Unify Reports Third Quarter 2004 Results
SACRAMENTO, Calif.--(BUSINESS WIRE)--Feb. 24, 2004--
Year-to-Date Software License Revenues Increase 4 Percent;
Unify NXJ Momentum Continues With 56 NXJ Customers to Date
Unify Corporation (OTCBB:UNFY) today announced financial results for the
third quarter of fiscal 2004 ended Jan. 31, 2004.
Total revenues in the third quarter were $2.6 million, a 23 percent
decrease, compared to total revenues of $3.4 million for the third quarter of
fiscal 2003. Third quarter software license revenues were $1.2 million, a
decrease of 35 percent compared to $1.8 million for the same period last year.
"The decline in revenue was due to a reduction in Unify's enterprise
products revenue caused by delayed timing in closing several large transactions,
as compared to three large enterprise transactions that were closed during Q3
last year," said Todd Wille, president and CEO of Unify. "We believe this is a
timing issue and not a negative trend in the enterprise product line overall.
Our support renewals among this customer base, a key measure of customer
retention, remain strong."
Net loss for the third quarter was ($470,000), or ($0.02) loss per share,
compared to net income of $306,000, or ($0.01) earnings per share, in the third
quarter of the prior year. Gross margin for the quarter was 80 percent, compared
to 88 percent in the same period last year.
The Company had $2.8 million in cash and cash equivalents at Jan. 31, 2004,
up from $2.6 million at January 31, 2003, but down from $3 million as of April
30, 2003. Stockholders' equity at January 31, 2004 was $1.3 million, compared to
$1.3 million at January 31, 2003, and compared to $1.5 million at April 30,
2003.
"During the quarter we saw significant momentum on the Unify NXJ front.
What really stands out is the number of repeat NXJ customer deals and larger
transaction sizes among the 17 contracts closed this quarter, the enthusiastic
reception from customers and prospects of the NXJ 10 application platform and
the increasing NXJ sales activity and pipeline growth," Wille added.
For the nine months ended January 31, 2004, total revenues were $8.7
million, down three percent, compared to $9.0 million for the same nine-month
period last year. GAAP net loss for the first nine months was ($553,000) or
($0.03) loss per share, compared to a GAAP net loss of ($64,000) or ($0.00) loss
per share for the first nine months of last year. On a Non-GAAP basis, net loss
for the first nine months was ($68,000), compared to a Non-GAAP net loss of
($146,000) for same nine-month period last year. Non-GAAP net income excludes
severance charges, write-down of the Company's investments and other special
charges (recoveries).
Reconciliation of GAAP Net Loss to Non-GAAP Net Income (Loss):
Nine Nine
Quarter Quarter Months Months
Ended Ended Ended Ended
Jan 31, Jan 31, Jan 31, Jan 31,
2004 2003 2004 2003
GAAP Net Income (Loss) ($470,000) $306,000 ($553,000) ($64,000)
Adjustments :
Severance Charges 200,000
Write-down of Other
Investments 30,000 175,000 50,000
Special Charges
(Recoveries)(1) 8,000 110,000 (132,000)
---------- --------- ---------- ----------
Non-GAAP Net Income (Loss) ($462,000) $336,000 ($68,000) ($146,000)
========== ========= ========== ==========
(1) Special charges (recoveries) related primarily to litigation
expenses
During the third quarter, Unify:
-- Earned business from several new and long-standing customers including
Administrative Systems Inc., Business Console Ltd., BMW Lease BV,
Celebrity Software, Credit Lyonnais Singapore, Fannie Mae, Fourstar
Meat Co., GE Medical Systems Information Technologies, Layher, PFU
Tokyo, State of Vermont and Vinci Park.
-- Closed 17 Unify NXJ transactions with a significant increase in
average selling price.
-- Brought the total number of Unify NXJ customers to 56 since launch of
the product.
-- Hired a new sales director and a new sales representative.
-- Launched the Unify NXJ 10 Application Platform Suite with business
process management, reporting, forms processing, portal and portal
integration, and enterprise application integration components,
providing a comprehensive business process automation solution with an
increasing average selling price.
Business Outlook
The Company anticipates that software licenses revenue will grow eight to
12 percent for fiscal 2004, compared to fiscal year 2003. However, given the
continued year-to-date shortfall in consulting revenues for fiscal 2004, as
compared to fiscal 2003, the Company expects fiscal 2004 total revenues to be
flat to two percent growth, as compared to last fiscal year.
Conference Call
Unify will hold its quarterly conference call, open to all interested
parties, on Feb. 24, 2004, beginning at 2 p.m. Pacific Time. Listeners should
dial 877-692-2592 prior to the start of the conference call. The conference call
will also be Webcast. Online listeners should visit www.unify.com/investors
prior to the start of the call for login information. A replay of the conference
call will be available until March 10, 2004 by dialing 877-519-4471 and entering
the passcode 4489549.
About Unify
Unify Corporation is a global enterprise software company. Leveraging 23
years of software innovation to more than 2,000 customers and 300 ISV partners
worldwide, Unify delivers the market's only comprehensive, vendor-independent
application platform that is easy, powerful and open. Customers include
bioMerieux, Inc., Credit Lyonnais, Citigroup Inc., G.E. Medical Systems
Information Technologies, GlaxoSmithKline, Heineken, PCN, and Travel Centers of
America. Founded in 1980, Unify is headquartered in Sacramento, Calif., and has
offices in the UK and France, in addition to a worldwide network of
distributors. Visit Unify at www.unify.com.
This press release contains "forward-looking statements" as that term is
defined in Section 21E of the Securities Exchange Act of 1934 as amended.
Forward looking statements are denoted by words such as "anticipates",
"expects", "intends", "plans", "believes", "seeks", "estimates", and other
variations of such words and similar expressions are intended to identify such
forward-looking statements. These forward looking statements are subject to
risks and uncertainties that could cause actual results to differ materially
from those expressed or implied by our forward looking statements. Such risks
and uncertainties include, but are not limited to general economic conditions in
the computer and software industries, domestically and worldwide, the Company's
ability to keep up with technological innovations in relation to its
competitors, product defects or delays, developments in the Company's
relationships with its customers, distributors and suppliers, changes in pricing
policies of the Company or its competitors and the Company's ability to attract
and retain employees in key positions. In addition, Unify's forward looking
statements should be considered in the context of other risks and uncertainties
discussed in our SEC filings available for viewing on its web site at "Investor
Relations," "SEC filings" or from the SEC at www.sec.gov.
Note to Editors: Trademarks
Unify is a registered trademark of Unify Corporation. Unify NXJ is a
trademark of Unify Corporation. Other brands or product names shown are
trademarks of their respective owners.
UNIFY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
January April
31, 30,
2004 2003
Assets
Current assets:
Cash and cash equivalents $ 2,753 $ 3,030
Accounts receivable, net 2,977 2,504
Prepaid expense & other current assets 463 290
-------- --------
Total current assets 6,193 5,824
Property and equipment, net 341 345
Other investments 214 392
Other assets 236 114
-------- --------
Total assets $ 6,984 $ 6,675
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Account payable $ 496 $ 556
Current portion of long term debt 266 200
Other accrued liabilities 923 822
Accrued compensation and related expenses 703 652
Deferred revenue 3,305 2,936
-------- --------
Total current liabilities 5,693 5,166
Long-term debt - -
Commitments and contingencies
Stockholders' equity:
Common stock 22 21
Additional paid in capital 59,505 59,339
Note receivable from stockholder 0 (60)
Accumulated other comprehensive loss 181 (43)
Accumulated deficit (58,417) (57,748)
-------- --------
Total stockholders' equity 1,291 1,509
-------- --------
Total liabilities and stockholders' equity $ 6,984 $ 6,675
======== ========
UNIFY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Nine Months
Ended Ended
January 31, January 31,
2004 2003 2004 2003
------- ------- ------- -------
Revenues:
Software Licenses $ 1,185 $ 1,825 $ 4,427 $ 4,273
Services 1,459 1,609 4,322 4,730
------- ------- ------- -------
Total revenues 2,644 3,434 8,749 9,003
------- ------- ------- -------
Cost of Revenues:
Software licenses 226 72 413 206
Services 302 324 950 863
------- ------- ------- -------
Total cost of revenues 528 396 1,363 1,069
Gross margin 2,116 3,038 7,386 7,934
------- ------- ------- -------
Operating Expenses:
Product development 618 971 2,297 3,160
Selling, general and administrative 1,960 1,722 5,344 4,904
Write-down of other investments 0 30 175 50
Special charges (recovery) 8 0 110 (132)
------- ------- ------- -------
Total operating expenses 2,586 2,723 7,926 7,982
------- ------- ------- -------
Income (loss) from operations (470) 315 (540) (48)
Other income (expense), net (4) (2) (7) 4
------- ------- ------- -------
Income (loss) before income taxes (474) 313 (547) (44)
Provision (recovery) for income taxes (4) 7 6 20
------- ------- ------- -------
Net income (loss) $ (470)$ 306 $ (553)$ (64)
======= ======= ======= =======
Net income (loss) per share:
Basic $ (0.02)$ 0.01 $ (0.03)$ (0.00)
Dilutive $ (0.02)$ 0.01 $ (0.03)$ (0.00)
Shares used in computing net income (loss) per
share:
Basic 21,596 21,072 21,471 20,866
Dilutive 21,596 21,724 21,471 20,866
CONTACT: Unify Corporation
Deb Thornton, 916-928-6379
deb@unify.com
www.unify.com