Exhibit 99.1
[OBJECT OMITTED]
Contact: John R. Polchin Anna Van Lier
Chief Financial Officer Director, Corporate Communications
Convera Convera
703.761.3700 703.761.3700
jpolchin@convera.com avanlier@convera.com
Convera Reports First Quarter Results
Revenues Up 17% Year-Over-Year; 37% Sequentially
Vienna, Va., May 26, 2004 - Convera Corporation (NASDAQ: CNVR), a leading
provider of search and categorization software for enterprises and government
agencies, today announced financial results for the three-month period ended
April 30, 2004.
Revenue for the first quarter totaled $8.2 million, a 17% increase from the $7.0
million as reported for the year-ago quarter and a 37% sequential increase from
the three-month period ended January 31, 2004. Growth in government business
primarily accounted for the increase during the period. Gross profit for the
three-month period ended April 30, 2004 totaled $6.3 million, resulting in a
gross margin of 77%, as compared to 67% for the prior-year period.
Net loss for the three-month period ended April 30, 2004 was $4.8 million, or
$0.14 per share, compared to a net loss of $5.9 million, or $0.20 per share, for
the comparable year-ago period.
During the quarter the Company executed an enterprise license agreement with an
existing customer within the U.S. Department of Justice enabling the expanded
use of RetrievalWare throughout the Agency's field offices across the United
States. In addition to this, a multi-year enterprise license arrangement was
reached with an agency of the U.K. government involved in security efforts.
"Our first quarter results were largely fueled by the continued adoption of
Convera technology in large government security organizations worldwide," said
Patrick C. Condo, President and Chief Executive Officer of Convera. "These
organizations are on the leading edge of utilizing the advanced search and
discovery capabilities of RetrievalWare 8. We expect to further leverage this
sector over the coming quarters while we continue to pursue growth opportunities
within the commercial marketplace."
Cash and investments as of April 30, 2004 totaled $21.5 million. The larger than
expected change in cash from the year-end position is directly related to the
timing of certain planned collections that are now expected to be received
during the second quarter of fiscal 2005.
Attached is the financial information comparing results for the three-month
period ended April 30, 2004 to the same period in 2003.
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
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Page 2 - Convera Reports First Quarter 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.
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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
April 30,
2004 2003
---- ----
(unaudited) (unaudited)
Revenues:
License $ 5,856 $ 4,231
Services 583 1,199
Maintenance 1,731 1,530
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Total revenues 8,170 6,960
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Cost of Revenues:
License 659 430
Services 716 1,417
Maintenance 522 463
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Total cost of revenues 1,897 2,310
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Gross Margin 6,273 4,650
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Operating Expenses:
Sales and marketing 5,013 4,700
Research and product development 3,640 3,282
General and administrative 2,416 2,291
Restructuring charges - 325
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Total operating expenses 11,069 10,598
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Operating Loss (4,796) (5,948)
Other Income, net 37 51
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Net Loss $ (4,759) $ (5,897)
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Net loss per common share - basic & diluted $ (0.14) $ (0.20)
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Weighted-average number of common
shares outstanding - basic & diluted 33,936 29,033
Page 3 - Convera Reports First Quarter Results
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 April 30, 2004 January 31, 2004
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(unaudited)
Current Assets
Cash and cash equivalents $ 21,471 $ 30,530
Short term investments 71 71
Accounts receivable, net 10,605 5,464
Prepaid expenses and other 2,657 2,536
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Total current assets 34,804 38,601
Other assets, net 3,792 3,984
Goodwill 2,275 2,275
Other intangible assets 768 835
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Total Assets $ 41,639 $ 45,695
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 3,290 $ 2,615
Accrued expenses 4,020 4,093
Accrued bonuses 829 745
Deferred revenues 3,777 3,720
Restructuring reserve 620 620
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Total current liabilities 12,536 11,793
Restructuring reserve, net of
current portion 726 887
Other long-term liabilities 1,241 1,647
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Total long-term liabilities 1,967 2,534
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Total Liabilities 14,503 14,327
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Shareholders' Equity 27,136 31,368
Total Liabilities & Shareholders'
Equity $ 41,639 $ 45,695
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