I'm new here - but the long-term longs have probably seen this. CEO Scott Broomfield is a man of his word . . . (from the Centura IR pages, 5/99, still up today)
It was a surprise to me to learn that CNTR is the 36th largest software co. in the world. This is the turnaround play of the year, IMO . . .
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Letter to Shareholders
Scott Broomfield, Annual Report - May 1999 To Our Shareholders:
This was an amazing year for Centura. Our accomplishments would not have been possible without the support of our shareholders, customers and employees. In 1998, we set out to accomplish three major objectives: strategic refocus, stabilization and revitalization of product development. Although we accomplished these major objectives, we must persist in the execution of our strategies, as success is built brick by brick. In the following, I will review these accomplishments during 1998 and highlight our objectives and opportunities for 1999.
First and most importantly, we set the strategic direction for Centura in late 1997. Our detailed analysis of our market opportunities, our vision, the Company?s strengths and fundamental factors necessary for success, indicated we should focus Centura on embedded databases and development solutions. Without this new direction, we would not have been able to begin the process of rebuilding the Company?s credibility.
Our goal is to become the market leader in secure, embeddable, e-business and micro database solutions and to provide the connectivity products necessary to integrate these solutions into business systems. Our strategic focus is to provide the best products and consulting solutions in order to help our customers be more successful. We began this new focus in 1998. No longer is business intelligence the purview of only the CEO. Internet and appliance computing will allow the front line employee access to the critical information necessary for real-time business decisions.
Next, we tackled the serious task of stopping the Company?s cash drain. We restructured operations, reduced non-essential staff personnel, eliminated cash bonuses and aligned employee long-term incentives with shareholder interests. Further, we began designing the processes and programs needed to deliver the results we had planned for during 1998.
In early 1998, we completed the Company?s equity recapitalization. This gave Centura the financial foundation imperative to the execution of our strategic objectives. The recapitalization moved Centura from a negative net equity to positive, improved our cash position and eliminated the Company?s long term debt, all of which resulted in Centura remaining public. It was at this point that we were able to begin investing in engineering and marketing. In essence, to begin to invest in the future of the business.
By the third quarter of 1998, we turned the corner with respect to Company sales. For three years, the Company?s revenues declined. In our 3rd and 4th quarters, we reversed the trend by beating our prior year?s invoicing levels. For all of 1998, Centura improved invoicing by approximately 3% to $52.2 million, from $50.6 million, in 1997. Centura?s bottom line financial performance, in terms of operating income and operating cash flow, was the best in the history of the Company.
Third, we re-freshed the major products in the Company. We introduced our Embedded SQLBase 7.0 and our Active X version of Centura Team Developer, our application development solution. More importantly, however, during the first quarter of 1999 we introduced our "first to market" secure, embedded database called SQLBase SafeGarde. Our thesis is that information increases in value when it is accessible and secure. Especially as it relates to the new distributed, Internet and appliance computing environments, this information must be secure. No competitor offers this end-to-end secure solution. Now, our customers and our customers? customers can access their information reliably, cost-effectively and without needing to become security experts. Furthermore, we have developed this solution without sacrificing performance.
Throughout the year, we built our executive and middle management team. We have hired many talented people out of some of the most successful high technology companies in the world. Moreover, we actually grew our total employee count by almost 20% in order to build the infrastructure necessary to grow the business. The experience this team brings to Centura will help our performance as we enter 1999.
Our performance resulted in a 29% return on shareholder equity; the first positive shareholder return since the early nineties.
As we look forward, 1999 promises to be an exciting year for Centura. We believe we are well positioned with respect to market trends. Our themes are simple but powerful; a return to strategic value for our customers and a return to growth for our business.
The Company provides best-of-breed products that meet the market requirements of fast time to market, low cost of ownership, safety, performance and ease of use. These result in a total solution that helps customers maximize their growth, profitability and return on investment. As the world evolves from distributed computing, through the Internet, towards appliances requiring access to applications and databases, the Company will introduce products and provide consulting solutions to support our customers in these new environments. In parallel with our product plan, we will invest in extensive training for our employees and clear and compelling marketing campaigns to grow the business. Moreover, our pending acquisition of Raima Corporation, if approved by the SEC, will accelerate our plans with respect to hand held computing devices and Linux operating system environments. As we introduce these products and programs, the Company will be working closely with industry analysts to help position Centura as adding value for our customers. As always, we will be diligent in balancing our opportunities with the risks that are always inherent in this competitive industry.
Please review our Company 10K report in conjunction with this annual report summary, as our 10K report examines, in detail, our results for the year ended 1998, our perspective on the industry and our outlook for the future.
In summary, where 1998 was about Centura?s viability, 1999 is about Centura?s visibility. Where 1998 was about Centura?s stability, 1999 is about Centura?s growth. I am pleased with our accomplishments during the past year and am excited about our opportunities for the future. There are, of course, many challenges in the coming years and we have the clarity of purpose, the commitment, the capability and the persistence to take Centura to new heights. We thank you ? our shareholders, customers and employees ? for your on going support.
Sincerely,
Scott R. Broomfield Chairman, CEO & President
John W. Bowman EVP and CFO< |
