Ariba Reports Results for the Fourth Quarter and Fiscal Year 2004; Company Sees Increased Demand for Spend Management Solutions.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. -- Ariba(R), Inc. (Nasdaq:ARBA), the leading Spend Management solutions provider, today announced results for the fourth quarter and fiscal year ended September September: see month. 30, 2004. Quarterly Results Total revenues for the fourth quarter of fiscal 2004 were $84.1 million, as compared to $59.1 million for the fourth quarter of fiscal 2003. Software license revenues for the quarter were $15.6 million, as compared to $23.6 million for the fourth quarter of fiscal 2003. Subscription and maintenance revenues were $31.1 million, as compared to $22.6 million for the fourth quarter of fiscal 2003. Services and other revenues for the quarter were $37.4 million, as compared to $12.9 million for the fourth quarter of fiscal 2003. Net loss for the fourth quarter of fiscal 2004 was $22.9 million, or a loss of $0.36 per share, as compared to net income for the fourth quarter of fiscal 2003 of $7.4 million, or $0.16 per share. The net loss for the fourth quarter of fiscal 2004 included charges of $5.1 million for in-process research and development and 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. , $1.1 million for stock-based compensation and $16.9 million 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). and integration costs. Excluding these items, total non-GAAP expenses for the fourth quarter of fiscal 2004 were $83.8 million, resulting in non-GAAP net income of $250,000, or $0.00 per share. The results for the fourth quarter of fiscal 2004 include the results from FreeMarkets, Inc., which Ariba merged with on July July: see month. 1, 2004. Per share numbers reflect the one-for-six reverse split of Ariba's common stock effected July 1, 2004. Fiscal Year Results Revenues for fiscal year 2004 were $245.8 million, as compared to $236.7 million for fiscal year 2003. Software license revenues were $65.7 million, as compared to $103.1 million for fiscal year 2003. Subscription and maintenance revenues were $95.7 million, as compared to $87.1 million for fiscal year 2003. Services and other revenues for the year were $84.5 million, as compared to $46.5 million for fiscal year 2003. Net loss for fiscal 2004 was $25.2 million, or a loss of $0.51 per share, as compared to net loss for fiscal 2003 of $106.3 million, or a loss of $2.40 per share. The net loss for fiscal 2004 included charges of $5.6 million for in-process research and development, amortization of intangible assets, $2.8 million for stock-based compensation and $16.8 million for restructuring and integration costs. Net loss for fiscal 2003 included charges of $117.5 million for amortization of intangible assets, $2.2 million for stock-based compensation and $5.4 million for restructuring and integration costs. "I am pleased with our results during the fourth 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. "We are leading the market at a time when demand for Spend Management solutions continues to grow. Our team is delivering globally to help accelerate bottom line results for our customers, and we are executing well against our integration plans following our recent merger activities." 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 As companies seek to generate cost savings, grow margins and accelerate 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, they continue to invest in Ariba Spend Management solutions. During the fourth quarter, Ariba added 31 new customers, including well-known well-known adj. 1. Widely known; familiar or famous: a well-known performer. 2. Fully known: well-known facts. companies such as Ameritrade, Caterpillar caterpillar (kăt`əpĭl'ər, kăt`ər–), common name for the larva of a moth or butterfly. Caterpillars have distinct heads and are segmented and wormlike. , Continental Airlines, and Sprint. Ariba also added new customers in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia, including PPF PPF Plasma protein fraction, see there , the largest financial
services The examples and perspective in this article or section may not represent a worldwide view of the subject.Please [ improve this article] or discuss the issue on the talk page. group in the Czech Republic Czech Republic, Czech Česká Republika (2005 est. pop. 10,241,000), republic, 29,677 sq mi (78,864 sq km), central Europe. It is bordered by Slovakia on the east, Austria on the south, Germany on the west, and Poland on the north. . In addition, more than 120 customers in all regions renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. or expanded their investment in Ariba Spend Management solutions during the fourth quarter, including: Air Products, Sunoco, Inc., Phelps Dodge Phelps Dodge Corporation is a former United States company founded in 1834 by Anson Greene Phelps and William E. Dodge. On March 19, 2007, it was acquired by Freeport-McMoRan and now operates under the name Freeport-McMoRan Copper & Gold Inc. Corporation, Nestle USA Inc., 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 Inc., Uniq plc, and Vtech Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. Ltd. "We continue to expand the use of Ariba's products and services within our organization, having already sourced more than GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1 billion of contracts through the Ariba system. The savings achieved in the last six months alone have demonstrated the strategic value in spend management, and justified our further investment in Ariba Solutions," said David Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs , Director of Procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. and Logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. for National Grid national grid Noun Brit & NZ 1. a network of high-voltage power lines linking major electric power stations 2. the arrangement of vertical and horizontal lines on an ordnance survey map Transco, the UK's largest utility. Ariba Enhances Strategic Sourcing Solution During the fourth quarter, Ariba expanded the functionality of its industry-leading strategic sourcing solution with the release and delivery of a Visibility and Sourcing Solution feature pack. The new release integrates leading functionality from both Ariba and FreeMarkets, as well as functionality from Covisint Covisint is a global enabler of interoperability solutions and services for organizations of any size, connecting people and systems across industries. Covisint supports over 275,000 users, representing more than 30,000 organizations in over 96 countries in the global automotive and , LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , which FreeMarkets acquired last year, and Softface, Inc., which Ariba acquired earlier this year. The feature pack provides customers with robust sourcing expertise, delivering sustainable sourcing results with broad category experience, full closed-loop process coverage and deep penetration in global markets. Conference Call Information Ariba will hold a conference call today at 2:00 p.m. PDT/5:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss the quarterly and year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results. To join the call, please dial (877) 375-2162 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 (973) 582-2734 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 approximately 3:00 p.m. PDT/6:00 p.m. EDT today through November November: see month. 3, 2004 by dialing (877) 519-4471 in the United States and Canada or (973) 341-3080 internationally and entering ID #: 5265938. About Ariba, Inc. Ariba, Inc. is the leading provider of Spend Management solutions. Ariba helps 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. Ariba and the Ariba logo are registered trademarks of Ariba, Inc. Ariba Spend Management, Ariba Analysis, Ariba Buyer, Ariba Category Management, Ariba Contracts, Ariba Travel & Expense, Ariba Workforce, 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 eForms, Ariba Enterprise Sourcing, Ariba Supplier Network, BPM (Business Process Management) A structured approach that models an enterprise's human and machine tasks and the interactions between them as processes. BPM software provides users with a dashboard interface that offers a high-level view of the operation that typically Services, Power Sourcing, Total Spend Capture and PO-Flip are trademarks or service marks of Ariba, Inc. 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; 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, including a recession; inability to control costs; changes in the company's pricing or compensation policies; inability to successfully manage a reduction in the company's workforce; significant fluctuations in our stock price; the outcome of 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. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of our financial statements and the level of associated professional fees and expenses; the impact of acquiring Alliente, Softface and FreeMarkets, 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-Q Form 10-Q See 10-Q. filed August 13, 2004 and in its Form S-4 filed May 13, 2004.
Ariba, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited; in thousands)
September 30, September 30,
2004 2003
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $74,031 $70,819
Short-term investments 37,227 56,323
Restricted cash 45,623 1,123
Accounts receivable, net 48,071 8,669
Prepaid expenses and other current
assets 10,795 10,747
------------- -------------
Total current assets 215,747 147,681
Property and equipment, net 21,909 21,767
Long-term investments 29,676 78,329
Restricted cash, less current portion 26,862 28,579
Goodwill, net 574,679 181,033
Other intangible assets, net 62,249 --
Other assets 2,767 1,741
------------- -------------
Total assets $933,889 $459,130
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $15,679 $10,767
Accrued compensation and related
liabilities 32,724 26,674
Accrued liabilities 87,580 35,513
Restructuring obligations 14,836 13,764
Deferred revenue 49,664 57,470
Current portion of long-term debt 132 --
------------- -------------
Total current liabilities 200,615 144,188
Accrued liabilities, less current portion 3,194 --
Restructuring obligations, less current
portion 41,042 34,112
Deferred revenue, less current portion 22,858 43,954
Long-term debt, less current portion 260 --
------------- -------------
Total liabilities 267,969 222,254
------------- -------------
Minority interests 19,547 20,019
------------- -------------
Stockholders' equity:
Common stock (1) 125 90
Additional paid-in capital (1) 4,963,002 4,501,424
Deferred stock-based compensation (5,959) (314)
Accumulated other comprehensive
income 1,634 2,856
Accumulated deficit (4,312,429) (4,287,199)
------------- -------------
Total stockholders' equity 646,373 216,857
------------- -------------
Total liabilities and
stockholders' equity $933,889 $459,130
============= =============
(1) Reflects the company's one-for-six reverse stock split effected
July 1, 2004.
Ariba, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except per share data)
Three Months Ended Year Ended
September 30, September 30,
2004 2003 2004 2003
--------- -------- --------- ----------
Revenues:
License $15,563 $23,580 $65,654 $103,066
Subscription and
maintenance 31,105 22,634 95,689 87,093
Services and other 37,408 12,918 84,455 46,539
--------- -------- --------- ----------
Total revenues 84,076 59,132 245,798 236,698
Cost of revenues (2) 35,827 15,656 94,865 63,710
Amortization of acquired
technology and customer
intangible assets 4,725 -- 5,066 4,000
--------- -------- --------- ----------
Total cost of revenues 40,552 15,656 99,931 67,710
--------- -------- --------- ----------
Gross profit 43,524 43,476 145,867 168,988
--------- -------- --------- ----------
Operating expenses:
Sales and marketing (2) 23,346 16,635 74,290 66,484
Research and development
(2) 15,219 13,037 54,091 54,014
General and
administrative 9,958 6,625 26,072 36,203
Amortization of other
intangible assets 235 -- 460 113,464
In-process research and
development 100 -- 100 --
Stock-based compensation 1,149 325 2,788 2,161
Restructuring and
integration costs 16,900 -- 16,803 5,350
--------- -------- --------- ----------
Total operating
expenses 66,907 36,622 174,604 277,676
--------- -------- --------- ----------
Income (loss) from operations (23,383) 6,854 (28,737) (108,688)
Interest and other
income, net 314 1,218 2,808 5,729
--------- -------- --------- ----------
Net income (loss) before
income taxes and minority
interests (23,069) 8,072 (25,929) (102,959)
Provision (benefit) for
income taxes 193 (419) (160) (92)
Minority interests in net
income (loss)
of consolidated
subsidiaries (403) 1,126 (539) 3,460
--------- -------- --------- ----------
Net income (loss) $(22,859) $7,365 $(25,230) $(106,327)
========= ======== ========= ==========
Net income (loss) per share -
basic (1) $(0.36) $0.16 $(0.51) $(2.40)
========= ======== ========= ==========
Weighted average shares -
basic (1) 62,734 44,806 49,625 44,381
========= ======== ========= ==========
Net income (loss) per share -
diluted (1) $(0.36) $0.16 $(0.51) $(2.40)
========= ======== ========= ==========
Weighted average shares -
diluted (1) 62,734 45,946 49,625 44,381
========= ======== ========= ==========
(1) Reflects the company's one-for-six reverse stock split effected
July 1, 2004.
(2) Certain reclassifications, none of which affected net income
(loss) or net income (loss) per share, have been made to prior
year amounts to conform to the current period presentation.
Specifically, the company reclassified certain operating expenses
to cost of revenues of $3.3 million and $13.7 million for the
three months and year ended September 30, 2003, respectively and
$14.6 million for the year ended September 30, 2004.
Ariba, Inc. and Subsidiaries
Reconciliation of GAAP Operating Results to
Non-GAAP Operating Results
(Unaudited; in thousands, except per share data)
The following tables reconcile the specific items excluded from GAAP
in the calculation of non-GAAP operating results for the periods
indicated below:
Three Months Ended
Expense reconciliation September 30, 2004
--------------------
GAAP revenue $84,076
GAAP net loss 22,859
--------------------
Total GAAP expenses 106,935
In-process research and development and
amortization of acquired technology, customer
and other intangible assets (5,060)
Stock-based compensation (1,149)
Restructuring and integration costs (16,900)
--------------------
Total non-GAAP expenses $83,826
====================
Three Months Ended
Net income (loss) reconciliation September 30, 2004
--------------------
GAAP net loss $(22,859)
In-process research and development and
amortization of acquired technology, customer
and other intangible assets 5,060
Stock-based compensation 1,149
Restructuring and integration costs 16,900
--------------------
Non-GAAP net income $250
====================
Three Months Ended
Net income (loss) per share reconciliation September 30, 2004
--------------------
GAAP loss per share - basic and diluted $(0.36)
In-process research and development and
amortization of acquired technology, customer
and other intangible assets $0.08
Stock-based compensation $0.02
Restructuring and integration costs $0.27
--------------------
Non-GAAP income per share - basic and diluted $0.00
====================
Weighted average shares - basic 62,734
Weighted average shares - diluted 63,627
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