InfoVista Announces Financial Results for Q4 and Fiscal Year 2006/2007

PARIS, France and HERNDON, Virginia, July 26 /PRNewswire-FirstCall/ -- InfoVista (Euronext: IFV, ISIN: FR0004031649, NASDAQ: IVTA), the leading service-centric performance management software company, today announced financial results for the quarter and full year ended June 30, 2007.

PARIS, France and HERNDON, Virginia, July 26 /PRNewswire-FirstCall/ — InfoVista (Euronext: IFV, ISIN: FR0004031649, NASDAQ: IVTA), 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 EUR9.7 million, roughly unchanged from the previous quarter and down 14% from the comparable period last year. InfoVista's net loss for the quarter totaled EUR1.2 million mainly due to the non-cash write-down of an investment in equity securities for EUR1.1 million. In the comparable quarter of the prior year, InfoVista had posted net income of EUR0.8 million.

For the year ended June 30, 2007, total revenues amounted to EUR39.9 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 EUR41.0 million or a year-on-year increase of 1%. Net loss stood at EUR2.2 million for fiscal year 2007, compared to net income of EUR0.5 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 for the fourth quarter declined 14% to EUR9.7 million compared to last year.

– Revenues for fiscal year 2007 declined by 2% year-on-year to EUR39.9 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 EUR 41.0 million, or a year-on-year increase of 1%.

– License revenues for the fourth quarter declined 28% to EUR4.3 million from fourth quarter of last fiscal year; license revenues declined by 16% year-on-year to EUR19.2 million for fiscal year 2007.

– Service revenues increased 3% to EUR5.0 million in the fourth quarter compared to the same period last year, and 16% year-on-year, to EUR20.7 million, for fiscal year 2007. The Company's professional services witnessed a significant growth during the fiscal year, cumulating in revenues of EUR4.8 million and representing a 26% growth against fiscal year 2006. For the fourth quarter professional services revenues were at EUR1.2 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.


– 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 EUR8.1 million, compared to EUR8.5 million in the comparable period last year.

– For fiscal year 2007 excluding exceptional items operating expenses stood at EUR33 million compared to EUR32.6 million in the comparable period last year.

– For fiscal year 2007, the Company incurred exceptional reorganization charges stood at EUR0.7 million.

Impairment of Investment in Equity Securities

– In the fourth quarter, the Company decided to write down its EUR1.5 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 EUR1.1million in the fourth quarter.


– Net loss for the fourth quarter was EUR1.2 million, including EUR1.1 million for an impairment charge. Net loss for fiscal year 2007 was EUR2.2 million, compared to net income of EUR0.5 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 EUR7.3 million as of June 30, 2007, down from EUR7.9 million in the prior year.

– The Company's balance sheet remains healthy, with no debt and with cash, cash equivalents and marketable securities at EUR36.3 million as of June 30, 2007, compared to EUR38.2 million as at June 30, 2006. During the fiscal year, as part of its share re-purchase program, InfoVista paid EUR3.3 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 EUR5.3 million in the fourth quarter compared to last year's very strong growth performance of 38%. In America, revenues declined 18% to EUR3.1 million in the fourth quarter, compared to last year's fourth quarter. Asia revenues decreased by a 26% drop to EUR1.4 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 EUR6.0 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 EUR3.7 million in the quarter.

Major Wins in the Quarter

– During the quarter, InfoVista recognized revenue totaling over EUR1 million with different arms of Telefonica, including EUR0.8 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 EUR0.6 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(R) 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 EUR14.3 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 EUR3 million in revenue with Microsoft.

– The EMEA operations performed well in fiscal year 2007 with total year-on-year revenues up 13% to EUR20.8 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 EUR4.8 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.


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 EUR9 and EUR9.5 million and we confirm our fiscal year 2008 guidance of 10% top-line growth to approximately EUR44 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#.

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(R), 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 Autorite des Marches 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.

INFOVISTA CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for share and per share data) ——————————————— For the twelve For the three months ended June 30, months ended June 30, ——————————————— 2007 2006 2007 2006 ——————————————— (unaudited) (unaudited) (unaudited) Revenues License revenues EUR 19,169 EUR 22,686 EUR 4,353 EUR 6,048 Service revenues 20,716 17,925 5,391 5,235 ——————————————— Total revenues 39,885 40,611 9,744 11,283 Cost of revenues Cost of licenses 747 796 160 248 Cost of services 6,969 7,098 1,773 1,843 ——————————————— Total cost of revenues 7,716 7,894 1,933 2,091 ——————————————— Gross profit 32,169 32,717 7,811 9,192 Operating expenses Sales and marketing expenses 17,501 18,130 4,266 4,700 Research and development expenses 8,063 7,618 2,092 2,089 General and administrative expenses 7,469 6,862 1,741 1,758 Restructuring costs 722 – – – ——————————————— Total operating expenses 33,755 32,610 8,099 8,547 ——————————————— Operating (loss) income (1,586) 107 (288) 645 Other income (expense): Financial income 966 701 181 224 Net foreign currency transaction losses (270) (91) (11) (38) Impairment on investment in equity security (1,100) – (1,100) – ——————————————— (Loss) income before income taxes (1,990) 717 (1,218) 831 Income tax (expense) benefit (174) (197) (12) 7 ——————————————— Net (loss) income EUR (2,164) EUR 520 EUR (1,230) EUR 838 ——————————————— Basic net (loss) income per share EUR (0.12) EUR 0.03 EUR (0.07) EUR 0.05 Diluted net (loss) income per share EUR (0.12) EUR 0.03 EUR (0.07) EUR 0.04 Basic weighted average shares outstanding 18,218,738 17,810,281 18,619,055 18,248,266 Diluted weighted average shares outstanding 18,218,738 19,315,017 18,619,055 19,579,865 The above table presents the Consolidated Statement of Operations in accordance with US GAAP. INFOVISTA CONSOLIDATED BALANCE SHEETS (In thousands) ———————— As of ———————— June 30, June 30, 2007 2006 ———— ———- (unaudited) ASSETS Cash and cash equivalents EUR 7,352 EUR 12,034 Marketable securities 28,910 26,170 Trade receivables, net 11,176 10,914 Prepaid expenses and other current assets 1,382 2,005 ———————— Total current assets 48,820 51,123 ———————— Fixed assets, net 2,140 2,109 Intangible assets, net 1,132 1,569 Investment in equity securities 378 1,340 Deposits and other assets 491 811 ———————— Total long-term assets 4,141 5,829 ———————— Total assets EUR 52,961 EUR 56,952 ———————— LIABILITIES & STOCKHOLDERS' EQUITY Trade payables EUR 1,774 EUR 2,183 Accrued salaries and commissions 1,771 2,495 Accrued social security and other payroll taxes 1,461 1,469 Deferred revenue 7,341 7,929 Accrued VAT 548 1,658 Other current liabilities 163 220 ———————— Total current liabilities 13,058 15,954 ———————— Other long term liabilities 1,035 225 ———————— Total long-term liabilities 1,035 225 ———————— Stockholders' equity Common stock 10,653 10,545 Capital in excess of par value of stock 89,218 88,784 Accumulated deficit (53,833) (51,669) Accumulated other comprehensive loss (1,543) (1,466) Less common stock in treasury, at cost (5,627) (5,421) ———————— Total stockholders' equity 38,868 40,773 ———————— Total liabilities and stockholders' equity EUR 52,961 EUR 56,952 The above table presents the Consolidated Balance Sheets in accordance with US GAAP

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