Contacts: 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 THIRD QUARTER FINANCIAL RESULTS
REVENUES GROW BY 39% YEAR-OVER-YEAR AND 14% SEQUENTIALLY
Vienna, Va., December 10, 2003 - Convera Corporation (NASDAQ: CNVR), a leading
provider of search and categorization software for enterprises and government
agencies, today reported financial results for its third fiscal quarter ended
October 31, 2003.
Total revenues for the third quarter were $8.7 million, an increase of 39% over
total revenues of $6.3 million reported for the same quarter last fiscal year.
The third quarter revenues also represent a sequential increase of 14% over
total revenues for the second quarter of this year. The company's total expenses
for the third quarter were $12.0 million, down 4% from $12.5 million in the
third fiscal quarter last year. For the third quarter, the company reduced its
net loss for the period by 46% with a loss of $3.3 million or $0.10 per common
share, compared to a net loss of $6.1 million or $0.21 per common share in the
third fiscal quarter last year.
Federal license revenues were up 384% compared to the same quarter last year.
Large contracts with the Department of Defense and several intelligence agencies
fueled Convera's continued growth in the government market.
For the nine months ended October 31, 2003, total revenues were $23.3 million
compared to total revenues of $17.6 million reported for the same period last
year, an increase of 32%. The Company recorded a net loss of $14.3 million, or
$0.47 per common share, compared to a net loss of $24.7 million, or $0.86 per
common share, for the same period last year, a reduction of 42%.
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
Page 2 - Convera Announces Third 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 Nine Months Ended
October 31, October 31,
2003 2002 2003 2002
(unaudited) (unaudited)
Revenues:
License $ 6,279 $ 3,555 $ 15,097 $ 9,541
Services 741 1,172 3,407 3,117
Maintenance 1,677 1,523 4,766 4,921
---------------- --------------- --------------- ----------------
---------------- --------------- --------------- ----------------
Total revenues 8,697 6,250 23,270 17,579
---------------- --------------- --------------- ----------------
---------------- --------------- --------------- ----------------
Cost of Revenues:
License 301 806 1,118 2,257
Services 963 1,365 3,755 4,574
Maintenance 534 454 1,500 1,401
---------------- --------------- --------------- ----------------
Total cost of revenues 1,798 2,625 6,373 8,232
---------------- --------------- --------------- ----------------
Gross Margin 6,899 3,625 16,897 9,347
---------------- --------------- --------------- ----------------
Operating Expenses:
Sales and marketing 4,375 4,823 13,708 16,369
Research and product development 2,894 3,035 9,395 9,298
General and administrative 2,908 1,970 7,432 6,888
Restructuring charges - - 620 1,890
Amortization of intangible assets 67 67 202 174
Incentive bonus payments due to employees - - - (138)
Acquired in-process research & development - - - 126
---------------- --------------- --------------- ----------------
---------------- ---------------
Total operating expenses 10,244 9,895 31,357 34,607
---------------- --------------- --------------- ----------------
Operating Loss (3,345) (6,270) (14,460) (25,260)
Other Income, net 44 140 145 526
---------------- --------------- --------------- ----------------
Net Loss $ (3,301) $ (6,130) $ (14,315) $ (24,734)
================ =============== =============== ================
================ =============== =============== ================
Net loss per common share - basic & diluted $ (0.10) $ (0.21) $ (0.47) $ (0.86)
================ =============== =============== ================
================ =============== =============== ================
Weighted-average number of common
shares outstanding - basic & diluted 33,800 28,964 30,699 28,804
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.
ASSETS October 31, 2003 January 31, 2003
(unaudited)
Current Assets
Cash and cash equivalents $ 35,012 $ 10,318
Short term investments 133 20,148
Accounts receivable, net 6,926 6,732
Prepaid expenses and other 2,386 2,509
---------------------- -----------------------
---------------------- -----------------------
Total current assets 44,457 39,707
Other assets, net 4,724 6,060
Goodwill & other intangible assets 3,178 3,372
---------------------- -----------------------
---------------------- -----------------------
Total Assets $ 52,359 $ 49,139
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 2,933 $ 3,069
Accrued expenses 7,653 7,220
Accrued bonuses 1,130 919
Deferred revenues 4,190 2,739
Restructuring reserve 628 1,326
---------------------- -----------------------
---------------------- -----------------------
Total current liabilities 16,534 15,273
Restructuring reserve, net of current portion 1,040 1,494
---------------------- -----------------------
---------------------- -----------------------
Total Liabilities 17,574 16,767
---------------------- -----------------------
---------------------- -----------------------
Shareholders' Equity 34,785 32,372
Total Liabilities & Shareholders'
Equity $ 52,359 $ 49,139
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