No .19 was what was announced on July 20th...
did you read this:
OVERVIEW
Our net loss for the second quarter of 1999 was $8.8 million, or $0.28 per
diluted share compared to a net loss of $2.4 million, or $0.11 per diluted
share, for the same period last year. Our net loss for the first six months of
1999 was $6.2 million, or $0.20 per diluted share compared to a net loss of $1.6
million, or $0.08 per diluted share, for the same period last year. Excluding
acquisition-related charges and assuming a 35% tax rate, the net loss per
diluted share for the second quarter of 1999 and six months ended June 30, 1999
was $0.19 and $0.08, respectively. This compares to a net earnings per diluted
share of $0.04 and $0.07 for the same periods of 1998.
During the second quarter of 1999, our results of operations reflected an
operating loss of $14.4 million compared to an operating loss of $2.8 million
for the second quarter last year. Quarterly operating expenses, excluding
acquisition-related charges and amortization, increased 237% to $26.6 million in
the first quarter of 1999 from $7.9 million in the same period last year and
exceeded total revenue growth of 128%. Our operating loss for the first six
months of 1999 was $12.6 million compared to an operating loss of $2.4 million
for the same period last year. For the six-month period ending June 30, 1999,
operating expenses, excluding acquisition-related charges and amortization,
increased 205% to $46.4 million in the first six months of 1999 from $15.2
million in the same period last year exceeding total revenue growth of 165%.
A shortfall in license revenues, combined with increases in expenses in
sales and administration in anticipation of higher revenues, impacted our
results for the quarter and six-months ended June 30, 1999. There were two
primary reasons for our revenue shortfall. First, a significant number of
software license sales our partners, as well as our internal sales force, had
projected for the quarter did not close or closed for smaller amounts than
anticipated. For example, we noted delays in sales where customer's approval
processes were elevated to higher levels, as well as clients who chose to
purchase on a project-by-project basis rather than a volume buy. In addition,
sales through some of our channel partners were delayed due to a variety of
factors, including our software being bundled into large enterprise agreements
which generally involve a longer sales cycle, and customers electing to defer
their purchase decision. Second, our software license revenue growth is
increasingly dependent on our sales and marketing partnership with IBM. Both of
our sales forces can sell the MQSeries Integrator ("MQSI") product, but the
economics are different depending on which partner actually takes the order. In
the second quarter of 1999, the percentage of total MQSI sales recorded by IBM
was much higher than anticipated, which resulted in lower than expected royalty
income.
We are actively addressing our future operating plans given the uncertainty
of market conditions, and we are currently focused on controlling expenses by
closely reviewing headcount additions and adding personnel only in critical
positions. Controls over discretionary expenses have also been tightened
throughout the organization.
Subsequent to June 30, 1999, we have planned significant personnel
reductions and facility consolidations. Consequently, we will incur a one-time
charge to operating expenses of approximately $3-$5 million in the third quarter
of 1999. In early July 1999, IBM informed us that they would no longer provide
royalty information during the current quarter. Beginning with the third quarter
of 1999, we will record royalty income from IBM on a one-quarter lag.
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