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
March 2, 2005
Date of Report (Date of Earliest Event Reported)
CONVERA CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 000-31989 54-1987541
(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of incorporation) 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 March 2, 2005,
reporting the Company's financial results for the three-month period and fiscal
year ended January 31, 2005. 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 March 2, 2005, reporting
Convera Corporation's financial results for the three-month period and fiscal
year ended January 31, 2005.
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: March 2, 2005
Exhibit 99.1
CONVERA
Contact: John R. Polchin
Chief Financial Officer
Convera
703.761.3700
jpolchin@convera.com
Convera Reports Fourth Quarter and Full-Year Results
Vienna, Va., March 2, 2005 - 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 and
fiscal year (fiscal year 2005) ended January 31, 2005.
Revenue for the fourth quarter of fiscal 2005 totaled $6.3 million, a 6%
increase from the comparable period of fiscal 2004, while full-year revenue
totaled $25.7 million versus $29.3 million for the prior fiscal year period.
Gross profit for the three-month and twelve-month periods ended January 31, 2005
totaled $5.2 million and $19.0 million, respectively, compared to $4.0 million
and $20.7 million for the three and twelve-month periods, respectively, ended
January 31, 2004. Consequently, gross margins for the three-month and
twelve-month periods ended January 31, 2005 were 83% and 74%, respectively,
while gross margins for the comparable periods of the prior fiscal year were 67%
and 71%, respectively.
The net loss for the quarter ended January 31, 2005 was $3.5 million (inclusive
of $426,000 in net restructuring charges incurred in December 2004) or $0.09 per
share, compared to a net loss of $3.7 million, or $0.11 per share, for the
comparable quarter of fiscal 2004. The net loss for the fiscal year ended
January 31, 2005 was $19.8 million (inclusive of $944,000 in net restructuring
charges incurred in the latter half of the fiscal year), or $0.56 per share,
compared to a net loss of $18.1 million, (inclusive of $621,000 in restructuring
charges) or $0.57 per share for the fiscal year ended January 31, 2004.
Cash and investments as of January 31, 2005 totaled $17.8 million.
Commenting on the Company's results, Patrick C. Condo, President and Chief
Executive Officer, Convera stated, "This past year was one of transition for
Convera. We embarked upon a development initiative aimed at extending our
technology to the World Wide Web, effected a realignment of our core software
operations (including the elimination of approximately $22 million in annualized
expenses), and redirected our primary selling efforts towards the emerging
government sector. Entering fiscal 2006, we believe we are well positioned to
deliver improved bottom-line performance, in concert with continued technology
advancements from our Web indexing initiative, as well as RetreivalWare(R), our
core software offering."
On February 2, 2005 the Company announced that its advanced development effort
focused on applying portions of the Company's existing technology to searching
and indexing contextually relevant information from the World Wide Web attained
a development milestone by indexing more than 1 billion documents. The Company
further announced that it expects to launch a service offering during the next
two quarters. Capital outlays to date, in connection with this proposed service
offering, remain limited to equipment, personnel and general operating costs,
which are expected to increase as the indexing initiative progresses. The
Company continues to assess future capital requirements for this Web indexing
initiative and may elect to seek additional funding sources over the coming
quarters.
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Page 2 - Convera Reports Fourth Quarter and Full-Year Results
The attached financial information compares the results of operations for the
three-month and twelve-month periods ended January 31, 2005 to the same periods
in 2004 and the balance sheet as of January 31, 2005 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 Twelve Months Ended
January 31, January 31,
2005 2004 2005 2004
(unaudited) (unaudited) (unaudited)
Revenues:
License $ 3,263 $ 3,225 $ 14,360 $ 18,322
Services 849 932 3,746 4,338
Maintenance 2,219 1,824 7,592 6,591
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Total revenues 6,331 5,981 25,698 29,251
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Cost of Revenues:
License 14 501 1,658 1,822
Services 741 961 3,332 4,715
Maintenance 332 533 1,718 2,033
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Total cost of revenues 1,087 1,995 6,708 8,570
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Gross Margin 5,244 3,986 18,990 20,681
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Operating Expenses:
Sales and marketing 2,230 4,416 14,476 18,124
Research and product development 3,490 2,586 13,801 11,981
General and administrative 2,655 3,133 9,764 10,564
Restructuring charge 426 - 944 621
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Total operating expenses 8,801 10,135 38,985 41,290
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Operating Loss (3,557) (6,149) (19,995) (20,609)
Other Income, net 63 2,405 175 2,550
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Net Loss $ (3,494) $ (3,744) $(19,820) $(18,059)
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Net loss per common share - basic & diluted $ (0.09) $ (0.11) $ (0.56) $ (0.57)
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Weighted-average number of common
shares outstanding - basic & diluted 37,899 33,821 35,433 31,486
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Page 3 - Convera Reports Fourth Quarter and Full-Year 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 January 31, 2005 January 31, 2004
(unaudited)
Current Assets
Cash and cash equivalents $ 17,766 $ 30,530
Short term investments 71 71
Accounts receivable, net 6,530 5,464
Prepaid expenses and other 2,390 2,536
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Total current assets 26,757 38,601
Other assets, net 6,696 3,984
Goodwill 2,275 2,275
Other intangible assets 566 835
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Total Assets $ 36,294 $ 45,695
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 1,967 $ 2,615
Accrued expenses 3,529 4,093
Accrued bonuses 526 745
Deferred revenues 4,288 3,720
Restructuring reserve 835 620
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11,145 11,793
Restructuring reserve, net of
current portion - 887
Other long-term liabilities - 1,647
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Total long-term liabilities - 2,534
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Total Liabilities 11,145 14,327
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Shareholders' Equity 25,149 31,368
Total Liabilities & Shareholders'
Equity $ 36,294 $ 45,695
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