Contact: Anna Van Lier
Director, Corporate Communications
Convera
703.761.3700
avanlier@convera.com
Convera Announces FY '04 Fourth Quarter and
Year-End Financial Results
Annual Revenues Up 24% as Federal Business Grows by 138%
Vienna, Va., March 10, 2004 - Convera Corporation (NASDAQ: CNVR), a leading
provider of search and categorization software for enterprises and government
agencies, today reported financial results for its fourth quarter and fiscal
year ended January 31, 2004.
Total revenues for the fourth quarter were $6.0 million, essentially flat
compared to the same quarter last fiscal year. For the year ended January 31,
2004, total revenues were $29.3 million, an increase of 24% compared to revenues
of $23.6 million reported last fiscal year. The increase in annual revenues was
driven by strong growth in the company's Federal business, in which total
revenues were up 138% over the prior year.
The net loss for the fourth quarter was $3.7 million, or $0.11 per share,
compared to a net loss of $4.3 million, or $0.15 per share, in the fourth
quarter last year. The net loss for the year ended January 31, 2004 was $18.1
million, or $0.57 per common share, compared to a net loss of $29.1 million, or
$1.01 per common share one year ago.
Convera's North American commercial revenues for the fourth quarter grew by 7%
and federal revenues increased 22% compared to the fourth quarter last year.
This was the ninth consecutive quarter in which the company's Federal business
reported revenue growth compared to the same period of the previous year.
International revenues declined 29% compared to the fourth quarter last year.
The Company has more than 900 customers worldwide which includes 250 government
customers, 100 of which are involved in intelligence and law enforcement.
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 900
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
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.
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Page 2 - Convera Announces Fourth Quarter, Year-End Financial Results
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 Year Ended
January 31, January 31,
2004 2003 2004 2003
---- ---- ---- ----
(unaudited) (unaudited) (unaudited)
Revenues:
License $ 3,225 $ 3,520 $ 18,322 $ 13,062
Services 932 902 4,338 4,018
Maintenance 1,824 1,613 6,591 6,534
---------------- --------------- --------------- ----------------
---------------- --------------- --------------- ----------------
Total revenues 5,981 6,035 29,251 23,614
---------------- --------------- --------------- ----------------
---------------- --------------- --------------- ----------------
Cost of Revenues:
License 502 1,053 1,822 3,485
Services 960 872 4,715 5,446
Maintenance 533 365 2,033 1,766
---------------- --------------- --------------- ----------------
Total cost of revenues 1,995 2,290 8,570 10,697
---------------- --------------- --------------- ----------------
Gross Margin 3,986 3,745 20,681 12,917
---------------- --------------- --------------- ----------------
Operating Expenses:
Sales and marketing 4,416 3,649 18,124 20,018
Research and product development 2,586 2,341 11,981 11,639
General and administrative 3,133 1,755 10,564 8,642
Restructuring charges - 447 621 2,337
Incentive bonus payments due to employees - - - (138)
Acquired in-process research & development - - - 126
---------------- --------------- --------------- ----------------
---------------- ---------------
Total operating expenses 10,135 8,192 41,290 42,624
---------------- --------------- --------------- ----------------
Operating Loss (6,149) (4,447) (20,609) (29,707)
Other Income, net 2,405 111 2,550 636
---------------- --------------- --------------- ----------------
Net Loss $ (3,744) $ (4,336) $ (18,059) $ (29,071)
================ =============== =============== ================
================ =============== =============== ================
Net loss per common share - basic & diluted $ (0.11) $ (0.15) $ (0.57) $ (1.01)
================ =============== =============== ================
================ =============== =============== ================
Weighted-average number of common
shares outstanding - basic & diluted 33,821 29,003 31,486 28,854
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 January 31, 2004 January 31, 2003
---------------- ----------------
(unaudited)
Current Assets
Cash and cash equivalents $ 30,530 $ 10,318
Short term investments 71 20,148
Accounts receivable, net 5,463 6,732
Prepaid expenses and other 2,537 2,509
---------------------- -----------------------
---------------------- -----------------------
Total current assets 38,601 39,707
Other assets, net 3,983 6,060
Goodwill 2,275 2,268
Other intangible assets 836 1,104
---------------------- -----------------------
Total Assets $ 45,695 $ 49,139
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 2,615 $ 3,069
Accrued expenses 4,093 7,220
Accrued bonuses 745 919
Deferred revenues 3,720 2,739
Restructuring reserve 620 1,326
---------------------- -----------------------
---------------------- -----------------------
Total current liabilities 11,793 15,273
Restructuring reserve, net of
current portion 887 1,494
Other long-term liabilities 1,647 -
---------------------- -----------------------
Total long-term liabilities 2,534 1,494
---------------------- -----------------------
Total Liabilities 14,327 16,767
---------------------- -----------------------
---------------------- -----------------------
Shareholders' Equity 31,368 32,372
Total Liabilities & Shareholders'
Equity $ 45,695 $ 49,139
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