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InfoVista Announces Financial Results for Q4 and Fiscal Year 2006/2007
Paris, France and Herndon, VA (United States), July 26, 2007 – InfoVista (Euronext: IFV, ISIN: FR0004031649), the leading service-centric performance management software company, today announced financial results for the quarter and full year ended June 30, 2007.
Total revenues for the fourth quarter were €9.7 million, roughly unchanged from the previous quarter and down 14% from the comparable period last year. InfoVista’s net loss for the quarter totaled €1.2 million mainly due to the non-cash write-down of an investment in equity securities for €1.1 million. In the comparable quarter of the prior year, InfoVista had posted net income of € 0.8 million.
For the year ended June 30, 2007, total revenues amounted to €39.9 million, virtually unchanged from the previous year. On a constant exchange rate basis between fiscal year 2007 and 2006, total revenues for the year ended June 30, 2007 would have been € 41.0 million or a year-on-year increase of 1%. Net loss stood at €2.2 million for fiscal year 2007, compared to net income of €0.5 million in fiscal year 2006.
Reflecting on InfoVista’s fourth quarter performance, Alain Tingaud, Chairman & Chief Executive Officer, commented: “In Q4, as we had anticipated, InfoVista continued to face challenging conditions in the US. However, the early fallout from the initiatives we put in place last March to adapt our US organization is encouraging, and we are confident that they will begin yielding positive results in the second half of fiscal year 2008. With progress in the US and major new releases, we confirm our guidance for the fiscal year 2008 of 10% revenue growth.”
Financial Highlights
Revenues
- Revenues for the fourth quarter declined 14% to €9.7 million compared to last year.
- Revenues for fiscal year 2007 declined by 2% year-on-year to €39.9 million. On a constant exchange rate basis between fiscal year 2007 and 2006, total revenues for the year ended June 30, 2007 would have been € 41.0 million, or a year-on-year increase of 1%.
- License revenues for the fourth quarter declined 28% to €4.3 million from fourth quarter of last fiscal year; license revenues declined by 16% year-on-year to €19.2 million for fiscal year 2007.
- Service revenues increased 3% to €5.4 million in the fourth quarter compared to the same period last year, and 16% year-on-year, to €20.7 million, for fiscal year 2007. The Company’s professional services witnessed a significant growth during the fiscal year, cumulating in revenues of €4.8 million and representing a 26% growth against fiscal year 2006. For the fourth quarter professional services revenues were at €1.2 million. InfoVista continues to benefit from good maintenance renewal from customers resulting in a 7% increase in maintenance revenues for the fourth quarter and 13% for fiscal year 2007.
Expenses
- For the fourth quarter, gross margin was 80.2% of revenues compared to 81.5% for the same quarter the previous year. Gross margin for the fiscal year 2007 was 80.7% almost unchanged in percentage compared to the previous year.
- Operating expenses for the fourth quarter totaled €8.1 million, compared to €8.5 million in the comparable period last year.
- For fiscal year 2007 excluding exceptional items operating expenses stood at €33 million compared to €32.6 million in the comparable period last year.
- For fiscal year 2007, the Company incurred exceptional reorganization charges stood at €0.7 million.
Impairment of Investment in Equity Securities
- In the fourth quarter, the Company decided to write down its €1.5 million investment in a private company, carried out in several financing rounds since 2003. This treatment resulted in a non-cash non-operating charge of €1.1million in the fourth quarter.
Earnings
- Net loss for the fourth quarter was €1.2 million, including €1.1 million for an impairment charge. Net loss for fiscal year 2007 was €2.2 million, compared to net income of €0.5 million in fiscal year 2006.
Balance Sheet
- Days Sales Outstanding (DSO) stood at 103 days for the fourth quarter. This DSO is higher than the Company’s normal quarterly trend as a result of increased business in Europe, where cash collections tend to be longer.
- Deferred revenue was €7.3 million as of June 30, 2007, down from €7.9 million in the prior year.
- The Company’s balance sheet remains healthy, with no debt and with cash, cash equivalents and marketable securities at €36.3 million as of June 30, 2007, compared to €38.2 million as at June 30, 2006. During the fiscal year, as part of its share re-purchase program, InfoVista paid €3.3 million to repurchasing 700,000 of its own shares. InfoVista shares issued and outstanding amounted to 19,727,376 and 18,634,286 as at June 30, 2007, respectively.
Fourth Quarter Operational Highlights
- EMEA, America and Asia contributed 54%, 31% and 15%, respectively, to total revenues for the fourth quarter. In EMEA, revenues were down 6% to €5.3 million in the fourth quarter compared to last year’s very strong growth performance of 38%. In America, revenues declined 18% to €3.1 million in the fourth quarter, compared to last year’s fourth quarter. Asia revenues decreased by a 26% drop to €1.4 million compared to an exceptional quarter last year where revenues almost tripled.
- In America, the transformation that has been taking place over the past three months, including the arrival of a new Sales Vice-President, the change of almost half of the sales team and the appointment of a new pre-sales manager, have yet to bear fruit. Progress is underway and management expects to see a turnaround in its performance in the second half of fiscal year 2008.
- In EMEA, the overall decline in total revenues reflects a tough comparison with last year’s fourth quarter where revenues grew by 38%. However, the performance for the full fiscal year shows good momentum across the region. During the last quarter, the Company recognized revenues from major deals with Telefonica in Spain and Germany and continued to extend its business in Italy, adding Telecom Italia to its list of customers.
- In Asia Pacific, the decline in the quarter is largely due to the impact of a particularly large deal signed in the prior year’s comparable quarter.
- Revenues from the direct sales channel totaled €6.0 million in the fourth quarter, accounting for 62% of the total. Indirect revenues, generated through partners such as Dimension Data, and Italtel, contributed 38% of total revenues for €3.7 million in the quarter.
Major Wins in the Quarter
- During the quarter, InfoVista recognized revenue totaling over €1 million with different arms of Telefonica, including €0.8 million from Telefonica in Germany.
- InfoVista also signed a significant deal with BSkyB, a leading provider of broadband services that selected InfoVista after a rigorous evaluation process to ensure optimal end-to-end service quality and support rapid subscriber uptake.
- InfoVista also added Telecom Italia, a major European service provider, to its customer base, displacing one of the Company’s competitors.
- In the fourth quarter, InfoVista also saw another large repeat deal of €0.6 million from Bell Canada
InfoVista Continues to Innovate in High Growth Market Opportunities
- In the fourth quarter, the Company announced the beta release of VistaInsight® for Servers 3.0. The solution, which will be available for deployment at the end of September 2007, has the capacity to collect and store data from hundreds or thousands of servers into one unified view. The solution depicts trends, predicts when servers and devices will be unable to respond to user demand, and enables accurate planning for growth. Reports provide pre- and post-virtualization performance data for consolidation strategies, and provide granular drill downs for data center operations support.
Fiscal Year Operational Highlights
- America’s operational performance in fiscal year 2007 was far below the Company’s expectations with total revenues decreasing year-on-year by 18% to €14.3 million and resulted in a reorganization of US operations in March 2007. During the year, the Company secured deals with existing customers such as Bell Canada and Lehman Brothers and won new customers such as Cricket Communications. In addition, the Company recognized €3 million in revenue with Microsoft.
- The EMEA operations performed well in fiscal year 2007 with total year-on-year revenues up 13% to €20.8 million. InfoVista recorded increased sales activity with the European Service Providers including most of Europe’s leading telecommunication incumbents totaling a growth over last year of 18% in the fiscal year 2007.
- The Company’s Asian operations remained flat in fiscal year 2007 with total revenues of €4.8 million after outstanding revenue growth of 86% in fiscal year 2006, mainly attributed to the booking of a multi million deal with Telstra in that fiscal year.
Deregistration from the SEC
- During the fourth quarter, InfoVista announced that it filed a Form 15F with the U.S. Securities and Exchange Commission (‘SEC’) to deregister its shares and terminate its reporting obligations under the U.S. Securities Exchange Act of 1934 (‘Exchange Act’).
- As a result, the Company shall only perform future financial communications (including the 2007 annual report) in IFRS in both French and English.
Outlook
Looking ahead, Mr. Tingaud commented: “We start the new fiscal year with confidence that progress in the US will be witnessed throughout fiscal year 2008. In accordance with our transformation plan to be announced this fall, fiscal year 2008 shall be a year of rebuilding and significant investment in the development of additional software solutions and services. In Q1, revenues should be between €9 and € 9.5 million and we confirm our fiscal year 2008 guidance of 10% top-line growth to approximately €44 million”.
Conference Call
InfoVista will host an investor conference call today at 8:30 a.m. (EST) / 1:30 p.m. (UK) / 2:30 p.m. (Continental Europe). The call will be available by dialing +33(0)1 70 99 42 70 in France, +44(0)20 7138 0824 in the UK, or +1 718 354 1158 in North America. A replay will be available shortly after the end of the call at the following numbers: France: +33(0) 1 71 23 02 48, UK: +44(0)20 7806 1970, North America: +1 718 354 1112, Passcode: 2445400#.
Download the CONSOLIDATED STATEMENTS OF OPERATIONS and CONSOLIDATED BALANCE SHEETS (pdf)
About InfoVista
InfoVista is the Service-Centric Performance Management Software Company that assures the optimal delivery of business-critical IT services. Driven by a uniquely adaptive and real-time technology foundation, InfoVista solutions improve business effectiveness, reduce operating risk, lower cost of operations, increase agility and create competitive advantage. Eighty percent of the world's largest service providers as ranked by Fortune®, as well as leading Global 2000 enterprises, rely on InfoVista to enhance the business value of their technology assets. Representative customers include ABN AMRO, Allstream, Banques Populaires, AXA, Banque de France, Bell Canada, British Telecom, Broadwing Communications, Cable & Wireless, Com Hem, Defense Information Systems Agency (DISA), Deloitte, Deutsche Telekom, France Telecom, Savvis Corporation, SingTel, Telefonica, and US Cellular. A Software Magazine 500 company, InfoVista stock is traded on Eurolist by Euronext (FR0004031649). For more information about the company, please visit www.infovista.com.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the matters discussed in this news release are "forward looking statements." These statements involve risks and uncertainties which could cause actual results to differ materially from those in such forward-looking statements; including, without limitation, risks and uncertainties arising from the rapid evolution of our markets, competition, market acceptance of our products, our dependence upon spending by the telecommunications industry and our ability to develop and protect new technologies. For a description of other factors which might affect our actual results, please see the "Risk Factors" section and other disclosures in InfoVista's public filings with the US Securities & Exchange Commission and French Autorité des Marchés Financiers. Readers of this news release are cautioned not to put undue reliance on any forward-looking statement. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
InfoVista, VistaInsight and VistaWatch are the registered trademark of InfoVista, S.A.
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