Ariba Reports Results for the First Quarter of Fiscal Year 2006; Company Gains Traction with On-Demand Spend Management Solutions; Adds 30 New Customers.SUNNYVALE Sunnyvale, city (1990 pop. 117,229), Santa Clara co., W Calif., near San Francisco; settled 1849, inc. 1912. A city in Silicon Valley, its many manufactures include semiconductors; machinery and instruments; electrical, electronic, and aerospace products; , Calif. -- The last sentence of the third paragraph should read: Excluding these items, total non-GAAP expenses for the first quarter of fiscal 2006 were $66.0 million... (sted Excluding these items, total non-GAAP expenses for the fourth quarter of fiscal 2005 were $66.0 million...) The corrected release reads: ARIBA ARIBA (Brit) n abbr (= Associate of the Royal Institute of British Architects) → Qualifikationsnachweis in Architektur REPORTS RESULTS FOR THE FIRST QUARTER OF FISCAL YEAR 2006 Company Gains Traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. with On-Demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front Spend Management Solutions; Adds 30 New Customers Ariba(R), Inc. (Nasdaq:ARBA), the leading spend management solutions provider, today announced results for the first quarter of fiscal year 2006 ended December December: see month. 31, 2005. Financial Results Total revenues for the first quarter of fiscal year 2006 were $76.2 million, as compared to $86.9 million for the first quarter of fiscal year 2005. Software license revenues for the quarter were $6.6 million, as compared to $17.1 million for the first quarter of fiscal year 2005. Subscription and maintenance revenues for the quarter were $31.8 million, as compared to $31.4 million for the first quarter of fiscal year 2005. Services and other revenues for the quarter were $37.8 million, as compared to $38.4 million for the first quarter of fiscal year 2005. Net loss for the first quarter of fiscal year 2006 was $3.7 million, or $0.06 per share, as compared to a net loss for the first quarter of fiscal year 2005 of $46.8 million, or $0.75 per share. The net loss for the first quarter of fiscal 2006 included charges of $4.8 million for amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , $8.8 million for stock-based compensation, and $273,000 for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs. Excluding these items, total non-GAAP expenses for the first quarter of fiscal 2006 were $66.0 million, resulting in non-GAAP net income of $10.2 million, or $0.14 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. "We continue to transition our business from a software license model to a subscription-based, on-demand model, and we are very pleased with the progress we made during the first quarter," said Bob Calderoni, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Ariba. "Our strategy is to enable companies of all sizes to realize the benefits of spend management, and this quarter we saw increases in the number of total customer deals and new customers. For years, large enterprises have benefited from our differentiated dif·fer·en·ti·ate v. dif·fer·en·ti·at·ed, dif·fer·en·ti·at·ing, dif·fer·en·ti·ates v.tr. 1. To constitute the distinction between: approach to drive spend management results, and now small to mid-market companies are coming to us as well." Customers Validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data Growing Market for Spend Management Solutions Ariba added 30 new customers during the first quarter of fiscal year 2006, as companies continue to seek innovative ways to generate cost savings, improve their margins and accelerate positive bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. results. Overall, more than 180 customers in all regions purchased Ariba Spend Management(TM) solutions, including: Air Products, Alcoa Alcoa U.S. company, the world's largest producer of aluminum. Established in Pittsburgh, Pa., in 1888, it adopted the name Aluminum Co. of America in 1907. Alcoa introduced aluminum foil in 1910 and found uses for aluminum in the emerging aviation and automobile industries. , American Express American Express (NYSE: AXP), sometimes known as "AmEx" or "Amex", is a diversified global financial services company, headquartered in New York City. The company is best known for its credit card, charge card and traveler's cheque businesses. , Burlington Burlington, town, Canada Burlington, town (1991 pop. 129,575), SE Ont., Canada, on Lake Ontario. First settled (1798) by Mohawk Loyalist Joseph Brandt, Burlington's economy was built on the shipment of wheat, lumber, and quarried rock by waterway. Northern Santa Fe Santa Fe, city, Argentina Santa Fe, city (1991 pop. 341,000), capital of Santa Fe prov., NE Argentina, a river port near the Paraná, with which it is connected by canal. , EADS EADS European Aeronautic Defence and Space Company N.V. EADS Expeditionary Air Defense System (USMC) EADS Extended Air Defense Systems EADS Environmental Assessment Data System EADS Echelons Above Division Study Deutschland, Hanover Insurance Hanover Insurance (formerly NASDAQ: HINS) based in Worcester, Massachusetts is one of the oldest continuous businesses in the United States, still operating within its original industry. Group, Hewlett-Packard See HP. Hewlett-Packard - (HP) Hewlett-Packard designs, manufactures and services electronic products and systems for measurement, computation and communications. The company's products and services are used in industry, business, engineering, science, medicine and , Medbuy, Pfizer Pfizer Incorporated (NYSE: PFE) is a major research-based pharmaceutical company, which ranks number two in sales The company is based in New York City. It produces the number-one selling drug Lipitor (atorvastatin, used to lower blood cholesterol); the oral antifungal , RTE (1) See runtime engine. (2) (Real-Time Executive) The operating system used in the HP 1000 series. See HP 1000. , Safeway Safeway is a brand name used by several companies around the world: Supermarket chains
Either of two linked companies, Unilever PLC (based in London) and Unilever NV (based in Rotterdam). They are the holding companies for more than 500 firms worldwide that manufacture and sell soaps, foods, and other products. , among others. On-Demand Solutions Gain Increasing Traction On November November: see month. 15, 2005, Ariba announced the on-demand delivery of its spend management solutions and offered customers new pricing and packaging options. Recognizing that successful spend management requires more than just software, Ariba's solutions combine technology with the knowledge of its more than 400 global commodity experts and the supporting services needed to drive spend management results. Offered on a subscription basis and delivered in flexible packages, Ariba's on-demand offerings make spend management more affordable, easier to get started, and scalable for companies of all sizes. Conference Call Information Ariba will hold a conference call today at 2:00 p.m. PST PST Paroxysmal supraventricular tachycardia, see there / 5:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. to discuss the first quarter of fiscal year 2006 results. To join the call, please dial (877) 407-8031 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , or (201) 689-8031 if calling internationally. There will also be a live web broadcast available on the investor relations Investor relations The process by which the corporation communicates with its investors. section of the company's website at www.ariba.com or at www.vcall.com. A replay of this call will be available at approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 5:00 p.m. PST / 8:00 p.m. EST today through January January: see month. 30, 2006 by calling (877) 660-6853 in the United States and Canada or (201) 612-7415 internationally and entering account number: 286 and conference ID number: 186819. About Ariba, Inc. Ariba, Inc. is the leading provider of Spend Management solutions to help companies realize rapid and sustainable bottom line results. Successful companies around the world in every industry use Ariba Spend Management software and services. Ariba can be contacted in the U.S. at 1.650.390.1000 or at www.ariba.com. Copyright (C) 1996 - 2006 Ariba, Inc. Ariba and the Ariba logo are registered trademarks of Ariba, Inc. Ariba Spend Management, Ariba Spend Management. Find it. Get it. Keep it., Ariba. This is Spend Management, Ariba Solutions Delivery, Ariba Analysis, Ariba Buyer, Ariba Category Management, Ariba Category Procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. , Ariba Contract Compliance, Ariba Contracts, Ariba Contract Management, Ariba Contract Workbench, Ariba Data Enrichment enrichment Food industry The addition of vitamins or minerals to a food–eg, wheat, which may have been lost during processing. See White flour; Cf Whole grains. , Ariba eForms, Ariba Sourcing, Ariba Invoice An itemized statement or written account of goods sent to a purchaser or consignee by a vendor that indicates the quantity and price of each piece of merchandise shipped. A consular invoice is one used in foreign trade. , Ariba Travel & Expense, Ariba Workforce, Ariba Supplier Network, Ariba Supplier Performance Management, Ariba PunchOut, Ariba QuickSource, PO-Flip, Ariba Settlement and Ariba Spend Management Knowledge Base are trademarks or service marks of Ariba, Inc. Ariba Proprietary and Confidential confidential, adj pertaining to information that is only shared with those directly responsible for patient care. . All rights reserved. Patents pending. All other trademarks are property of their respective owners. Ariba Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Safe Harbor Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 1995: Information and announcements in this release involve Ariba's expectations, beliefs, hopes, plans, intentions or strategies regarding the future and are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Ariba as of the date of the release, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to Ariba's operating and financial results to differ materially from its current expectations include, but are not limited to: delays in development or shipment of new versions of Ariba's products and services; lack of market acceptance of Ariba's existing or future products or services; inability to continue to develop competitive new products and services on a timely basis; introduction of new products or services by major competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; the ability to attract and retain qualified employees; difficulties in assimilating as·sim·i·late v. as·sim·i·lat·ed, as·sim·i·lat·ing, as·sim·i·lates v.tr. 1. Physiology a. To consume and incorporate (nutrients) into the body after digestion. b. acquired companies; long and unpredictable sales cycles and the deferrals of anticipated orders; declining economic conditions; inability to control costs; changes in the company's pricing or compensation policies; significant fluctuations in our stock price; the outcome of and costs associated with pending or potential future regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. or legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. ; the impact of our acquisitions, including the disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. or loss of customer, business partner, supplier or employee relationships; and the level of costs and expenses incurred by Ariba as a result of such transactions. Factors and risks associated with its business, including a number of the factors and risks described above, are discussed in Ariba's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed December 7, 2005.
Ariba, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited; in thousands)
December 31, September 30,
2005 2005
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 69,026 $ 60,909
Short-term investments 52,122 50,520
Restricted cash 1,744 1,381
Accounts receivable, net 39,322 41,890
Prepaid expenses and other current
assets 9,159 10,080
------------- -------------
Total current assets 171,373 164,780
Property and equipment, net 17,083 17,999
Long-term investments 1,469 2,731
Restricted cash, less current portion 30,531 31,894
Goodwill 326,101 328,692
Other intangible assets, net 36,750 41,562
Other assets 3,209 2,986
------------- -------------
Total assets $586,516 $590,644
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 12,021 $ 11,031
Accrued compensation and related
liabilities 26,902 30,046
Accrued liabilities 26,825 23,461
Restructuring obligations 16,242 18,144
Deferred revenue 41,350 39,548
Deferred income - Softbank 13,569 13,368
------------- -------------
Total current liabilities 136,909 135,598
Deferred rent obligations 22,428 22,184
Restructuring obligations, less current
portion 64,790 68,356
Deferred revenue, less current portion 19,350 21,056
Deferred income - Softbank, less current
portion 10,742 13,925
------------- -------------
Total liabilities 254,219 261,119
------------- -------------
Stockholders' equity:
Common stock 145 143
Additional paid-in capital 4,995,121 5,023,965
Deferred stock-based compensation -- (35,537)
Accumulated other comprehensive income 2,753 3,011
Accumulated deficit (4,665,722) (4,662,057)
------------- -------------
Total stockholders' equity 332,297 329,525
------------- -------------
Total liabilities and
stockholders' equity $586,516 $590,644
============= =============
Ariba, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except per share data)
Three Months Ended
December 31,
2005 2004 (1)
--------- ---------
Revenues:
License $ 6,622 $ 17,122
Subscription and maintenance 31,801 31,428
Services and other 37,809 38,379
--------- ---------
Total revenues 76,232 86,929
--------- ---------
Cost of revenues:
License 568 694
Subscription and maintenance 7,624 7,467
Services and other 31,374 30,690
Amortization of acquired technology and
customer intangible assets 4,613 4,700
--------- ---------
Total cost of revenues 44,179 43,551
--------- ---------
Gross profit 32,053 43,378
--------- ---------
Operating expenses:
Sales and marketing 18,610 26,786
Research and development 11,953 12,847
General and administrative 8,818 9,455
Other income - Softbank (3,401) --
Amortization of other intangible assets 200 185
Restructuring and integration costs 273 1,817
Litigation provision -- 37,000
--------- ---------
Total operating expenses 36,453 88,090
--------- ---------
Loss from operations (4,400) (44,712)
Interest and other income, net 889 2,615
--------- ---------
Loss before income taxes and minority
interests (3,511) (42,097)
Provision for income taxes 154 4,639
Minority interests in net income of
consolidated subsidiaries -- 16
--------- ---------
Net loss $(3,665) $(46,752)
========= =========
Net loss per share - basic and diluted $ (0.06) $ (0.75)
Weighted average shares - basic and diluted 65,322 62,707
(1) The Company has made certain reclassifications to prior year
amounts to conform to the current year presentation, none of which
affected net loss or net loss per share.
Ariba, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (1)
(Unaudited; in thousands, except per share data)
Three Months Ended
December 31,
2005 2005 Non-
Reported Adj GAAP
-------- -------- ---------
Revenues:
License $ 6,622 $ -- $ 6,622
Subscription and maintenance 31,801 -- 31,801
Services and other 37,809 -- 37,809
-------- -------- --------
Total revenues 76,232 -- 76,232
-------- -------- --------
Cost of revenues:
License 568 -- 568
Subscription and maintenance (2) 7,624 (504) 7,120
Services and other (2) 31,374 (2,017) 29,357
Amortization of acquired technology
and customer intangible assets (3) 4,613 (4,613) --
-------- -------- --------
Total cost of revenues 44,179 (7,134) 37,045
-------- -------- --------
Gross profit 32,053 7,134 39,187
-------- -------- --------
Operating expenses:
Sales and marketing (2) 18,610 (2,738) 15,872
Research and development (2) 11,953 (1,596) 10,357
General and administrative (2) 8,818 (1,953) 6,865
Other income - Softbank (3,401) -- (3,401)
Amortization of other intangible
assets (3) 200 (200) --
Restructuring and integration
costs (4) 273 (273) --
Litigation provision (5) -- -- --
-------- -------- --------
Total operating expenses 36,453 (6,760) 29,693
-------- -------- --------
(Loss) income from operations (4,400) 13,894 9,494
Interest and other income, net 889 -- 889
-------- -------- --------
(Loss) income before income taxes and
minority interests (3,511) 13,894 10,383
Provision for income taxes 154 -- 154
Minority interests in net income of
consolidated subsidiaries -- -- --
-------- -------- --------
Net (loss) income $(3,665) $13,894 $10,229
======== ======== ========
Net (loss) income per share - basic and
diluted
Basic $ (0.06) $ 0.16
Diluted $ (0.06) $ 0.14
Weighted average shares
Basic 65,322 65,322
Diluted 65,322 72,456
Three Months Ended
December 31,
2004 2004 Non-
Reported Adj GAAP
-------- -------- ---------
Revenues:
License $ 17,122 $ -- $17,122
Subscription and maintenance 31,428 -- 31,428
Services and other 38,379 -- 38,379
-------- -------- ---------
Total revenues 86,929 -- 86,929
-------- -------- ---------
Cost of revenues:
License 694 -- 694
Subscription and maintenance (2) 7,467 (231) 7,236
Services and other (2) 30,690 (922) 29,768
Amortization of acquired technology
and customer intangible assets (3) 4,700 (4,700) --
-------- -------- ---------
Total cost of revenues 43,551 (5,853) 37,698
-------- -------- ---------
Gross profit 43,378 5,853 49,231
-------- -------- ---------
Operating expenses:
Sales and marketing (2) 26,786 (2,113) 24,673
Research and development (2) 12,847 (445) 12,402
General and administrative (2) 9,455 (667) 8,788
Other income - Softbank -- -- --
Amortization of other intangible
assets (3) 185 (185) --
Restructuring and integration
costs (4) 1,817 (1,817) --
Litigation provision (5) 37,000 (37,000) --
-------- -------- ---------
Total operating expenses 88,090 (42,227) 45,863
-------- -------- ---------
(Loss) income from operations (44,712) 48,080 3,368
Interest and other income, net 2,615 -- 2,615
-------- -------- ---------
(Loss) income before income taxes and
minority interests (42,097) 48,080 5,983
Provision for income taxes 4,639 -- 4,639
Minority interests in net income of
consolidated subsidiaries 16 -- 16
-------- -------- ---------
Net (loss) income $(46,752) $48,080 $ 1,328
======== ======== =========
Net (loss) income per share - basic and
diluted
Basic $ (0.75) $ 0.02
Diluted $ (0.75) $ 0.02
Weighted average shares
Basic 62,707 62,707
Diluted 62,707 65,954
(1) To supplement our financial results presented on a GAAP basis, we
use non-GAAP measures of net income and earnings per share, which
exclude certain expenses that we believe are helpful in
understanding our past financial performance and prospects for
the future. Management uses the non-GAAP financial results as one
factor in its planning and forecasting of future periods. The
non-GAAP financial results are presented here with the intent of
providing additional information about our operating results and
trends. We believe the non-GAAP measures are useful in that they
enable investors to compare our results to our performance in
prior periods. The presentation of non-GAAP financial results is
not meant to be considered in isolation or as a substitute for
net income or earnings per share prepared in accordance with
GAAP. Investors should be aware that non-GAAP measures have
inherent limitations and should be read only on conjunction with
our consolidated financial statements prepared in accordance with
GAAP.
(2) Non-GAAP adjustment represents stock-based compensation
associated with stock options and restricted shares issued to
executive officers and employees.
(3) Non-GAAP adjustment represents the amortization of intangible
assets in connection with our acquisitions.
(4) Non-GAAP adjustment primarily reflects severance and related
benefits.
(5) Non-GAAP adjustment represents the provision from the settlement
of our patent infringement litigation.
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