Versant Announces Fourth Quarter and Year End 2004 Results
Highlights include Revenue Growth, Operational Restructuring, Sale
of Catalog Business and Launch of New Products FREMONT, Calif.,
Dec. 15 /PRNewswire-FirstCall/ -- Versant Corporation
(NASDAQ:VSNT), today announced its results for the fourth quarter
and the fiscal year ended October 31, 2004. For the fourth quarter
ended October 31, 2004, Versant reported total revenue of $6.2
million. License revenue for the fourth quarter was $2.9 million,
representing 47% of total quarterly revenues. Services revenue for
the fourth quarter was $3.3 million. Net loss from continuing
operations for the fourth quarter of 2004 was $3.5 million or
($0.10) per share. Operating expense for Q4 2004 included a $2.9
million restructuring charge, representing ($0.08) per share of the
total net loss from continuing operations of ($0.10) per share. "We
delivered strong sales results in the fourth quarter of 2004.
License revenues grew by 47% for our core data management business
over third quarter 2004. Our recent restructuring has positioned
the company such that in future quarters if we achieve revenue
levels similar to the fourth quarter, we expect the company to be
profitable," said Nick Ordon, Versant's chairman and chief
executive officer. "The quarter also included renewed commitments
from many of our value-added reseller customers including
PeopleSoft, Verisign, and Borland. We also saw deployment licenses
from several accounts both in North America and Europe including
Siemens ICN, Lucent, and Burlington Northern and Santa Fe Railway
Company." Comparatively, revenues for Q4 2004 were up 8% over Q4
2003. Operating expenses for Q4 2004 increased by $2.4 million from
Q4 2003. Net loss per share from continuing operations for Q4 2004
was ($0.10) per share compared to a net loss of ($0.06) per share
for Q4 2003. Revenues for the year ended October 31, 2004 were up
4% over the year ended October 31, 2003. Operating expense for
fiscal 2004 increased by $5.5 million from fiscal 2003. Net loss
per share from continuing operations for fiscal 2004 was ($0. 32)
per share compared to a net loss of ($0.17) per share in fiscal
2003. The net loss from continuing operations for fiscal 2004
included a $3.3 million restructuring charge, representing ($0.11)
per share of the total net loss from continuing operations of
($0.32) per share. Key Highlights -- North American license revenue
doubles from Q3 2004, continued strong performance in Europe --
Restructuring expected to reduce ongoing expenses by $700,000 per
quarter -- All-cash sale of catalog business -- Launch of new
products and new go-to-market strategy "North American license
revenues more than doubled in the fourth quarter compared to the
third quarter of 2004 with repeat orders from several existing
customers as well as addition of several new customers. The
majority of six- figure deals came from value-added resellers. We
currently expect that this renewed commitment should lead to more
business from these resellers in the future. Europe came in with a
consistent and strong performance as well. Our European revenues
are over 50% above the levels before we merged with Poet Holdings
in March 2004," said Ordon. "In order to streamline our operations
and benefit from the refined focus, we also undertook a major
restructuring effort in the fourth quarter. This restructuring is
projected to reduce our quarterly expenses by over $700,000
starting with the first quarter of fiscal 2005." Ordon also said,
"The sale of the catalog business to ems ePublishing AG provided
Versant with several major benefits. First, it allows us to focus
on our data management business completely. Secondly, the all-cash
sale strengthened our balance sheet. Finally, selling the business
to a leading catalog solutions provider will ensure that the
customers of catalog product get the proper level of service in the
future." "The fourth quarter of 2004 also marked the formal launch
of the Versant Open Access JDO product. We plan to release the
Versant Open Access for .NET in 2005. The initial response from our
customers has been very positive. In addition, we continue to see
these products broadening the reach of Versant beyond our
traditional areas of strength" said Ordon. "We have also created a
new go-to-market strategy for fully exploiting the potential of
these new products." To implement the new go-to-market strategy,
Versant completed a reorganization of the sales force aimed at
addressing the multiple market segments with a much broader product
line created from the acquisitions in 2004. James (Jim) Pollitt,
Versant's Vice President of Professional Services, has been
appointed as Versant's Vice President of Field Operations for North
America and Asia and will replace Charles Wuischpard who has left
to pursue other opportunities. Mr. Pollitt will lead the sales and
services of Versant's products in North America and Asia. Versant
also created new positions for regional directors of Open Access
Program in both North America and Europe. The regional program
directors will create a new inside sales function in Versant to
fully exploit the Open Access market opportunity. "I am very
excited about the new structure of our sales force. Jim brings in
tremendous experience in solutions selling and is a proven sales
leader at Versant having grown Versant's IBM Websphere services
revenues by 150% in past three years," said Ordon. "In addition,
Jim already knows the sales organization well and will build on the
current sales momentum. I am also very positive about the creation
of a dedicated team to jump start the sales of our Open Access
products." Operating Results Outlook The following statements are
projections and forward-looking statements that are based on
management's estimates as of December 15, 2004. Ordon said, "The
Company currently anticipates that first quarter 2005 revenue will
be in the range of approximately $6.2 to $6.7 million with an
estimated EPS in the range of break even to income of $0.01 per
share." About Versant Corporation Versant Corporation is an
industry leader in specialized data management and open data access
software. Using Versant's solutions, customers cut hardware costs,
speed and simplify development, significantly reduce administration
costs and deliver products with a strong competitive edge.
Versant's solutions are deployed in a wide array of industries
including telecommunications, financial services, transportation,
manufacturing, and defense. With over 50,000 installations, Versant
has been a highly reliable partner for over 15 years for Global
2000 companies such as British Airways, US Government, Financial
Times, IBM, and MCI. For more information, call 510-789-1500 or
visit http://www.versant.com/. Forward Looking Statements Involve
Risks and Uncertainties This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934, and
is subject to the safe harbor created by those sections. These
forward-looking statements include statements regarding forecasts
of ranges for Versant's revenues and earnings per share for the
first fiscal quarter of 2005; expectations of additional business
from existing resellers; the anticipated reductions in ongoing
quarterly operating expenses; the timing and the release of
Versant's Open Access for .NET; the broadening of markets beyond
traditional areas; the ability to manage field operations in North
America and Asia; and the financial impact that the sale of the
catalog business and Versant's recent restructuring will have on
future operations and our expense levels. Investors are cautioned
that any such forward-looking statements are not guarantees of
future performance and these forward-looking statements involve
significant risks and uncertainties, there are important factors
that could cause our actual results to differ materially from those
in the forward-looking statements. These risk and uncertainties
include, without limitation; the inability to achieve revenue
expectations as a result of delays in the sales cycle for our
products and services, changing markets demands and the performance
of our resellers; the possibility that existing value added
resellers may not remain committed to our software or that their
sales activity may not keep pace with their historical results;
that future sales levels will not meet expectations, unanticipated
delays in the release of the Open Access .NET product; the
potential short-term impact to revenues as a result of changes in
field operations; the possibility that additional integration
actions may be necessary with respect to the merger with Poet; the
uncertainty as to the impact and duration of the current economic
slowdown and the associated reduction in corporate IT spending; the
possibility that additional restructuring actions may be required;
and the company's ability to successfully manage its costs and
operations and maintain its working capital. The forward-looking
statements contained in this press release are made only as of the
date of this press release, and the Company assumes no obligation
to publicly update any forward-looking statement. Investors are
cautioned not to place undue reliance on forward-looking
statements. Additional information concerning factors that could
cause results to differ can be found in the Company's filings with
the Securities and Exchange Commission, including the Company's
most recent Annual Report on Form 10-K for the year ending 2003 and
its Quarterly Reports on Form 10-Q for the quarters ending January
31, 2004, April 30, 2004 and July 31, 2004. NOTE: Versant is either
a registered trademark or trademark of Versant Corporation in the
United States and/or other countries. All other products are a
registered trademark or trademark of their respective company in
the United States and/or other countries. Conference Call
Information Versant will host a teleconference to discuss year-end
FY2004 results today after markets close. The details for the
earnings call are as follows: Date: Wed., December 15, 2004 Time:
1:30 Pacific (4:30 Eastern) Dial-in number: 1-800-247-9979
International: 1-973-935-2401 Internet Simulcast*:
http://www.viavid.net/detailpage.aspx?sid=000020EB *Windows Media
Player needed for simulcast. Simulcast is voice only. Call the
conference call telephone number 5-10 minutes prior to the start
time. An operator will request your name and organization and ask
you to wait until the call begins. If you have any difficulty
connecting with the conference call number, please call the Liolios
Group at 949-574-3860. A replay of the conference call will be
available until December 22, 2004 by calling: Replay Numbers:
Toll-free 1-877-519-4471, International 1-973-341-3080 Internet
Simulcast*: http://www.viavid.net/detailpage.aspx?sid=000020EB
(Pass code: 5469168) VERSANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (In thousands) October 31, October 31,
2004 2003 -------- --------- ASSETS Current assets: Cash and cash
equivalents $3,633 $3,311 Accounts receivable, net 5,121 4,023
Other current assets 823 623 -------- --------- Total current
assets 9,577 7,957 Property and equipment, net 742 1,232 Other
assets 561 543 Intangibles, net of accumulated amortization 4,770
389 Goodwill, net of accumulated amortization 16,895 948 --------
--------- $32,545 $11,069 ======== ========= LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Short-term debt $-- $500
Accounts payable 839 739 Accrued liabilities 5,428 2,148 Current
portion of deferred revenue 3,027 3,905 Current portion of deferred
rent 93 63 -------- --------- Total current liabilities 9,387 7,355
-------- --------- Long-term liabilities, net of current portion:
Long-term portion of deferred revenue 43 83 Long-term portion of
deferred rent 236 309 -------- --------- Total long-term
liabilities 279 392 -------- --------- -------- --------- Total
liabilities 9,666 7,747 -------- --------- Shareholders' equity:
Convertible preferred stock, no par value -- 4,912 Common stock, no
par value 94,021 57,956 Deferred compensation (146) -- Accumulated
deficit (71,565) (59,568) Accumulated other comprehensive income
569 22 -------- --------- Total shareholders' equity 22,879 3,322
-------- --------- $32,545 $11,069 ======== ========= VERSANT
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share amounts) Three Months
Ended Year Ended October 31, October 31, 2004 2003 2004 2003 ------
------ ------ ------ Revenue: License $2,923 $2,845 $9,686 $9,082
Maintenance 1,631 1,477 6,392 6,076 Professional services 1,675
1,435 6,797 6,901 ----- ----- ----- ----- Total revenue 6,229 5,757
22,875 22,059 ----- ----- ----- ----- Cost of revenue: License 82
24 486 843 Maintenance 308 322 1,516 1,312 Professional services
1,502 1,371 5,858 6,011 Amortization of purchased intangibles 224
24 698 91 ----- ----- ----- ----- Total cost of revenue 2,116 1,741
8,558 8,257 ----- ----- ----- ----- Gross profit 4,113 4,016 14,317
13,802 ----- ----- ----- ----- Operating expenses: Marketing and
sales 2,006 1,945 8,026 7,698 Research and development 1,381 960
5,112 4,340 General and administrative 1,234 952 4,449 3,267
Restructuring charge 2,857 -- 3,271 -- Impairment of intangibles --
-- 1,024 -- Non cash stock expense (13) 1,208 86 1,209 ----- -----
----- ----- Total operating expenses 7,465 5,065 21,968 16,514
----- ----- ----- ----- Loss from operations (3,352) (1,049)
(7,651) (2,712) ----- ----- ----- ----- Other income, net (159) 260
84 397 ----- ----- ----- ----- Loss from continuing operations
before taxes and deemed dividend (3,511) (789) (7,567) (2,315)
Provision for income taxes 20 12 88 74 ----- ----- ----- ----- Net
Loss from continuing operations before deemed dividend $(3,531)
$(801) $(7,655) ($2,389) Deemed dividend to preferred shareholders
-- (2,422) -- ----- ----- ----- ----- Net Loss from continuing
operations attributable to common shareholders $(3,531) $(801)
$(10,077) ($2,389) Loss from discontinued operations, net of income
tax (181) (1,646) Loss from the sale of discontinued operations,
net of income tax (309) (309) ----- ----- ----- ----- Net loss
before cumulative effect of accounting change $(4,021) (801)
(12,032) (2,389) Cumulative effect of accounting change -- 35 --
----- ----- ----- ----- Net loss $(4,021) (801) (11,997) (2,389)
===== ===== ===== ===== Basic & Diluted (loss) earnings per
share Net Loss from continuing operations attributable to common
shareholders $(0.10) $(0.06) $(0.32) $(0.17) Loss from discontinued
operations $(0.01) $(0.00) $(0.05) $(0.00) Loss from sale of
discontinued operations $(0.01) $(0.00) $(0.01) $(0.00) Cumulative
effect of accounting change $(0.00) $(0.00) $(0.00) $(0.00) Net
loss attributable to common shareholders $(0.12) $(0.06) $(0.38)
$(0.17) Basic and diluted weighted average common shares 34,689
14,041 31,173 13,682 The following information is a forward-looking
statement and does not reflect any historical financial results of
operation of Versant Corporation and its Subsidiaries VERSANT
CORPORATION AND SUBSIDIARIES GUIDANCE FOR QUARTER ENDING JANUARY
31, 2004 (In thousands, except per share amounts) Low High Revenue
$6,200 $6,700 Net Income (Loss) From Operations $0 $426 Earnings
per share 0.00 $0.01 DATASOURCE: Versant Corporation CONTACT: Lee
McGrath, Chief Financial Officer of Versant Corporation,
1-800-VERSANT, or +1-510-789-1500, or ; or Versant IR Contact,
Scott Liolios of Liolios Group, Inc., +1-949-574-3860, or , for
Versant Corporation Web site: http://www.versant.com/
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