Plumtree Software (Nasdaq:PLUM) today announced results for its
second quarter ended June 30, 2005. Revenue for the second quarter
of 2005 calculated in accordance with Generally Accepted Accounting
Principles (GAAP) was $20.9 million and non-GAAP revenue for the
second quarter of 2005 was $22.5 million. This compared to $24.6
million for GAAP and non-GAAP revenue for the first quarter of 2005
and $19.5 million for GAAP and non-GAAP revenue for the comparable
quarter last year, representing an 8.6% revenue decrease from the
first quarter of 2005, and a 15.4% increase over the second quarter
of 2004. Net loss for the second quarter of 2005 calculated in
accordance with GAAP was $2.2 million, or $0.07 per share, compared
to net income of $259,000, or $0.01 per share, for the first
quarter of 2005 and a net loss of $3.7 million, or $0.12 per share,
for the second quarter of 2004. Non-GAAP net loss for the second
quarter of 2005 was $378,000, or $0.01 per share, compared to
non-GAAP net income of $307,000, or $0.01 per share, for the first
quarter of 2005 and non-GAAP net loss of $2.7 million, or $0.09 per
share, for the second quarter of 2004. Non-GAAP revenue excludes
the effect of the contingent contract reserve of $1.5 million
recorded in the three months ended June 30, 2005 related to issues
with the "Price Reductions" clause in our U.S. General Services
Administration (GSA) contract. Non-GAAP net income (loss) excludes
charges for contingent contract reserve, amortization of
stock-based compensation, amortization of acquired technology,
charges related to restructuring, and assumes an effective tax rate
of 30% on net income (loss), if any. A reconciliation of these
non-GAAP results to GAAP results is included in the financial
tables below. As of June 30, 2005, Plumtree's cash, cash
equivalents and short-term investments were $68.0 million, an
increase of approximately $800,000 from $67.2 million on March 30,
2005. Plumtree has no long-term debt. "Our second quarter
performance is the direct result of our inability to close a
handful of deals by the end of the quarter. While we are
disappointed with the short term impact on our results, we
anticipate that a number of these deals will close shortly,
including one which has closed since June 30," said John Kunze, CEO
of Plumtree. "Demand for our Integrated Activity Management
collaborative applications remains strong." Second Quarter
Highlights 2005 second quarter highlights include: Customer
Success: Plumtree signed 66 total license deals this quarter,
adding 20 new customers, including Osiptel, Tyco Electronics
Corporation, Organismo Supervisor de la Inversion en Energia,
Conservation International, Defense Advanced Research Products
Agency (DARPA), NHS 24 Scotland, State of Wisconsin, King &
Spalding LLP, Columbia University, FBL Financial Group, TEPPCO GP,
Inc., Independent Electricity System Operator, Integro Ltd., Cast
Iron Systems Inc., Pennsylvania Department of Education, National
Arts Council, Palacios & Asociados Consorcio Logistico,
Changhong Zarva Information Technology Products Co. Ltd., Shanghai
Video Group and Elior Data. Integrated Activity Management (IAM) In
Plumtree's annual analysis on the state of the corporate portal
market, the June report revealed that CIOs at large enterprises
rank portal projects among their highest spending priorities for
2005. It also substantiated an emerging industry consensus that
portal technology is the delivery vehicle for a new generation of
composite applications in a marketplace driven by the promise of
service-oriented architectures (SOA). In the second quarter of
2005, Plumtree saw a continued rise in this trend with new
customers creating and deploying IAM applications using the portal
platform. Australia-based Dome Coffees selected Plumtree's portal
framework and development environment to build new IAM applications
that will help ease franchise owners' administration burdens,
streamline business processes and underpin a strategy designed to
grow franchise numbers by over 1,000 percent. In the past, Dome
Coffees distributed franchise procedures and processes in paper
manuals that were continuously updated by fax and stored in
three-ring binders. However, with major expansion in the company's
sights, Dome Coffees required a more sophisticated technology
system to make a compelling proposition for potential franchisees.
As a result, they deployed Plumtree's portal platform to automate
business processes and consolidate information for their central
support centre. Manual procedures, including customer feedback,
site selection, field audits of cafe standards, inventory
management and staff training, are now automated via Plumtree
portal applications. Corporate Update In May, Plumtree opened EMEA
Odyssey 2005 in the U.K., its first annual user conference for the
region. The event provided an arena for Plumtree's customers,
prospects and partners to exchange ideas on furthering innovation
in portal technology. At the event, Plumtree customers shared how
they earned significant return on investment (ROI) on their
advanced portal deployments as the role of portals expand from the
assembly of enterprise content and information to a framework for
building composite applications. Additionally, David Meyer, vice
president of product management at Plumtree, participated in an
industry panel discussion at the JavaOne Conference in San
Francisco, where he debated portal best practices and market
approaches alongside competing vendors. Synergy Alliance Update
Plumtree announced a strategic partnership with Fuego(R), a leading
provider of agile business process management (BPM) solutions.
Plumtree will be an original equipment manufacturer (OEM) of the
software suite, FuegoBPM(TM). With the addition of robust BPM
functionality in Plumtree's portal platform, customers will be able
to deploy composite applications designed to help automate and
streamline processes, improve productivity and reduce IT and
operational costs. Also, in this quarter, Plumtree partnered with
Kapow Technologies, a Web integration company, for accelerating
portlet creation and publishing in the portal framework.
Additionally, Plumtree teamed with Theoris, a business intelligence
software company, to bring business intelligence capabilities to
Plumtree's corporate portal customers. Major Product Updates
Plumtree announced its Enterprise Web Development Kit (EDK)
extensions for integrating systems of records such as PeopleSoft,
SAP and Siebel. This kit consists of code samples and templates to
enable developers to rapidly create integration portlet services
with the user interface of their choice. In turn, these portlets
form service-oriented building blocks for creating composite
applications which can be delivered through the Plumtree Corporate
Portal. Industry Recognition Plumtree was positioned in the leaders
quadrant in the "2005 Horizontal Portal Products Magic Quadrant"
report conducted by Gartner, Inc. "Leaders" are vendors who are
performing well today, have a clear vision of market direction, and
are actively building competencies to sustain their leadership
position in the market. The positioning in the leader quadrant by
Gartner is a testament to Plumtree's continued innovation and
success in creating portal solutions that effectively address the
evolving needs of enterprises. Q3 2005 Financial Outlook Plumtree
Software currently anticipates third quarter 2005 non-GAAP revenue
to be between $24.5 million and $25.5 million. Third quarter 2005
non-GAAP net loss is currently expected to be between $0.01 and
$0.04 per share, excluding amortization of deferred stock-based
compensation estimated to be $35,000, and assuming an effective tax
rate of 30% on net income, if any. For a discussion of factors that
could cause actual results to differ materially from these targets,
see "Safe Harbor Statement and Caution" below. Conference Call
Interested parties can hear the conference call concerning
Plumtree's financial results for the second quarter on Monday,
August 8, 2005 at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)
via live Webcast by visiting www.plumtree.com/ir, or alternatively,
they may listen to a teleconference by calling 800-857-9600
domestically or 210-234-0000 internationally. The passcode for the
teleconference is Plumtree. The Webcast replay of the call will be
available at www.plumtree.com/ir from the conclusion of the initial
Webcast until the release of Plumtree's third quarter 2005
financial results. An audio replay of the call will also be
available until August 18, 2005. The dial-in number for the audio
replay is 866-432-8780. The passcode for the audio replay is
Plumtree. About Plumtree Software Plumtree Software is a technology
leader, providing enterprise solutions to bridge disparate work
groups, IT systems and business processes with its cross-platform
portal. Plumtree Software continues to innovate, offering rich
service-oriented environments to deliver composite applications
that give customers the freedom and flexibility to support advanced
user needs and business processes. Plumtree Software's solutions
provide significant business value to more than 21 million users
worldwide. Customers include Airbus, Mazda, Pratt & Whitney and
U.S. Navy. For more information, visit www.plumtree.com. Plumtree
is a registered trademark of Plumtree Software, Inc. and/or its
subsidiaries in the U.S. and/or other countries. All other
registered and unregistered trademarks in this document are the
sole property of their respective owners. Safe Harbor Statement and
Caution This press release contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. These forward-looking statements include:
statements regarding our current financial outlook for the third
quarter of 2005; our expected revenue and net loss; anticipated
positive trends in our business; our ability to close certain deals
that were not completed in the second quarter of 2005; and
continued growth and demand in our markets, including the markets
for Integrated Activity Management applications. These forward
looking statements are subject to numerous risks and uncertainties
and actual results may vary materially. We may not achieve
anticipated future operating results or the benefits expected from
industry developments or our new product offerings. The markets for
our products may not continue to grow. Our success depends on,
among other factors, continued customer demand and interest in our
current and new products; our ability to compete with our larger
competitors, in an increasingly competitive and consolidating
industry environment, that may have longer operating histories,
more established product offerings and greater resources; and our
success in building product pipeline, improving sales execution and
achieving growth. Other risks and uncertainties include risks
associated with the ongoing GSA review process, and our internal
investigation into the "Price Reductions" clause of the GSA
contract, an uncertain general economic environment; adverse
conditions in worldwide IT spending trends; failure to expand our
customer base; the impact of increasing competition; the length and
complexity of Plumtree's sales cycle; the success of major version
releases, new platforms, applications and tools; the ability of our
customers to deploy our products successfully and their willingness
to act as references; changes in the needs and priorities of
existing and potential customers; failure to manage technological
change; our ability to expand into and within global markets; our
ability to manage costs; our ability to provide a return on
investment to our customers; the impact of geopolitical conflicts
and events; and those other risks and uncertainties contained in
the Company's most recent Annual Report filed with the Securities
and Exchange Commission ("SEC") on Form 10-K, and all subsequent
SEC filings. Copies of filings made with the SEC are available
through the SEC's electronic data gathering analysis retrieval
system (EDGAR) at www.sec.gov. We undertake no obligation following
the date of this release to update or revise our forward-looking
statements or to update the reasons actual results could differ
materially from those anticipated in forward-looking statements. We
caution you not to place undue reliance upon any such
forward-looking statements, which speak only as of the date such
statements are made. Past performance is not indicative of future
results. We cannot guarantee any future operating results,
activity, performance or achievement. Each third party opinion or
survey results noted in this release contains only one subjective
evaluation of a technology market, representing marketplace
characteristics at a given time and are subject to change without
notice. These results and opinions should not be deemed to be an
endorsement of Plumtree or any of its products or any other company
or product. Any analyst opinion or survey represents only one of
many information sources available and decision-makers should not
rely solely on any one evaluation. Industry surveys and published
analyst opinions are not an indication of future results. We
caution you not to place undue reliance upon any survey or analyst
report. Use of GAAP and Non-GAAP Results Plumtree's management
believes that a presentation of revenues excluding the effect of
contingent contract reserves and operating costs and expenses
excluding amortization of deferred stock-based compensation,
amortization of acquired technology and charges related to
restructuring, and assuming a fixed effective tax rate, provides a
meaningful basis for evaluating our revenue and underlying cost and
expense levels. Presentation of non-GAAP net income (loss) and
earnings per share information provides greater comparability of
Plumtree's financial results against historical results as well as
those of other enterprise software companies and financial models
of securities analysts. A reconciliation of non-GAAP results to
GAAP results is provided in the financial tables below. -0- *T
PLUMTREE SOFTWARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands, except per share amounts) (unaudited)
Three Months Six Months Ended Ended June 30, June 30, 2005 2004
2005 2004 ------- ------- ------- ------- Revenue: License 7,396
7,911 17,387 14,782 Service and maintenance 15,075 11,557 29,661
22,408 Contingent contract reserve (1,543) - (1,543) - -------
------- ------- ------- Total revenue 20,928 19,468 45,505 37,190
Cost of revenue: License 114 422 283 850 Service and maintenance
5,771 4,638 11,337 8,756 Amortization of stock-based compensation
& acquired technology 5 425 6 872 ------- ------- -------
------- Total cost of revenue 5,890 5,485 11,626 10,478 -------
------- ------- ------- Gross margin 15,038 13,983 33,879 26,712
Operating expenses: Research and development 6,344 5,886 12,933
11,395 Sales and marketing 8,166 8,623 17,476 16,635 General and
administrative 2,842 2,752 5,548 5,139 Restructuring charges - 307
- 307 Amortization of stock-based compensation 17 103 19 287
------- ------- ------- ------- Total operating expenses 17,369
17,671 35,976 33,763 ------- ------- ------- ------- Loss from
operations (2,331) (3,688) (2,097) (7,051) Interest and other
income, net 388 140 590 289 ------- ------- ------- ------- Loss
before income taxes (1,943) (3,548) (1,507) (6,762) Provision for
income taxes 259 139 437 301 ------- ------- ------- ------- Net
loss (2,202) (3,687) (1,944) (7,063) ======= ======= =======
======= Net loss per share: Basic and diluted (0.07) (0.12) (0.06)
(0.22) ======= ======= ======= ======= Shares used to compute net
loss per share: Basic and diluted 33,103 31,882 32,938 31,680
======= ======= ======= ======= PLUMTREE SOFTWARE, INC. NON GAAP(a)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands,
except per share amounts) (unaudited) /--------------- Non GAAP
---------------/ Three Months Six Months Ended Ended June 30, June
30, (unaudited) (unaudited) 2005 2004 2005 2004 ------- -------
------- ------- Revenue: License 7,396 7,911 17,387 14,782 Service
and maintenance 15,075 11,557 29,661 22,408 ------- ------- -------
------- Total revenue 22,471 19,468 47,048 37,190 Cost of revenue:
License 114 422 283 850 Service and maintenance 5,771 4,638 11,337
8,756 ------- ------- ------- ------- Total cost of revenue 5,885
5,060 11,620 9,606 ------- ------- ------- ------- Gross margin
16,586 14,408 35,428 27,584 Operating expenses: Research and
development 6,344 5,886 12,933 11,395 Sales and marketing 8,166
8,623 17,476 16,635 General and administrative 2,842 2,752 5,548
5,139 ------- ------- ------- ------- Total operating expenses
17,352 17,261 35,957 33,169 ------- ------- ------- ------- Non
GAAP loss from operations (766) (2,853) (529) (5,585) Interest and
other income, net 388 140 590 289 ------- ------- ------- -------
Non GAAP income (loss) before income taxes (378) (2,713) 61 (5,296)
Non GAAP income taxes(b) - - 18 - ------- ------- ------- -------
Non GAAP net income (loss) (378) (2,713) 43 (5,296) ======= =======
======= ======= Non GAAP net income (loss) per share: Basic (0.01)
(0.09) 0.00 (0.17) ======= ======= ======= ======= Diluted (0.01)
(0.09) 0.00 (0.17) ======= ======= ======= ======= Shares used to
compute net income (loss) per share: Basic 33,103 31,882 32,938
31,680 ======= ======= ======= ======= Diluted 33,103 31,882 35,849
31,680 ======= ======= ======= ======= (a) Non GAAP Statements of
Operations excludes $1,543, $0, $1,543 and $0 of contingent
contract reserve, respectively, $22, $134, $25 and $371 of
amortization of stock based compensation, respectively and $0,
$394, $0 and $788 of amortization of acquired technology,
respectively. In addition, the Non GAAP Statement of Operations for
the three months and the six months ended June 30, 2004 excludes
$307 of restructuring costs. (b) Assumes an annualized effective
tax rate of 30% on net income, if any. PLUMTREE SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) As
of As of June December 30, 31, 2005 2004 -------- -------- ASSETS
Current assets: Cash, cash equivalents and short-term investments
$67,966 $65,034 Accounts receivables, net of allowances 17,591
20,552 Other current assets 3,054 2,313 -------- -------- Total
current assets 88,611 87,899 Property and equipment, net 2,453
2,532 Other long-term assets 312 380 -------- -------- $91,376
$90,811 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $2,291 $1,841 Accrued and
other current liabilities 14,920 14,944 Deferred revenues 20,631
20,804 -------- -------- Total current liabilities 37,842 37,589
Long-term liabilities 2,171 2,216 -------- -------- Total
Liabilities 40,013 39,805 Total Stockholders' Equity 51,363 51,006
-------- -------- -------- -------- $91,376 $90,811 ========
======== *T
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