Starbase Announces Record Fourth Quarter and FY2000 Year-End Results
May 18, 2000 04:11 PM Eastern Time
SANTA ANA, Calif.--(BUSINESS WIRE)--May 18, 2000--
New Target Markets, Strategic Acquisitions, and Sales and Marketing Teams Bolster Accelerating Adoption of StarTeam
as a Best-of-Breed eBusiness Application Development Solution
Starbase Corp. SBAS , a leading provider of collaboration solutions for integrated content and software applications, Thursday reported record financial results for the fourth fiscal quarter and fiscal year ended March 31, 2000.
Revenues for the fourth quarter were $6,193,000, a 186% increase over revenues of $2,162,000 for the fourth quarter of 1999, and a 50% increase over revenues of $4,133,000 for the third quarter of 2000. This represents the 12th consecutive quarter of revenue growth. Net loss for the fourth quarter of 2000, excluding acquisition related costs, was $420,000, or $(0.01) per share, compared with a net loss of $2,635,000, or $(0.10) per share, for the same period in 1999. Reported net loss, including acquisition costs, for the quarter was $2,872,000, or $(0.07) per share, compared with a net loss of $2,635,000 or $(0.10) per share for the same period in 1999. The net loss for the fourth quarter ended March 31, 2000, included non-cash expenses of approximately $2,452,000, or $(0.06) per share, related primarily to the acquisition of Premia Corp., of which approximately $100,000 is included in license cost of revenues. These expenses included acquisition charges of $322,000 and a one-time in-process research and development write-off of $2,130,000.
Revenues for the year ended March 31, 2000 were $17,532,000, a 157% increase over revenues of $6,832,000 for the year ended March 31, 1999. Net loss applicable to the common stock, excluding acquisition related costs, was $3,666,000, or $(0.11) per share, compared with a net loss of $9,960,000, or $(0.49) per share, for the year ended March 31, 1999. Reported net loss, including acquisition costs, for the year ended March 31, 2000 was $6,267,000, or $(0.19) per share, compared with a net loss of $9,960,000, or $(0.49) per share for the same period in 1999.
Balance Sheet Strengthened
During the fourth quarter ended March 31, 2000, cash increased to $11,448,000 from $9,240,000 on Dec. 31, 1999. Accounts receivable increased during the quarter to $6,696,000 from $4,273,000. Deferred revenue, which will be recognized over the subsequent 12 months, increased 72% during the quarter to $4,017,000 from $2,332,000 on Dec. 31, 1999. Long-term deferred revenue at March 31, 2000 was $535,000. In addition, the remaining outstanding preferred stock was converted into common stock during the quarter.
"Fiscal year 2000 was a period of expansion and strong growth for Starbase," said William R. Stow III, chairman and chief executive officer of Starbase. "We dramatically strengthened our corporate sales, marketing, management and development organizations with the acquisition of Premia Corp. In addition, the November 1999 announcement of the acquisition of ObjectShare Inc. resulted in key sales and management personnel joining the Starbase team during fiscal 2000. The acquisition, which was completed in April 2000, has bolstered our professional services organization for fiscal 2001. Our growth over the past year has been truly impressive. We added approximately 450 new customers during the year bringing the Starbase family of customers to over 1,300. We have broadened our customer base, formed new partnerships, expanded our family of products, and opened new markets. The strategic repositioning from our traditional business to eBusiness has accelerated our growth with increased demand for our best-of-breed solutions."
Stow continued, "Our technology and continuing development efforts have lead to the recognition of Starbase as an eBusiness application solution company. We believe these developments will be significant contributors to our continuing growth as we offer our customers the best collaborative environment for the development and management of eBusiness applications."
Sales and Marketing Highlights
Starbase's direct sales organization experienced broad success with both new and existing customers during the year. New customers during the fourth quarter were such companies as Applied Materials, Arthur Andersen, Bridgestone/Firestone, carsdirect.com, Ernst & Young, Baltimore Gas & Electric, Kickstart.com, Kohl's Department Stores, Polaroid, Petplace.com, eLetter.com, Mediatrix Telecom, Motiva, Omaha Steaks, Rare Medium, OxygenMedia.com and sandiego.com. Additional purchases during the fourth quarter from existing companies such as AIG, Ademco, Artificial Life, FHC Health Systems/Lifescape, Intel, Mayo Foundation, Politzer & Haney, and Tektronix also contributed significantly to the company's growth. Repeat orders made up approximately 57% of revenue during the quarter. For the fourth quarter, licenses sales increased with 76 customers that ordered 25+ seats, 50 customers ordered 40+ seats, and 10 customers ordered 100+ seats. Fiscal fourth quarter 2000 Internet and eBusiness sales were 35% of revenues, indicating strong growth potential in the Internet and eBusiness marketplace.
"During the fourth quarter, consulting and training revenues increased 180% and 65%, respectively, over the prior quarter, contributing significantly to product sales. We also saw our services backlog increase 137% compared to the third quarter to over $500,000 at March 31, 2000," said Jim Smith, senior vice president of the customer group. "Customers require a complete solution to achieve their eBusiness objectives. Starbase's family of products together with newly acquired ObjectShare's consulting and training programs have helped Starbase to meet and surpass customer requirements. Starbase's consulting and training services have become an integral part of the direct sales growth and success."
Development Highlights
StarGate SDK, a comprehensive software development kit providing an open programmable access to the StarTeam Server and connectivity to best-of-breed eBusiness products from industry leading companies, continued to gain customer acceptance during the quarter.
During the fourth quarter StarTeam 4.2 was released with its integration with Microsoft(R) Visual InterDev(R)6.0, a rapid development environment for creating data-driven, dynamic Web applications. StarTeam 4.2, along with StarGate SDK and its third party integration and customized solutions, support Starbase's commitment to provide best-of-breed whole product solutions for our customers.
StarTeam 5.0 Sun Solaris Edition was released to Starbase's StarClients group, an early release program of selected Starbase customers. This latest version of StarTeam enables organizations building applications on the Sun Solaris operating environment to implement a complete custom management solution for projects involving the creation, testing, deployment and management of Web-based applications.
eTeam Program
The groundwork for the recently announced eTeam program began during the fourth quarter of the fiscal year. These strategic eTeam relationships will strengthen Starbase's leadership position in the delivery of custom development solutions for organizations involved in the production and deployment of Web sites, eCommerce and eBusiness critical applications. Although the announcement of eTeam was just released, Starbase has already experienced revenue generated from these strategic partnerships and continues to pursue additional market opportunities.
Premia Acquisition Highlights
In March 2000, Starbase acquired Premia Corp. Premia's award-winning software products will contribute greatly in the future to strengthening Starbase's digital asset management solutions. Starbase technology currently enables collaboration between all team members, from project leaders to programmers, and from graphic designers to content writers. CodeWright, Premia's leading product, is one of the most widely used development environments in the market today. Developers use CodeWright for projects written in multiple languages, which is increasingly common in Internet development. With the combined technologies, teams of developers can collaborate, create, share and manage digital assets in the production of eCommerce and Web applications. The integration of Premia's technology and product offerings will enable current and future customers to achieve a higher level of collaboration and a deeper understanding of the digital assets in the Starbase repository. The founders of Premia, who founded another company that pioneered an industry leading enabling technology more than 10 years ago, have now joined the StarBase team. The product they developed helped lead to the emerging eBusiness application development market.
About Starbase
Starbase is a leading provider of collaboration solutions for integrated content and software applications. Collaboration is the simultaneous coordination, management and communication of geographically dispersed contributors of both code and content for eBusiness applications. With approximately 1,325 StarTeam customers worldwide, the company's technology supports the continuous cycle of creating, linking and managing digital assets, which comprise complex eBusiness applications. Starbase products enable users with differing technical and functional backgrounds to collaborate on the production of Web sites and eBusiness initiatives from multiple locations. StarTeam, the company's flagship product, was recognized as a premier team collaboration product in "StarTeam Fuels Team Exchange," InfoWorld in January 2000 and received "Two Thumbs Up" from New Media in May 1999 and Four Stars from Software Development in August 1999. Microsoft and CMP Media named Starbase the 25th fastest growing ISV for Windows in April 1999. StarTeam also received the "Best of the Test Center" award by InfoWorld in January 1998. Companies and organizations, including leading corporations such as Lucent Technologies, Intel, BMC Software, Motorola, PepsiCo, Seagate Technology, Hollywood Entertainment, Reynolds & Reynolds Co., eTour.com, Oxygen Media, and Ann Taylor have selected StarTeam to manage their eBusiness development projects. Starbase is located at 4 Hutton Centre Drive, Suite 800, Santa Ana, CA 92707. Tel: 714/445-4400. Fax: 714/445-4404. Visit Starbase's Web site at www.starbase.com.
StarBase and its product names are trademarks of Starbase Corp. All other product and company names herein are trademarks of their respective owners.
Forward-Looking Statements
When used in the preceding discussion, the words "believes, expects, or intend to" and similar conditional expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, (i) conditions in the general economy or the software industry, (ii) the timely development and market acceptance of products and technologies, (iii) competitive factors, (iv) demand for team productivity software products, (v) sell-through of products in the sales channel, and (vi) other risks described in Starbase Corp.'s SEC reports and filings.
STARBASE CORP.
Balance Sheets
(In thousands, except share data)
March 31, March 31,
2000 1999
Assets
Current assets:
Cash and cash equivalents $ 11,448 $ 1,363
Restricted cash 39 39
Marketable securities 11 121
Accounts receivable, net of allowances
of $202 (2000) and $155 (1999) 6,696 2,528
Notes and other receivables, net
of allowance of $707 (2000) 26 9
Prepaid expenses and other assets 568 265
Total current assets 18,788 4,325
Property and equipment, net 1,526 987
Intangible assets, net 21,074 971
Note receivable from officer 99 94
Long-term restricted cash 39 79
Other non-current assets 687 149
Total assets $ 42,213 $ 6,605
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,358 $ 640
Accrued compensation 1,475 493
Other accrued liabilities 390 131
Deferred revenue 4,017 658
Current portion of long-term obligations 119 95
Total current liabilities 7,359 2,017
Long-term liabilities:
Long-term obligations, less current portion 49 116
Long-term deferred revenue 535 --
Other long-term liabilities -- 10
Total long-term liabilities 584 126
Total liabilities 7,943 2,143
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value;
10,000,000 shares authorized, 0 and
558,993 shares issued and
outstanding at March 31, 2000
and 1999; liquidation preference
of $0 (March 31, 2000) and $4,916
(March 31, 1999) -- 6
Common stock, $.01 par value;
80,000,000 shares authorized,
44,315,610 and 28,636,362 issued
and outstanding at March 31, 2000 and 1999. 443 286
Additional paid-in capital 92,242 56,208
Accumulated deficit (58,305) (52,038)
Accumulated other comprehensive loss (110) --
Net stockholders' equity 34,270 4,462
Total liabilities and stockholders' equity $ 42,213 $ 6,605
The accompanying notes are an integral part of the financial
statements.
STARBASE CORP.
Statements of Operations
(In thousands, except per-share amounts)
Three months ended Year ended
March 31, March 31,
2000 1999 2000 1999
(Unaudited)
Revenues:
License $ 5,013 $ 1,847 $14,486 $ 5,964
Service 1,180 315 3,046 868
Total revenues 6,193 2,162 17,532 6,832
Cost of Revenues:
License 206 60 1,136 508
Service 565 -- 1,480 --
Total cost of revenues 771 60 2,616 508
Gross margin 5,422 2,102 14,916 6,324
Operating Expenses:
Research and development 1,477 1,276 4,552 4,437
Sales and marketing 3,308 2,047 9,097 7,638
General and
administrative 1,362 546 4,527 2,963
Amortization of
intangibles 2,358 -- 2,507 --
Total operating
expenses 8,505 3,869 20,683 15,038
Operating loss (3,083) (1,767) (5,767) (8,714)
Interest and other
income (loss) 211 (5) 300 32
Equity in loss of investee -- -- (250) --
Loss before income taxes (2,872) (1,772) (5,717) (8,682)
Provision for income taxes -- 3 1 1
Net loss (2,872) (1,775) (5,718) (8,683)
Non-cash dividend and
accretion of beneficial
conversion feature -- 860 549 1,277
Net loss applicable
to common stockholders $(2,872) $(2,635) $(6,267) $(9,960)
Per share data:
Basic and diluted net
loss per common share $ (0.07) $ (0.10) $ (0.19) $ (0.49)
Basic and diluted
weighted average common
shares outstanding 41,126 25,769 33,412 20,526
The accompanying notes are an integral part of the financial
statements.
JP/np
CONTACT: Starbase Corp. Doug Norman, Chief Financial Officer 714/445-4445 dnorman@starbase.com or Ann Jones, Director of Investor Relations 714/445-4440 ajones@starbase.com
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