Visigenic Reports Record Revenues for Third Quarter of Fiscal 1998
January 22, 1998 04:06 PM
SAN MATEO, Calif.--(BUSINESS WIRE)--Jan. 22, 1998--Visigenic Software, Inc. VSGN today reported record quarterly revenues for its third fiscal quarter, ended December 31, 1997. Revenue for the third quarter of fiscal 1998 was $6.7 million, representing a 21% increase over revenue of $5.5 million recorded during the comparable period of fiscal 1997. The third quarter net loss was $2.1 million or ($0.14) per share, compared to a net loss of $2.3 million or ($0.17) per share for the same quarter of the prior year.
Software license revenue from VisiBroker object request broker (ORB) products increased 95% in the third quarter of fiscal 1998 when compared to the third quarter of fiscal 1997. Total software license revenue decreased 4.9% in comparison with the third quarter of fiscal 1997 due primarily to the Company's previously announced discontinuation of its ODBC-based database access product line. Revenue from consulting services, maintenance and other increased 146% over the comparable period of the prior year and accounted for 34% of total revenue for the third quarter of fiscal 1998. For the nine months ended December 31, 1997, Visigenic's revenue increased 38% to $18.5 million from $13.3 million in the comparable period of the prior year. The net loss for the first nine months of fiscal 1998 was $8.3 million or ($.58) per share, compared to a net loss of $18.2 million or ($1.46) per share for the first nine months of fiscal 1997.
Quarterly Highlights
"We are very pleased by our growth and sales activity during the quarter," said Mark Hanson, president and chief operating officer of Visigenic. "We continued to expand our VisiBroker sales to end-user corporate customers and further strengthened our professional services business, which has significantly increased its contribution to our revenue."
Important developments during the third quarter of fiscal 1998
include:
-- Visigenic continued to increase its VisiBroker object request
broker (ORB) sales to corporate end-users. During the quarter,
the Company completed agreements with such industry leaders as
AT&T, Ball Aerospace, Bank of America, GE Medical, JFK Space
Center, Merck, Motorola, Southern California Gas, US West
Communications, and Vanguard.
-- Visigenic is beginning to see the results of its seeding strategy
to IT organizations this past year, as initial VisiBroker
projects led to larger purchases of Visigenic technology. One
example of this from the third quarter is a new corporate-wide
VisiBroker licensing agreement with Charles Schwab, one of the
leading financial services firms in the United States.
-- Visigenic further strengthened its position as a leading supplier
of embedded ORB technology to the software industry. During the
quarter, Visigenic signed a number of new ORB-related partner
agreements, including deals with 3Com, Cabletron, Cascade, Cisco,
and Corel.
-- Visigenic signed a non-exclusive agreement with Sun Microsystems
under which Visigenic will market its VisiBroker for Java and
VisiBroker for C++ technology to users of Sun's NEO ORB
technology.
-- Visigenic continued to expand its VisiBroker ORB product line
with the commercial release of VisiBroker Manager, an integrated
set of tools for managing VisiBroker-based environments.
VisiBroker Manager tools provide an interactive, graphical
interface from a central location, enabling developers to better
manage their distributed applications.
-- Visigenic shipped to beta customers the initial release of its
VisiBroker Integrated Transaction Service (ITS), the first
CORBA-based transactional middleware solution. VisiBroker ITS is
designed to simplify the complexity of distributed transactions
by providing an essential set of services integrated into one
architecture. These services include transaction management,
recovery and logging, integration with databases and existing
systems, and GUI administration facilities.
About Visigenic Software
Visigenic is playing a key role in creating the foundation on
which new, mission-critical applications are being developed -- the
open, distributed, object-based architecture for the new global
enterprise. Building on its expertise in standards-based distributed
object and data access technologies, Visigenic has become a leading
supplier of ORB technology to the computer industry. Companies
embedding Visigenic's VisiBroker technology into their products and/or
product architectures include Oracle, Hitachi, Netscape, Novell,
Sybase, Borland, Gemstone, Silicon Graphics, Cincom and Business
Objects. Recently, VisiBroker won DBMS Magazine's 1997 Readers' Choice
Award for best Object Request Broker. Additionally, Visigenic was
identified by IDC, an independent market research firm, as the fastest
growing object middleware vendor in their "Middleware: 1997 Worldwide
Markets and Trends" report. Additional information about Visigenic may
be obtained via the Web at visigenic.com .
On November 18th, 1997, Visigenic and Borland International, Inc.
announced that the two companies had signed a definitive agreement for
Visigenic to be acquired by Borland. The board of directors of both
companies have approved the acquisition, which is subject to approval
by the stockholders of both companies, as well as to customary
regulatory approvals and other closing conditions.
Special Note
Forward-looking statements in this release, including but not
limited to, those concerning Visigenic's future financial performance,
product availability dates, the potential benefits of the proposed
acquisition, and the potential features of or benefits to be derived
from Visigenic's products, involve a number of uncertainties and
risks, and actual events or results may differ materially. These risks
include, among others, shifts in customer demand, the level of market
acceptance of Visigenic's new or enhanced products, delays in
scheduled product availability dates, actions or announcements by
competitors, software errors, general business conditions and market
growth rates in the client/server and Internet software markets.
Further, to the extent any portion of the release is interpreted to be
a forward-looking statement relating to Visigenic's proposed
combination with Borland, readers should note that the consummation of
the transaction and, if consummated, the success of the combination
are subject to certain risks. These types of risks include, among
others, the following: if the transaction is consummated, the risks
associated with the integration of Borland's and Visigenic's
respective operations, technologies and products, and possible
disruptive effects of organizational or personnel changes. Other
factors which may have an effect on Visigenic's business are described
in the company's S.E.C. reports on forms 10-Q, 10-K and 8-K as filed
with the Securities and Exchange Commission.
-0-
Note to Editors: Visigenic is a registered trademark and
VisiChannel for JDBC and VisiBroker are trademarks of Visigenic
Software, Inc. Java and JDBC are registered trademarks of Sun
MicroSystems. All other trademarks are property of their respective
owners.
VISIGENIC SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, March 31,
1997 1997
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents $15,539 $19,679
Accounts receivable, net 6,807 8,324
Prepaid expenses 427 709
---------------------------
Total current assets 22,773 28,712
---------------------------
PROPERTY AND EQUIPMENT, net 3,222 3,143
OTHER ASSETS, net:
Excess of purchase price
over net assets acquired 217 1,078
Other 128 110
===========================
TOTAL ASSETS $26,340 $33,043
===========================
CURRENT LIABILITIES:
Accounts payable $ 599 $ 846
Accrued liabilities -
Payroll and related benefits 2,185 1,458
Other 1,458 1,222
Deferred revenue 2,746 2,519
---------------------------
Total current liabilities 6,988 6,045
---------------------------
STOCKHOLDERS' EQUITY:
Common stock 14 14
Additional paid-in-capital 59,411 58,723
Accumulated deficit (40,054) (31,747)
Accumulated translation adjustment (19) 8
---------------------------
Total stockholders' equity 19,352 26,998
===========================
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $26,340 $33,043
===========================
VISIGENIC SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Nine Months
Ended Ended
December 31, December 31,
1997 1996 1997 1996
------------- --------------
REVENUE:
Software licenses $4,374 $4,602 $12,460 $10,768
Consulting services,
maintenance and other 2,303 937 5,991 2,581
--------------------------------------
Total revenue 6,677 5,539 18,451 13,349
--------------------------------------
COST OF REVENUE:
Software licenses 696 391 1,726 922
Consulting services,
maintenance and other 1,571 961 4,348 2,094
--------------------------------------
Total cost of revenue 2,267 1,352 6,074 3,016
--------------------------------------
GROSS PROFIT 4,410 4,187 12,377 10,333
--------------------------------------
OPERATING EXPENSES:
Product development 2,151 2,512 7,533 6,650
Sales & marketing 3,135 2,697 9,298 7,304
General & administrative 1,056 787 3,308 1,950
Purchased in process
product development - 350 - 12,364
Amortization of excess of
purchase price over
net assets acquired 247 189 859 361
--------------------------------------
Total operating expenses 6,589 6,535 20,998 28,629
--------------------------------------
Loss from operations (2,179) (2,348) (8,621) (18,296)
--------------------------------------
INTEREST AND OTHER INCOME, net 183 142 614 190
PROVISION FOR TAXES (100) (57) (311) (96)
======================================
NET LOSS ($2,096) ($2,263) ($8,318) ($18,202)
======================================
NET LOSS PER SHARE ($0.14) ($0.58)
========= =========
PRO FORMA NET LOSS PER SHARE ($0.17) ($1.46)
========== ==========
SHARES USED IN PER SHARE
CALCULATION 14,527 12,976 14,450 12,494
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