GENTIA SOFTWARE
Tuition House, St. George's Road
Wimbledon
London SW19 4EU
(Nasdaq: GNTIY)
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
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George Sprenkle For Analyst Info: Julie Creed (312) 640-6724
Chief Financial Officer For General Info: Jerry Meyer (212) 661-8030
011-44-181-971-4000 For Media Info: Alicia Nieva-Woodgate (212) 661-8030
FOR IMMEDIATE RELEASE:
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January 29, 1998
GENTIA REPORTS FOURTH QUARTER, FULL-YEAR RESULTS
LONDON, JANUARY 29, 1998 -- Gentia Software (Nasdaq: GNTIY), developer of the
world's only networked business intelligence environment for enterprise-wide
deployment, today reported revenues of $5.5 million and a net loss of $3.1
million, or $0.33 per diluted share, in the fourth quarter of 1997. These
figures are consistent with a forecast release issued by the company on January
13.
In the fourth quarter of 1996, Gentia reported revenues of $8.2 million and net
income of $944,000, or $0.08 per diluted share.
In 1997 as a whole the company had a net loss of $4.0 million, or $0.44 per
diluted share, on revenues of $27.2 million. The comparable totals for 1996 were
net income of $2.5 million, or $0.24 per diluted share, on revenues of $26.0
million.
Strong working capital management made it possible for the company to close 1997
with more than $20 million in cash and a 3.7 current ratio.
Paul Rolph, chairman and chief executive officer of Gentia, said the decline in
fourth quarter results was due to the general confusion in this increasingly
crowded data warehousing, business intelligence and decision-support
marketplace.
"These results do not change the fact that our solution offers unique
competitive advantages including the capacity to have a direct impact on the
return on investment of an enterprise," Mr. Rolph said. "Therefore our company
will continue leveraging its distinctive competencies in areas of strategic
importance."
Mr. Rolph said one of these key areas where progress has been significant is the
company's accelerating transition from a technology-led to a solutions-led
provider, a change that positions Gentia in market segments where margins are
better, the competitive landscape is more favorable, and the advantages of its
product are more clearly evident.
At the end of October, in announcing results for the third quarter of 1997, Mr.
Rolph said that for Gentia the current problems in the marketplace are more a
matter of sales deferred than of sales lost. He noted that a number of
transactions that the company had expected to close in the third quarter but
that remained unclosed on September 30 were expected to be completed by the
first quarter of 1998.
"This has in fact proved to be the case," Mr. Rolph said today. "Of five
competitive situations unexpectedly left unfinished on September 30, we have
subsequently lost one and won three, and we expect to bring the fifth to a
successful conclusion in this year's first quarter."
He said Gentia is also on schedule recruiting its sales force to a level
appropriate to the opportunities the company is encountering in its markets.
"Seven talented and proven members with a track record of over-achievement have
been added to the U.S. sales force in the past few months," Mr. Rolph said, "and
a vigorous recruitment program continues."
In the first quarter of this year, the culmination of a product development,
marketing and distribution partnership announced on January 20 by Gentia and
Renaissance Worldwide comes to market. Renaissance Worldwide is a leading
provider of integrated business and technology consulting in the areas of
strategy, solutions and professional services. The two companies are jointly
developing strategic planning and management applications for enterprise-wide
deployment.
Among these applications is the Renaissance Balanced Scorecard, which helps
organizations make use of financial, customer, operational and "soft" measures
to achieve strategic business goals and objectives. Powered by Gentia, the
Renaissance Balanced Scorecard will enable enterprises to quickly develop and
disseminate strategy from the "board room" to the "front line" of an
organization.
"This agreement is a real breakthrough in the marketplace," Mr. Rolph said. "Our
combined product will provide customers not just with technology but with a
finished solution that can make a real impact on their business."
About the Company
Gentia Software provides a complete environment for building, deploying and
managing enterprise Business Intelligence (BI) applications. Through
sophisticated analytical processing and an open network architecture, Gentia
enables the delivery of a new class of analytical applications such as the
Balanced Scorecard that ensure delivery of information to all decision-makers
throughout an organization.
The company is headquartered in London, England, and maintains its U.S.
headquarters in Boston, Massachusetts. Offices are located throughout North
America in such major cities as Atlanta, Chicago, Cleveland, Dallas, Denver, New
York, Los Angeles and San Francisco. International subsidiaries are located in
Australia, Belgium, France, Germany, Hong Kong, South Africa, and The
Netherlands. The company also operates internationally through a network of
distributors in Argentina, Brazil, Costa Rica, Israel, Italy, Malaysia, Mexico,
Portugal, Scandinavia, Singapore, Spain, Switzerland, Thailand, The Philippines
and Venezuela.
Gentia has more than 450 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, and Volvo.
Internet users can obtain additional information about Gentia and its products
by navigating to 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.
GENTIA SOFTWARE PLC
Condensed Consolidated Statements of Operations
Three months ended Twelve months ended
Dec 31, Dec 31, Dec 31, Dec 31, 1996
1997 1996 1997
(in thousands, except per share amounts)
(Unaudited) (Unaudited) (Unaudited) (Audited)
US$ US$ US$ US$
Revenues:
License $2,215 $5,491 $14,985 $16,861
Services and other 3,308 2,749 12,186 9,104
5,523 8,240 27,171 25,965
Cost of revenues:
License 145 205 1,179 804
Services and other 1,894 1,412 6,800 4,937
2,039 1,617 7,979 5,741
Gross profit 3,484 6,623 19,192 20,224
Operating expenses:
Sales and marketing 3,884 3,485 14,308 10,271
Research and development 1,292 1,019 4,699 3,185
General and administrative 2,543 1,090 6,279 3,926
Goodwill amortization 102 87 371 122
Total operating expenses 7,821 5,681 25,657 17,504
Income (loss) from operations (4,337) 942 (6,465) 2,720
Other income 350 322 1,235 965
Income (loss) before provision for
taxes (3,987) 1,264 (5,230) 3,685
Provision for income taxes 874 (320) 1,247 (1,216)
Net income (loss) ($3,113) $944 ($3,983) $2,469
Net income (loss) per share:
* Basic ($0.33) $0.11 ($0.44) $0.31
* Diluted ($0.33) $0.08 ($0.44) $0.24
Shares used to compute:
* Basic 9,398 8,635 9,155 7,846
* Diluted 9,398 11,206 9,155 10,492
GENTIA SOFTWARE PLC
Condensed Consolidated Balance Sheets
December 31, December 31,
1997 1996
(in thousands)
(Unaudited) (Audited)
US$ US$
Assets
Current assets:
Cash and cash equivalents $20,332 $25,228
Accounts receivable, net of allowance $1,819
* ( Dec 31, 1996 - $478) 7,758 9,953
Prepaid expenses and other current assets 1,921 821
Deferred taxes 285 0
Total current assets $30,296 $36,002
Property and equipment, net 2,037 2,013
Goodwill on acquisition, net of amortization
of $494
* (Dec 31, 1996 - $122) 3,602 3,388
Deferred taxes 459 148
Total assets $36,394 $41,551
Liabilities and shareholders' equity
Current liabilities:
Current portion of lease obligations $105 $194
Accounts payable 1,743 1,648
Taxes payable 0 1,373
Accrued liabilities 1,337 1,778
Deferred revenues 3,630 2,969
UK value added tax 227 346
Other accounts payable 1,110 985
Total current liabilities $8,152 $9,293
Non current liabilities:
Deferred taxation 274 29
Long-term portion of lease obligations 109 225
Total liabilities $8,535 $9,547
Shareholders' equity:
Ordinary shares 2,300 2,152
Additional paid-in capital 27,406 27,182
Retained earnings (1,236) 2,747
Cumulative translation adjustment (611) (77)
Total shareholders' equity $27,859 $32,004
Total liabilities and shareholders' equity $36,394 $41,551