EXHIBIT 99.1
IMMEDIATE RELEASE
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CORPORATE CONTACT:
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Persistence Software, Inc.
Brian Tobin, Corporate Controller
(650) 372-3600
btobin@persistence.com
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PERSISTENCE SOFTWARE, INC. ANNOUNCES
THIRD QUARTER 2004 FINANCIAL RESULTS
SAN MATEO, Calif., October 21, 2004 -- Persistence(R) Software (Nasdaq: PRSW), a
technology leader for data access and caching, today announced financial results
for the third quarter of 2004 ended September 30, 2004.
Revenues for the third quarter were $2,498,000, compared to $2,321,000 for the
second quarter of 2004, and $1,806,000 for the third quarter of 2003. This
represents a 7.6% sequential increase over the prior quarter and a 38% increase
over revenues in the third quarter of 2003.
The company reported net income for the third quarter of $105,000, or $0.04 per
fully diluted share, its fourth consecutive quarter of profitability. This
compares to net income for the second quarter of $129,000, or $0.05 per fully
diluted share, and net loss reported for the third quarter of 2003 of
$1,213,000, or a loss of $0.50 per fully diluted share for the third quarter of
2003.
Cash balances at September 30, 2004 were $5,371,000, compared to $4,987,000 as
of June 30, 2004 and $5,091,000 as of September 30, 2003.
"Our financial results for the third quarter are testament to the strength of
our product offering," said Christopher Keene, chief executive officer of
Persistence. "Despite industry fundamentals that remain challenging, we have
completed our fourth consecutive quarter of profitability, increased revenues
over the prior quarter by $177,000 and increased the company's cash position by
$384,000." Mr. Keene added, "We are pleased to end the quarter on a high note
with our recent announcement that we have entered into an agreement and plan of
merger with Progress Software, (Nasdaq:PRGS), which, if approved by our
stockholders, will result in our acquisition by Progress Software in early
November 2004. I would like to extend my sincere thanks to our customers,
employees and shareholders for their continued loyalty and support."
HIGHLIGHTS OF THE QUARTER
o On September 27, 2004 the company announced the availability of
Persistence EdgeXtend(TM) for C#, Version 3 -- a comprehensive
platform enabling developers to build cost-effective, scalable
object-oriented data access layers for enterprise-class Microsoft(R)
.NET applications. EdgeXtend for C#, Version 3 is now available in
both Professional and Enterprise Editions.
o On September 27, 2004 Progress Software (Nasdaq:PRGS) (PSC) announced
an agreement by which PSC will acquire Persistence in an all-cash
transaction for a purchase price of $5.70 per share or approximately
$16 million in the aggregate. Upon the closing of the transaction,
Persistence will become part of ObjectStore, an operating company of
PSC that provides products for real-time data management. The merger
is subject to the approval of the Persistence stockholders.
o On August 31, 2004 Persistence announced that Play-on-the-Go, a
leading-edge provider of online games, used Persistence EdgeXtend to
build the data access components of its applications in a matter of
days -- effectively doubling productivity for server side development.
It was noted that during deployment of the games, EdgeXtend is
expected to eliminate data bottlenecks with intelligent caching.
o On July 26, 2004, the company announced that VCG, the leader in
staffing software, was building the latest version of their flagship
StaffSuite(R) product using Persistence EdgeXtend for C#. The company
said that VCG develops and sells staffing management software to
mid-sized companies in the temporary staffing market. They have nearly
300 customers, primarily staffing firms with 5-500 users. VCG was the
first vendor to deliver a comprehensive multi-tier front-to-back
staffing software solution, called StaffSuite.
CONFERENCE CALL AND WEBCAST
Persistence Software will hold a conference call and simultaneous webcast on
October 21, 2004 at 4:15 p.m. Eastern Time to discuss the company's third
quarter fiscal 2004 financial results. Interested parties can access the call by
dialing 800-322-0079 (domestic) or 973-935-2401 (international) or by accessing
the web cast at www.persistence.com. A replay of the call will be available at
877-519-4471 (domestic) or 973-341-3080 (international), access number 5283956,
for 5 days following the call; and the web cast can be accessed at
www.persistence.com/company for 30 days.
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ABOUT PERSISTENCE
Persistence Software (NASDAQ: PRSW) is the Data Services platform for the
Real-Time Enterprise. Since 1991, Persistence products have provided reliable,
distributed caching infrastructure that is automatically generated by
model-driven, object-relational mapping tools. The EdgeXtend product family is a
cross-platform data access and caching software that meets requirements for all
stages of the application development lifecycle --from design through
performance testing and deployment. Our patented technology supports
cross-platform deployment of high-performance, custom applications written in
Java, C++ or C#, including those built for BEA WebLogic(R), IBM WebSphere(R) or
using the Microsoft(R) .NET framework. Many of the major companies in the Forbes
Global 2000 have achieved breakthrough performance and developer productivity.
Find Persistence on the web at www.persistence.com.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Except for the historical information contained herein, the matters discussed in
this press release are forward-looking statements involving risks and
uncertainties, which could cause actual results to differ materially from those
in such forward-looking statements. Potential risks and uncertainties include,
but are not limited to, the possibility that we may not receive the requisite
stockholder approval needed to consummate our merger with Progress Software and
we may not achieve our sales targets. In addition, we face the following risks
and uncertainties, including uncertainties related to our long sales cycle, our
reliance on a relatively small number of customers, risks associated with our
declining sales, our dependence on our newest EdgeXtend product, failure to
manage our resources or attract and retain the services of key employees, our
need to deliver products that are free of defects and errors and meet rapidly
changing technology standards and customer requirements, our need to build a
strong direct sales team and develop third party sales channels, our dependence
on enterprise-wide system deployments, and our need to address competition from
companies with substantially greater resources. Further information regarding
these and other risks and uncertainties is included in our Annual Report on Form
10-K for the year ended December 31, 2003, the Quarterly Report on Form 10-QSB
for the quarter ended June 30, 2004 and in our other filings with the Securities
and Exchange Commission. EdgeXtend, PowerTier and DirectAlert are registered
trademarks of Persistence Software, Inc. All other product, trademark, company,
or service names mentioned herein are the property of their respective owners.
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PERSISTENCE SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
( Unaudited )
( In thousands, except per share amounts )
THREE MONTHS ENDED NINE MONTHS ENDED
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
2004 2003 2004 2003
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Revenues:
Licenses $ 1,321 $ 722 $ 3,303 $ 3,672
Service 1,177 1,084 3,573 3,533
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Total revenues 2,498 1,806 6,876 7,205
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Cost of revenues:
Licenses 275 25 317 86
Service 292 395 875 1,331
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Total cost of revenues 567 420 1,192 1,417
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Gross profit 1,931 1,386 5,684 5,788
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Operating expenses:
Sales and marketing 711 1,228 2,249 4,304
Research and development 594 732 1,787 2,384
General and administrative 520 631 1,464 1,931
Purchased intangibles -- -- (110) --
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Total operating expenses 1,825 2,591 5,390 8,619
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Income / (Loss) from operations 106 (1,205) 294 (2,831)
Interest and other income, net 7 (4) 14 9
Income taxes (8) (4) (17) (23)
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Net income / (loss) $ 105 $(1,213) $ 291 $(2,845)
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Basic net profit / (loss) per share $ 0.04 $ (0.50) $ 0.11 $ (1.18)
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Diluted net profit / (loss) per share $ 0.04 $ (0.50) $ 0.11 $ (1.18)
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Shares used in calculating basic
net profit / (loss) per share 2,718 2,409 2,716 2,406
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Shares used in calculating diluted
net profit / (loss) per share 2,739 2,409 2,740 2,406
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PERSISTENCE SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
( Unaudited )
( In thousands )
AS OF
SEP. 30, DEC. 31,
2004 2003
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Assets:
Current assets:
Cash, cash equivalents $ 5,371 $ 5,680
Accounts receivable, net 1,267 1,498
Prepaids and other current assets 406 258
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Total current assets 7,044 7,436
Property and equipment, net 89 95
Purchased intangibles, net 31 59
Other assets 37 37
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Total assets $ 7,201 $ 7,627
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Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $ 207 $ 329
Accrued liabilities 1,204 1,262
Deferred revenues (net of long term portion) 2,233 2,565
Current portion of long-term obligations 6 334
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Total current liabilities 3,650 4,490
Long-term liabilities
Long-term portion of deferred revenues 208 84
Long-term obligations 5 18
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Total long-term liabilities 213 102
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Total liabilities 3,863 4,592
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Stockholders' equity:
Common stock, net 67,137 67,112
Accumulated deficit (63,785) (64,076)
Other (14) (1)
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Total stockholders' equity 3,338 3,035
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Total liabilities and stockholders' equity $ 7,201 $ 7,627
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