Exhibit 99.1
Unify Reports Strong Fiscal 2008 First Quarter Results
-- Total Revenue Increases 129% Over 2007
-- Software License Revenue Increases 274% Over 2007
-- Operating Income of $108,000 and Positive Operating Cash Flow
SACRAMENTO, Calif.--(BUSINESS WIRE)--Sept. 6, 2007--Unify Corp.
(OTCBB: UFYC), a global provider of application modernization
software, today announced financial results for its fiscal first
quarter 2008 ended July 31, 2007.
Fiscal First Quarter 2008 Highlights:
-- Total revenue increased 129% year-over-year to $4.0 million.
-- Software license revenue increased 274% year-over-year to $1.5
million.
-- Services revenue increased 86% year-over-year to $2.5 million.
-- Second consecutive quarter of positive operating cash flow.
-- Income from operations was $108,000 versus a loss of $314,000
a year-ago.
-- Net loss was $218,000 versus a loss of $754,000 a year-ago.
-- Adjusted EBITDA of $387,000 versus a negative $260,000 a
year-ago.
-- Company signed 79 new customers.
-- Completed 10 proof of concept migration projects for the
Microsoft(R) Edition of Composer for Lotus Notes. Five of the
projects were referred to the Company by Microsoft.
Business Discussion:
"We are pleased to achieve operating income, positive cash flow
and triple digit revenue growth during the first quarter, which is
seasonally our weakest quarter," commented Todd Wille, CEO of Unify.
"Our software licenses and services revenues grew significantly
year-over-year. Our recurring maintenance revenues, which represented
60% of total Q1 revenues, remained strong with renewals in excess of
95 percent. For the second quarter in a row, we were operating cash
flow positive. Additionally, we added 79 new customers in our database
and development software business as we continue to see the
combination of Unify and GUPTA creating new opportunities around the
world."
Mr. Wille continued, "With the application modernization side of
our business, we have become an endorsed partner of Microsoft with our
Composer for Lotus Notes offering. We are engaged with the Microsoft
sales teams in addition to working with large solution integrators to
engage with customers that want to modernize their Lotus Notes
applications. We completed 10 proof of concept migration projects. Our
Composer for Lotus Notes solution provides enterprises the only viable
alternative to an expensive rewrite for transitioning their Lotus
Notes applications to either the Microsoft or Java platforms. We
believe this is a tremendous opportunity for Unify as large
organizations with hundreds to thousands of applications written in
Lotus Notes look for ways to move these mission critical applications
and data to new SOA enabled platforms. In the second quarter, we
expect to expand our relationship with Microsoft to market our
Composer Solution.
"We are in an exciting period of growth and we look forward to
further expanding the reach of our compelling product and services
offerings. During the second quarter, we will be conducting customer
conferences in Sweden, Germany, France, North America, and Russia for
our software business. Additionally, during the second quarter we will
be introducing major new product releases of our development and
database products, which will bring additional visibility, momentum
and results to an already stellar beginning of the fiscal year,"
concluded Mr. Wille.
Financial Results:
The company reported total revenues in the first quarter of fiscal
2008 of $4.0 million, up 129% when compared to $1.7 million in the
first quarter of fiscal 2007. Software licenses revenue increased 274%
to $1.5 million, compared to $391,000 for the fiscal first quarter in
2007. Services revenue was up 86% to $2.5 million for the quarter,
compared to $1.3 million for the same quarter of fiscal 2007.
Net loss was $218,000 or $0.04 loss per share compared to a net
loss of $754,000 or $0.13 loss per share in the first quarter of
fiscal 2007. The improvement was primarily attributable to the
synergies expected from merging Unify and GUPTA last November.
Adjusted EBITDA for the first quarter was $387,000 compared to a
negative $260,000 last year. This Adjusted EBITDA does not take into
account the $580,000 of GUPTA maintenance revenue eliminated by
purchase accounting in relation to the GUPTA acquisition. Adjusted
EBITDA is calculated by taking the Company's operating income (loss)
and adjusting for depreciation and amortization, non-cash stock-based
compensation and other charges. The Company believes that this
non-GAAP measure, viewed in addition to and not in lieu of the
Company's reported GAAP results, provides useful information to
investors because it is an integral part of the Company's internal
evaluation of operating results.
Non-GAAP total revenues were up 162% to $4.5 million for the first
quarter of fiscal 2008. Non-GAAP total revenues include $580,000 of
maintenance revenue that would have been recognized without the
write-down of the GUPTA deferred revenue as required by purchase
accounting. Correspondingly, non-GAAP service revenue would have
increased 129% to $3.1 million for the quarter, compared to $1.3
million for the same quarter of fiscal 2007. If this maintenance
revenue were added to the Company's first quarter operating results,
the reported net loss of $218,000 would have increased to net income
of $362,000.
Unify ended its fiscal 2008 first quarter with total cash and cash
equivalents of $1.9 million, compared to the $2.1 million it reported
at April 30, 2007. Share count used for GAAP EPS calculations in
fiscal Q1 2008 was 6.0 million.
Investor Conference Call:
Unify management will host a conference call today, September 6,
2007, at 2:00 p.m. PT (5:00 p.m. ET) to review the fiscal first
quarter 2008 financial results and other corporate events. Todd Wille,
President and CEO, and Steve Bonham, CFO, will be discussing these
results.
The call can be accessed by dialing (800) 218-0530 and giving the
pass code "UNIFY." Participants are asked to call the assigned number
approximately 10 minutes before the conference call begins. In
addition, the conference call will be available over the Internet at
www.unify.com in the Investor Relations section of the site. A replay
of the call will be available approximately one hour following the end
of the call through 11:59 p.m. PT on Thursday, September 13, 2007 by
dialing (800) 405-2236 and entering the following passcode: 11096029#.
About Unify
Unify is a global provider of application modernization software
that enables Service-Oriented Architecture (SOA). Unify allows an
organization to modernize mission critical applications while
maximizing its legacy investments throughout the enterprise. Unify's
enterprise software portfolio enhances SOA environments by improving
application time-to-market metrics, increasing collaboration and
service-enabling legacy information. Headquartered in Sacramento,
Calif., Unify has offices in London, Munich, Paris and Sidney. Visit
www.unify.com or email us at info@unify.com.
Some of the information in this press release may contain
projections or other forward-looking statements regarding future
events or the future financial performance of the Company. We wish to
caution you that these statements involve risks and uncertainties and
actual events or results may differ materially. Among the important
factors which could cause actual results to differ materially from
those in the forward-looking statements are general market conditions,
unfavorable economic conditions, our ability to execute our business
strategy, the effectiveness of our sales team and approach, our
ability to target, analyze and forecast the revenue to be derived from
a client and the costs associated with providing services to that
client, the date during the course of a calendar year that a new
client is acquired, the length of the integration cycle for new
clients and the timing of revenues and costs associated therewith, our
client concentration given that the Company is currently dependent on
a few large client relationships, potential competition in the
marketplace, the ability to retain and attract employees, market
acceptance of our service programs and pricing options, our ability to
maintain our existing technology platform and to deploy new
technology, our ability to sign new clients and control expenses, the
possibility of the discontinuation of some client relationships, the
financial condition of our clients' business and other factors
detailed in the Company's filings with the Securities and Exchange
Commission, including our recent filings on Forms 10-K and 10-Q.
UNIFY CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
July 31,
-------------------
2007 2006
--------- ---------
Revenues:
Software licenses $1,463 $ 391
Services 2,498 1,342
--------- ---------
Total revenues 3,961 1,733
--------- ---------
Cost of Revenues:
Software licenses 47 64
Services 195 249
--------- ---------
Total cost of revenues 242 313
--------- ---------
Gross profit 3,719 1,420
--------- ---------
Operating Expenses:
Product development 911 375
Selling, general and administrative 2,700 1,359
--------- ---------
Total operating expenses 3,611 1,734
--------- ---------
Income (loss) from operations 108 (314)
Other income (expense), net (316) 22
--------- ---------
Loss from continuing operations before income
taxes (208) (292)
Provision for income taxes 10 -
--------- ---------
Loss from continuing operations (218) (292)
Loss from discontinued operations - (462)
--------- ---------
Net loss $ (218) $ (754)
========= =========
Net loss per share:
Basic earnings per share:
Continuing operations $(0.04) $(0.05)
Discontinued operations -- (0.08)
--------- ---------
Net loss per share $(0.04) $(0.13)
========= =========
Dilutive earnings per share:
Continuing operations $(0.04) $(0.05)
Discontinued operations -- (0.08)
--------- ---------
Net loss per share $(0.04) $(0.13)
========= =========
Shares used in computing net loss per share:
Basic 6,037 5,905
Dilutive 6,037 5,905
RECONCILIATION OF GAAP TO NON-GAAP
(In thousands)
Three Months Ended
July 31,
-------------------
2007 2006
--------- ---------
Unaudited Unaudited
GAAP operating income (loss) $ 108 $ (314)
--------- ---------
Amortization of intangible assets 184 --
Depreciation 52 38
Stock based compensation expense 43 16
--------- ---------
Total adjustments to GAAP operating income 279 54
--------- ---------
Non-GAAP operating income (loss) - Adjusted EBITDA $ 387 $ (260)
========= =========
UNIFY CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
July 31, April 30,
2007 2007
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 1,870 $ 2,064
Accounts receivable, net 3,722 4,227
Prepaid expenses and other current assets 472 520
--------- ---------
Total current assets 6,064 6,811
Property and equipment, net 219 229
Investments 214 214
Goodwill 6,028 5,667
Intangibles, net 2,782 2,643
Other assets, net 372 474
--------- ---------
Total assets $ 15,679 $ 16,038
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 904 $ 620
Current portion of long term debt 1,429 1,361
Accrued compensation and related expenses 772 804
Other accrued liabilities 1,808 1,792
Deferred revenue 5,009 5,577
--------- ---------
Total current liabilities 9,922 10,154
Long term debt, net 4,937 4,910
Other long term liabilities 108 121
Commitments and contingencies -- --
Stockholders' equity:
Common stock 6 6
Additional paid-in capital 65,032 64,973
Accumulated other comprehensive income (loss) 63 45
Accumulated deficit (64,389) (64,171)
--------- ---------
Total stockholders' equity 712 853
--------- ---------
Total liabilities and stockholders' equity $ 15,679 $ 16,038
========= =========
CONTACT: Unify Corp.
Steven Bonham, Chief Financial Officer
916-928-6400
ir@unify.com
or
IR Contact:
MKR Group, Inc.
Todd Kehrli or Charles Messman
323-468-2300
ufyc@mkr-group.com