Exhibit 99.1
NetManage Reports Financial Results for Second Quarter 2006
CUPERTINO, Calif.--(BUSINESS WIRE)--July 21, 2006--NetManage, Inc.
(Nasdaq:NETM), a leading software company that provides solutions for
integrating, Web enabling and accessing enterprise information
systems, today reported financial results for the second quarter ended
June 30, 2006.
Net revenues for the second quarter of 2006 were $9.0 million,
compared to net revenues of $8.5 million for the first quarter of 2006
and $10.7 million for the second quarter of 2005. Net loss for the
second quarter was $899,000, or $0.10 per share, compared to a net
income in the second quarter of 2005 of $695,000, or $0.07 per diluted
share.
For the six months ended June 30, 2006, net revenues were $17.5
million, compared to net revenues of $22.8 million for the same period
of 2005. Net loss for the six months ended June 30, 2006 was $1.7
million, or $0.18 per share, compared to a net income for the six
months ended June 30, 2005 of $1.5 million, or $0.15 per diluted
share.
Cash, cash equivalents and short-term investments were $24.5
million as of June 30, 2006.
Management Commentary
"Net revenues increased 5% sequentially on higher license fees,"
said Zvi Alon, chairman, president and CEO of NetManage. "While sales
productivity in Europe improved from the first quarter of 2006, sales
were slower than expected in North America primarily due to the large
number of new sales representatives who are taking longer than
anticipated to get to full productivity. We do not believe this is a
market issue and are optimistic of the growth in the application
integration markets where we are competing," explained Mr. Alon.
"While we are disappointed that we did not see the improvement in
sales in the second quarter we anticipated, we believe NetManage is
well positioned for growth and a return to profitability during the
second half of the year," concluded Mr. Alon.
Customer Wins
Leading organizations around the world continue to choose
NetManage solutions to integrate and leverage their core business
investments. During the quarter, NetManage secured business from
Daimler Chrysler, Wells Fargo Bank, Xerox Corporation, World Savings,
Michelin Tires, Alaska Air, American Honda Motors, Abbot Labs, Sallie
Mae, CBS and Siemens, among others.
Recent Operational Highlights
-- The Company was named as an SD Times 100 Software Industry
Leader Company, recognized for innovation and leadership in
data and host integration for the past year.
-- NetManage added support for the "separation of duties"
security model in the OnWeb for iSeries product. This new
functionality provides separation of administration,
development and deployment and is important for our government
and finance customers.
-- NetManage announced RUMBA FTP 4.2 -- which is a fully featured
graphical FTP client that includes support for additional IBM
server modes, scripting capabilities, and an enhanced user
interface.
-- The Company announced a strategic partnership with Cape Clear
Software. The combination of NetManage and Cape Clear
solutions helps enterprises leverage their existing
applications on legacy and mainframe systems and use them
within broader SOA strategies.
Conference Call Information
The Company has scheduled a conference call to review the results
at 5:30 a.m. PT (8:30 a.m. ET) on Friday, July 21, 2006. The call will
be broadcast live via the Investors section on the NetManage Web site,
www.netmanage.com/investors or by dialing 866-200-5830 and entering
pass code 320896#. A playback of the conference call will be available
until July 28, 2006, on the NetManage investor relations Web site or
by dialing 866-206-0173 and entering the pass code 179714#.
NetManage will furnish this press release to the Securities and
Exchange Commission on Form 8-K and will post this release in the
Investors section of its Web site prior to its conference call.
About NetManage
NetManage, Inc. (NASDAQ:NETM) a software company that provides
solutions for integrating, Web enabling, and accessing enterprise
information systems. More than 10,000 customers worldwide, including a
majority of the Fortune 500, have chosen NetManage for mission
critical application integration. For more information, visit
www.netmanage.com.
(C) 2006 NetManage, Inc., its subsidiaries, and its affiliates.
All rights reserved.
NetManage, the NetManage logo, the lizard-in-the-box logo, RUMBA,
ONESTEP, ViewNow, SupportNow, Librados, and OnWeb are either
trademarks or registered trademarks of NetManage, Inc., its
subsidiaries, and affiliates in the United States and/or other
countries. All other trademarks are the property of their respective
owners.
This press release contains, in addition to historical
information, forward-looking statements that involve risks and
uncertainties, including statements regarding improvement in the
Company's competitive position, improvement in financial results and
business pipeline, the Company's positioning in its market, and the
progress and benefits of the Company's execution on its business plan.
The Company's actual results could differ materially from the results
discussed in the forward-looking statements. The factors that could
cause or contribute to such differences include, among others, that
competitive pressures continue to increase, that the markets for the
Company's products could grow more slowly than the Company or market
analysts believe, that the Company is unable to integrate or take
advantage of its acquisitions successfully, or that the Company will
not be able to take advantage of growth in the Company's target
markets. Additional information on these and other risk factors that
could affect the Company's financial results is included in the
Company's Annual Report on Form 10-K, Forms 10-Q, Forms 8-K and other
documents filed with the Securities and Exchange Commission.
NETMANAGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
(Unaudited)
June 30, December 31,
2006 2005
-------- ------------
Assets
Cash, cash equivalents and short-term investments $24,539 $21,515
Accounts receivable, net 5,646 11,327
Prepaid expenses and other current assets 1,207 1,217
-------- --------
Total current assets 31,392 34,059
Property and equipment, net 2,398 2,805
Goodwill 3,648 3,697
Other intangibles, net 1,253 1,604
Long-term investments - 1,583
Other long-term assets 160 118
-------- --------
Total assets $38,851 $43,866
======== ========
Liabilities and Stockholders' Equity
Current liabilities $ 4,992 $ 5,932
Current deferred revenue 11,284 14,081
-------- --------
Total current liabilities 16,276 20,013
Long-term deferred revenue 329 343
Other long-term liabilities 757 807
-------- --------
Total long-term liabilities 1,086 1,150
-------- --------
Total liabilities 17,362 21,163
Stockholders' equity 21,489 22,703
-------- --------
Total liabilities and stockholders' equity $38,851 $43,866
======== ========
NETMANAGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three months Six months ended
ended June 30, June 30,
2006 2005 2006 2005
-------- -------- -------- --------
Net revenues:
License fees $ 3,179 $ 3,807 $ 5,902 $ 9,129
Services 5,811 6,856 11,616 13,658
-------- -------- -------- --------
Total net revenues 8,990 10,663 17,518 22,787
-------- -------- -------- --------
Cost of revenues:
License fees 215 292 415 618
Services 921 808 1,649 1,646
Amortization of intangible assets 70 70 140 140
-------- -------- -------- --------
Total cost of revenues 1,206 1,170 2,204 2,404
-------- -------- -------- --------
Gross margin 7,784 9,493 15,314 20,383
-------- -------- -------- --------
Operating expenses:
Research and development 1,901 1,793 3,754 3,730
Sales and marketing 5,259 5,280 10,230 10,919
General and administrative 1,559 2,150 3,248 4,588
Restructuring charge (benefit) 61 (165) 25 (92)
Amortization of intangible assets 105 115 210 230
-------- -------- -------- --------
Total operating expenses 8,885 9,173 17,467 19,375
-------- -------- -------- --------
Income (loss) from operations (1,101) 320 (2,153) 1,008
Interest income and other, net 232 229 540 295
Foreign currency transaction loss (19) (246) (22) (175)
-------- -------- -------- --------
Income (loss) before provision for
income taxes (888) 303 (1,635) 1,128
Provision (benefit) for income
taxes 11 (392) 18 (375)
-------- -------- -------- --------
Net income (loss) $ (899) $ 695 $(1,653) $ 1,503
======== ======== ======== ========
Net income (loss) per share:
Basic $ (0.10) $ 0.07 $ (0.18) $ 0.16
Diluted $ (0.10) $ 0.07 $ (0.18) $ 0.15
Weighted average common shares and
equivalent:
Basic 9,422 9,301 9,408 9,261
Diluted 9,422 9,705 9,408 9,705
CONTACT: The Blueshirt Group
Alex Wellins, 415-217-7722 (Investors)
alex@blueshirtgroup.com
Brinlea Johnson, 415-217-7722 (Investors)
brinlea@blueshirtgroup.com