Convera(R) Reports Fourth Quarter and Fiscal Year 2008 Financial Results

Posted by admin

March 27, 2008

VIENNA, Va., March 26 /PRNewswire-FirstCall/ — Convera Corporation — — a leading provider of vertical search services for publishers, today announced financial results for the three-month period and fiscal year ended January 31, 2008.
On August 9, 2007, the Company completed the sale of the assets of its RetrievalWare(R) enterprise search business to Fast RW Software for $23 million, including $18.1 million of cash, $4.0 million of restricted cash held in escrow and the assumption of approximately $0.9 million of liabilities related to the employees of the RetrievalWare business. The Company recognized a $17.9 million gain on this transaction.
All revenue and expenses reported for the RetrievalWare enterprise search business for the three-month and fiscal year periods ended January 31, 2008 and 2007 were reported as discontinued operations in the statement of operations. The assets and liabilities of the RetrievalWare enterprise search business are reported as “held for sale” on the January 31, 2007, balance sheet.
Revenue from continuing operations for the fourth quarter of fiscal 2008 totaled $280,000, an increase of $163,000 over the comparable year-ago period. Revenue from continuing operations for the fiscal year ended January 31, 2008, totaled $1,118,000, an increase of $849,000 over the prior year.
As of January 31, 2008, a total of 39 Excalibur supported vertical search sites from 24 different publishers are in production. There were three vertical search sites from a single publisher in production at January 31, 2007. Search activity from the Excalibur supported vertical sites increased from 7.8 million searches in the third quarter to 9.5 million in the 4th quarter.
As of today, a total of 45 Excalibur supported vertical search sites have been launched into production. With the sites currently in production and those in development, Convera is presently providing vertical search services to 30 different trade publishers.
Patrick Condo, President and CEO of Convera, stated, “We are pleased with the progress we are making in acquiring customers, launching sites and increasing the traffic on our network. We expect to see the financial results of this effort evidenced in this next fiscal year as the impact of our efforts to increase revenue and decrease expenses becomes clear beginning in the first quarter of this fiscal year.”
The loss from continuing operations for the three-month period ended January 31, 2008, was $7.2 million, or $0.13 per share, compared to a loss of $8.6 million, or $0.16 per share, for the comparable year-ago period. The net loss from continuing operations for the fiscal year ended January 31, 2008, was $27.0 million, or $0.51 per share, compared to a loss of $45.3 million, or $0.87 per share, for the comparable year-ago period.
The decreased loss reflects the decrease in staffing and Convera’s efforts to discontinue non-strategic activities from streamlining actions taken during fiscal 2008. Convera expects further benefits from these actions in the coming quarters as a result of continued alignment of resources to pursue the publishing marketplace.
Income from discontinued operations was $166,000 or $0.00 per share for the three-month period ended January 31, 2008, compared to a net loss of $1.1 million or $0.02 per share for the comparable year-ago period. Net income from discontinued operations for the three months ended represents an adjustment to the gain recognized from the sale of RetrievalWare due to favorable finalization of the purchase price adjustment and other transaction related contingencies.
Income from discontinued operations for the fiscal year ended was $17.9 million or $0.34 per share, compared to net income of $456,000 or $0.01 per share in the comparable period of the prior fiscal year. Net income from discontinued operations for the fiscal year ended January 31, 2008, includes the $17.9 million gain recognized from the sale of the RetrievalWare business and $20,000 in income from operating this discontinued business.
Net loss for the three months ended January 31, 2008, was $7.0 million or $0.13 per share, which compares to a net loss of $9.7 million or $0.18 per share, for the comparable period of the prior year.
Net loss for the fiscal year ended January 31, 2008, which includes the $17.9 million gain recognized on the sale of the RetrievalWare business, was $ 9.1 million or $0.17 per share, which compares to a net loss of $44.8 million or $0.86 per share, for the comparable period of the prior year.
Cash and investments as of January 31, 2008, totaled $36.6 million.
The attached financial information compares the results of operations for the three-months and fiscal year ended January 31, 2008, to the same periods in 2007, and the balance sheet as of January 31, 2008 and 2007.
The condensed, consolidated statements of operations for the Company for the three months ended January 31, 2008 and 2007 appear below and are presented in accordance with accounting principles generally accepted in the United States. All amounts, except per share amounts, are expressed in thousands of U.S. dollars.
Three Months Ended
January 31,
2008 2007
(unaudited) (unaudited)
Continuing Operations:
Revenues:
Hosted services $280 $117

Operating Expenses:
Cost of revenue - hosted services 3,199 2,021
Sales and marketing 896 1,035
Research and product development 1,076 2,560
General and administrative 2,026 3,698
Amortization of capitalized software
development costs - -
Impairment of long lived assets 603 -
Total Expense 7,800 9,314

Operating loss (7,520) (9,197)

Interest income, net 364 602

Loss from continuing operations $(7,156) $(8,595)

Discontinued Operations:
Loss from discontinued operations - (1,142)
Gain on sale of discontinued operation 166 -

Income (loss) from discontinued
operations 166 (1,142)

Net Loss $(6,990) $(9,737)

Earnings(loss) per share - basic &
diluted
Continuing operations $(0.13) $(0.16)
Discontinued operations 0.00 (0.02)
$(0.13) $(0.18)

Weighted average number of common
shares outstanding - basic and diluted 53,280 52,810

The condensed, consolidated statements of operations for the Company for the fiscal years ended January 31, 2008 and 2007 appear below and are presented in accordance with accounting principles generally accepted in the United States. All amounts, except per share amounts, are expressed in thousands of U.S. dollars.
Fiscal Year Ended
January 31,
2008 2007
Continuing Operations:
Revenues:
Hosted services $1,118 $269

Operating Expenses:
Cost of revenue - hosted services 9,660 8,138
Sales and marketing 3,880 4,386
Research and product development 4,652 11,010
General and administrative 11,179 14,833
Amortization of capitalized software
development costs - 3,045
Impairment of long lived assets 603 6,407
Total Expense 29,974 47,819

Operating loss (28,856) (47,550)

Interest income, net 1,815 2,267

Loss from continuing operations $(27,041) $(45,283)

Discontinued Operations:
Income from discontinued operations 20 456
Gain on sale of discontinued operation 17,925 -

Income from discontinued operations 17,945 456

Net Loss $(9,096) $(44,827)

Earnings(loss) per share - basic &
diluted
Continuing operations $(0.51) $(0.87)
Discontinued operations 0.34 0.01
$(0.17) $(0.86)

Weighted average number of common
shares outstanding - basic and diluted 53,146 52,222

The condensed, consolidated Balance Sheets for the Company as of January 31, 2008, and January 31, 2007, appear below and are presented in accordance with accounting principles generally accepted in the United States. All amounts, except per share amounts, are expressed in thousands of U.S. dollars
Assets January 31, January 31,
2008 2007
(unaudited) (unaudited)
Current Assets:
Cash and cash equivalents $36,641 $47,504
Accounts receivable, net 182 170
Escrow, Prepaid expenses and other 4,002 1,022
Assets held for sale - 6,281
Total current assets 40,825 54,977

Equipment and leasehold improvements, net 4,913 3,714
Other assets 629 590
Total assets $46,367 $59,281

Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable $699 $1,796
Accrued expenses 2,282 2,232
Deferred revenues 651 725
Liabilities held for sale - 3,431
Total Liabilities 3,632 8,184

Shareholders’ Equity 42,735 51,097

Total liabilities and shareholders’ equity $46,367 $59,281

About Convera(R)

Convera is the leading provider of search as a service for trade publishers and is the vertical search provider of choice for a growing number of specialist publishers around the world. Convera enables publishers to generate additional revenue by creating customized search applications for specialist audiences under their own brand and also manages the vertical search sites of a growing number of specialist publishers. Convera site search, vertical search and lead generation applications can combine publisher proprietary content with an editorially vetted best of the Web for specific professional audiences, providing an authoritative and comprehensive search experience. Many of the world’s largest publishers are working with Convera to accelerate their e-publishing strategies, meet growing online revenue goals and build loyal online professional communities.
This release, including any statements from Convera personnel, contains statements about Convera’s future expectations, performance, plans, and prospects, as well as assumptions about future events. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties, including without limitation, business and economic conditions and trends; the ability to continue funding operating losses; fluctuations in operating results including impacts from reduced corporate IT spending and lengthier sales cycles; continued success in technological advances and development; possible disruption in commercial activities caused by terrorist activity and armed conflict, such as changes in logistics and security arrangements; reduced customer demand relative to expectations; competitive factors; and other risk factors listed from time to time in the company’s reports to the Securities and Exchange Commission. Actual results may differ materially from our expectations as the result of these and other important factors relating to Convera’s business and product development efforts, which are further described in Convera’s filings with the SEC. These filings can be obtained from the SEC’s website located at . Any forward-looking statements are based on information available to Convera on the date of this release, and Convera assumes no obligation to update such statements. Convera(R) and the Convera design logo are trademarks of Convera in the United States and other countries.
Convera Corporation

Computer Software