UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) November 17, 2004
CONVERA CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 000-31989 54-1987541
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(State or other jurisdiction of incorporation) (Commission File No.) (I.R.S. Employer Identification No.)
1921 GALLOWS ROAD, SUITE 200
VIENNA, VIRGINIA 22182
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(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (703) 761-3700
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
__ Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
___ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
___ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
___ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results Of Operations And Financial Condition
Attached and incorporated herein by reference as Exhibit 99.1 is a copy of
a press release of Convera Corporation (the "Company"), dated November 17, 2004,
reporting the Company's financial results for the quarter ended October 31,
2004. Such information, including the Exhibit attached hereto, shall not be
deemed "filed" for purposes of Section 18 of the Securities Act of 1934, nor
shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933, except as shall be expressly set forth by specific reference in
such filing.
Item 9.01(c). Financial Statements and Exhibits
99.1 Press Release of Convera Corporation dated November 17, 2004,
reporting Convera Corporation's financial results for the quarter ended October
31, 2004.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
CONVERA CORPORATION
By: /s/ JOHN R. POLCHIN
______________________
John R. Polchin
Chief Financial Officer
Date: November 17, 2004
Exhibit 99.1
CONVERA
Contacts: 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 Third Quarter Results
Vienna, Va., November 17, 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 October 31, 2004.
Revenues for the third quarter of fiscal 2005 totaled $6.1 million, a $2.6
million decrease from the $8.7 million as reported for the comparable period of
the prior year. This variance is primarily attributable to a $3.4 million
federal enterprise license transaction recorded during the year-ago period and
the absence of a like-sized deal for the third quarter of fiscal 2005. Gross
profit for the three-month period ended October 31, 2004 totaled $4.1 million,
resulting in a gross margin of 67%. The gross profit and gross margin for the
comparable period of the prior year were $6.8 million and 79% respectively.
The net loss for the three-month period ended October 31, 2004 was $4.5
million (inclusive of a $518,000 restructuring charge related to Convera's
August 2004 actions effected to streamline software operations), or $0.13 per
share, compared to a net loss of $3.3 million, or $0.10 per share, for the
comparable year-ago quarter.
Cash and investments as of October 31, 2004 totaled $22.7 million,
inclusive of $10.3 million in proceeds from the completion of the September 2004
private placement as previously announced. This cash balance compares to $30.6
million as of January 31, 2004.
Commenting on the quarter, Patrick C. Condo, President and Chief Executive
Officer, Convera stated, "The quarter reflected partial benefits of our August
realignment and expense actions, a more targeted effort towards the evolving
government sector and continued progress surrounding the development of our Web
initiative. These activities will be our primary focus over the coming quarters
as we seek to further advance our technology offerings by providing the
marketplace with cohesive search platforms for both internal and Web-based
content."
As the Company has previously announced, it has embarked on an advanced
development effort focused on applying portions of the Company's existing
technology to assist customers in locating contextually relevant information
from the World Wide Web. This development effort has since progressed to a
software prototype aimed at fully indexing the Web. To date, the Company has met
all internal development milestones regarding this initiative. The Company will
comment on a timeframe for commercial availability if and when appropriate.
Further, as previously announced, in concert with this effort the Company has
executed an enterprise hosting service agreement with AT&T to host this proposed
future product offering. Capital outlays to date, in connection with this
proposed product offering, have been limited to equipment, personnel and general
operating costs, which are expected to increase as progress continues. The
Company is also assessing future capital requirements for this initiative and
may elect to seek funding sources over the coming quarters.
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Page 2 - Convera Reports Third Quarter Results
The attached financial information compares the results of operations for
the three-month and nine-month periods ended October 31, 2004 to the same
periods in 2003 and the balance sheet as of October 31, 2004 to the balance
sheet as of January 31, 2004.
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 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 and development including the Web initiative; 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,
2004 2003 2004 2003
(unaudited) (unaudited)
Revenues:
License $ 3,043 $ 6,279 $ 11,096 $ 15,097
Services 1,274 741 2,898 3,407
Maintenance 1,813 1,677 5,373 4,766
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Total revenues 6,130 8,697 19,367 23,270
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Cost of Revenues:
License 516 368 1,643 1,320
Services 1,074 963 2,591 3,755
Maintenance 428 534 1,387 1,500
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Total cost of revenues 2,018 1,865 5,621 6,575
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Gross Margin 4,112 6,832 13,746 16,695
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Operating Expenses:
Sales and marketing 2,931 4,375 12,246 13,708
Research and product development 3,039 2,894 10,311 9,395
General and administrative 2,187 2,908 7,109 7,432
Restructuring charge 518 - 518 620
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Total operating expenses 8,675 10,177 30,184 31,155
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Operating Loss (4,563) (3,345) (16,438) (14,460)
Interest Income, net 45 44 112 145
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Net Loss $ (4,518) $ (3,301) $(16,326) $(14,315)
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Net loss per common share - basic & diluted $ (0.13) $ (0.10) $ (0.47) $ (0.47)
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Weighted-average number of common
shares outstanding - basic & diluted 35,824 33,800 34,605 30,699
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Page 3 - Convera Reports Third 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 October 31, 2004 January 31, 2004
(unaudited)
Current Assets
Cash and cash equivalents $ 22,662 $ 30,530
Short term investments 71 71
Accounts receivable, net 6,714 5,464
Prepaid expenses and other 2,274 2,536
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Total current assets 31,721 38,601
Other assets, net 3,920 3,984
Goodwill 2,275 2,275
Other intangible assets 633 835
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Total Assets $ 38,549 $ 45,695
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 2,802 $ 2,615
Accrued expenses 3,331 4,093
Accrued bonuses 300 745
Deferred revenues 3,869 3,720
Restructuring reserve 793 620
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11,095 11,793
Restructuring reserve, net of
current portion 265 887
Other long-term liabilities 485 1,647
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Total long-term liabilities 750 2,534
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Total Liabilities 11,845 14,327
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Shareholders' Equity 26,704 31,368
Total Liabilities & Shareholders'
Equity $ 38,549 $ 45,695
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