Pervasive Software Reports Revenue, Earnings Increases for Its
Third Fiscal Quarter Leading Data Infrastructure Software Company
Achieves Year-Over-Year Increases in Both Revenue and Profitability
for Its Seventh Consecutive Quarter AUSTIN, Texas, April 20
/PRNewswire-FirstCall/ -- Pervasive Software(R) Inc. , a global
value leader in data infrastructure software, today reported its
seventh consecutive quarter of year-over-year increases in revenue
and pro forma profitability and the thirteenth consecutive quarter
of profitability. "Once again Pervasive delivered excellent
financial results, a testament to our compelling low total cost of
ownership value proposition that continues to resonate in the
marketplace," said David Sikora, president and CEO, Pervasive
Software. "Over the past nine months, we have grown from a single-
product, single-market database company to a multi-product,
multi-market company serving the data infrastructure software needs
of independent software vendors (ISVs) and IT managers around the
world." "This quarter marks the first full quarter of combined
financial results following the December 2003 acquisition of Data
Junction Corporation, a pioneering data and application integration
company," Sikora added. Revenue, as reported under generally
accepted accounting principles (GAAP), was $14.2 million for the
third quarter of fiscal year 2004, compared to $10.0 million for
the third quarter of last fiscal year. Net income was $2.3 million,
or $0.10 diluted earnings per share, for the third quarter,
compared to net income of $1.8 million, or $0.10 diluted earnings
per share, for the third quarter of last fiscal year. On a pro
forma basis, as described below, Pervasive realized pro forma net
income of $2.6 million, or $0.11 diluted earnings per share, in the
third quarter of fiscal year 2004, compared to net income of $1.8
million, or $0.10 diluted earnings per share, in the third quarter
of last fiscal year. Pervasive continued to generate positive cash
flow from operations with $2.8 million in the third quarter of
fiscal 2004, ending the quarter with $32 million in cash and
marketable securities and no debt. "The Pervasive team is doing a
great job of executing this fiscal year," Sikora continued, "and we
are pleased with the solid results delivered for the quarter. While
continuing to execute well in our database business, we started the
process of integrating the Data Junction and Pervasive operational
activities. Importantly, we accomplished one of our foundational
goals of repackaging technology acquired from Data Junction and
launching a new set of products which specifically addresses very
real integration pains in mid-sized businesses and departments of
large enterprises. These products are being marketed to Data
Junction's traditional customers, as well as to Pervasive's
extensive worldwide base of long-standing ISV customers, and the
early feedback has been favorable. We are excited, as are our
customers, about the revenue opportunities made possible by this
new integration product platform. Simply put, seeds are being
planted following the combination of the two companies, and we
believe they are beginning to take root." Business Outlook For the
fourth fiscal quarter ending June 30, 2004, Pervasive expects
revenue to be in the range of $14.4 million to $14.9 million and
GAAP-basis net income to be in the range of $2.6 million to $2.8
million, both representing increases over the same quarter of last
year. GAAP-basis profitability includes amortization of purchased
intangibles of approximately $0.3 million in the third quarter.
Pervasive management believes that the pro forma results described
in this release are useful for an understanding of Pervasive's
ongoing operations because GAAP results include non-cash charges
associated with the write-off of in-process research and
development and the amortization of purchased intangibles.
Management uses these pro forma results to compare the company's
performance to that of prior periods for analysis of trends, and to
evaluate the company's financial strength, develop budgets, manage
expenditures and develop a financial outlook. Pro forma results are
supplemental and are not intended as a substitute for GAAP results.
Conference Call Details Pervasive will host a conference call to
discuss these results with the investment community today at 4 p.m.
Central Time. The dial-in numbers for the call are 800.894.5910 or
785.424.1052. The conference ID is "PVSW". The conference call may
also be accessed live over the Web at
http://www.pervasive.com/ircalendar . Check the site before the
call for login information. Replay will be available 6 p.m.,
Tuesday, April 20, to midnight, Tuesday, April 27, by dialing
888.274.8332 or 402.220.2325, or for a longer period through
Pervasive's Web site. About Pervasive Software Pervasive Software
is a global value leader in data infrastructure software. The
company's award-winning products enable customers to manage,
integrate, analyze and secure their critical data, providing the
industry's best combination of performance, reliability and cost.
Pervasive's strength is evidenced by the size and diversity of its
customer base, serving tens of thousands of customers in virtually
every industry market around the world. With headquarters in
Austin, Texas, Pervasive was founded in 1994 and sells its products
into more than 150 countries. More information may be found on the
Web at http://www.pervasive.com/ . Cautionary Statement This
release may contain forward-looking statements, which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
generally preceded by words such as "may," "plans," "expects,"
"believes," "anticipates," "estimates" or "intends." All
forward-looking statements included in this document are based upon
information available to Pervasive as of the date hereof, and
Pervasive assumes no obligation to update any such forward-looking
statement. Investors are cautioned that actual results could differ
materially from Pervasive's current expectations. Factors that
could cause or contribute to such differences include, the factors
and risks discussed in Pervasive's reports filed from time to time
with the Securities and Exchange Commission including, without
limitation, the risk that Pervasive will be unable to attract,
motivate and retain skilled sales, marketing, engineering and other
personnel, the risk that the packaged client/server applications
market will not continue to grow at historical rates, and the risk
that current revenues are substantially dependent upon continued
market acceptance of and revenues from the company's data
infrastructure products. All Pervasive brand and product names are
trademarks or registered trademarks of Pervasive Software Inc. in
the United States and other countries. All other marks are the
property of their respective owners. Contacts: John Farr Chief
Financial Officer 800.287.4383 Marian Kelley Director, Corporate
Communications 512.231.6033 Pervasive Software Inc. Condensed
Consolidated Statements of Operations (GAAP) (A) (in thousands,
except per share data) (Unaudited) Three months Nine months ended
ended March 31 March 31 ---------------- ---------------- 2004 2003
(B) 2004 2003 ------- ------- ------- ------- Revenues: Product
licenses $11,147 $9,084 $29,309 $26,120 Services and other 3,055
948 5,794 2,871 ------- ------- ------- ------- Total revenue
14,202 10,032 35,103 28,991 Costs and expenses: Cost of product
licenses 553 256 1,139 719 Cost of services and other 1,627 1,223
3,899 3,759 Sales and marketing 5,621 3,592 12,918 10,194 Research
and development 2,768 1,912 7,156 5,898 General and administrative
1,166 1,231 3,916 3,703 Write-off of acquired in-process research
and development --- --- 1,084 --- ------- ------- ------- -------
Total costs and expenses 11,735 8,214 30,112 24,273 ------- -------
------- ------- Operating income from continuing operations 2,467
1,818 4,991 4,718 Interest and other income, net 47 116 221 426
Income tax provision (200) (150) (550) (450) ------- -------
------- ------- Income from continuing operations 2,314 1,784 4,662
4,694 Gain from discontinued operations --- --- --- 159 -------
------- ------- ------- Net income $2,314 $1,784 $4,662 $4,853
======= ======= ======= ======= Diluted earnings per share: Income
from continuing operations $0.10 $0.10 $0.22 $0.26 Gain from
discontinued operations --- --- --- 0.01 ------- ------- -------
------- Net income $0.10 $0.10 $0.22 $0.27 ======= ======= =======
======= Shares used in computing diluted earnings per share 24,228
17,879 21,300 17,710 (A) See pro forma results of operations and
related reconciliation to GAAP results for the three months ended
March 31, 2004, later in this release. (B) On December 4, 2003, we
acquired Data Junction Corporation. During the third quarter of
last fiscal year, the quarter ended March 31, 2003, Data Junction
separately reported $3.5 million in revenue and $0.6 million in
operating income. These prior year results of Data Junction are not
included in this column and are included here for informational
purposes only. Pervasive Software Inc. Pro Forma Condensed
Consolidated Statements of Operations (A) (in thousands, except per
share data) (Unaudited) Three months ended March 31, 2004
----------------------------------- Total Pro Pro Consolidated
Forma Forma GAAP Adjustments Adjusted (B) ------------ -----------
---------- Revenues: Product licenses $11,147 $--- $11,147 Services
and other 3,055 --- 3,055 ------------ ----------- ---------- Total
revenue 14,202 --- 14,202 Costs and expenses: Cost of product
licenses 553 (317) 236 Cost of services and other 1,627 --- 1,627
Sales and marketing 5,621 --- 5,621 Research and development 2,768
--- 2,768 General and administrative 1,166 --- 1,166 ------------
----------- ---------- Total costs and expenses 11,735 (317) 11,418
------------ ----------- ---------- Operating income from
continuing operations 2,467 317 2,784 Interest and other income,
net 47 --- 47 Income tax provision (200) --- (200) ------------
----------- ---------- Net income $2,314 $317 $2,631 ============
=========== ========== Diluted earnings per share $0.10 $0.11
============ ========== Shares used in computing diluted earnings
per share 24,228 24,228 (A) See Unaudited Condensed Consolidated
Statements of Operations earlier in this release. Pro forma
presentation is not intended to replace GAAP presentation. Pro
forma measures are calculated in the manner described in this
release. (B) Pro forma adjustments consist of $0.3 million of
purchased intangibles amortization related to the Data Junction
acquisition. Pervasive Software Inc. Condensed Consolidated Balance
Sheets (in thousands) March 31, June 30, 2004 2003 ----------
---------- (Unaudited) ASSETS Current assets: Cash and marketable
securities $31,983 $41,665 Trade accounts receivable, net 7,983
4,900 Notes receivable from related parties --- 102 Prepaid
expenses and other current assets 1,564 727 ---------- ----------
Total current assets 41,530 47,394 Property and equipment, net
2,455 2,251 Notes receivable from related parties --- 204 Purchased
technology, net 6,962 536 Goodwill 38,961 --- Other assets 203 207
---------- ---------- Total assets $90,111 $50,592 ==========
========== LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable and accrued liabilities $9,343 $8,122
Deferred revenue 4,671 2,236 Liabilities of discontinued operations
--- 32 ---------- ---------- Total current liabilities 14,014
10,390 Stockholders' equity 76,097 40,202 ---------- ----------
Total liabilities and stockholders' equity $90,111 $50,592
========== ========== DATASOURCE: Pervasive Software Inc. CONTACT:
John Farr, Chief Financial Officer, +1-800-287-4383, or Marian
Kelley, Director, Corporate Communications, +1-512-231-6033, both
of Pervasive Software Inc., Web site: http://www.pervasive.com/
http://www.pervasive.com/ircalendar
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