EXHIBIT 99.1
INTERWOVEN REPORTS FINAL DETAILS AND IMPROVED GAAP RESULTS AFTER
IMPACT OF PREVIOUSLY ANNOUNCED REAL ESTATE TRANSACTION
Q3 GAAP Net Loss per Share Announced on October 20 Improved by $0.02
SUNNYVALE, CALIF. - NOVEMBER 2, 2004 - Interwoven, Inc. (Nasdaq: IWOV), provider
of Enterprise Content Management (ECM) solutions for business, today announced
effectiveness of an amendment to its headquarters lease that relieves it of
future lease payment obligations and improves its previously reported third
quarter of 2004 net loss calculated in accordance with generally accepted
accounting principles by $1.1 million, or $0.02 per share.
Interwoven will have no further obligations on 89,000 square feet of currently
unoccupied space following the payment of approximately $12.3 million to Ariba.
Under the terms of the amendment, Interwoven will be relieved of its obligation
to pay rent and operating expenses on the space for the remaining lease term,
which ends July 31, 2007, improving its future cash flows. As a result of the
effectiveness of this amendment, Interwoven will adjust its previously reported
financial results calculated in accordance with generally accepted accounting
principles for the three months ended September 30, 2004 by reducing its
reported net loss from $2.6 million, or $0.06 per share, to $1.5 million, or
$0.04 per share, and from a net loss of $25.2 million, or $0.62 cents per share,
to $24.1 million, or $0.60 per share, for the nine months ended September 30,
2004. The adjusted results for the three and nine months ended September 30,
2004 are included with this release.
For the third quarter of 2004, Interwoven reported total revenues of $40.3
million, an increase from the $39.5 million posted in the quarter ended June 30,
2004, and an increase of 54 percent from total revenues of $26.1 million for the
same period last year. The adjusted net loss for the third quarter of 2004,
calculated in accordance with generally accepted accounting principles, was $1.5
million, or $0.04 per share, compared to a net loss of $18.8 million, or $0.71
per share, for the same period last year. On a pro forma basis, Interwoven
reported net income of $1.5 million for the third quarter of 2004, or $0.04 per
share compared to a pro forma net loss of $4.4 million, or $0.17 per share, in
the third quarter last year. Pro forma net income (loss) excludes amortization
of stock-based compensation and intangible assets, restructuring adjustments and
the related tax impact of these items.
For the nine months ended September 30, 2004, Interwoven reported total revenues
of $117.2 million, an increase of 50 percent from the $77.9 million for the same
period last year. The adjusted net loss for the nine months ended September 30,
2004, calculated in accordance with generally accepted accounting principles,
was $24.1 million, or $0.60 per share, compared to a net loss of $35.1 million,
or $1.36 per share, for the same period last year. On a pro forma basis,
Interwoven reported net income of $1.6 million for the nine months ended
September 30, 2004, or $0.04 on a per share basis, compared to a pro forma net
loss of $15.8 million, or $0.61 per share, last year. Pro forma net income
(loss) excludes restructuring adjustments, amortization of stock-based
compensation and intangible assets, a charge for in-process research and
development in 2003 and the related tax impact of these items.
A reconciliation of net loss calculated in accordance with generally accepted
accounting principles and pro forma net income (loss), is provided in the tables
immediately following the consolidated statements of operations below. These pro
forma measures are not in accordance
with, or an alternative for, similar measures calculated in accordance with
generally accepted accounting principles and may be different from pro forma
measures used by other companies. Interwoven believes that the presentation of
pro forma results provides useful information to management and investors
regarding underlying trends in its consolidated financial condition and results
of operations. Readers of Interwoven's consolidated financial statements are
advised to review and carefully consider the financial information prepared in
accordance with generally accepted accounting principles contained in this press
release and Interwoven's periodic filings with the Securities and Exchange
Commission.
ABOUT INTERWOVEN
Interwoven, Inc., provider of Enterprise Content Management solutions for
business, enables organizations to unify people, content and processes to
minimize business risk, accelerate time-to-value and sustain lower total cost of
ownership. Interwoven delivers deep industry-specific solutions which reduce
business process cycle time from initial collaboration through design,
production, sales, marketing, legal review, IT and service. Interwoven leads the
industry with a service-oriented architecture today and easy-to-use, best-
in-class components and solutions. Today, more than 3,000 enterprises, law firms
and professional services organizations worldwide are Interwoven customers
including British Telecom, Ford, Freshfields Bruckhaus Deringer, General Motors,
Jones Day, Motorola and Yamaha. Interwoven is headquartered in Sunnyvale,
Calif., with offices around the world. For more information visit
www.interwoven.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking" statements, including statements
about historical results that may suggest trends for our business. These
statements are based on estimates and information available to us at the time of
this press release and are not guarantees of future performance. All statements
other than statements of historical fact are statements that could be deemed as
forward-looking statements. Actual results could differ materially from our
current expectations as a result of many factors, including: customer acceptance
of our enterprise content management solutions and new product releases may be
slower than we anticipate; customer spending on enterprise content management
initiatives may decline; our ability to cross-sell additional products into our
installed base of customers; intense competition in our market which makes our
results difficult to predict; development of certain Interwoven products and
services may not proceed as planned; and the introduction of new products or
services by competitors and the ongoing consolidation in our market place could
delay or reduce sales. These and other risks and uncertainties associated with
our business are described in our most recent Annual Report on Form 10-K,
subsequent Quarterly Reports on Form 10-Q and Current Reports on Forms 8-K,
which are on file with the Securities and Exchange Commission and available
through WWW.SEC.GOV.
###
INTERWOVEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS, AS ADJUSTED
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------- -----------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Revenues:
License $ 16,157 $ 10,383 $ 49,335 $ 29,726
Support and service 24,104 15,690 67,815 48,128
----------- ----------- ----------- -----------
Total revenues 40,261 26,073 117,150 77,854
Cost of revenues:
License 3,387 1,426 9,864 2,593
Support and service 9,705 7,260 28,643 23,842
----------- ----------- ----------- -----------
Total cost of revenues 13,092 8,686 38,507 26,435
----------- ----------- ----------- -----------
Gross profit 27,169 17,387 78,643 51,419
Operating expenses:
Sales and marketing 17,300 13,251 52,585 41,518
Research and development 7,746 6,058 23,033 18,062
General and administrative 3,052 2,867 9,022 9,346
Amortization of stock-based compensation 941 475 4,352 1,482
Amortization of intangible assets 1,217 657 3,631 1,545
In-process research and development -- -- -- 599
Restructuring and excess facilities (1,360) 13,324 10,477 15,701
----------- ----------- ----------- -----------
Total operating expenses 28,896 36,632 103,100 88,253
----------- ----------- ----------- -----------
Loss from operations (1,727) (19,245) (24,457) (36,834)
Interest income and other, net 468 579 1,114 2,513
----------- ----------- ----------- -----------
Loss before provision for income taxes (1,259) (18,666) (23,343) (34,321)
Provision for income taxes 243 174 729 813
----------- ----------- ----------- -----------
Net loss $ (1,502) $ (18,840) $ (24,072) $ (35,134)
=========== =========== =========== ===========
Basic and diluted net loss per common share $ (0.04) $ (0.71) $ (0.60) $ (1.36)
=========== =========== =========== ===========
Shares used in computing basic and diluted
net loss per common share 40,564 26,398 40,374 25,866
=========== =========== =========== ===========
INTERWOVEN, INC.
IMPACT OF PRO FORMA ADJUSTMENTS ON REPORTED NET LOSS, AS ADJUSTED
(In thousands, except per share data)
(Unaudited)
Three Months Ended Three Months Ended
September 30, 2004 September 30, 2003
------------------------------------ ---------------------------------------
As reported Adjustments* Pro forma As reported Adjustments* Pro forma
----------- ----------- --------- ----------- ----------- ---------
Revenues:
License $ 16,157 $ -- $ 16,157 $ 10,383 $ -- $ 10,383
Support and service 24,104 -- 24,104 15,690 -- 15,690
---------- ----------- --------- ----------- ----------- ---------
Total revenues 40,261 -- 40,261 26,073 -- 26,073
Cost of revenues:
License 3,387 (2,739) 648 1,426 -- 1,426
Support and service 9,705 -- 9,705 7,260 -- 7,260
---------- ----------- --------- ----------- ----------- ---------
Total cost of revenues 13,092 (2,739) 10,353 8,686 -- 8,686
---------- ---------- --------- ----------- ----------- ---------
Gross profit 27,169 2,739 29,908 17,387 -- 17,387
Operating expenses:
Sales and marketing 17,300 -- 17,300 13,251 -- 13,251
Research and development 7,746 -- 7,746 6,058 -- 6,058
General and administrative 3,052 -- 3,052 2,867 -- 2,867
Amortization of stock-
based compensation 941 (941) -- 475 (475) --
Amortization of intangible assets 1,217 (1,217) -- 657 (657) --
Restructuring and excess facilities (1,360) 1,360 -- 13,324 (13,324) --
---------- ---------- --------- ----------- --------- ---------
Total operating expenses 28,896 (798) 28,098 36,632 (14,456) 22,176
---------- ----------- --------- ----------- --------- ---------
Income (loss) from operations (1,727) 3,537 1,810 (19,245) 14,456 (4,789)
Interest income and other, net 468 -- 468 579 -- 579
---------- ----------- --------- ----------- ----------- ---------
Income (loss) before income taxes (1,259) 3,537 2,278 (18,666) 14,456 (4,210)
Provision for income taxes 243 532 775 174 -- 174
---------- ----------- --------- ----------- ----------- ---------
Net income (loss) $ (1,502) $ 3,005 $ 1,503 $ (18,840) $ 14,456 $ (4,384)
========== =========== ========= =========== ======== =========
Net income (loss) per share $ (0.04) $ 0.04 $ (0.71) $ (0.17)
========== ========= =========== =========
Shares used in computing pro forma
net income (loss) per share** 40,564 41,319 26,398 26,398
========== ========= =========== =========
* The pro forma adjustments represent the reversal of restructuring and
excess facilities charges (benefit), the amortization of stock-based
compensation and intangible assets and the related tax impact of these
adjustments.
** The shares used in computing pro forma net income for the three months
ended September 30, 2004 include the dilutive impact of common stock
options.
INTERWOVEN, INC.
IMPACT OF PRO FORMA ADJUSTMENTS ON REPORTED NET LOSS, AS ADJUSTED
(In thousands, except per share data)
(Unaudited)
Nine Months Ended Nine Months Ended
September 30, 2004 September 30, 2003
---------------------------------- --------------------------------------
As reported Adjustments* Pro forma As reported Adjustments* Pro forma
----------- ----------- --------- ----------- ----------- ---------
Revenues:
License $ 49,335 $ -- $ 49,335 $ 29,726 $ -- $ 29,726
Support and service 67,815 -- 67,815 48,128 -- 48,128
--------- ----------- --------- ---------- ----------- ----------
Total revenues 117,150 -- 117,150 77,854 -- 77,854
Cost of revenues:
License 9,864 (7,917) 1,947 2,593 -- 2,593
Support and service 28,643 -- 28,643 23,842 -- 23,842
--------- ----------- --------- ---------- ----------- ----------
Total cost of revenues 38,507 (7,917) 30,590 26,435 -- 26,435
--------- ----------- --------- ---------- ----------- ----------
Gross profit 78,643 7,917 86,560 51,419 -- 51,419
Operating expenses:
Sales and marketing 52,585 -- 52,585 41,518 -- 41,518
Research and development 23,033 -- 23,033 18,062 -- 18,062
General and administrative 9,022 -- 9,022 9,346 -- 9,346
Amortization of stock-
based compensation 4,352 (4,352) -- 1,482 (1,482) --
Amortization of intangible assets 3,631 (3,631) -- 1,545 (1,545) --
In-process research and development -- -- -- 599 (599) --
Restructuring and excess facilities 10,477 (10,477) -- 15,701 (15,701) --
--------- ----------- --------- ---------- ----------- ----------
Total operating expenses 103,100 (18,460) 84,640 88,253 (19,327) 68,926
--------- ----------- --------- ---------- ----------- ----------
Income (loss) from operations (24,457) 26,377 1,920 (36,834) 19,327 (17,507)
Interest income and other, net 1,114 -- 1,114 2,513 -- 2,513
--------- ----------- --------- ---------- ----------- ----------
Income (loss) before income taxes (23,343) 26,377 3,034 (34,321) 19,327 (14,994)
Provision for income taxes 729 662 1,391 813 -- 813
--------- ----------- --------- ---------- ----------- ----------
Net income (loss) $ (24,072) $ 25,715 $ 1,643 $ (35,134) $ 19,327 $ (15,807)
========= =========== ========= ========== =========== =========
Net income (loss) per share $ (0.60) $ 0.04 $ (1.36) $ (0.61)
========= ========= ========== ==========
Shares used in computing pro forma
net income (loss) per share** 40,374 41,683 25,866 25,866
========= ========= ========== ==========
* The pro forma adjustments represent the reversal of restructuring and
excess facilities charges, in-process research and development, the
amortization of stock-based compensation and intangible assets and the
related tax impact of these adjustments.
** The shares used in computing pro forma net income for the nine months
ended September 30, 2004 include the dilutive impact of common stock
options.
INTERWOVEN, INC.
CONSOLIDATED BALANCE SHEETS, AS ADJUSTED
(In thousands)
September 30, 2004 December 31, 2003
------------------ -----------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 73,731 $ 43,566
Short-term investments 64,963 96,921
Accounts receivable, net 25,828 33,834
Prepaid expenses and other current assets 8,319 8,629
----------- ----------
Total current assets 172,841 182,950
Property and equipment, net 6,210 7,403
Goodwill 185,464 185,991
Other intangible assets, net 33,234 43,134
Other assets 2,299 2,347
----------- ----------
Total assets $ 400,048 $ 421,825
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank borrowings $ 611 $ 1,213
Accounts payable 4,747 4,576
Accrued liabilities 18,369 22,961
Restructuring and excess facilities accrual 22,944 15,733
Deferred revenues 45,429 44,066
----------- ----------
Total current liabilities 92,100 88,549
Accrued liabilities 2,515 912
Restructuring and excess facilities accrual 19,962 31,430
----------- ----------
Total liabilities 114,577 120,891
----------- ----------
Commitments and contingencies
Stockholders' equity:
Common stock 41 40
Additional paid-in capital 695,914 693,773
Deferred stock-based compensation (2,762) (9,564)
Accumulated other comprehensive income (loss) (310) 25
Accumulated deficit (407,412) (383,340)
----------- ----------
Total stockholders' equity 285,471 300,934
----------- ----------
Total liabilities and stockholders' equity $ 400,048 $ 421,825
=========== ==========