EXHIBIT A
Second Quarter Press Release
GENTIA SOFTWARE REPORTS RECORD SECOND QUARTER REVENUES
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Continues to Dominate Networked Business Intelligence Market
Success in Competing for Blue Chip Customers
New Strategic Partnerships
BOSTON, July 31, 1997 - Gentia Software plc (Nasdaq: GNTIY - formerly Planning
Sciences International plc) developer of the world's only networked business
intelligence environment for enterprise-wide deployment, today reported net
income of $544,000 or $0.05 per share, on record second quarter revenues of $8.1
million. In last year's second quarter the company's net income was $574,000 or
$0.05 per share, on revenues of $6.1 million.
Paul Rolph, chairman and chief executive officer, noted that Gentia's revenue in
this year's second quarter was 16% higher than in the preceding quarter and 33%
higher than in the comparable period of 1996.
"Our gains in the U.S. market have been particularly strong," Mr. Rolph said.
"After formal competitive assessment, in the second quarter, Gentia was selected
by major American corporations including J.P. Morgan and Company, Federal
Express, Sun Microsystems and Hewlett-Packard. In addition, we announced
partnerships with Sybase and Informix that we expect to contribute significantly
to our continued success."
Mr. Rolph said Gentia sees great opportunities to accelerate its momentum and
increase its market share by making a significantly greater investment in sales
and marketing in the second half of 1997.
"We intend to seize these opportunities, and we believe that doing so will
enhance our ability to continue rapid rates of growth in 1998 and beyond," he
said. "Gentia Software sees itself as being in a battle for market share. We
know we have the technology to win that battle, and we are going to be
relentless in our pursuit of success."
Mr. Rolph said Gentia is continuing to win more than 80 per cent of competitive
bid situations in which it is a candidate. He said the new "Networked Business
Intelligence" marketing campaign, initiated by worldwide marketing vice
president Scott Silk, is proving to be an important factor in revenue growth.
"We also changed our company name from Planning Sciences International plc to
Gentia Software plc at the end of the second quarter," Mr. Rolph said. "Though
the costs of this change had a moderately adverse impact on the quarter's net
income, the change is more than worth the cost. The new name reinforces both our
product brand and our position as the world leader in Networked Business
Intelligence."
In this year's second quarter the company had noteworthy competitive success not
only in the U.S. but also in Europe, where it has been selected recently by
accounts such as Swiss Reinsurance in the financial sector.
Approximately 42% of Gentia's first half 1997 revenues came from the U.S., while
27% came from the U.K. This compares with 39% from the U.S. and 40% from the
U.K. a year earlier. While U.S. sales have exceeded Gentia's targets, a recent
failure to meet objectives in the U.K. has led to extensive staffing and
structural changes there.
"The change we've made in our U.K. sales operations have been far-reaching," Mr.
Rolph said. "The problems that made those changes necessary have now been
addressed, and our actions have cleared the way to greatly improved performance.
I am confident of better results in the U.K. by year-end."
He said the company also plans to enter the Japanese market by the end of 1997.
About the Company
Gentia Software focuses on the development of the networked business
intelligence environment also named Gentia. The company's headquarters are in
Boston, Massachusetts, and London, England, and has offices in Denver, Atlanta,
Los Angeles, San Francisco, New York City and New Jersey in the U.S. and also in
Australia, Hong Kong, South Africa, Germany, Belgium and The Netherlands.
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Gentia is the world's only networked business intelligence environment for
complex business analysis and reporting. Gentia applications are deployed using
a distributed object-based architecture which assures delivery of key
information on the desktops of decision-makers throughout an organization.
Gentia has more than 400 corporate and public-sector clients. Among them are
major organizations such as J.P. Morgan and Company, Federal Express, Swiss
Reinsurance, Sun Microsystems, Motorola, Barclays Bank, Volvo, Hewlett-Packard
and McDonnell Douglas.
Internet users can obtain further information via the Gentia Software home page
http://www.gentia.com.
This news release contains statements of a forward looking nature relating to
the financial performance of Gentia Software. Such statements are based upon the
information available to management at this time, and they necessarily involve
risk because actual results could differ materially from current expectations.
Among the many factors that could cause actual results to differ from those set
forth in the Company's forward looking statements are changes in general
economic conditions, actions taken by customers or competitors, and the receipt
of more or fewer orders than expected.
Financial Tables follow
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GENTIA SOFTWARE PLC
Condensed Consolidated Balance Sheets
June 30, 1997 December 31, 1996
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(unaudited) (audited)
(in thousands)
US$ US$
Assets
Current assets:
Cash and cash equivalents $21,744 $25,228
Accounts receivable, net of allowance $421
( Dec 31, 1996 - $478) 11,621 9,953
Prepaid expenses and other current assets 1,857 821
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Total current assets $35,222 $36,002
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Property and equipment, net 2,243 2,013
Goodwill on acquisition, net of amortization of $301
(Dec 31, 1996 - $122) 3,261 3,388
Deferred taxation 148 148
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Total assets $40,874 $41,551
============= =============
Liabilities and shareholders' equity
Current liabilities:
Current portion of lease obligations $175 $194
Accounts payable 1,234 1,648
Taxes payable 1,392 1,373
Accrued liabilities 1,238 1,778
Deferred revenues 2,981 2,969
UK value added tax 264 346
Other accounts payable 885 985
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Total current liabilities 8,169 9,293
Non current liabilities:
Deferred taxation 29 29
Long-term portion of lease obligations 167 225
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Total liabilities 8,365 9,547
Shareholders' equity:
Ordinary shares 2,156 2,152
Additional paid-in capital 27,302 27,182
Retained earnings 3,350 2,747
Cumulative translation adjustment (299) (77)
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Total shareholders' equity 32,509 32,004
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Total liabilities and shareholders' equity $40,874 $41,551
============= =============
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GENTIA SOFTWARE PLC
Condensed Consolidated Statement of Operations
(Unaudited)
Three months ended Six months ended
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June 30, June 30, June 30, June 30,
1997 1996 1997 1996
-------------- ----------- ----------- ------------
(in thousands, except per share amounts)
US$ US$ US$ US$
Revenues:
License $5,018 $3,966 $8,974 $7,279
Services and other 3,088 2,138 6,133 4,028
----------- ----------- ---------- -----------
8,106 6,104 15,107 11,307
----------- ----------- ---------- -----------
Cost of revenues:
License 116 109 283 211
Services and other 1,662 1,275 3,177 2,307
----------- ----------- ---------- -----------
1,778 1,384 3,460 2,518
----------- ----------- ---------- -----------
Gross profit 6,328 4,720 11,647 8,789
Operating expenses:
Sales and marketing 3,591 2,314 6,705 4,381
Research and development 1,005 775 2,220 1,372
General and administrative 1,163 989 2,280 1,874
Goodwill amortization 91 - 179 -
----------- ----------- ---------- -----------
Total operating expenses 5,850 4,078 11,384 7,627
----------- ----------- ---------- -----------
Income from operations 478 642 263 1,162
Other income 295 269 598 267
----------- ----------- ---------- -----------
Income before provision for taxes 773 911 861 1,429
Provision for income taxes 229 337 258 529
----------- ----------- ---------- -----------
Net income $ 544 $ 574 $ 603 $ 900
=========== =========== ========== ===========
Net income per share $ 0.05 $ 0.05 $ 0.06 $ 0.09
Weighted average shares outstanding 10,896 10,614 10,928 9,755
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