The following script is taken from
mktnews.nasdaq.com
CNBC - SQUAWK BOX
INFORMIX CEO ROBERT FINOCCHIO
FEBRUARY 12, 1998
Mark: We're back. Shareholders of Informix were anything but merry last November after the company announced it would be reinstating past earnngs. But the company has come back swinging, reporting a fourth quarter profit after the bell yesterday of five cents. Wall Street was looking for a significant loss. Shares of Informix finished at 7 3/8 yesterday up slightly from a low of 4 and significantly off a high of 21 1/8. Is now the time for investors to jump on Informix? The latest indication the market makers on the Nasdaq will sometimes play games they will put out prices just to see what kind of interest is out there but this looks like a fairly solid 9 1/2 for Informix right now. Joining us from San Francisco to talk about all that is Robert Finocchio CEO at Informix. Good morning, sir. And thanks for being with us.
Good morning.
Mark: The numbers have obviously caught Wall Street by surprise. Is the bottom is the trough past you? Behind you? I'm sorry. Is the trough behind you? Your revenues are still lower than they were a year ago but did that trough come somewhere in those 12 months?
Well, we did a lot of very hard work, made a lot of progress and I think our fourth quarter really represents successful execution of our restructuring plan. We lowered costs, we did it the right way, and we got good traction at the top line encouraged by the support of our customers.
Mark: So are you satisfied that the worst is over?
Yes I'm satisfied that the worst is over. We're focused on the future building the new company.
Mark: Talk to me about the future. You've said a number of things in the press the entire industry will have to move to a new accounting standard, for example, that calls for far more careful metering of revenue recognition. That's right.
Mark: Does that mean that from here on your revenues will be less predictable?
No, just the opposite. The new accounting standard sop 97-2 really causes all of us in the industry to be more conservative in terms of how we recognize revenue. In fact when we did our restatement we moved as close as we could to those accounting standards which we knew would go into effect at the beginning of 1998.
Mark: Let me ask you a techie question.
Okay.
Mark: It comes up continually in the trade press and to be honest with you I'm not sure I understand it. But there is this debate going on as to relational data base software versus object oriented data bases and you are ---in the criticism I've seen ---is you may be way ahead of the curve that yours is a techie oriented more object oriented, more what might be hot three years from now but not so hot today. Would you address the issue of where the actual technology of your business stands your industry stands?
Sure. Sure there's no doubt we're ahead of our competition with the technology called Object Relational which allows objects to operate inside a traditional relational database seamlessly and effectively. We really brought this capability to market in a big way early last year and we've had a very, very good year of growth with that. We have about a thousand customers, still very small, but I think it's a very important market especially as we move to more and more sophisticated web sites complex content will be inside databases. So it's going to be a very important future positioning for the company and I'm very glad we have this position right now. Weaver focused on the high end of the marketplace it would not be prudent for us to gravel in the low end where we can't differentiate our product.
Mark: Okay. But if I read you correctly, you are saying, yes, we may be ahead of the curve here for awhile?
No, we're ahead of our competition but many customers are starting to use this technology. We have about a thousand users.
Mark: Joe Kernen wants in.
Joe: Thanks. Mr. Finocchio, license revenues were better than expected. They only dropped 30% from last year and analysts some were looking for a 40% drop. But still down 30%. If that continues, I mean, you know, you can't go forward just cutting expenses. That's what people are worried about. What's your strategy for the future?
Pay attention to the fact that we grew our revenue from around 150 to 181, Q3 to Q4.
Joe: Right. The question---
That shows a good sign of good trend. Certainly, one quarter does not constitute a trend. But I think it is a milestone very good progress for the company and sets a very solid foundation to allow our customers to be a lot more confident in doing business with Informix going to the future.
Joe: I was looking for analysts to maybe raise their ratings today but what I'm seeing mostly is okay we're up to maybe 9 1/2 on the stock it may be fully valued here. Expenses going forward are the thing to look at. But you've still got Oracle and Microsoft to contend with.
Right, right.
Joe: Do you think the stock is fairly valued here like they say? Or --
It's up to the market to value the stock. I think my job is to manage the company well. I have a feeling that if we grow make money the stock price will reflect that.
Joe: How do you take on Microsoft and Oracle?
We do it by competing very soundly. Going where they're not strong and we're at the top end of the spectrum, as Microsoft. While they dominate the low end shrink wrap part of the marketplace, we function on high end high functionality high end of the marketplace focusing very hard in segments of the market where Oracle may not be particularly strong such as enterprise data warehouses.
Mark: Mr. Finocchio, thank you very much. Looks good.
Thank you.
Mark: Robert Finocchio, CEO at Informix. |
