New Products, New Customers
Extend Company’s Leadership in Enterprise Spend Management
SUNNYVALE, Calif., April 27, 2004 — Ariba, Inc. (Nasdaq: ARBA), the leading Enterprise Spend Management (ESM) solutions provider, today announced results for the quarter ended March 31, 2004.
Quarterly Results
Revenues for the second quarter of fiscal 2004 were $56.0 million, as compared to $59.3 million for the second quarter of fiscal 2003. Software license revenues for the quarter were $15.9 million, as compared to $27.7 million for the second quarter of fiscal 2003, while maintenance and service revenues for the quarter were $40.1 million, as compared to $31.5 million for the second quarter of fiscal 2003. Net loss for the second quarter of fiscal 2004 was $831,000, or $0.00 per share. Net loss for the second quarter of fiscal 2003 was $51.6 million, or $0.19 per share.
“This was an important quarter for Ariba,” said Bob Calderoni, president and CEO, Ariba, Inc. “We continued to build capabilities that will reinforce our position as the market leader for Enterprise Spend Management solutions. The acquisitions of Alliente and Softface, coupled with our announcement of three new products, provide us with the broadest technology platform in the market, while we expect our pending merger with FreeMarkets to provide us with the deepest services expertise in the market.”
Key Acquisitions Announced During the Quarter
Since January, Ariba has announced or completed acquisitions intended to enhance its Spend Management offerings in three critical areas. In January, Ariba acquired procurement business process outsourcing (BPO) providerAlliente, and in April it acquired spend data classification and enrichment market leaderSoftface. Ariba’s pending merger with strategic sourcing market leaderFreeMarkets was announced in January 2004 and is targeted to close in June, subject to regulatory and stockholder approvals.
New Solutions Extend Spend Management to the Frontlines
In addition to the acquisitions, Ariba announced three new spend management solutions this quarter:Ariba Contract Workbench™, Ariba Category Procurement™, andAriba Settlement™.
| | • | Ariba Contract Workbench expands Ariba’s footprint to enable complete automation of the contract lifecycle – reducing cycle times, enhancing collaboration capabilities and contract visibility, and standardizing contract language. |
| | • | Ariba Category Procurement enables companies to manage the requisition-to-pay lifecycle for complex spend categories – such as temporary labor, consulting, print, and marketing – that require highly interactive buying processes, variable pricing, and time card and service receipt management. By facilitating these processes, the tool enhances contract compliance, allows for greater spend visibility, and accelerates cycle times. |
| | • | Ariba Settlement is an invoicing solution that assists with payment terms and discount handling, payment schedules, status visibility and electronic disbursement on the Ariba Supplier Network™, as well as forecast and discount analysis, and vendor self service and payment profile synchronization. |
Ariba Spend Management solutions also include Ariba Buyer™, Ariba Analysis™, Ariba Contracts™, Ariba Invoice™, Ariba Category Management™, Ariba Enterprise Sourcing™ and Ariba Supplier Performance Management™.
New Customers Select Ariba Spend Management Solutions
The company added five new customers in the second quarter, with wins against major ERP vendors as well as best-of-breed specialists. Notable new customers includeGenzyme Corporation, a world leader in biotechnology, andBNP Paribas,the most profitable bank in continental Europe. Genzyme selected Ariba Buyer and Ariba Enterprise Sourcing as part of a strategic initiative to drive down procurement costs, establish new process efficiencies, automate procurement and sourcing, establish advantageous pricing and renegotiate contracts on a global basis. BNP Paribas focused on the sourcing components of Ariba’s solution, purchasing Ariba Analysis, Ariba Enterprise Sourcing, Ariba Category Management, and Ariba Supplier Performance Management to identify global savings opportunities, improve buyer productivity, standardize processes, drive process cycle time reductions, and proactively manage supplier improvement.
Existing Customers Expand Investment
Existing Ariba customers expanded their investment in Ariba solutions during the March quarter. In North America, customers adding new Ariba solutions includedGoodyear, the world’s leading tire manufacturer,KeyCorp, one of the U.S.’s largest bank-based financial services companies,ThePNC Financial Services Group, a best-in-class financial services company, andING Americas, a division of leading global financial institution, ING Groep. In Europe, world-leading financial services company,Credit Suisse, and the second largest airport operator in the U.K.,Manchester Airports Group, were among those customers adding to their Ariba Spend Management solution.
Conference Call Information
Ariba will hold a conference call today at 2:00 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 8:00 p.m. EDT today through May 5, 2004 by dialing (800) 642-1687 or (706) 645-9291 and entering ID #: 6656427.
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 Network, BPM Services, Power Sourcing, Total Spend Capture and PO-Flip are trademarks or service marks of Ariba, Inc. All other trademarks are property of their respective owners.
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; the impact of acquiring Alliente and entering into an agreement to acquire FreeMarkets, including the disruption or loss of customer, business partner, supplier or employee relationships; the level of costs and expenses incurred by Ariba as a result of such transactions; 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 its business, including a number of the factors and risks described above, are discussed in Ariba’s Form 10-K/A filed January 28, 2004 and in its Form S-4/A filed April 2, 2004.
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Investor Contact: | | John Ederer, (650) 390-2742 or jederer@ariba.com |
Media Contact: | | Ingrid Bell, (650) 390-4204 or ibell@ariba.com |
— Financial Tables to Follow —
ARIBA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
| | | | | | | | |
| | | March 31,
2004
| | | September 30,
2003
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ASSETS | | | | | | | | |
| | |
Cash and cash equivalents | | $ | 65,120 | | | $ | 70,819 | |
Short-term investments | | | 47,345 | | | | 56,323 | |
Restricted cash | | | 35,302 | | | | 1,123 | |
Accounts receivable, net | | | 13,208 | | | | 8,669 | |
Prepaid expenses and other current assets | | | 12,635 | | | | 10,747 | |
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Total current assets | | | 173,610 | | | | 147,681 | |
Property and equipment, net | | | 19,887 | | | | 21,767 | |
Long-term investments | | | 69,661 | | | | 78,329 | |
Restricted cash, less current portion | | | 27,312 | | | | 28,579 | |
Goodwill, net | | | 188,598 | | | | 181,033 | |
Other intangible assets, net | | | 1,024 | | | | — | |
Other assets | | | 2,188 | | | | 1,741 | |
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Total assets | | $ | 482,280 | | | $ | 459,130 | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
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Accounts payable | | $ | 12,153 | | | $ | 10,767 | |
Accrued compensation and related liabilities | | | 22,031 | | | | 26,674 | |
Accrued liabilities | | | 77,173 | | | | 35,513 | |
Restructuring obligations | | | 10,423 | | | | 13,764 | |
Deferred revenue | | | 51,345 | | | | 57,470 | |
Other long-term liabilities | | | 43 | | | | — | |
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Total current liabilities | | | 173,168 | | | | 144,188 | |
Restructuring obligations, less current portion | | | 28,424 | | | | 34,112 | |
Deferred revenue, less current portion | | | 31,112 | | | | 43,954 | |
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Total liabilities | | | 232,704 | | | | 222,254 | |
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Minority interests | | | 21,225 | | | | 20,019 | |
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Stockholders’ equity: | | | | | | | | |
Common stock | | | 548 | | | | 540 | |
Additional paid-in capital | | | 4,510,661 | | | | 4,500,974 | |
Deferred stock-based compensation | | | (4,765 | ) | | | (314 | ) |
Accumulated other comprehensive income | | | 3,846 | | | | 2,856 | |
Accumulated deficit | | | (4,281,939 | ) | | | (4,287,199 | ) |
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Total stockholders’ equity | | | 228,351 | | | | 216,857 | |
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Total liabilities and stockholders’ equity | | $ | 482,280 | | | $ | 459,130 | |
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ARIBA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | | Six Months Ended
| |
| | | March 31,
| | | March 31,
| |
| | | 2004
| | | 2003
| | | 2004
| | | 2003
| |
Revenues: | | | | | | | | | | | | | | | | |
License | | $ | 15,940 | | | $ | 27,749 | | | $ | 34,616 | | | $ | 58,198 | |
Maintenance and service | | | 40,068 | | | | 31,525 | | | | 74,123 | | | | 62,805 | |
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Total revenues | | | 56,008 | | | | 59,274 | | | | 108,739 | | | | 121,003 | |
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Cost of revenues | | | 16,249 | | | | 14,209 | | | | 29,177 | | | | 27,932 | |
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Gross profit | | | 39,759 | | | | 45,065 | | | | 79,562 | | | | 93,071 | |
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Operating expenses: | | | | | | | | | | | | | | | | |
Sales and marketing | | | 25,289 | | | | 20,532 | | | | 42,828 | | | | 41,121 | |
Research and development | | | 12,844 | | | | 13,874 | | | | 25,121 | | | | 27,832 | |
General and administrative | | | 5,401 | | | | 13,769 | | | | 9,944 | | | | 20,833 | |
Amortization of other intangible assets | | | 76 | | | | 47,787 | | | | 76 | | | | 113,464 | |
Stock-based compensation | | | 838 | | | | 1,197 | | | | 868 | | | | 1,472 | |
Restructuring and lease abandonment costs | | | (2,397 | ) | | | — | | | | (2,397 | ) | | | — | |
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Total operating expenses | | | 42,051 | | | | 97,159 | | | | 76,440 | | | | 204,722 | |
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Income (loss) from operations | | | (2,292 | ) | | | (52,094 | ) | | | 3,122 | | | | (111,651 | ) |
Other income, net | | | 953 | | | | 1,564 | | | | 1,771 | | | | 3,325 | |
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Net income (loss) before income taxes | | | (1,339 | ) | | | (50,530 | ) | | | 4,893 | | | | (108,326 | ) |
Provision (benefit) for income taxes | | | (255 | ) | | | 105 | | | | (527 | ) | | | 443 | |
Minority interests in net income (loss) of consolidated subsidiaries | | | (253 | ) | | | 948 | | | | 160 | | | | 1,476 | |
Net income (loss) | | $ | (831 | ) | | $ | (51,583 | ) | | $ | 5,260 | | | $ | (110,245 | ) |
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Net income (loss) per share—basic | | $ | 0.00 | | | $ | (0.19 | ) | | $ | 0.02 | | | $ | (0.42 | ) |
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Weighted average shares used in computing net income (loss) per share—basic | | | 271,878 | | | | 265,247 | | | | 270,938 | | | | 264,650 | |
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Net income (loss) per share—diluted | | $ | 0.00 | | | $ | (0.19 | ) | | $ | 0.02 | | | $ | (0.42 | ) |
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Weighted average shares used in computing net income (loss) per share—diluted | | | 271,878 | | | | 265,247 | | | | 277,678 | | | | 264,650 | |
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