Informix Establishes Two Independent Operating Companies
WESTBORO, Mass.--(BUSINESS WIRE)--Sept. 19, 2000--Informix(R) Corporation (Nasdaq:IFMX) announced the final step in its strategic realignment, which will involve the establishment of two independent operating companies. The first, Informix Software, will focus on providing database management systems for data warehousing, transaction processing, and e-Business applications. The second is a new e-Business solutions company being launched to focus on providing database and platform independent software solutions and infrastructure for the e-Business marketplace. The new e-Business solutions company will be formally named by year end.
Both companies will initially be wholly owned subsidiaries of Informix Corporation, although the eventual goal is to create two independent publicly traded companies. Informix is currently analyzing how to separate the capital structure of the two businesses so as to maximize shareholder value and expects to announce the final details by year end. Once done, this will essentially complete the strategic process begun in August 2000.
This follows the Company's announcement on August 9, 2000, of several strategic initiatives, amongst which was the consolidation of five business groups into two operations, Database Business Operations and Solutions Business Operations, which form the foundation for the two new operating companies.
Commenting on today's announcement, Mr. Peter Gyenes, President and Chief Executive Officer of Informix, stated, "It has been the primary goal of this executive team to take decisive action to bring Informix back into a market leadership position, for the benefit of our customers, employees and stockholders. After in-depth analyses using both internal and external resources, we have concluded that by creating two independent operating companies, we will bring complete focus to bear on every aspect of each business, which address different markets and must satisfy different customer requirements. We believe this sharpened focus on our customers and markets will enhance our ability to provide product innovation, deliver world-class support to our customers and partners, and maximize profitability and shareholder value."
Informix Software
Informix Software will focus on database management systems optimized for data warehousing, transaction processing, and e-Business environments. The Company's strategic focus will be to grow the installed base of Informix database customers by leveraging its technology advantages of performance, scalability, and high reliability, and by bringing its customers the most advanced e-Business database available on the market. Informix is committed to delivering a single next-generation database engine by progressively integrating the best features of multiple Informix databases. Informix is also committed to continuing to develop a broad network of partner and ISV relationships to expand the portfolio of applications available on its database product line, particularly in high growth markets such as e-commerce and CRM. The Company will also place a strong emphasis on growing the associated services business to support its worldwide customer base.
Jim Foy, currently Senior Vice President of the Database Business Operation, has been appointed President of Informix Software. Upon completion of the corporate restructuring, the Company will be staffed with approximately 2,300 employees including approximately 625 in worldwide sales and marketing, 570 consultants and technical support, and approximately 650 in product development, and will establish its headquarters in one of the Company's existing Silicon Valley locations. Informix Software has over 25,000 customers worldwide as of July 2000. Significant customers added in the third quarter include i2 Technologies, Wells Fargo Bank, BAe Systems, Service Merchandise, and SBC Communications.
Revenues for 2000 are forecast to be in the range of $780 million to $800 million based on the current outlook, with expected growth of approximately 5% in 2001 driven by anticipated strong increases in sales of e-Business database engines. Operating margins in 2001 are expected to reach 20% to 25% excluding transition and restructuring charges.
e-Business Solutions Company
The new e-Business Solutions Company develops and markets a suite of next generation e-Business software solutions and infrastructure that will be focused on supporting all leading databases, including those from Oracle, IBM, Microsoft, Sybase and Informix. The new e-Business Solutions Company will provide a complete, integrated solution which combines Web publishing, e-Commerce, and business intelligence. These offerings address the growing demand of Global 2000 companies seeking common platforms that integrate e-Commerce, content management, and analytic capabilities and uniquely enable organizations to gain a transparent view of both traditional and new Internet operations required by today's click and mortar businesses.
Pete Fiore, currently Senior Vice President of the Solutions Business Operation, has been appointed President of the new company. The Company will be headquartered in Westboro, Mass., and employ approximately 1,100 employees including approximately 450 in worldwide sales and marketing, 240 consultants and technical support, and approximately 310 in product development. The new company has over 1,500 customers as of July 2000. Significant customers added during the third quarter included Williams Vyvx, TalentSpot, Startle, Wegmans, SC Johnson, Dresdner Bank, BizRate.com, Anheuser Busch, and The Hartford Insurance Company. Revenues for 2000 are forecast to be between $120 million and $130 million based on the current outlook. Growth of between 80% and 100% is expected for 2001. The new company expects to reach profitability in 2001, with continued strong revenue and earnings growth in 2002 and beyond.
Resetting Quarterly Financial Targets
The Company also announced that a re-evaluation of its business model indicates a current quarterly revenue run rate in the range of $200 million to $215 million, with the newly defined Database and Solutions businesses accounting for about 85% and 15%, respectively. This is the approximate revenue level it expects to report for the third quarter ending September 30, 2000, and the base upon which future growth expectations should be built. Based on the revised revenue outlook, the Company expects to report an operating loss of $0.05 to $0.08 per diluted share in the third quarter before transition charges and previously announced non-recurring items of $75 million to $90 million. The Company expects to be approximately breakeven in the fourth quarter of 2000 and return to profitability in the first quarter of 2001, excluding transition and non-recurring charges in both periods.
In addition, Informix said that the additional transition charges expected through the first half of 2001 would range from $15 million to $20 million, slightly higher than the $10 million to $15 million announced on August 9, 2000, primarily as a result of additional staff reductions from establishing the two independent operating companies.
Mr. Gyenes noted, "We have analyzed historical quarterly revenues and have reset short-term revenue targets with an emphasis on order visibility and maintaining a conservative approach while we pass through this phase of our operational improvements. Our revenues have been negatively impacted by extraordinary swings in foreign exchange rates and by post Y2K lower demand for legacy applications. Although our pipelines for our solutions offerings and for our high performance databases are growing, we are clearly under-performing to our potential. Most customers tell us our products are great and we see high market demand for the type of offerings we provide. We believe the realignment actions announced today, along with the impact of the management appointments and focus we put in place several weeks ago, the current ramping up of the many sales and support personnel joining the company earlier this year, and the introduction of new products over the next two quarters in both businesses, position us to execute and reclaim our position as a growth software company providing leadership value to our customers."
Senior Management Appointments/Corporate Headquarters Move
The Company reported that Peter Gyenes, currently President and CEO of Informix Corporation, assumed the additional position of Chairman of the Board of the Company effective September 18, 2000. He replaced Robert J. Finocchio, Jr., who resigned as Chairman of the Board effective September 18, 2000.
Informix also announced that Jamie Arnold, Vice President of Finance and Operations for the Americas, has been appointed Chief Financial Officer of Informix Software and will become Chief Financial Officer of Informix Corporation effective November 1, 2000. He succeeds Yon Yoon Jorden as Chief Financial Officer of Informix Corporation, who has resigned effective November 1, 2000. Ms. Jorden will remain with the Company through the end of 2000 to implement the separation of the two companies and ensure a smooth transition.
Mr. Arnold (44) has been with Informix Corporation since 1997. He was previously Corporate Controller of Centura Software, Inc. Prior to that he was a Senior Manager at Price Waterhouse LLP.
The company also announced that Joanne Protano, formerly Corporate Controller of Ardent(TM) Software, Inc., which was acquired by Informix in March 2000, has been appointed to the position of Chief Financial Officer of the new e-Business Solutions Company. Before joining Ardent, Ms. Protano, (31), was manager in the technology group at Deloitte and Touche LLP.
Concurrent with the recent management changes and its business realignment initiatives, Informix Corporation has moved its corporate headquarters to Westboro, Massachusetts.
Summary
Since August 14, 2000, the effective date of its previously announced share buyback program, Informix has repurchased 6.4 million shares of its stock in the open market at an average price per share of $5.27.
At the end of the third quarter, the Company expects to have cash and cash equivalents of approximately $245 million and to be debt free.
The Company will report its third quarter earnings during the third week of October.
About Informix
Informix Software is the technology leader in software infrastructure and solutions for the Internet. Informix brings a focused set of products and services that integrate e-business and business intelligence on an Internet infrastructure. The Company's highly scalable database engines, in addition to its business intelligence, content management and e-commerce solutions, enable customers to succeed in the new economy. For more information, contact the nearest sales office or visit the Web site at www.informix.com.
Note to Editors: The following are trademarks of Informix Corporation or its affiliates, one or more of which may be registered in the U.S. or other jurisdictions: Informix(R) and Ardent(TM).
Safe Harbor Statement
This public announcement contains forward-looking statements that are subject to numerous risks and uncertainties. These forward-looking statements include, without limitation, those as to:
-- The Company's ability to separate its operations into two
independent operating companies, hire and retain qualified
personnel for both companies, and realize the anticipated
profitability and resulting stockholder value of the two
independent operating companies
-- The Company's ability to provide product innovation and
support to its customers and partners
-- Market acceptance of the independent operating companies
-- The Company's ability to maintain and grow its installed base
of database management systems by leveraging its technology
advantages
-- The Company's ability to create and market a single, open,
next-generation database engine
-- The Company's ability to continue to develop a broad network
of partner and independent software vendor relationships to
expand the portfolio of applications available on the
Company's database product line
-- The extent to which the Company and the independent operating
companies can achieve forecasted revenues
-- The extent to which anticipated strong sales of the Company's
E-business database engines will materialize
-- The extent to which the Company will be able to develop
products that can exploit an open architecture that supports
all leading databases
-- The extent to which the Company can improve its operations,
achieve accelerated revenue growth and increase company-wide
efficiencies
-- The Company's ability to introduce new products in the fourth
quarter of fiscal year 2000 and the first quarter of fiscal
year 2001 in both businesses that will contribute
substantially to acceleration of the Company's revenue and
market share growth
-- Continuing high market demand and growing pipelines for the
Company's product offerings
-- The Company's ability to achieve anticipated revenues for the
third and fourth quarters of fiscal year 2000 and fiscal year
2001
-- The Company's expectation to have cash and cash equivalents of
approximately $245 million and to be debt free and the end of
the third quarter of fiscal year 2000
Risks and uncertainties could cause actual results and events to differ materially from historical, anticipated or desired results and events. Investors and potential investors carefully should review the description of the risks and uncertainties, which, together with other detailed information about Informix Corporation, is contained in the periodic reports that the Company files from time to time with the Securities and Exchange Commission.
Informix news releases are available at no charge through Business Wire's NewsOnDemand fax service. To immediately receive an index of available releases, call 800/356-0851.
CONTACT: Informix Corporation
Tony Riggio or Paul Collins, 508/366-3888 (Editorial)
tony.riggio@informix.com
paul.collins@informix.com
or
Morgen-Walke Associates, Inc.
Gordon McCoun or Stephanie Prince, 212/850-5600 (IR)
gmccoun@morgenwalke.com
sprince@morgenwalke.com
Copyright 2000, Business Wire. All of the releases provided by Business Wire are protected by copyright and other applicable laws, treaties and conventions. Information contained in the releases is furnished by Business Wire's members, who are solely responsible for their content, accuracy and originality. All reproduction, other than for an individual user's reference, is prohibited without prior written permission. |
