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FOR IMMEDIATE RELEASE
Versant Contact:
Lee McGrath
Chief Financial Officer
Versant Corporation
1-800-VERSANT
510-789-1500
lmcgrath@versant.com
Versant IR Contact:
Scott Liolios
Liolios Group, Inc.
949-574-3860
scott@liolios.com
Versant Announces Results for Second Quarter 2004
Key Highlight: Completion of Merger with Poet
Fremont, California, June 9, 2004 - Versant Corporation (NASDAQ: VSNT), today announced its results for the second quarter of fiscal year 2004 ended April 30, 2004.
Versant reported total revenue of $5.2 million for the second quarter. Data management business revenue for the second quarter was $5.0M, representing 96% of the total quarterly revenue. Catalog business (described later) revenue for the second quarter was $200,000 or 4% of the total quarterly revenues. Net loss for the company for the second quarter of 2004 was $2.1 million or ($0.09) per share. Loss from operations for the data management business was $1.2 million, representing 57% of the total loss from operations for the quarter. Loss from operations for the catalog business was $900K, representing 43% of the total loss from operations for the quarter. Contributing in part to the quarter’s net loss were approximately $600,000 in intangible, amortization, restructuring and other costs primarily related to Versant’s recently completed merger with Poet Holdings, Inc.
“Our business level for the quarter was below what we had anticipated, largely due to business difficulties experienced by two of our premier Value Added Resellers. This is not a condition we expect to continue long-term. Beyond this specific area of weakness, our broader business base generally tracked in-line with plan,” said Nick Ordon, Versant’s chairman and chief executive officer. “During this quarter we also completed our merger with Poet Holdings, which in many ways has been our most significant event since going public. We have made excellent progress integrating Versant and Poet Holdings. Integration tasks still remain before us, and will continue to impact us in our third quarter. We do have a clear plan that we are executing against and we currently expect the majority of the integration priorities to be completed by our fourth quarter of this year. In addition, we expect that by fourth quarter the impact of the catalog business on Versant’s earnings will be minimal.”
6539 Dumbarton Circle • Fremont • CA 94555 • USA • Main: (+1) 510 789 1500 • Fax: (+1) 510 789 1515
Key Highlights
• Completion of merger with Poet Holdings
• Strong Balance Sheet
• Release of .Net data access products
“We are pleased with the completion of our merger with Poet Holdings,” said Ordon, “The combination of the two companies continues to be very synergistic. We expect to start to reap the benefits of the merger beginning in the third quarter of fiscal 2004 and expect the full impact of the merger to be more visible in the fourth quarter. We are now able to provide customers with a complete selection of database technologies spanning from small devices to large clustered enterprise systems. We are also in a unique position in the marketplace where we will be able to offer data access technologies in both the Java and Microsoft™ .Net space. This broad set of product offerings will allow us to leverage our customers and our bigger presence in the global marketplace.”
“The combined company has a very strong balance sheet that enables us to invest in the right areas to build a successful enterprise software company”, said Ordon. “I am also pleased that in this transitional quarter the development team was able to maintain its focus and successfully delivered the Microsoft™ .Net data access product to market. This is the first time in company’s history that we have a strong product offering for the Microsoft™ developer community.”
Future Outlook
Ordon said, “The Company is committed to returning to profitability and demonstrating the synergies that the merger with Poet has created. We are releasing guidance with this earnings release for the next two quarters to show the growth ramp we expect in our data management business.”
Please see attached tables for detailed guidance for the third and fourth quarters of 2004.
About Versant’s Catalog Business
Versant acquired its catalog business when it merged with Poet Holdings in March 2004. Poet had created a position in the electronic catalog market, developing the underlying technology that enables large enterprises to electronically link with their suppliers. Versant’s catalog business has several marquee customers including Daimler-Chrysler that rely on its products that are collectively branded as X-Solutions.
About Versant Corporation
Versant Corporation (NASDAQ: VSNT) is an industry leader in data management and open data access software. Using Versant’s solutions, customers cut hardware costs, speed and simplify development, significantly reduce administration costs and deliver products with a
strong competitive edge. Versant’s solutions are deployed in a wide array of industries including telecommunications, financial services, transportation, manufacturing, and defense. With over 5,000 installations, Versant has been a highly reliable partner for over 14 years for Global 2000 companies such as British Airways, US Government, Financial Times, Tyco International, IBM, and MCI. For more information, call 510-789-1500 or visit www.versant.com.
Forward Looking Statements Involve Risks and Uncertainties
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. Forward-looking statements are statements about future events or forecasts and may be identified by the use of words such as “expects”, “anticipates”, “believes” or other similar words or phrases. These forward-looking statements include, but are not limited to, statements regarding Versant’s future performance. This press release also contains forward-looking statements concerning several matters including, without limitation: guidance regarding Versant’s anticipated operating results for its third and fourth fiscal quarters in fiscal 2004; the anticipated business prospects of value-added resellers of our products; the expected timing of the completion of the post-merger integration of Versant and Poet Holdings, Inc.; the expected realization of certain benefits and synergies from Versant’s merger with Poet Holdings and its timing; our ability to structure our catalog business to reduce its impact on Versant’s operating results and the timing of that structuring; Versant’s ability to reach a broader customer base due to its merger with Poet, and the impact of Versant being able to offer its .Net product. Investors are cautioned that any such forward-looking statements are not guarantees of Versant’s future and that these statements involve risks and uncertainties that may cause Versant’s actual results, future structure and the subject of these forward-looking statements to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to: the state of the market for database management products; our ability to timely develop new and relevant products; the impact of competitive technologies and product offerings on our sales and prices; our ability to develop and offer products that successfully and flexibly operate in different computing environments; the performance of our resellers, and whether we can timely restructure our catalog business; delays in sales cycles for our products and services, and continued integration issues related to our merger with Poet Holdings. These and other related risks are described in more detail in the Company’s filings with the Securities and Exchange Commission, including the Company’s most recent Reports on Form 10-K and 10-Q made with the Securities and Exchange Commission. The forward-looking statements included in this press release are made only as of the date of this press release, and the Company has no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.
Versant and Poet, are either registered trademarks or trademarks of Versant Corporation in the United States and/or other countries. All other products are a registered trademark or trademark of their respective company in the United States and/or other countries.
Conference Call
Versant will host a teleconference to discuss second quarter fiscal 2004 results today after markets close. The details for the earnings call are as follows:
Date: | Wednesday, June 09, 2004 |
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Time: | 1:30 PM Pacific (4:30 PM Eastern) |
Dial-in number: | 1-800-473-6123 |
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International: | 1-973-582-2706 |
Internet Simulcast: http://www.viavid.net/detailpage.aspx?sid=00001C55
*Windows Media Player needed for simulcast. Simulcast is voice only.
Dial in 5-10 minutes prior to the start time. An operator will request your name and organization and ask you to wait until the call begins. If you have any difficulty connecting, please call the Liolios Group at (949) 574-3860.
A replay of the conference call will be available until June 16, 2004 (pass code 4839485)
Replay number: 1- 877-519-4471
International Replay number: 1-973-341-3080
Internet Simulcast: http://www.viavid.net/detailpage.aspx?sid=00001C55
VERSANT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
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| April 30, |
| October 31, |
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| (unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
| $ | 8,707 |
| $ | 3,311 |
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Accounts receivable, net of allowance for doubtful accounts of $413 and $258, respectively |
| 4,449 |
| 4,023 |
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Other current assets |
| 612 |
| 623 |
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Total current assets |
| 13,768 |
| 7,957 |
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Property and equipment, net |
| 1,263 |
| 1,232 |
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Other assets |
| 746 |
| 543 |
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Intangibles, net of accumulated amortization |
| 7,615 |
| 389 |
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Goodwill |
| 15,883 |
| 948 |
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Total assets |
| $ | 39,275 |
| $ | 11,069 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Line of credit |
| $ | — |
| $ | 500 |
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Accounts payable |
| 1,246 |
| 739 |
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Accrued liabilities |
| 3,083 |
| 2,148 |
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Current portion of deferred revenue |
| 3,999 |
| 3,905 |
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Current portion of deferred rent |
| 221 |
| 63 |
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Total current liabilities |
| 8,549 |
| 7,355 |
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Long-term liabilities, net of current portion: |
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Long-term portion of deferred revenue |
| 30 |
| 83 |
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Long-term portion of deferred rent |
| 295 |
| 309 |
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Total long-term liabilities |
| 325 |
| 392 |
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Total liabilities |
| 8,874 |
| 7,747 |
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Shareholders’ equity: |
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Convertible preferred stock, no par value |
| — |
| 4,912 |
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Common stock, no par value |
| 90,501 |
| 55,096 |
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Accumulated deficit |
| (60,047 | ) | (56,708 | ) | ||
Accumulated other comprehensive income |
| (53 | ) | 22 |
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Total shareholders’ equity |
| 30,401 |
| 3,322 |
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| $ | 39,275 |
| $ | 11,069 |
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VERSANT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
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| Three Months Ended |
| Six Months Ended |
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| 2004 |
| 2003 |
| 2004 |
| 2003 |
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Revenue: |
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License |
| $ | 1,709 |
| $ | 1,662 |
| $ | 4,791 |
| $ | 4,334 |
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Maintenance |
| 1,709 |
| 1,531 |
| 3,300 |
| 3,098 |
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Professional services |
| 1,792 |
| 1,831 |
| 3,485 |
| 3,441 |
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Total revenue |
| 5,210 |
| 5,024 |
| 11,576 |
| 10,873 |
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Cost of revenue: |
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License |
| 190 |
| 78 |
| 237 |
| 614 |
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Maintenance |
| 450 |
| 338 |
| 789 |
| 668 |
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Professional services |
| 1,539 |
| 1,510 |
| 3,015 |
| 2,950 |
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Amortization of purchased intangibles |
| 149 |
| 24 |
| 173 |
| 43 |
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Total cost of revenue |
| 2,328 |
| 1,950 |
| 4,214 |
| 4,275 |
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Gross profit |
| 2,882 |
| 3,074 |
| 7,362 |
| 6,598 |
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Operating expenses: |
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Marketing and sales |
| 1,946 |
| 1,767 |
| 4,110 |
| 3,893 |
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Research and development |
| 1,490 |
| 1,139 |
| 2,451 |
| 2,409 |
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General and administrative |
| 1,354 |
| 970 |
| 2,161 |
| 1,818 |
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Restructuring Charge |
| 202 |
| 202 |
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Total operating expenses |
| 4,992 |
| 3,876 |
| 8,924 |
| 8,120 |
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Total loss from operations |
| (2,110 | ) | (802 | ) | (1,562 | ) | (1,522 | ) | ||||
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Other income, net |
| 44 |
| 54 |
| 141 |
| 134 |
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Total loss before taxes |
| (2,066 | ) | (748 | ) | (1,421 | ) | (1,388 | ) | ||||
Provision for income taxes |
| 6 |
| 23 |
| 46 |
| 47 |
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Net Loss |
| $ | (2,072 | ) | $ | (771 | ) | $ | (1,467 | ) | $ | (1,435 | ) |
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Basic net loss per share |
| $ | (.09 | ) | $ | (.06 | ) | $ | (.08 | ) | $ | (.11 | ) |
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Diluted net loss per share |
| $ | (.09 | ) | $ | (.06 | ) | $ | (.08 | ) | $ | (.11 | ) |
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Basic weighted average common shares |
| 24,205 |
| 13,642 |
| 19,474 |
| 13,508 |
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Diluted weighted average common shares |
| 24,205 |
| 13,642 |
| 19,474 |
| 13,508 |
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VERSANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
ACTUAL RESULTS FOR THE QUARTER ENDED APRIL 30, 2004
(In thousands, except per share amounts)
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| Data |
| Catalog |
| Total |
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Revenue |
| 5,026 |
| 184 |
| 5,210 |
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Gross Margin |
| 58 | % | -11 | % | 55 | % | |
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Loss From Operations |
| (1,203 | )(b) | (907 | )(c) | (2,110 | ) | |
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Net Loss |
| N/A |
| N/A |
| (2,072 | ) | |
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Net Loss Per Share |
| N/A |
| N/A |
| $ | (0.09 | ) |
(a) Includes results of Poet Holdings Corp from March 19, 2004 through April 30, 2004
(b) Includes $149,000 of amortization of intangible assets primarily in connection with the Poet merger and $264,880 in relation to one time deal costs and restructuring charges
(c) Includes $201,769 of restructuring costs
The following information is a forward-looking statement and does not reflect any
historical financial results of operation of Versant Corporation and its Subsidiaries
VERSANT CORPORATION AND SUBSIDIARIES
GUIDANCE FOR QUARTER ENDING JULY 31, 2004
(In thousands, except per share amounts)
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| Low End of Guidance Range |
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| Data |
| Catalog |
| Total |
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Revenue |
| 5,800 |
| 700 |
| 6,500 |
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Gross Margin |
| 59 | % | 35 | % | 56 | % | |
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Loss From Operations |
| (653 | )(a) | (1,061 | )(b) | (1,714 | ) | |
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Net Loss |
| N/A |
| N/A |
| (1,639 | ) | |
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Net Loss Per Share |
| N/A |
| N/A |
| $ | (0.05 | ) |
(a) Includes amortization of intangible assets. (Primarily those acquired in the Poet acquisition) |
| 288 |
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Includes depreciation of fixed assets |
| 203 |
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Total Non Cash Expense Included |
| $ | 491 |
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(b) Includes approximately $250K of restructuring costs
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| High End of Guidance Range |
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| Data |
| Catalog |
| Total |
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Revenue |
| 6,500 |
| 800 |
| 7,300 |
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Gross Margin |
| 63 | % | 43 | % | 61 | % | |
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Income/ (Loss) From Operations |
| 35 | (a) | (961 | )(b) | (926 | ) | |
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Net Loss |
| N/A |
| N/A |
| (851 | ) | |
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Net Loss Per Share |
| N/A |
| N/A |
| $ | (0.02 | ) |
(a) Includes amortization of intangible assets. (Primarily those acquired in the Poet acquisition) |
| 288 |
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Includes depreciation of fixed assets |
| 203 |
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Total Non Cash Expense Included |
| $ | 491 |
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(b) Includes approximately $250K of restructuring costs
The following information is a forward-looking statement and does not reflect any
historical financial results of operation of Versant Corporation and its Subsidiaries
VERSANT CORPORATION AND SUBSIDIARIES
GUIDANCE FOR QUARTER ENDING OCTOBER 31, 2004
(In thousands, except per share amounts)
|
| Low End of Guidance Range |
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| Data |
| Catalog |
| Total |
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Revenue |
| 6,400 |
| 800 |
| 7,200 |
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Gross Margin |
| 62 | % | 45 | % | 60 | % | |
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Loss From Operations |
| (196 | )(a) | (334 | ) | (530 | ) | |
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Net Loss |
| N/A |
| N/A |
| (455 | ) | |
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Net Loss Per Share |
| N/A |
| N/A |
| $ | (0.01 | ) |
(a) Includes amortization of intangible assets. (Primarily those acquired in the Poet acquisition) |
| 288 |
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Includes depreciation of fixed assets |
| 203 |
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Total Non Cash Expense Included |
| $ | 491 |
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| High End of Guidance Range |
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| Data |
| Catalog |
| Total |
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Revenue |
| 7,100 |
| 900 |
| 8,000 |
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Gross Margin |
| 66 | % | 51 | % | 64 | % | |
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Income/ (Loss) From Operations |
| 498 | (a) | (234 | ) | 264 |
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Net Income |
| N/A |
| N/A |
| 339 |
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Net Income Per Share |
| N/A |
| N/A |
| $ | 0.01 |
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(a) Includes amortization of intangible assets. (Primarily those acquired in the Poet acquisition) |
| 288 |
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Includes depreciation of fixed assets |
| 203 |
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Total Non Cash Expense Included |
| $ | 491 |
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