Exhibit 99.1
BroadVision Contact:
Bob Okunski
BroadVision Investor Relations
650-542-4659
bob.okunski@broadvision.com
BroadVision, Inc. Announces Third Quarter 2003 Results
REDWOOD CITY, Calif. — October 22, 2003 — BroadVision, Inc. (Nasdaq: BVSN), a global provider of enterprise self-service web applications, today reported financial results for the third quarter ended September 30, 2003. Revenues for the third quarter of 2003 were $18.6 million, compared with revenues of $21.8 million for the second quarter ended June 30, 2003 and $27.2 million for the third quarter of 2002. License revenue for the quarter totaled $5.1 million versus $6.8 million in the second quarter of 2003.
In the third quarter, BroadVision posted a net loss on a generally accepted accounting principles (GAAP) basis of $10.3 million, or $0.31 per share, which included a restructuring charge of $4.5 million attributable to excess facilities and severance costs and a one-time charge of $4.2 million for the settlement of pending litigation. The GAAP net loss for the quarter compares with a GAAP net loss of $7.6 million, or $0.23 per share, for the second quarter of 2003, and a GAAP net loss of $67.7 million, or $2.11 per share, in the third quarter of 2002.
Including the $4.2 million one-time litigation settlement charge, pro forma net loss for the third quarter of 2003 was $5.5 million, or $0.17 per diluted share, compared with pro forma net income of $222,000, or $0.01 per diluted share, in the second quarter of 2003 and a pro forma net loss of $2.3 million, or $0.07 per share, in the third quarter of 2002. Pro forma results exclude certain restructuring and non-cash charges that totaled $4.8 million in the third quarter of 2003, $7.8 million in the second quarter of 2003 and $65.4 million in the third quarter of 2002. A reconciliation of pro forma results to GAAP results is provided in the financial information attached to this press release. The Company believes its pro forma results provide useful information because they reflect the Company’s financial performance excluding certain charges and restructuring expenses that the Company believes are not indicative of its ongoing operations.
“Although disappointed by the revenues that we recorded for the quarter, we generated important account wins,” commented Dr. Pehong Chen, BroadVision’s president and CEO. “Our Q3 revenues do not include a several million dollar license transaction that was completed during the quarter, but which was not recorded as revenue until after quarter-end. Overall, we are starting to see a shift in our business as customers look to extend their investment in BroadVision to maximize their e-business success. Our operational plan remains on track and we continue to improve efficiencies and effectively manage our expenses. I am encouraged about our progress and optimistic about our future success.”
During the third quarter of 2003, BroadVision closed new and repeat business with companies such as Bear Stearns, Children’s Hospital of Philadelphia, CTBR, Telecom Italia, Renault, Rothschild Bank, the U.S. Intelligence Community and Vodaphone Japan.
Conference Call
BroadVision will hold a conference call to discuss this press release and related matters at 5:00 pm Eastern Time, October 22, 2003. The call, hosted by Dr. Pehong Chen, president and CEO of BroadVision, can be accessed live and thereafter, by visiting the investor relations section of the Company’s website at www.broadvision.com/ir.
Information Concerning Forward-Looking Statements
Information in this release that involves expectations, beliefs, hopes, plans, intentions or strategies regarding the future are 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, which forward-looking statements involve risk and uncertainties. All forward-looking statements included in this release are based upon information available to BroadVision as of the date of this release, and BroadVision assumes no obligation to update or correct any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from BroadVision’s current expectations. Factors which could cause or contribute to such differences include, but are not limited to: lack of market acceptance of BroadVision’s existing and new products or services; BroadVision’s inability to continue to develop
2
competitive new products and services on a timely basis; introduction of new products or services by competitors; general economic conditions and BroadVision’s inability to attract and retain qualified employees. These and other factors and risks associated with BroadVision’s business are discussed in its most recent annual report on Form 10-K and in BroadVision’s quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission.
About BroadVision
BroadVision is a global provider of enterprise self-service web applications. Centered on One-To-One personalization, our integrated solutions for process, commerce, portal, and content help customers increase revenues and streamline costs by transacting more business over the web channel and consolidating multiple sites into a unified portal environment. Over 1,000 customers - including Air France, Cardinal Health, Hewlett-Packard, Sears, Toyota, U.S. Air Force and Vodafone - serving nearly 60 million registered users, rely on BroadVision’s open, scalable enterprise-class solutions to power and personalize their mission-critical web initiatives.
For more information about BroadVision, Inc., call 650.542.5100, email info@broadvision.com or visit www.broadvision.com.
# # #
BroadVision is a trademark or registered trademark of BroadVision, Inc. in the United States and other countries.
3
BROADVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
|
| September 30, |
| December 31, |
| ||
|
| (unaudited) |
|
|
| ||
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 80,620 |
| $ | 77,386 |
|
Short-term investments |
| 1,054 |
| 24,484 |
| ||
Accounts receivable, less allowance for doubtful accounts and reserves of $3,329 and $5,502 as of September 30, 2003 and December 31, 2002, respectively |
| 11,079 |
| 22,917 |
| ||
Prepaids and other |
| 5,404 |
| 9,181 |
| ||
Total current assets |
| 98,157 |
| 133,968 |
| ||
Property and equipment, net |
| 17,205 |
| 26,600 |
| ||
Long-term investments |
| — |
| 587 |
| ||
Restricted cash and investments |
| 20,958 |
| 16,704 |
| ||
Equity investments |
| 1,624 |
| 2,083 |
| ||
Goodwill |
| 53,421 |
| 53,421 |
| ||
Other intangibles, net |
| 3,013 |
| 3,899 |
| ||
Other assets |
| 2,483 |
| 2,874 |
| ||
Total assets |
| $ | 196,861 |
| $ | 240,136 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Bank borrowings and current portion of long-term debt |
| $ | 27,977 |
| $ | 25,977 |
|
Accounts payable |
| 11,615 |
| 8,105 |
| ||
Accrued expenses |
| 36,034 |
| 55,787 |
| ||
Unearned revenue |
| 7,098 |
| 14,158 |
| ||
Deferred maintenance |
| 16,477 |
| 24,325 |
| ||
Total current liabilities |
| 99,201 |
| 128,352 |
| ||
Long-term debt, net of current portion |
| 1,213 |
| 1,945 |
| ||
Other noncurrent liabilities |
| 70,023 |
| 68,206 |
| ||
Total liabilities |
| 170,437 |
| 198,503 |
| ||
Commitments and contingencies |
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
Common stock |
| 3 |
| 3 |
| ||
Additional paid-in capital |
| 1,212,194 |
| 1,210,797 |
| ||
Accumulated other comprehensive loss |
| (46 | ) | 37 |
| ||
Accumulated deficit |
| (1,185,727 | ) | (1,169,204 | ) | ||
Total stockholders’ equity |
| 26,424 |
| 41,633 |
| ||
Total liabilities and stockholders’ equity |
| $ | 196,861 |
| $ | 240,136 |
|
4
BROADVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
Three Months Ended | Nine Months Ended | ||||||||||||
|
| 2003 |
| 2002 |
| 2003 |
| 2002 |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
| ||||
Software licenses |
| $ | 5,076 |
| $ | 10,756 |
| $ | 19,875 |
| $ | 29,244 |
|
Services |
| 13,493 |
| 16,483 |
| 44,954 |
| 57,869 |
| ||||
Total revenues |
| 18,569 |
| 27,239 |
| 64,829 |
| 87,113 |
| ||||
Cost of revenues: |
|
|
|
|
|
|
|
|
| ||||
Cost of software licenses |
| 666 |
| 1,414 |
| 1,549 |
| 3,417 |
| ||||
Cost of services |
| 5,915 |
| 8,751 |
| 19,650 |
| 31,507 |
| ||||
Total cost of revenues |
| 6,581 |
| 10,165 |
| 21,199 |
| 34,924 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Gross profit |
| 11,988 |
| 17,074 |
| 43,630 |
| 52,189 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
| ||||
Research and development |
| 4,467 |
| 7,774 |
| 16,681 |
| 34,755 |
| ||||
Sales and marketing |
| 6,710 |
| 9,384 |
| 19,585 |
| 41,365 |
| ||||
General and administrative |
| 2,885 |
| 2,573 |
| 7,586 |
| 13,775 |
| ||||
Litigation settlement costs |
| 4,250 |
| — |
| 4,250 |
| — |
| ||||
Goodwill and intangible amortization |
| — |
| 887 |
| 887 |
| 2,661 |
| ||||
Restructuring charge |
| 4,509 |
| 63,205 |
| 13,361 |
| 103,150 |
| ||||
Impairment of assets |
| — |
| 853 |
| — |
| 3,129 |
| ||||
Total operating expenses |
| 22,821 |
| 84,676 |
| 62,350 |
| 198,835 |
| ||||
Operating loss |
| (10,833 | ) | (67,602 | ) | (18,720 | ) | (146,646 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest income, net |
| 81 |
| 658 |
| 673 |
| 1,908 |
| ||||
Other income (expense), net |
| 574 |
| (651 | ) | 1,780 |
| (8,588 | ) | ||||
Loss before provision for income taxes |
| (10,178 | ) | (67,595 | ) | (16,267 | ) | (153,326 | ) | ||||
Provision for income taxes |
| (87 | ) | (138 | ) | (256 | ) | (7,219 | ) | ||||
Net loss |
| $ | (10,265 | ) | $ | (67,733 | ) | $ | (16,523 | ) | $ | (160,545 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share |
| $ | (0.31 | ) | $ | (2.11 | ) | $ | (0.51 | ) | $ | (5.02 | ) |
Diluted loss per share |
| $ | (0.31 | ) | $ | (2.11 | ) | $ | (0.51 | ) | $ | (5.02 | ) |
Shares used in computing basic loss per share |
| 32,906 |
| 32,171 |
| 32,706 |
| 31,961 |
| ||||
Shares used in computing diluted loss per share |
| 32,906 |
| 32,171 |
| 32,706 |
| 31,961 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
PRO FORMA FINANCIAL INFORMATION(1): |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income (loss) |
| $ | (5,458 | ) | $ | (2,285 | ) | $ | (1,977 | ) | $ | (35,014 | ) |
Basic income (loss) per share |
| $ | (0.17 | ) | $ | (0.07 | ) | $ | (0.06 | ) | $ | (1.10 | ) |
Diluted income (loss) per share |
| $ | (0.17 | ) | $ | (0.07 | ) | $ | (0.06 | ) | $ | (1.10 | ) |
(1) Pro forma net income (loss) and the related per share amounts exclude restructuring charges, amortization of acquired technology, impairment of equity investments and impairment of assets. Pro forma net income (loss) and pro forma cost of revenues and operating expenses reconcile to the comparable amounts under generally accepted accounting principles as follows (in thousands):
5
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||
|
| 2003 |
| 2002 |
| 2003 |
| 2002 |
| ||||
Net loss, generally accepted accounting principles |
| $ | (10,265 | ) | $ | (67,733 | ) | $ | (16,523 | ) | $ | (160,545 | ) |
Pro forma adjustments: |
|
|
|
|
|
|
|
|
| ||||
Restructuring charges |
| 4,509 |
| 63,205 |
| 13,361 |
| 103,150 |
| ||||
Amortization of acquired technology |
| — |
| 887 |
| 887 |
| 2,661 |
| ||||
Impairment of equity investments |
| 298 |
| 503 |
| 298 |
| 10,312 |
| ||||
Provision for deferred tax valuation allowance |
| — |
| — |
| — |
| 6,279 |
| ||||
Impairment of assets |
| — |
| 853 |
| — |
| 3,129 |
| ||||
Total pro forma adjustments |
| 4,807 |
| 65,448 |
| 14,546 |
| 125,531 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Pro forma net loss |
| $ | (5,458 | ) | $ | (2,285 | ) | $ | (1,977 | ) | $ | (35,014 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Cost of revenues and operating expenses, generally accepted accounting principles |
| $ | 29,402 |
| $ | 94,841 |
| $ | 83,549 |
| $ | 233,759 |
|
Pro forma adjustments: |
|
|
|
|
|
|
|
|
| ||||
Restructuring charges |
| (4,509 | ) | (63,205 | ) | (13,361 | ) | (103,150 | ) | ||||
Amortization of acquired technology |
| — |
| (887 | ) | (887 | ) | (2,661 | ) | ||||
Total pro forma adjustments |
| (4,509 | ) | (64,092 | ) | (14,248 | ) | (105,811 | ) | ||||
Pro forma cost of revenues and operating expenses |
| $ | 24,893 |
| $ | 30,749 |
| $ | 69,301 |
| $ | 127,948 |
|
6