Exhibit 99.1
For More Information: | ||||
Investor Contact: | Press Contact: | |||
Karen Blasing | Matt Keowen | |||
Nuance | Nuance | |||
(650) 847-0000 | (650) 847-0000 | |||
kblasing@nuance.com | mkeowen@nuance.com |
NUANCE REPORTS SECOND QUARTER 2005 RESULTS
MENLO PARK, Calif—August 9, 2005 — Nuance (Nasdaq:NUAN) today announced results for the quarter ended June 30, 2005. Total revenue for the quarter was $11.3 million, as compared to $14.4 million in the second quarter of 2004, and $11.8 million in the first quarter of 2005.
“During the quarter, we continued to aggressively market voice automation and sell a range of Nuance products and services. We also made progress towards completing our merger with ScanSoft,” said Charles Berger, president and CEO of Nuance. “Revenue was down in the second quarter due, in substantial part, to customer uncertainties related to the merger. We believe this is a short-term phenomenon, and that the new combined company will be better positioned to help realize the potential for the industry.”
The net loss for the second quarter of 2005 was $6.7 million or $0.18 net loss per share, as compared to the second quarter 2004 loss of $1.6 million, or $0.05 net loss per share, and a $4.6 million loss or $0.13 net loss per share in the first quarter of 2005. In the second quarter of 2005, the company had $2.6 million of merger-related expenses.
Customer Wins
Leading organizations from around the world continue to turn to Nuance for phone self-service solutions that improve the customer experience and reduce costs.
During the second quarter, Yell Group PLC — one of the largest online and offline directory operators in the world — announced that it chose the Nuance Voice Platform™ as the basis of its voice-enabled customer service systems. Additionally, Yellow Pages Group Co. announced that it chose Nuance technology and Call Genie Inc. to create a completely new type of directory assistance. Known as HelloYellow™, this new service is the industry’s first interactive, voice-enabled offering that provides consumers with telephone access to the most popular categories associated with Yellow Pages Group Co.’s print and online directories.
Other customers that contributed revenue in the quarter included Alaska Airlines and Horizon Air, SunTrust Banks, Inc., and TELUS. Contracts with these companies and others were won directly by Nuance and through its resellers, including Edify, Intervoice, and Syntellect.
Continuing Innovation
In the quarter the company announced the release of Nuance Voice Creation Tools. When used in tandem with Nuance’s Vocalizer™ 4.0 text-to-speech engine, these unique tools reduce the time and cost of a potentially complex task — custom text-to-speech voice development — making it manageable for partners, as well as large customers needing multiple custom voices. Nuance is currently the only vendor making custom voice tools available.
About Nuance
In an era where a focus on the customer is essential to business success, Nuance provides leading companies with voice-automation solutions that enable both an outstanding customer experience and corporate cost efficiency. Nuance is a leader in the voice automation market, providing software and solutions to more than 1,000 companies worldwide. Clients include Avon, British Airways, Nomura Securities, OnStar, Sprint PCS, United Parcel Service, Vodafone and Wells Fargo. Nuance (Nasdaq:NUAN) is headquartered in Menlo Park, Calif., and has offices around the world. For more information, visit www.nuance.com or call 1-888-NUANCE-8.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC
ADDITIONAL INFORMATION AND WHERE TO FIND IT
ScanSoft Inc. has filed with the SEC a Registration Statement on Form S-4 (Reg. No. 333-125496) containing a definitive Joint Proxy Statement/Prospectus regarding the proposed merger with Nuance. Investors and security holders are urged to carefully read the Registration Statement and the definitive Joint Proxy Statement/Prospectus, as it contains important information about ScanSoft, Nuance, the proposed transaction and related matters, including notices of the Special Meeting of Stockholders of each of ScanSoft and Nuance to be held August 31, 2005. Investors and security holders may obtain free copies of the Registration Statement and the definitive Joint Proxy Statement/Prospectus, and other documents filed with the SEC by ScanSoft and Nuance, through the web site maintained by the SEC at www.sec.gov. In addition, investors and security holders may obtain free copies of the Registration Statement and the definitive Joint Proxy Statement/Prospectus from ScanSoft by contacting ScanSoft Investor Relations at (978) 977-2000 or from Nuance by contacting Nuance Investor Relations at (650) 847-0000.
ScanSoft and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of ScanSoft and Nuance in connection with the proposed transaction. Information regarding the special interests of these directors and executive officers in the proposed transaction is included in the Joint Proxy Statement/Prospectus described above. Additional information regarding these directors and executive officers is also included in ScanSoft’s proxy statement for its 2005 Annual Meeting of Stockholders, which was filed with the SEC on January 28, 2005. This document is available free of charge at the SEC’s web site at www.sec.gov and from ScanSoft by contacting ScanSoft Investor Relations at (978) 977-2000.
Nuance and its directors and executive officers also may be deemed to be participants in the solicitation of proxies from the stockholders of ScanSoft and Nuance in connection with the proposed transaction. Information regarding the special interests of these directors and executive officers in the proposed transaction is included in the Joint Proxy Statement/Prospectus described above. Additional information regarding these directors and executive officers is also included in Nuance’s proxy statement for its 2005 Annual Meeting of Stockholders, which was filed with the SEC on May 2, 2005. This document is available free of charge at the SEC’s web site at www.sec.gov and from Nuance by contacting Nuance Investor Relations at (650) 847-0000. The Nuance 2005 Annual Meeting has been postponed, pending the closing of the proposed transaction.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements, including, for example, those relating to the revenue of Nuance and to customer benefits attainable by using Nuance’s voice automation products and services. There is no assurance that the results contemplated or implied by any forward-looking statements will be realized. The following factors, risks and uncertainties, among others, could cause actual results to differ materially from those contemplated by this press release’s forward-looking statements: the ability of Nuance Voice Creation Tools to reduce the time and costs involved in custom text-to-speech development; the ability of ScanSoft and Nuance to consummate the proposed transaction; Nuance’s ability to produce additional demand for voice solutions in key world markets; and other factors described in Nuance’s filings with the Securities and Exchange Commission, including in Nuance’s last-filed Form 10-Q and the Joint Proxy Statement/Prospectus described above. Nuance does not undertake to update any oral or written forward-looking statements that may be made by or on behalf of Nuance.
Nuance and Nuance Vocalizer are registered trademarks or trademarks of Nuance Communications, Inc. All other trademarks are property of their respective owners.
Nuance Communications, Inc.
Condensed Consolidated Balance Sheet
(In Thousands, Except Share and Per Share Amounts)
(UNAUDITED)
June 30, 2005 | December 31, 2004 | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 71,585 | $ | 53,583 | ||
Short-term investments | 15,076 | 37,493 | ||||
Accounts receivables, net | 6,830 | 13,953 | ||||
Prepaid expenses and other current assets | 4,568 | 3,839 | ||||
Total current assets | 98,059 | 108,868 | ||||
Property and equipment, net | 3,848 | 4,059 | ||||
Long-term note receivable | — | 5,005 | ||||
Intangible assets, net | 374 | 580 | ||||
Restricted cash | 11,398 | 11,109 | ||||
Deferred income taxes | 390 | 398 | ||||
Other assets | 221 | 238 | ||||
Total assets | $ | 114,290 | $ | 130,257 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current Liabilities: | ||||||
Accounts payable | $ | 1,382 | $ | 1,328 | ||
Accrued liabilities | 6,902 | 8,067 | ||||
Merger expenses payable | 2,301 | — | ||||
Restructuring reserves | 10,322 | 10,203 | ||||
Current deferred revenue | 5,904 | 8,157 | ||||
Total current liabilities | 26,811 | 27,755 | ||||
Long-term deferred revenue | 457 | 544 | ||||
Long-term restructuring reserve | 47,774 | 52,705 | ||||
Other long-term liabilities | 38 | 37 | ||||
Total liabilities | 75,080 | 81,041 | ||||
Stockholders’ equity | 39,210 | 49,216 | ||||
Total liabilities and stockholders’ equity | $ | 114,290 | $ | 130,257 | ||
Nuance Communications, Inc.
Condensed Consolidated Statement of Operations
(In Thousands, Except Per Share Amounts)
(UNAUDITED)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Revenue: | ||||||||||||||||
License | $ | 4,541 | $ | 7,169 | $ | 8,704 | $ | 12,672 | ||||||||
Service | 2,605 | 3,412 | 6,239 | 6,974 | ||||||||||||
Maintenance | 4,111 | 3,812 | 8,115 | 7,449 | ||||||||||||
Total revenue | 11,257 | 14,393 | 23,058 | 27,095 | ||||||||||||
Cost of revenue: | ||||||||||||||||
License | 107 | 140 | 195 | 228 | ||||||||||||
Service | 3,263 | 2,254 | 6,381 | 4,851 | ||||||||||||
Maintenance | 619 | 683 | 1,271 | 1,391 | ||||||||||||
Total cost of revenue | 3,989 | 3,077 | 7,847 | 6,470 | ||||||||||||
Gross profit | 7,268 | 11,316 | 15,211 | 20,625 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 6,796 | 7,331 | 13,738 | 13,520 | ||||||||||||
Research and development | 3,006 | 3,562 | 6,198 | 7,732 | ||||||||||||
General and administrative | 2,264 | 2,345 | 5,415 | 4,274 | ||||||||||||
Merger expenses | 2,602 | — | 2,602 | — | ||||||||||||
Restructuring credits | (47 | ) | — | (98 | ) | (41 | ) | |||||||||
Total operating expenses | 14,621 | 13,238 | 27,855 | 25,485 | ||||||||||||
Loss from operations | (7,353 | ) | (1,922 | ) | (12,644 | ) | (4,860 | ) | ||||||||
Interest and other income, net | 623 | 306 | 1,210 | 540 | ||||||||||||
Loss before income tax benefit | (6,730 | ) | (1,616 | ) | (11,434 | ) | (4,320 | ) | ||||||||
Income tax benefit | (63 | ) | (20 | ) | (216 | ) | (117 | ) | ||||||||
Net loss | $ | (6,667 | ) | $ | (1,596 | ) | $ | (11,218 | ) | $ | (4,203 | ) | ||||
Basic and diluted net loss per share | $ | (0.18 | ) | $ | (0.05 | ) | $ | (0.31 | ) | $ | (0.12 | ) | ||||
Shares used to compute basic and diluted net loss per share | 36,435 | 35,386 | 36,278 | 35,226 | ||||||||||||