Contact:
Todd Petruska
Burson-Marsteller
212-614-4704
todd.petruska@bm.com
Convera(R) Reports Fourth Quarter and Fiscal Year
2008 Financial Results
Vienna, Va., March 26, 2008 - Convera Corporation (NASDAQ: CNVR) -
www.convera.com - a leading provider of vertical search services for publishers,
today announced financial results for the three-month period and fiscal year
ended January 31, 2008.
On August 9, 2007, the Company completed the sale of the assets of its
RetrievalWare(R) enterprise search business to Fast RW Software for $23 million,
including $18.1 million of cash, $4.0 million of restricted cash held in escrow
and the assumption of approximately $0.9 million of liabilities related to the
employees of the RetrievalWare business. The Company recognized a $17.9 million
gain on this transaction.
All revenue and expenses reported for the RetrievalWare enterprise search
business for the three-month and fiscal year periods ended January 31, 2008 and
2007 were reported as discontinued operations in the statement of operations.
The assets and liabilities of the RetrievalWare enterprise search business are
reported as "held for sale" on the January 31, 2007 balance sheet.
Revenue from continuing operations for the fourth quarter of fiscal 2008 totaled
$280,000, an increase of $163,000 over the comparable year-ago period. Revenue
from continuing operations for the fiscal year ended January 31, 2008 totaled
$1,118,000, an increase of $849,000 over the prior year.
As of January 31, 2008, a total of 39 Excalibur supported vertical search sites
from 24 different publishers are in production. There were three vertical search
sites from a single publisher in production at January 31, 2007. Search activity
from the Excalibur supported vertical sites increased from 7.8 million searches
in the third quarter to 9.5 million in the 4th quarter.
As of today, a total of 45 Excalibur supported vertical search sites have been
launched into production. With the sites currently in production and those in
development, Convera is presently providing vertical search services to 30
different trade publishers. Patrick Condo, President and CEO of Convera, stated,
"We are pleased with the progress we are making in acquiring customers,
launching sites and increasing the traffic on our network. We expect to see the
financial results of this effort evidenced in this next fiscal year as the
impact of our efforts to increase revenue and decrease expenses becomes clear
beginning in the first quarter of this fiscal year.
The loss from continuing operations for the three-month period ended January 31,
2008, was $7.2 million, or $0.13 per share, compared to a loss of $8.6 million,
or $0.16 per share, for the comparable year-ago period. The net loss from
continuing operations for the fiscal year January 31, 2008, was $27.0 million,
or $0.51 per share, compared to a loss of $45.3 million, or $0.87 per share, for
the comparable year-ago period.
The decreased loss reflects the decrease in staffing and Convera's efforts to
discontinue non-strategic activities from streamlining actions taken during
fiscal 2008. Convera expects further benefits from these actions in the coming
quarters as a result of continued alignment of resources to pursue the
publishing marketplace.
Income from discontinued operations was $166,000 or $0.00 per share for the
three-month period ended January 31, 2008, compared to a net loss of $1.1
million or $0.02 per share for the comparable year-ago period. Net income from
discontinued operations for the three months ended represents an adjustment to
the gain recognized from the sale of RetrievalWare due to favorable finalization
of the purchase price adjustment and other transaction related contingencies.
Income from discontinued operations for the fiscal year ended was $17.9 million
or $0.34 per share, compared to net income of $456,000 or $0.01 per share in the
comparable period of the prior fiscal year. Net income from discontinued
operations for the fiscal year ended January 31, 2008, includes the $17.9
million gain recognized from the sale of the RetrievalWare business and $20,000
in income from operating this discontinued business.
Net loss for the three months ended January 31, 2008 was $7.0 million or $0.13
per share, which compares to a net loss of $9.7 million or $0.18 per share, for
the comparable period of the prior year.
Net loss for the fiscal year ended January 31, 2008, which includes the $17.9
million gain recognized on the sale of the RetrievalWare business, was $ 9.1
million or $0.17 per share, which compares to a net loss of $44.8 million or
$0.86 per share, for the comparable period of the prior year.
Cash and investments as of January 31, 2008, totaled $36.6 million. The attached
financial information compares the results of operations for the three-months
and fiscal year ended January 31, 2008, to the same periods in 2007, and the
balance sheet as of January 31, 2008 and 2007.
The condensed, consolidated statements of operations for the Company for the
three months ended January 31, 2008 and 2007 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
January 31,
----------------------------------------------------------
2008 2007
====== ======
Continuing Operations: (unaudited) (unaudited)
Revenues:
Hosted services $ 280 $ 117
Operating Expenses:
Cost of revenue - hosted services 3,199 2,021
Sales and marketing 896 1,035
Research and product development 1,076 2,560
General and administrative 2,026 3,698
Amortization of capitalized software - -
development costs - -
Impairment of long lived assets 603 -
---------- ----------
Total Expense 7,800 9,314
---------- ----------
Operating loss (7,520) (9,197)
Interest income , net 364 602
---------- ----------
Loss from continuing operations $ (7,156) $ (8,595)
---------- ----------
Discontinued Operations:
Loss from discontinued
operations - (1,142)
Gain on sale of discontinued
operation 166 -
---------- ----------
Income (loss) from discontinued
operations 166 (1,142)
---------- ----------
Net Loss $ (6,990) $ (9,737)
============ ============
Earning (loss) per share - basic
& diluted
Continuing operations $ (0.13) $ (0.16)
Discontinued operations 0.00 (0.02)
---------- ----------
$ (0.13) $ (0.18)
---------- ----------
Weighted average number of common
shares outstanding - basic
and diluted 53,280 52,810
============ ============
The condensed, consolidated statements of operations for the Company for the
fiscal years ended January 31, 2008 and 2007 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.
Fiscal Year Ended
January 31,
----------------------------------------------------------
2008 2007
====== ======
Continuing Operations:
Revenues:
Hosted services $ 1,118 $ 269
Operating Expenses:
Cost of revenue - hosted services 9,660 8,138
Sales and marketing 3,880 4,386
Research and product development 4,652 11,010
General and administrative 11,179 14,833
Amortization of capitalized software - -
development costs - 3,045
Impairment of long lived assets 603 6,407
---------- ----------
Total Expense 29,974 47,819
---------- ----------
Operating loss (28,856) (47,550)
Interest income , net 1,815 2,267
---------- ----------
Loss from continuing operations $ (27,041) $ (45,283)
---------- ----------
Discontinued Operations:
Income from discontinued
operations 20 456
Gain on sale of discontinued
operation 17,925 -
---------- ----------
Income (loss) from discontinued
operations 17,945 456
---------- ----------
Net Loss $ (9,096) $ (44,827)
============ ============
Earning (loss) per share - basic
& diluted
Continuing operations $ (0.51) $ (0.87)
Discontinued operations 0.34 0.01
---------- ----------
$ (0.17) $ (0.86)
============ ============
Weighted average number of common
shares outstanding - basic and
diluted 53,146 52,222
============ ============
The condensed, consolidated Balance Sheets for the Company as of January 31,
2008, and January 31, 2007, 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
Assets January 31, 2008 January 31, 2008
================== ==================
(unaudited) (unaudited)
Current Assets:
Cash and cash equivalents $ 36,641 $ 47,504
Accounts receivable, net 182 170
Escrow, Prepaid expenses and other 4,002 1,022
Assets held for sale - 6,281
---------- ----------
Total current assets 40,825 54,977
Equipment and leasehold improvements, net 4,913 3,714
Other assets 629 590
---------- ----------
Total assets $ 46,367 $ 59,281
============ ============
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $ 699 $ 1,796
Accrued expenses 2,282 2,232
Deferred revenues 651 725
Liabilities held for sale - 3,431
---------- ----------
Total Liabilities 3,632 8,184
Shareholder's Equity 42,735 51,097
Total liabilities and shareholders'
equity $ 46,367 $ 59,281
========== ==========
About Convera(R)
Convera is the leading provider of vertical search services for publishers.
Convera enables publishers to generate additional revenue by creating customized
search applications for specialist audiences under their own brand.
Convera vertical search applications can combine publisher proprietary content
with an editorially vetted best of the Web for specific professional audiences,
providing an authoritative and comprehensive search experience. Many of the
world's largest publishers are working with Convera to accelerate their
e-publishing strategies, meet growing online revenue goals and build loyal
online professional communities.
###
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; the ability to continue
funding operating losses; fluctuations in operating results including impacts
from reduced corporate IT spending and lengthier sales cycles; continued success
in technological advances and development; 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 reports to the Securities and Exchange Commission. 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 SEC. 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. Convera(R) and the Convera design logo are trademarks of Convera in
the United States and other countries.