Company Reports Third Consecutive Profitable Quarter
OAKLAND, Calif., April 22 /PRNewswire/ -- Forte Software, Inc.
(Nasdaq: FRTE), a leading supplier of development and integration environments
for enterprise networked applications, today reported financial results for
its fourth quarter and its fiscal year ended March 31, 1999.
Total revenue for the quarter increased to $22.5 million, a 10 percent
increase over total revenue of $20.4 million in the immediately preceding
quarter and a 3 percent increase over the same period last year. Net income as
reported included a $1.5 million expense related to technology acquired during
the quarter to accelerate new products to market for the integration
marketplace. Net income and net income per share before the expense related
to technology would have been $1.6 million and $.08 per share. Reported
net income for the quarter was $122 thousand as compared to a net loss of
$2.7 million in the same period last year. Accordingly, net income per share
for the fourth quarter was $.01 per share as compared to a net loss of $.14
per share in the same period last year.
Total revenue for the fiscal year ended March 31, 1999 increased to
$79.5 million, a 11.5 percent increase over total revenue of $71.3 million
last year. Net loss for the fiscal year decreased $12.8 million to a net loss
of $1.4 million for the current fiscal year. Net loss per share for the
fiscal year ended March 31, 1999 was $.07 per share as compared to a net loss
per share of $.73 last year. Net income per share before the expense related
to technology acquired during the fourth quarter would have been a positive
$.01 per share.
License fee revenue in the recent quarter ended March 31, 1999 increased
sequentially by 18 percent from the immediately preceding quarter ended
December 31, 1998. License fee revenue totaled $12.7 million for the fourth
quarter, a 2 percent increase, as compared to $12.4 million in the same period
last year. Maintenance and services revenue increased 4 percent for the
quarter to $9.8 million as compared with $9.4 million for the same period last
year. License fees represented 56 percent, and maintenance and services
contributed 44 percent of total revenue for the fourth quarter.
Marty Sprinzen, President and Chief Executive Officer commented, "Domestic
revenue increased by 42 percent sequentially during the fourth quarter to
$15.7 million due primarily to progress in our realignment of the North
American sales organization and availability of our Enterprise Application
Integration products. Productivity in the North American sales organization
during the fourth quarter was the highest for the fiscal year. During the
fourth quarter we continued to make selective investments in our Enterprise
Application Integration Business Unit (EAI), in the Java product development
project in our Internet Business Unit and marketing activities to enhance our
product solutions.
During the fourth quarter we closed several strategic enterprise
application integration deals that reflected the results of our new emphasis
on this market sector. Two of these deals were in excess of $1.0 million.
Sprinzen continued, "I believe our investments in the EAI products are
beginning to pay off. We are more clearly organized for greater focus on
market opportunities. We have formed two business units with general managers
to accelerate our business opportunities in the Integration and Internet
markets. The Java product for the Internet Business Unit went into beta
during the December quarter and our new Integration products were available
for shipment in the March quarter. Total revenue from Integration related
products during the fourth quarter were approximately $3.5 million, including
revenue from Forte Conductor(TM), the Company's award winning business process
integration product. We are very excited about the opportunities available in
the Enterprise Integration and Internet market sectors."
The Company ended the fiscal year with a strong financial condition with
cash and accounts receivable balances of approximately $50.0 million. Cash
flow during the fourth quarter was positive for the first time in 8 quarters.
Cash flow was positive $1.7 million and days sales in accounts receivable
decreased slightly to 93 days from the immediately preceding quarter. Also,
the balance in deferred revenue increased by approximately $2.0 million from
the immediately preceding quarter.
Additionally, the Company announced that John Hubinger has been named
Vice President of North American Sales. Hubinger has been with the Company
for over three years and his responsibilities most recently were Director of
Business Development. In this role he was primarily responsible for managing
the Company's strategic thrust into the indirect sales channel with VARs and
system integrators, which is a key strategic component of the Company's
future.
The following table provides a summary of financial performance for the
fourth quarter and fiscal year ended March 31, 1999, as compared to the same
periods last year (in millions, except per share data):
Quarter Ended Fiscal Year Ended
March 31, March 31,
1999 1998 1999 1998
Revenue $22.5 $21.8 $79.5 $71.3
Operating (loss) $(.2) $(2.8) $(2.5) $(15.8)
Net income (loss) $.1 $(2.7) $(1.4) $(14.2)
Basic net income (loss)
per share $.01 $(.14) $(.07) $(.73)
New Accounts
During the quarter, 22 new customers were added including General Motors,
Viking Freight, Inc. (An FDX Corp. subsidiary), CACI Technologies, BDZ and
Canal+ in France, Electrodata in Italy, EuropeCar, Metro Velda Pty in
Australia, VolksWagon Services and Goldstone Softech in India.
Fourth Quarter Highlights
During the quarter, the Company:
-- Announced a joint development and marketing relationship with New Era
of Networks, Inc. NEON and Forte will resell each other's products and
NEON will use Forte(R) and Forte Conductor(TM) to extend its
integration products. Together, these product lines will offer the
industry's most complete framework for managing an integrated
portfolio of applications.
-- Announced the execution of product and reseller agreements with IONA
Technologies. The two companies are partnering to use each other's
technologies to deliver next-generation development, deployment and
integration tools.
-- Announced the formation of its Enterprise Application Integration
Business Unit, and its role as a founder in the Enterprise Integration
Council, an industry group formed to help foster the growth of the
enterprise integration market.
-- Announced a new series of XML-based application package adapters to
simplify the integration of popular software packages into enterprise
application portfolios. The initial offerings in the series are for
SAP(R) R/2 and R/3 and Vantive Enterprise(TM).
-- Announced the formation of its Enterprise Internet Business Unit, and
the beta release of its new Java product suite, code named SynerJ.
SynerJ supports the creation and deployment of truly reliable and
scalable applications for the Internet written purely in Java.
-- Announced that Dr. Alan Baratz, president of Java Software at Sun
Microsystems, will deliver the guest keynote presentation at Forte's
fifth annual user meeting, Forte Forum.
-- Was awarded the Crossroads 99 A-List Award from Open Systems Advisors
(OSA) for Forte Conductor. OSA cited Conductor as the industry's first
environment that makes it possible for organizations to incorporate
pre-built software components into powerful, graphically defined
process definitions.
-- Announced new relationships or major application deployments with
American Airlines, Atlantic Mutual, Lawpoint Pty Ltd, Marriott
International, Regional Transportation District of Denver, SaskTel, SNS
Reaal Group, STAHLWerke BREMEN, Tadpole Technology and Twentieth
Century Fox.
About Forte Software
Forte Software, Inc. is a pioneer in advanced development and integration
software for scalable distributed applications. IT organizations, systems
integrators, and independent software vendors use the Forte product family as
their application environment to more efficiently build, integrate, deploy and
manage powerful business solutions that run on the Internet and enterprise
networks. Forte technology is used as the foundation for 100 application
packages, and Forte products are marketed worldwide through direct operations,
subsidiaries, distributors and value-added resellers. For additional
information, contact Forte Software at info@forte.com or http://www.forte.com.
1999 Forte Software, Inc. Forte is a registered trademark, and Forte
Application Environment, Forte9 Application Server, Forte Open Mainframe
Architecture and Forte WebDesigner are trademarks, of Forte Software, Inc.
OS/390 is a registered trademark of IBM. Other brand or product names may be
trademarks or registered trademarks of their respective owners.
The statements in this release that relate to future plans, events, or
performance are forward-looking statements. Actual results might differ
materially due to a variety of factors. Forte Software cannot guarantee
completion of any future products or product features mentioned in this
release, and no reliance should be placed on their availability. Additional
information about factors that may impact results is contained in Forte
Software's Annual Report on Form 10-K under the sections entitled Business
Risks and Management's Discussion and Analysis of Financial Condition and
Results of Operations, and in other SEC filings including Forte Software's
most recent Form 10-Q.
Forte Software, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months ended Twelve months ended
March 31, March 31,
1999 1998 1999 1998
Revenues
License fees $12,675 $12,366 $40,479 $39,825
Maintenance and services 9,812 9,455 39,042 31,503
Total revenues 22,487 21,821 79,521 $71,328
Cost of revenues
License fees 50 432 590 892
Maintenance and services 4,413 5,332 20,061 18,844
Total Cost of revenues 4,463 5,764 20,651 19,736
Gross profit 18,024 16,057 58,870 51,592
Operating expenses
Sales and marketing 10,950 12,488 38,385 44,862
Product development and
engineering 4,289 4,196 16,178 14,983
General and administrative 1,450 2,198 5,291 7,585
Acquired Technology 1,500 -- 1,500 --
Total operating expenses 18,189 18,882 61,354 67,430
Income (loss) from operations (165) (2,825) (2,484) (15,838)
Interest income and expense,
net 303 476 1,376 2,006
Income (loss) before income
taxes 138 (2,349) (1,108) (13,832)
Provision for income taxes 16 310 250 345
Net income (loss) $122 $(2,659) $(1,358) $(14,177)
Income (loss) per share
--Basic $0.01 $(0.14) $(0.07) $(0.73)
Income (loss) per share
--Diluted $0.01 $(0.14) $(0.07) $(0.73)
Shares used in per share
calculation
Basic 20,124 19,512 19,918 19,334
Diluted 21,880 19,512 19,918 19,334
Forte Software, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
March 31 March 31,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents $11,789 $13,358
Short-term investments 14,880 20,802
Accounts receivable, net 23,231 20,277
Prepaid expenses and other current assets 3,115 1,635
Total current assets 53,015 56,072
Equipment and leasehold improvements, net 4,707 7,416
Other assets 1,500 250
Total assets $59,222 $63,738
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued liabilities
and other obligations $10,948 $13,728
Deferred revenue 10,337 12,312
Total current liabilities 21,285 26,040
Capital lease obligations, due after one year -- 123
Deferred revenue 66 265
Commitments
Stockholders' equity:
Common stock 203 195
Additional paid-in capital 68,621 66,851
Accumulated deficit (31,021) (29,663)
Foreign currency translation adjustments 68 (73)
Total stockholders' equity 37,871 37,310
Total liabilities and stockholders' equity $59,222 $63,738
SOURCE Forte Software, Inc.
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Related links:
http://www.forte.com
CONTACT:
Bob L. Corey, Senior Vice President, CFO of
Forte Software, Inc., 510-869-2013; or general, Lisa Horn
Chainey, investors, Nancy Hansen, or media, Scott Marx, all of
The Financial Relations Board, 415-986-1591
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