CENTURA SOFTWARE CORP files 12/21/98 10-K. Reports $53.4 mil tot rev, $2.1 mil NI
IFN Smart Edgar News - April 01, 1999 12:56
Excerpted from 10-K filed on 04/01 by CENTURA SOFTWARE CORP:
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management's discussion and analysis of the financial condition and
results of operations should be read in conjunction with the Consolidated
Financial Statements and Notes thereto, as well as "Risk Factors"
included in this Annual Report on Form 10-K.
Overview
The Company commenced operations in 1984 and provides a suite of
products application developers use to build and deploy business
applications in a cost effective manner. Centura products include an
embeddable and secure databases that scale from micro database
environments to the Web, and object oriented and web-based application
development tools. The Company's product lines include a secure
embeddable database, (SQLBase), application and web-based development
tools, (Centura Team Developer, the 32-bit version of SQLWindows, and
Centura net.db) and PC to mainframe connectivity products (SQLHost).
These products are expected to constitute the majority of the Company's
net revenues for the foreseeable future ? see "Recent Developments"
below; also see Note 13 ? Subsequent Events, to the Consolidated
Financial Statements. Any failure to deliver products as scheduled, or
such products' failure to achieve early market acceptance, could have a
material adverse effect on the business, operating results and financial
condition of the Company. The Company distributes its products in the
United States and internationally through a corporate sales organization
consisting of the Company's internal sales force complimented by
marketing arrangements with vertical software partners, hardware original
equipment manufacturers and systems integrators, and a channel sales
organization consisting of value-added resellers and distributors. See
"Item 1. Business Risk Factors New Product Risks; Rapid Technological
Change," "Highly Competitive Markets", "Market Acceptance of PC
Client/Server Systems" and "Internet Software Market".
The Company reported a profit of $2.1 million for fiscal year 1998,
a loss of $0.6 million for 1997, and a profit of $2.0 million for 1996.
Beginning in the fourth quarter of 1997, the Company refocused and
restructured its operations to leverage its core technological
competencies into next generation products, which include embeddable
databases and web-based development tools. The Company continues to
embrace object oriented application development. With the addition of
Centura net.db, the Company's products now provide a comprehensive
architecture for the development and deployment of information systems
and applications from a host environment, through two-tier client/server
and SQL databases, to the multi-tier environment of the World Wide Web.
The Company has experienced in the past and may in the future continue to
experience significant fluctuations in quarterly operating results. Many
of the Company's product licensing arrangements are subject to revenue
recognition on a per-unit deployed basis as the Company's deferred
obligation to its customers is gradually extinguished. Revenue
recognition in such cases is therefore dependent upon the business
activities of the Company's customers and the timely and accurate
reporting of such activities to the Company, which makes predictability
of the related revenue extremely uncertain. Although the Company has
operated historically with little or no backlog of traditional boxed
product shipments, it has experienced a seasonal pattern of product
revenue decline between the fourth quarter and the succeeding first
quarter, contributing to lower worldwide product revenues and operating
results during such quarters. It has generally realized lower European
product revenues in the third quarter as compared to the rest of the
year. The Company has also experienced a pattern of recording a
substantial portion of its revenues in the third month of a quarter. As a
result, product revenues in any quarter are dependent on orders booked in
the last month. Accordingly, any significant shortfall in sales of the
Company's products in relation to the Company's expectations could have
an immediate adverse impact on the Company's business, operating results
and financial condition. Due to the foregoing factors, it is likely that
the Company's operating results may, during any fiscal period, fall below
the expectations of securities analysts and investors. See "Part I,
(End of item excerpt.) (End of item excerpt.)
----------FINANCIAL DATA SCHEDULE--------
LEGEND This schedule contains summary financial information extracted
FISCAL-YEAR-END Dec-31-1998
PERIOD-START Jan-01-1998
PERIOD-END Dec-31-1998
PERIOD-TYPE 12-MOS
CASH 6,414
SECURITIES 0
RECEIVABLES 14,309
ALLOWANCES 1,321
INVENTORY 44
CURRENT-ASSETS 23,029
DEPRECIATION 18,502
TOTAL-ASSETS 29,372
CURRENT-LIABILITIES 22,046
BONDS 0
PREFERRED-MANDATORY 0
PREFERRED 0
COMMON 85,690
OTHER-SE (78,417)
TOTAL-LIABILITY-AND-EQUITY 29,372
SALES 33,453
TOTAL-REVENUES 53,497
CGS 4,652
TOTAL-COSTS 9,034
OTHER-EXPENSES 40,568
LOSS-PROVISION 0
INTEREST-EXPENSE 505
INCOME-PRETAX 2,388
INCOME-TAX 273
INCOME-CONTINUING 2,115
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET-INCOME 2,115
EPS-PRIMARY $0.08
EPS-DILUTED $0.08
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