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Portal Software Reports Pro-Forma Break-Even Fourth Quarter Results and Results for Fiscal Year 2003
February 20, 2003 16:12:00 (ET)
CUPERTINO, Calif., Feb 20, 2003 (BUSINESS WIRE) -- Portal Software, Inc. (PRSF, Trade), a leading provider of billing and customer management software, today reported financial results for the fourth quarter and fiscal year 2003, period ended January 31, 2003.
Fourth Quarter Results
Revenues for the quarter totaled $31.1 million, compared to revenues of $30.2 million in the prior quarter, and revenues of $33.7 million for the same period last year. Pro forma net profit for the fourth quarter of fiscal 2003 was $1.3 million, or $0.01 per diluted share. This compares to a pro forma net loss of $5.4 million, or $0.03 per share in the prior quarter and a pro forma net loss of $9.2 million, or $0.05 per share in the fourth quarter of fiscal 2002. Pro forma amounts in the fourth quarter of fiscal year 2003 exclude amortization and write-off of acquisition-related costs of $1.2 million and stock option compensation expense of approximately $2.0 million. Net loss for the quarter ended January 31, 2003 was $1.9 million or $0.01 per share, in accordance with generally accepted accounting principles. General and Administrative expenses were $2.7 million compared to $4.4 million in the prior quarter. The decrease is primarily due to a $1.1 million reversal of bad debt reserve, reduced consulting expenditures, and savings due to the company's restructuring efforts.
Global Customer Success
Strong customer wins and product roll-outs continued to demonstrate the value of Portal's Infranet(R) product-based billing platform for service providers that want to differentiate themselves by introducing new and creatively-bundled voice, data, or content-based services. In this quarter, Connexion by Boeing, a business unit of The Boeing Company, chose Infranet to serve as the charging and rating system for its groundbreaking new service providing high-speed Internet connectivity to airline passengers. Motorola implemented Portal to power BT Openzone, the first commercial public wireless LAN network in the UK, and US Cellular and T-Mobile USA became the latest major US wireless providers to select Portal. Also in this quarter, Portal secured business with Vodafone UK, THUS, and Homestore, a real estate media and technology supplier that selected Portal to support complex migration and consolidation of multiple billing systems.
Other key global customer wins announced during the quarter include Transtelecom, a Russian convergent voice and data provider; Shanghai Symphony Telecom (a joint venture between AT&T, China Telecom, and Shanghai Information Services) using Portal to support VPN services; Liaoning Communications, a subsidiary of China Netcom and a Portal customer since 1999, expanding its use of Infranet to support a wide range of broadband-based services; Cell C, Portal's first customer in South Africa, where Infranet is supporting value-based pricing for GSM and GPRS-based data and content services; and PT Telecom, where Portal is supporting VoIP for the largest telecommunications provider in Indonesia.
"Portal's value proposition is directly targeted at the most urgent business issues facing the communications market today," said John Little, chief executive officer at Portal Software. "Our product-based approach decreases the time to revenue for our customers while also giving them a low and predictable total cost of on-going operations. We have the right technology and the right approach to help companies succeed based on differentiated voice and digital services."
Fiscal Year 2003 Results
Revenue for fiscal year 2003 ended January 31, 2003 was $121.1 million, a 22% decrease from revenue of $154.8 million for fiscal year 2002. Pro forma net loss for fiscal year 2003 was $26.4 million or $0.15 cents per share, compared to a pro forma net loss of $84.9 million or $0.49 cents per share for fiscal year 2002. Pro forma amounts for fiscal 2003 exclude certain charges including a restructuring charge of $36.5 million, the amortization and write-off of purchased developed technology of $1.9 million, amortization and write-off of acquisition-related costs of $3.1 million, a write-off for impairment of assets of $1.5 million, and stock option compensation expense of $2.0 million. Pro forma amounts for fiscal 2002 exclude amortization of acquisition-related costs of $1.0 million, amortization and impairment of acquired intangibles of $234.5 million, restructuring charges of $71.0 million, and a write-off for impairment of assets of $4.0 million. Fiscal year ended January 31, 2003 net loss was $71.5 million or $0.41 per share, in accordance with generally accepted accounting principles, compared to a net loss of $395.5 million or $2.30 per share for the fiscal year ended January 31, 2002.
Business Outlook
The following statements are based on current expectations and are forward-looking. They are subject to a number of uncertainties and risks, including those discussed below, and actual results may differ materially.
While Portal has seen excellent customer traction, especially in Europe and Asia, customer purchasing decisions continue to be deliberate and constrained by tight capital budgets. There is a high probability that the uncertainties in the capital spending environment in the telecommunications arena will continue for an extended period of time. In addition, the significant transactions Portal expects to complete are larger, multi-year deals, which may add to long-term revenue predictability, but dampen near-term growth.
-- With continued economic uncertainty, intense market competition, and first quarter seasonality Portal currently expects first quarter fiscal 2004 revenue to remain flat to the approximate $30 million run rate it has seen the last 6 quarters. -- First quarter gross margins are expected to be roughly flat with the fourth quarter. -- Portal currently expects pro forma first quarter operating expenses to be in the range of $21 to $22 million. -- Pro forma results for the quarter are expected to be approximately break-even. -- The Company believes it has sufficient cash to manage through current conditions. Information About Pro Forma Presentation
Pro forma results are not prepared in accordance with GAAP and exclude certain gains, losses, costs, and expenses that are included under GAAP. Pro forma results are presented for information purposes only to provide an alternative method of assessing ongoing core operating results. Because there are no generally accepted industry standards for presenting pro forma results, the method used by Portal may differ from the methods used by other companies. Rules recently adopted by the Securities and Exchange Commission may change the manner in which Portal presents pro forma information in the future.
Conference Call Information
Portal will discuss its fourth quarter fiscal year 2003 results and other financial and business information in a conference call and an audio web cast on February 20, 2003, beginning at 2:00 p.m. Pacific time. The web cast is available to all interested parties and can be accessed at www.companyboardroom.com.
For company balance sheet and consolidated operations details, please visit the Investor Relations site at www.portal.com/about_portal/investor_relations.
About Portal Software, Inc.
Portal Software develops product-based billing and customer management solutions for communications and content service providers. Portal's convergent platform enables service providers to deliver voice, data, video, and content services with multiple networks, payment models, pricing plans, and value chains. Portal's unique approach is designed to provide its customers superior return on innovation with maximum value and lower total cost of ownership. Portal's customers include thirty-five of the top fifty wireless carriers as well as organizations such as Vodafone, AOL Time Warner, Deutsche Telekom, TELUS, NTT, China Telecom, Reuters, Telstra, China Mobile, Telenor Mobil, Vivendi, and France Telecom. For more information, please visit www.portal.com.
Statements in this release concerning Portal Software, Inc.'s business outlook, future financial and operating results, future expense reductions, and Portal's overall future prospects are forward-looking statements that involve a number of uncertainties and risks. Factors that could cause actual events or results to differ materially include the following: General business and economic conditions and changes in the amount of technology spending by our customers and prospects; market acceptance of Portal's products and services; customer and industry analyst perceptions of Portal and its technology vision and future prospects; fluctuations in the market price of Portal stock that can result in unpredictable compensation expense charges; difficulties in implementing or realizing the benefits of cost reduction efforts, such as our ability to sublease excess office facilities in a timely and cost effective manner and to effectively renegotiate or terminate real estate leases to reduce lease obligations; sales force training and productivity; challenges associated with recruiting, training, and retaining skilled management and other personnel; ability to establish, maintain, and effectively implement relationships with system integrators and other strategic resellers and vendors; rapid technological changes; competitive factors; and unanticipated delays in scheduled product availability. All statements made in this press release are made only as of the date set forth at the beginning of this release. Portal undertakes no obligation to update the information in this release in the event facts or circumstances subsequently change after the date of this press release.
Infranet and the Portal logo are U.S. registered trademarks, and Portal and TelcoOne are trademarks of Portal Software, Inc.
Portal Software, Inc.
Investor: Kathy Cotten, 408/572-2345
investor_relations@portal.com
Media: Amanda Klinger, 408/572-2985
aklinger@portal.com
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