EXHIBIT 99.1
Contact: Chris Mann Anna Van Lier
Chief Financial Officer Director, Corporate Communications
Convera Convera
703.761.3700 (703)761.3700
cmann@convera.com avanlier@convera.com
CONVERA ANNOUNCES SECOND QUARTER FINANCIAL RESULTS
REVENUES GROW BY 51% YEAR-OVER-YEAR AND 9% SEQUENTIALLY
Vienna, Va., August 27, 2003 - Convera Corporation (NASDAQ: CNVR), a leading
provider of search and categorization software for enterprises and government
agencies, today reported financial results for its second fiscal quarter ended
July 31, 2003.
Total revenues for the second quarter were $7.6 million, an increase of 51%
over total revenues of $5.0 million reported for the same quarter last fiscal
year. The second quarter revenues also represent a sequential increase of 9%
over total revenues for the first quarter of this year. The company's total
expenses for the second quarter were $12.8 million, down 10% from $14.2 million
in the second fiscal quarter last year. For the second quarter, the company
recorded a net loss of $5.1 million or $0.18 per common share, an improvement of
43% compared to a net loss of $9.0 million or $0.31 per common share in the
second fiscal quarter last year.
For the six months ended July 31, 2003, total revenues were $14.6 million
compared to total revenues of $11.3 million reported for the same period last
year, an increase of 29%. The company recorded a net loss of $11.0 million, or
$0.38 per common share, compared to a net loss of $18.6 million, or $0.65 per
common share, for the same period last year, an improvement of 41%.
During the second quarter, the company's Federal government business
continued to exhibit strong growth, with revenues up 167% compared to the same
period last year. The company's overall increase in revenues was driven by large
deals with leading financial institutions and worldwide government
organizations, including civilian, defense, and intelligence agencies.
About Convera Convera is a leading provider of mission-critical enterprise
search and categorization solutions. Convera's RetrievalWare solutions maximize
return on investment in vast stores of unstructured information by providing
highly scalable, fast, accurate and secure search across more than 200 forms of
text, video, image and audio information, in more than 45 languages. More than
800 customers in 33 countries rely on Convera's search solutions to power a
broad range of mission-critical applications including enterprise portals,
knowledge management, intelligence gathering, profiling, corporate policy
compliance, regulatory compliance, customer service and more. For more
information, contact Convera at 800-788-7758, via e-mail at info@convera.com or
on the Web at www.convera.com
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Page 2 - CONVERA ANNOUNCES SECOND QUARTER FINANCIAL RESULTS
This release, including any statements from Convera personnel, contains
statements about Convera's future expectations, performance, plans, and
prospects, as well as assumptions about future events. The reader is cautioned
not to put undue reliance on these forward-looking statements, as these
statements are subject to numerous factors and uncertainties, including without
limitation, business and economic conditions and trends; continued success in
technological advances; possible disruption in commercial activities caused by
terrorist activity and armed conflict, such as changes in logistics and security
arrangements; reduced customer demand relative to expectations; competitive
factors; and other risk factors listed from time to time in the company's SEC
reports. Actual results may differ materially from our expectations as the
result of these and other important factors relating to Convera's business and
product development efforts, which are further described in Convera's filings
with the Securities and Exchange Commission. These filings can be obtained from
the SEC's website located at www.sec.gov. Any forward-looking statements are
based on information available to Convera on the date of this release, and
Convera assumes no obligation to update such statements. The Convera design logo
and the following are worldwide trademarks of Convera: Convera(TM),
RetrievalWare(R), and Screening Room(R). The names of actual companies and
products mentioned herein may be the trademarks of their respective owners. ###
The condensed, consolidated statements of operations for the Company appear
below and are presented in accordance with accounting principles generally
accepted in the United States. All amounts, except per share amounts, are
expressed in thousands of U.S. dollars.
Three Months Ended Six Months Ended
July 31, July 31,
2003 2002 2003 2002
(unaudited) (unaudited)
Revenues:
License $ 4,587 $ 2,376 $ 8,818 $ 5,986
Services 1,467 982 2,666 1,945
Maintenance 1,559 1,678 3,089 3,398
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Total revenues 7,613 5,036 14,573 11,329
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Cost of Revenues:
License 454 697 817 1,451
Services 1,375 1,393 2,792 3,209
Maintenance 503 444 966 947
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Total cost of revenues 2,332 2,534 4,575 5,607
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Gross Margin 5,281 2,502 9,998 5,722
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Operating Expenses:
Sales and marketing 4,634 5,162 9,333 11,547
Research and product development 3,219 3,003 6,500 6,263
General and administrative 2,233 2,381 4,524 4,918
Restructuring charges 295 1,043 621 1,890
Amortization of goodwill & other intangible assets 67 67 135 107
Incentive bonus payments due to employees - - - (138)
Acquired in-process research & development - - - 126
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Total operating expenses 10,448 11,656 21,113 24,713
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Operating Loss (5,167) (9,154) (11,115) (18,991)
Other Income, net 50 159 101 387
---------------- --------------- --------------- ----------------
Net Loss $ (5,117) $ (8,995) $ (11,014) $ (18,604)
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Net loss per common share - basic & diluted $ (0.18) $ (0.31) $ (0.38) $ (0.65)
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Weighted-average number of common
shares outstanding - basic & diluted 29,210 28,913 29,123 28,723
The condensed, consolidated balance sheets for the Company appear below and
are presented in accordance with accounting principles generally accepted in the
United States. All amounts are expressed in thousands of U.S. dollars.
July 31, 2003 January 31, 2003
ASSETS
(unaudited)
Current Assets
Cash and cash equivalents $ 31,227 $ 10,318
Short term investments 5,355 20,148
Accounts receivable, net 7,287 6,732
Prepaid expenses and other 3,164 2,509
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Total current assets 47,033 39,707
Other assets, net 5,102 6,060
Goodwill & other intangible assets 3,245 3,372
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Total Assets $ 55,380 $ 49,139
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 3,452 $ 3,069
Accrued expenses 7,309 7,220
Accrued bonuses 1,125 919
Deferred revenues 3,423 2,739
Restructuring reserve 884 1,326
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Total current liabilities 16,193 15,273
Restructuring reserve, net of current portion 1,204 1,494
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Total Liabilities 17,397 16,767
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Shareholders' Equity 37,983 32,372
Total Liabilities & Shareholders'
Equity $ 55,380 $ 49,139
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