webMethods Reports Fiscal Second Quarter Financial Results
November 02 2006 - 4:28PM
PR Newswire (US)
FAIRFAX, Va., Nov. 2 /PRNewswire-FirstCall/ -- webMethods, Inc.
(NASDAQ:WEBM), a leading provider of business integration and
optimization software, today announced financial results for its
fiscal second quarter ended September 30, 2006. These financial
results are based on the company's preliminary valuation of the
purchase price allocation and related accounting treatment for its
acquisition of Infravio and Cerebra. Complete financial results
will be included in the company's Form 10-Q for the period ended
Sept. 30, 2006 and may vary from the results reported in this press
release. Total revenue for the second quarter was $50.8 million,
compared to $49.2 million in the prior year period. License revenue
for the second quarter was $16.5 million, compared to $19.4 million
in the prior year period. Professional Services revenue for the
second quarter was $13.3 million, compared to $11.3 million in the
prior year period. Maintenance revenue for the second quarter was
$21.0 million as compared to $18.5 million in the prior year
period. Under U.S. generally accepted accounting principles (GAAP),
the company's net loss for the second quarter was $4.1 million, or
a loss of $0.07 per share, compared to net income of $2.6 million,
or earnings of $0.05 per share, in the prior year period. GAAP
results for the second quarter reflect $2.8 million of stock-based
compensation expense as a result of the company's adoption of
Financial Accounting Standard No. 123R. Fiscal year 2006 results do
not include these expenses. Second quarter GAAP results also
include expenses of $736,000 for amortization of acquired
intangibles, $1.2 million for the write-off of in- process research
and development costs and $430,000 of transaction fees and other
related acquisition costs. This compares to expenses of $661,000
for amortization of deferred warrant charge and $599,000 for
amortization of acquired intangibles included in last year's second
quarter GAAP results. "Despite the weakness of our recent
performance, we continue to see healthy demand in the market place.
Clearly, we need to improve our execution and we've taken immediate
steps to do so," said David Mitchell, president and CEO,
webMethods, Inc. "We have also carefully reviewed current
organizational spending levels and have identified several
initiatives which will significantly reduce expenses over the next
several quarters. As our desire for profitability cannot outpace
our desire to grow, these initiatives will not reduce our quota
bearing headcount or impact our product or service deliverables."
Second Quarter Financial Highlights: * Cash and marketable
securities at September 30, 2006 decreased by approximately $38.5
million to $136.6 million from $175.1 million at June 30, 2006,
primarily due to the acquisition of Infravio and the purchase of
assets of Cerebra. * Total deferred revenue at September 30, 2006
decreased by $9.3 million to $47.2 million from $56.5 million at
June 30, 2006. Financial Outlook: Based on currently available
information, webMethods anticipates total revenue in the fiscal
third quarter ending December 31, 2006 will be in the range of $47
million to $50 million, which includes license revenue in the range
of $13.5 million to $16 million. GAAP net loss per share for the
third quarter is anticipated to be in the range of $0.16 to $0.11.
GAAP net loss for the third quarter is expected to include expenses
of approximately $3.5 million related to stock-based compensation,
$1.4 million for amortization of acquired intangibles, $1.3 million
for excess facilities costs and assumes income tax expenses of
$300,000. Quarterly Business Highlights: During the second quarter,
webMethods completed its acquisition of Infravio, a privately-held
provider of industry leading solutions for SOA governance, for
approximately $38 million. Earlier in the quarter, webMethods
completed its acquisition of assets of privately- held Cerebra,
Inc. Cerebra's semantic metadata technology will be offered as a
differentiating feature within future editions of webMethods'
flagship product suite, webMethods Fabric(TM). According to
Enterprise Management Associates [webMethods Executes on
Acquisition Strategy, Nabs Infravio (September 2006)], a leading
provider of IT industry research and analysis, "webMethods'
simultaneous courtships and acquisitions of Cerebra and Infravio
indicate clear market vision combined with an intent to pursue the
logical outcome of SOA evolution, which will undoubtedly be
inter-enterprise services. . . Together, they will significantly
enhance webMethods' already robust SOA execution environment and
could well be a key differentiator in the marketplace." In its July
2006 issue, Computer Business Review named webMethods one of the
ten most influential companies in Business Process Management (BPM)
and integration. The company was also recognized during the quarter
by SWIFT (the Society for Worldwide Interbank Financial
Telecommunications) with the organization's SWIFTReady Financial
EAI Gold Certification for 2006. These standards and protocols are
used to ensure reliable, secure and assured messaging between
nearly 8,000 financial institutions spanning more than 200
countries. In October, Francis A. "Fran" Dramis, Jr. was elected to
the webMethods Board of Directors as an additional independent
director. Mr. Dramis currently serves as the Chief Information,
E-Commerce and Security Officer for BellSouth Corporation. Global
Customer Wins: webMethods won new and additional business during
the second quarter with strategic customers worldwide. The
following companies represent important new and follow-on business
that closed during the quarter: Active Health Management, Inc.,
Arinso International, Arrivia.Kom, Capital One Services, Inc.,
Casbega S.A., Commonwealth of Pennsylvania Department of Labor and
Industry, Cox Communications, Elemica, Inc., Hewlett-Packard UAB
for Ministry of Health Lithuania, Lenders First Choice, Telarix,
and Tribeca Global Management LLC, a subsidiary of Citigroup
Alternative Investments, among others. Conference Call Information:
webMethods will host a conference call at 5:00 p.m. Eastern Time
today to discuss the company's fiscal second quarter financial
results and its future guidance. The conference call will be
available via telephone by dialing 1 (877) 468-1591 in North
America or 1 (706) 679-0585 outside North America, or via webcast
at http://www.webmethods.com/investors. A replay of this call will
be available through November 9, 2006. Please dial 1-(800) 642-1687
in North America and 1- (706) 645-9291 outside North America,
confirmation number 9838097. About webMethods, Inc. webMethods
(NASDAQ:WEBM) provides business integration software to integrate,
assemble and optimize available IT assets to drive business process
productivity. webMethods delivers an innovative, enterprise-class
business integration platform that incorporates proven integration
technology with next generation capabilities into one interoperable
set of tools that delivers a unique combination of efficiency,
agility and control. webMethods combines industry leadership with a
zealous commitment to customers to deliver tangible business value
to more than 1,400 global customers. webMethods is headquartered in
Fairfax, Va., with offices throughout the U.S., Europe, Asia
Pacific and Japan. More information about the company can be found
at http://www.webmethods.com/. The webMethods name and logo are
registered trademarks of webMethods, Inc. in the United States and
certain other countries. All other marks mentioned are trademarks
or service marks of their respective companies. This press release
and the conference call announced in it may contain various remarks
about the future expectations, plans and prospects of webMethods
that constitute forward-looking statements for purposes of the safe
harbor provisions of U.S. securities laws. Specific forward-looking
statements relate to future market opportunities for webMethods'
solutions, webMethods' products and services and their performance,
the size and strength of its markets, the size and quality of its
pipeline, expected future financial performance (including total
revenue, license revenue, level of cash and marketable securities,
non-cash or non-recurring charges, expenses, net earnings or loss,
earnings or loss per share), expected financial metrics,
webMethods' future cost savings and expense levels, the anticipated
result of marketing and selling models and approaches, the
anticipated contributions to webMethods' future financial
performance of certain products or geographic regions of its
business, demand for some or all of its products and the
contribution to webMethods' revenue of business partners or
webMethods' products or services. Actual results of webMethods may
differ materially from those indicated by these forward-looking
statements as a result of various risks and uncertainties,
including the risk that management of webMethods has not completed
its review of the preliminary results presented in this press
release and, accordingly the preliminary results may adjusted, the
impact of economic conditions, geopolitical factors, seasonal
factors, competitive and pricing pressures, terrorism and related
uncertainties in the U.S. and abroad on the company's customers and
prospects and their IT spending budgets and priorities; impact upon
operations of legal compliance matters or internal controls review,
improvement and remediation; difficulties in achieving or
maintaining anticipated expense levels and controlling major
expenses; variations in the size and timing of customer orders and
demand for software offered by webMethods; impact of compliance
programs and claims for alleged violations of requirements and
duties; impact of changes in management or staff levels; variations
in revenue influenced by software vendor or systems integrator
partners; impact of rapid technological change; and these and other
risks and uncertainties discussed more fully in webMethods' SEC
filings, including those discussed in the "Risk Factors" section of
webMethods' Form 10-K for the year ended March 31, 2006, which is
on file with the U.S. Securities and Exchange Commission and may be
accessed at http://www.sec.gov/ or webMethods' investor relations
web page at http://www.webmethods.com/investors. webMethods
disclaims any obligation to update or correct any forward-looking
statements made herein due to the occurrence of events after the
issuance of this press release. DATASOURCE: webMethods, Inc.
CONTACT: Christopher Martin, Investor Relations, +1-703-460-6609,
or John Conley, Public Relations, +1-703-460-5996, , both of
webMethods, Inc. Web site: http://www.webmethods.com/
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