Customer Count Surpasses 1290 with 2% Sequential License Growth
SUNNYVALE, Calif., Oct. 22 /PRNewswire-FirstCall/ -- Interwoven, Inc.
(Nasdaq: IWOV), a world-leading provider of content management for the
enterprise, today reported its third quarter results. During the quarter,
Interwoven signed 41 new license customers, bringing the Company's total
customer count to 1,292. Revenues for the quarter ended September 30, 2003
were $26.1 million, a decrease of 13% from revenues of $30.0 million for the
quarter ended September 30, 2002 and consistent with revenues of $26.2 million
for the quarter ended June 30, 2003. License revenues represented 40% of total
revenues, and service revenues represented 60% of total revenues, for the
quarter ended September 30, 2003. Included in license revenues is $1.1 million
from the resale of iManage, Inc. (Nasdaq: IMAN) products, with $687,000 in
associated resell costs.
For the quarter ended September 30, 2003, net loss on a GAAP basis was
$18.8 million, or $0.18 net loss per share on a basic and diluted basis,
compared with a net loss of $86.6 million, or $0.85 net loss per share on a
basic and diluted basis, for the quarter ended September 30, 2002. Pro forma
net loss was $4.4 million, or $0.04 net loss per share on a basic and diluted
basis, for the quarter ended September 30, 2003, which represents a 40%
improvement over the pro forma net loss of $7.3 million, or $0.07 net loss per
share on a basic and diluted basis, for the quarter ended September 30, 2002.
Pro forma net loss for the quarter ended September 30, 2003 differs from
GAAP net loss because it excludes amortization of acquired intangible assets
of $657,000, amortization of deferred stock-based compensation of $475,000 and
restructuring charges of $13.3 million. For the quarter ended September 30,
2002, pro forma net loss differs from GAAP net loss because it excludes the
following expenses: amortization of acquired intangible assets of $732,000,
amortization of deferred stock-based compensation of $1.0 million, a one-time
charge associated with goodwill impairment related to past acquisitions of
$76.4 million and restructuring charges of $1.2 million.
For the nine-month period ended September 30, 2003, revenues were
$77.9 million, a 19% decrease from revenues of $95.7 million for the
comparable period in 2002. For the nine-month period ended September 30,
2003, net loss on a GAAP basis was $35.1 million, or $0.34 net loss per share
on a basic and diluted basis, compared with a net loss of $116.1 million, or
$1.13 net loss per share on a basic and diluted basis, for the nine-month
period ended September 30, 2002. Pro forma net loss was $15.8 million, or
$0.15 net loss per share on a basic and diluted basis, for the nine-month
period ended September 30, 2003, compared with pro forma net loss of
$22.4 million, or $0.22 net loss per share on a basic and diluted basis, for
the nine-month period ended September 30, 2002.
Pro forma net loss for the nine-month period ended September 30, 2003
differs from GAAP net loss because it excludes amortization of acquired
intangible assets of $1.5 million, amortization of deferred stock-based
compensation of $1.5 million, write-off of in-process research and development
of $599,000 and restructuring charges of $15.7 million. For the nine-month
period ended September 30, 2002, pro forma net loss differs from GAAP net loss
because it excludes the following expenses: amortization of acquired
intangible assets of $3.3 million, amortization of deferred stock-based
compensation of $4.3 million, a one-time charge associated with goodwill
impairment related to past acquisitions of $76.4 million and restructuring
charges of $9.6 million.
The Company believes that its pro forma results provide useful information
to investors because they reveal the Company's results excluding non-cash and
cash expenses that the Company believes are not indicative of its on-going
operations. However, Interwoven urges readers to review and consider
carefully the GAAP financial information contained in the Company's SEC
filings and in earnings releases.
"We turned in a solid quarter of improving results. I commend the
Interwoven team for our ability to execute as we continue to add world-class
companies to our customer list and develop innovative, award-winning products
based on our recently-launched Interwoven 6 platform," said Martin Brauns,
chairman and CEO of Interwoven. "We are executing well on our strategy to
deliver the industry's leading integrated content management platform, and
we've already integrated both MediaBin and iManage products into our core
platform."
Since the merger announcement with iManage, Interwoven has executed nine
new iManage resell deals as a result of collaborative resale efforts between
Interwoven's and iManage's sales forces, including referrals from iManage's
sales force to Interwoven.
Q3 Highlights
A partial list of key new global customers include: Alticor (Quixtar),
Cable & Wireless UK Ltd., CalPERS, Gates Corporation, China General
Technology, InnovaPost (Canada Post), Maritime and Port Authority of
Singapore, Mobitai Communications, Naval Supply Systems Command (NAVSUP), and
New Balance Athletic Shoe, Inc.
Interwoven also received significant customer reorders that included:
Cathay Life Insurance, Ericsson, Eurocontrol, Hilton, Novartis, Southern
Company, Texas Instruments, and Yamaha.
Corporate Highlights
-- On August 6, 2003, iManage and Interwoven announced that they had
entered into a definitive agreement to merge in a stock and cash
transaction. The combined company will provide the best-integrated
platform to manage the complete content lifecycle -- from content
collaboration and creation, through management, distribution, reuse,
archival and disposition. By virtue of its Java technology,
comprehensive functionality, enterprise architecture and innovative
capabilities such as content intelligence and e-mail management, the
new platform is expected to be the industry's only next-generation
enterprise content management platform for the extended enterprise.
-- Interwoven and iManage completed significant steps toward closing the
merger. On August 29, 2003, the Federal Trade Commission granted early
termination of the antitrust waiting period under the Hart-Scott-
Rodino Act for the proposed merger of Interwoven and iManage. The
registration statement on Form S-4, which includes the joint proxy
statement/prospectus for each company's special meeting of
stockholders, became effective on October 9, 2003 and has been mailed
to Interwoven and iManage shareholders. Each company is scheduled to
hold a special meeting of stockholders on November 18, 2003, for the
purpose of approving the proposed merger, among other things.
-- Interwoven announced that, subject to shareholder approval, it would
effect a one-for-four reverse stock split of its common stock.
-- Interwoven launched the Interwoven Protect Program for compliance and
corporate governance. Designed in partnership with leading industry
and technology experts, Interwoven Protect enables businesses to
address increasingly frequent and stringent content compliance
requirements -- both internal and external to the enterprise.
-- Interwoven announced the opening of its sales office in Mumbai, India.
Products and Solutions
-- Interwoven launched the Interwoven 6 Platform in July, the first
content management platform to deliver on the usability requirements
for the enterprise with the introduction of TeamSite 6.0 Content
Server -- a major release of Interwoven's award-winning content
management software. TeamSite 6.0 was made generally available at the
end of September, and already in less than three weeks more than 100
customers have taken delivery of the new product.
-- Interwoven launched the content management industry's first
Service -- Oriented Architecture based on Web Services standards --
Interwoven ContentServices SDK 2.0 -- to enable fast and flexible
integration with business applications in the enterprise.
-- Interwoven delivered the content management industry's first self-
service solution with iPhrase, enabling organizations to cut support
costs significantly by shifting customers and employees to online
channels to find information, transact business, and resolve issues.
-- Interwoven announced the availability of Interwoven MediaBin Asset
Server 3.0 software, the industry's first integrated digital brand
management solution incorporating a service-oriented architecture,
facilitating faster time-to-market and brand consistency for global
enterprises.
-- iManage introduced a set of templates, pre-defined workflows and
collaborative workspaces for supporting corporate governance that
enable companies to rapidly deploy processes and controls to help meet
requirements of the Sarbanes-Oxley Act. Interwoven announced support
for this solution through its current resell agreement with iManage.
This solution is designed to deliver the lowest total cost of
compliance, driven by rapid deployment, ease of adoption and the
ability to reconfigure the solution quickly without extensive
reprogramming as processes and regulations change.
-- This week at the Gartner ITxpo Interwoven announced the availability
of the Interwoven-SBI Brand Portal solution. The new solution not
only provides customers with the ability to facilitate quick and easy
access to their entire store of brand assets -- ranging from corporate
and product logos, product photographs, PowerPoint presentations - but
also streamlines the process of maintaining and updating these assets.
Promotions and Appointments
During the quarter, Doug Jones was promoted to senior vice president of
corporate development.
Earnings Conference Call Information
The Company's regular conference call to report final results for the
quarter ended September 30, 2003 is scheduled for today, October 22 at 1:30 pm
PDT. The dial-in number is 913-981-4900; the pass code is #431620.
Replay information and live audio Webcast instructions will be available
at Interwoven's Website at http://www.interwoven.com/investors or by calling
719-457-0820; the pass code is #431620.
About Interwoven
Interwoven, Inc. is a world-leading provider of content management
software for the enterprise. Allied with leading enterprise application
providers, the Interwoven 6 platform provides content management for more than
1200 organizations worldwide, including Air France, Cisco Systems, General
Electric, General Motors, and Yamaha. For more information visit
http://www.interwoven.com.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030430/IWOVLOGO )
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking" statements, including
statements about historical results that may suggest trends for our business.
These statements are based on estimates and information available to us at the
time of the release and are not guarantees of future performance. All
statements other than statements of historical fact are statements that could
be deemed forward-looking statements. Actual results could differ materially
from our current expectations as a result of many factors, including the
possibility that the Interwoven/iManage merger does not close or that the
companies may be required to modify aspects of the transaction to achieve
regulatory approval or that prior to the closing of the proposed merger; that
development of certain products and services may not proceed as planned; that
customer acceptance of new product releases may be slower than we anticipate;
that customer spending on web initiatives may decline during the current
economic downturn, which may be longer than we anticipate; that Interwoven and
iManage are unable to transition customers, successfully execute their
integration strategies, or achieve planned synergies; and that the
introduction of new products or services by competitors could delay or reduce
sales. These and other risks and uncertainties associated with our business
are described in our most recent annual report on Form 10-K and subsequent
Forms 10-Q and 8-K, which are on file with the SEC and available through
http://www.sec.gov .
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
On October 8, 2003, in connection with the proposed merger transaction
involving Interwoven and iManage, Interwoven filed with the SEC a Registration
Statement on Form S-4 (File No. 333-108262) containing a definitive joint
proxy statement/prospectus regarding the merger. Investors and security
holders of Interwoven and iManage are urged to read this definitive joint
proxy statement/prospectus and any other relevant materials filed by
Interwoven and iManage with the SEC because they contain, or will contain,
important information about Interwoven, iManage and the merger. The definitive
joint proxy statement/prospectus and other relevant materials (when they
become available), and any other documents filed by Interwoven or iManage with
the SEC, may be obtained free of charge at the SEC's web site at http://www.sec.gov.
In addition, investors and security holders may obtain free copies of the
Interwoven documents filed with the SEC by contacting Interwoven Investor
Relations, Interwoven, Inc., 803 11th Avenue, Sunnyvale, CA 94089,
408-530-7009, investor.relations@interwoven.com. Investors and security
holders may obtain free copies of the iManage documents filed with the SEC by
contacting iManage Investor Relations, 950 Tower Lane, Suite 500, Foster City,
CA 94404, 650-577-6500, investors@imanage.com.
Interwoven and iManage, their respective directors, officers and employees
may be deemed to be participants in the solicitation of proxies in favor of
the merger from the stockholders of Interwoven and iManage. Information about
the directors and officers of Interwoven and iManage and the interests they
may have in the merger is available in the definitive joint proxy
statement/prospectus which is included in the Registration Statement on Form
S-4 filed by Interwoven with the SEC on October 8, 2003. Additional
information regarding the directors and executive officers of Interwoven is
also included in the proxy statement for Interwoven's 2003 annual meeting of
stockholders filed with the SEC on April 28, 2003. Additional information
regarding the directors and executive officers of iManage is also included in
the proxy statement for iManage's 2003 annual meeting of stockholders filed
with the SEC on April 25, 2003.
INTERWOVEN, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
(unaudited) (unaudited)
Revenues:
License $10,383 $12,398 $29,726 $43,271
Services 15,690 17,635 48,128 52,450
Total revenues 26,073 30,033 77,854 95,721
Cost of revenues:
License 1,426 599 2,593 2,616
Services 7,273 9,165 22,813 28,340
Total cost
of revenues 8,699 9,764 25,406 30,956
Gross profit 17,374 20,269 52,448 64,765
Operating expenses:
Research and
development 5,885 6,720 17,771 20,720
Sales and marketing 12,611 17,566 40,181 56,251
General and
administrative 3,667 4,412 12,003 14,004
Amortization of
deferred stock-
based compensation 475 1,020 1,482 4,285
Amortization of acquired
intangible assets 657 732 1,545 3,278
In-process research &
development -- -- 599 --
Restructuring charges 13,324 1,179 15,701 9,643
Impairment of goodwill -- 76,431 -- 76,431
Total operating
expenses 36,619 108,060 89,282 184,612
Loss from operations (19,245) (87,791) (36,834) (119,847)
Interest and
other income, net 579 1,284 2,513 4,673
Net loss before provision
for income taxes (18,666) (86,507) (34,321) (115,174)
Provision for
income taxes 174 116 813 904
Net loss ($18,840) ($86,623) ($35,134) ($116,078)
Basic and diluted
net loss per share ($0.18) ($0.85) ($0.34) ($1.13)
Shares used in computing
basic and diluted
net loss per share 105,591 101,859 103,464 102,633
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Pro forma information (A) (unaudited) (unaudited)
Historical net loss ($18,840) ($86,623) ($35,134) ($116,078)
Add back certain non-
cash and non-recurring
charges:
Amortization of
deferred stock-based
compensation 475 1,020 1,482 4,285
Amortization of acquired
intangible assets 657 732 1,545 3,278
In-process research
& development -- -- 599 --
Restructuring charges 13,324 1,179 15,701 9,643
Impairment of goodwill -- 76,431 -- 76,431
Total add back 14,456 79,362 19,327 93,637
Pro forma net loss
excluding certain
non-cash and non-
recurring charges ($4,384) ($7,261) ($15,807) ($22,441)
Pro forma basic and
diluted net loss
per share ($0.04) ($0.07) ($0.15) ($0.22)
Shares used in computing
pro forma basic and diluted
net loss per share 105,591 101,859 103,464 102,633
(A) The accompanying pro forma financial information is presented for
informational purposes only and should not be considered a
substitute for the historical financial information presented in
accordance with accounting principles generally accepted in the
United States.
INTERWOVEN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2003 2002
Assets (unaudited)
Current assets:
Cash and cash equivalents $43,072 $58,855
Short-term investments 106,396 122,814
Accounts receivable, net of allowances
of $1,723 and $1,926, respectively. 17,042 22,151
Prepaid expenses and other current assets 8,102 7,277
Total current assets 174,612 211,097
Property and equipment, net 7,353 11,694
Intangible assets, net 87,199 73,872
Restricted cash 378 378
Other assets 1,616 1,616
$271,158 $298,657
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $5,177 $3,438
Accrued liabilities 11,392 13,319
Restructuring and excess facilities costs 12,952 10,564
Deferred revenue 30,992 36,331
Total current liabilities 60,513 63,652
Other accrued liabilities,
net of current portion 1,235 2,070
Restructuring and excess facilities costs,
net of current portion 31,465 29,210
Total liabilities 93,213 94,932
Stockholders' equity 177,945 203,725
$271,158 $298,657
SOURCE Interwoven, Inc.
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Related links:
http://www.interwoven.com
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/20030430/IWOVLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, 1-888-776-6555 or +1-212-782-2840
CONTACT:
Dave Allen of Interwoven, Inc.,
+1-408-530-5745, or david.allen@interwoven.com
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