BroadVision Announces Third Quarter 2005 Results.REDWOOD CITY Redwood City, city (1990 pop. 66,072), seat of San Mateo co., W Calif., on San Francisco Bay; inc. 1868. Manufactures include commmunications, electrical, electronic, and medical equipment. , Calif. -- BroadVision A family of e-business applications from BroadVision, Inc., Redwood City, CA (www.broadvision.com) that provide the tools to develop a complete, commercial Web site. The suite of integrated and self-service applications includes BroadVision Process; Commerce; Content; and Portal, all of , Inc. (Nasdaq:BVSN BVSN Broadvision, Inc. (stock abbreviation, AMEX) ), a global provider of web self-service solutions, today reported financial results for its third quarter ended September September: see month. 30, 2005. Revenue for the quarter was $14.1 million, compared with revenue of $15.5 million for the second quarter ended June June: see month. 30, 2005 and $17.2 million for the third quarter of 2004. License revenue for the quarter totaled $3.1 million versus $3.4 million in the prior quarter and $4.7 million in the comparable quarter of 2004. In the third quarter, BroadVision posted a net loss on a generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) basis of $14.5 million, or $0.42 per share, as compared with a GAAP net loss of $2.9 million, or $0.09 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, for the second quarter of 2005, and GAAP net income of $23.4 million, or $0.69 per diluted share, in the third quarter of 2004. The GAAP loss in the most recent quarter included a charge related to the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of goodwill of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $13.2 million, business combination costs of $977,000 related to the pending acquisition by Vector Capital, and a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $245,000. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss for the third quarter of 2005 was $1.3 million, or $0.04 per share, compared with a pro forma net loss of $3.3 million, or $0.10 per share, in the second quarter of 2005 and a pro forma net loss of $2.1 million, or $0.06 per share, in the third quarter of 2004. These pro forma results exclude goodwill impairment charges, business combination costs, restructuring charges and credits, gains and losses from the revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of common stock warrants, and credits from the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of income tax accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. . A reconciliation of pro forma results to GAAP results is provided in the financial information attached to this press release. The Company believes its pro forma results provide useful information because they reflect the Company's financial performance excluding certain charges, credits, gains and losses that the Company believes are not indicative indicative: see mood. of its ongoing operations. "We recorded revenue declines in the third quarter as compared to both last quarter and the same quarter of last year," commented Dr. Pehong Chen, chairman and 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. of BroadVision. "We significantly lowered our cost structure in the quarter, and were able to generate improved pro forma operating results as compared to both periods. The Company continues to have significant liquidity challenges, however, and we are focused on assisting with the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the pending merger agreement with a wholly-owned subsidiary of Vector Capital, a transaction that we strongly believe is in the best interest of our stockholders." Definitive Agreement Status In July July: see month. 2005, the Company announced the execution of a definitive agreement to be acquired by a newly-formed portfolio company of Vector Capital, a San Francisco-based private equity firm. A proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. was prepared and sent to all shareholders of record as of September 16, 2005. The approval and adoption of the merger agreement requires the affirmative AFFIRMATIVE. Averring a fact to be true; that which is opposed to negative. (q.v.) 2. It is a general rule of evidence that the affirmative of the issue must be proved. Bull. N. P. 298 ; Peake, Ev. 2. 3. vote of the holders of a majority of the outstanding shares as of the record date at a special meeting of stockholders. Such meeting has been adjourned until November November: see month. 11, 2005. To receive a copy of the proxy statement or for more information, please contact BroadVision Investor Relations Investor relations The process by which the corporation communicates with its investors. at 650-542-5100 or ir1@broadvision.com. Information Concerning 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. Information in this release that involves expectations, beliefs, hopes, plans, intentions or strategies regarding the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which forward-looking statements involve risk and uncertainties. All forward-looking statements included in this release are based upon information available to BroadVision as of the date of this release, and BroadVision assumes no obligation to update or correct any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from BroadVision's current expectations. Factors that could cause or contribute to such differences include, but are not limited to: the risk that the merger transaction may not close; difficulty in attracting or retaining customers or employees as a result of the signing of the definitive merger agreement or the failure of the transaction to close; litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. resulting from the signing of the merger agreement or the associated transactions; and general economic and market conditions. These and other factors and risks associated with BroadVision's business are discussed in its most recent annual report on 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. and in BroadVision's quarterly reports on Form 10-Q Form 10-Q See 10-Q. as filed with the Securities and Exchange Commission ("SEC"). About BroadVision BroadVision is a global provider of web self-service solutions. Our agile commerce and portal applications enable customers to quickly create and adapt online processes to keep pace with changing business requirements. Over 1,000 organizations serving nearly 75 million registered users, rely on BroadVision's open solutions to power and personalize per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. their mission-critical web initiatives For more information about BroadVision, Inc., call 650-542-5100, email info@broadvision.com or visit www.broadvision.com. Additional Information About the Proposed Transaction and Where You Can Find It In connection with the proposed transaction, BroadVision has filed a definitive proxy statement and other relevant materials with the SEC. BEFORE MAKING ANY VOTING DECISION WITH RESPECT TO THE PROPOSED TRANSACTION, STOCKHOLDERS OF BROADVISION ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement and other relevant materials, and any other documents filed by BroadVision with the SEC, may be obtained free of charge at the SEC's website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . In addition, stockholders of BroadVision may obtain free copies of the documents filed with the SEC by contacting BroadVision Investor Relations at 650-261-5100 or BroadVision, Inc., 585 Broadway Broadway, famous thoroughfare in New York City. It extends from Bowling Green near the foot of Manhattan island N to 262d St. in the Bronx. Throughout its length Broadway is chiefly a commercial street. , Redwood City, CA 94063. You may also read and copy any reports, statements and other information filed by BroadVision with the SEC at the SEC public reference room at 100 F Street, NE, Room 1580, Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. , D.C. 20549. Please call the SEC at 800-SEC-0330 or visit the SEC's website for further information on its public reference room. BroadVision and its executive officers and directors may be deemed to be participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of proxies from BroadVision stockholders in favor of upon the side of; favorable to; for the advantage of. See also: favor the proposed transaction. Certain executive officers and directors of BroadVision have interests in the transaction that may differ from the interests of stockholders generally, including benefits conferred con·fer v. con·ferred, con·fer·ring, con·fers v.tr. 1. To bestow (an honor, for example): conferred a medal on the hero; conferred an honorary degree on her. under retention, severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and change in control arrangements, ownership interests in BroadVision's parent company after the transaction and continuation continuation - continuation passing style of director and officer insurance and indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from . These interests are described in the definitive proxy statement.
BROADVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
Sept 30, Dec. 31,
2005 2004
----------- -----------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 6,066 $ 41,851
Accounts receivable, less allowance for
doubtful accounts and reserves of $1,090
and $1,409 as of September 30, 2005 and
December 31, 2004, respectively 10,576 14,370
Restricted cash and investments, current
portion - 21,933
Prepaids and other 1,879 2,232
----------- -----------
Total current assets 18,521 80,386
Property and equipment, net 2,612 3,566
Restricted cash and investments, net of
current portion 1,997 2,323
Goodwill 43,236 56,434
Other assets 1,077 1,944
----------- -----------
Total assets $ 67,443 $ 144,653
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of bank borrowings $ 503 $ 20,637
Current portion of long-term debt 11,265 4,929
Accounts payable 4,561 7,470
Accrued expenses 16,168 40,745
Warrant liability 687 4,899
Unearned revenue and deferred maintenance 15,497 19,842
----------- -----------
Total current liabilities 48,681 98,522
Long-term debt, net of current portion - 7,054
Bank borrowings, net of current portion - 389
Other noncurrent liabilities 2,282 8,278
----------- -----------
Total liabilities 50,963 114,243
----------- -----------
Commitments and contingencies
Stockholders' equity 16,480 30,410
----------- -----------
Total liabilities and stockholders' equity $ 67,443 $ 144,653
=========== ===========
BROADVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Jun. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2005 2004 2005 2004
--------- --------- --------- --------- ---------
Revenues:
Software licenses $ 3,134 $ 3,391 $ 4,654 $ 10,941 $ 19,591
Services 10,943 12,123 12,570 35,017 38,650
--------- --------- --------- --------- ---------
Total revenues 14,077 15,514 17,224 45,958 58,241
Cost of revenues:
Cost of software
licenses 106 (186) 256 (137) 1,147
Cost of services 5,641 5,614 6,391 17,235 18,970
--------- --------- --------- --------- ---------
Total cost of
revenues 5,747 5,428 6,647 17,098 20,117
--------- --------- --------- --------- ---------
Gross profit 8,330 10,086 10,577 28,860 38,124
Operating expenses:
Research and
development 3,095 3,955 4,600 11,337 13,997
Sales and marketing 2,948 5,060 6,020 13,819 20,365
General and
administrative 2,162 2,829 2,335 7,526 7,152
Goodwill impairment 13,198 - - 13,198 -
Restructuring charge
(credit) 245 309 (25,454) (150) (24,205)
Business combination
costs 977 - - 977 -
--------- --------- --------- --------- ---------
Total operating
expenses 22,625 12,153 (12,499) 46,707 17,309
--------- --------- --------- --------- ---------
Operating income
(loss) (14,295) (2,067) 23,076 (17,847) 20,815
Interest and other
income (expense),
net (782) (777) 315 812 347
--------- --------- --------- --------- ---------
Income (loss)
before
(provision)/
benefit for
income taxes (15,077) (2,844) 23,391 (17,035) 21,162
Benefit (provision)
for income taxes 540 (70) (11) 2,503 (141)
--------- --------- --------- --------- ---------
Net income (loss) $(14,537) $ (2,914) $ 23,380 $(14,532) $ 21,021
========= ========= ========= ========= =========
Basic income (loss)
per share $ (0.42) $ (0.09) $ 0.70 $ (0.42) $ 0.63
========= ========= ========= ========= =========
Diluted income
(loss) per share $ (0.42) $ (0.09) $ 0.69 $ (0.42) $ 0.61
========= ========= ========= ========= =========
Shares used in
computing basic
income (loss) per
share 34,320 34,181 33,599 34,159 33,459
========= ========= ========= ========= =========
Shares used in
computing diluted
income (loss) per
share 34,320 34,181 34,052 34,159 34,322
========= ========= ========= ========= =========
BROADVISION, INC. AND SUBSIDIARIES
NON-GAAP PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Jun. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2005 2004 2005 2004
--------- --------- --------- --------- ---------
Revenues:
Software licenses $ 3,134 $ 3,391 $ 4,654 $ 10,941 $ 19,591
Services 10,943 12,123 12,570 35,017 38,650
--------- --------- --------- --------- ---------
Total revenues 14,077 15,514 17,224 45,958 58,241
Cost of revenues:
Cost of software
licenses 106 (186) 255 (137) 1,147
Cost of services 5,641 5,614 6,391 17,235 18,970
--------- --------- --------- --------- ---------
Total cost of
revenues 5,747 5,428 6,646 17,098 20,117
--------- --------- --------- --------- ---------
Gross profit 8,330 10,086 10,578 28,860 38,124
Operating expenses:
Research and
development 3,095 3,955 4,600 11,337 13,997
Sales and marketing 2,948 5,060 6,020 13,819 20,366
General and
administrative 2,162 2,829 2,336 7,526 7,152
--------- --------- --------- --------- ---------
Total operating
expenses 8,205 11,844 12,956 32,682 41,515
--------- --------- --------- --------- ---------
Operating
Income (loss) 125 (1,758) (2,378) (3,822) (3,391)
Interest and other
income (expense),
net (1,305) (1,509) 315 (2,207) 348
--------- --------- --------- --------- ---------
Income (loss)
before
(provision)/
benefit for
income taxes (1,180) (3,267) (2,063) (6,029) (3,043)
(Provision)/benefit
for income taxes (169) (70) (11) (204) (141)
--------- --------- --------- --------- ---------
Pro forma net
loss $ (1,349) $ (3,337) $ (2,074) $ (6,233) $ (3,184)
========= ========= ========= ========= =========
Pro forma basic
loss per share $ (0.04) $ (0.10) $ (0.06) $ (0.18) $ (0.10)
========= ========= ========= ========= =========
Pro forma diluted
loss per share $ (0.04) $ (0.10) $ (0.06) $ (0.18) $ (0.10)
========= ========= ========= ========= =========
Shares used in
computing basic
income (loss) per
share 34,320 34,181 33,599 34,159 33,459
========= ========= ========= ========= =========
Shares used in
computing diluted
income (loss) per
share 34,320 34,181 33,599 34,159 33,459
========= ========= ========= ========= =========
(1) Pro forma net loss and the related per share amounts exclude: 1)
restructuring charges and credits, 2) business combination costs, 3)
gains and losses from the revaluation of common stock warrants, 4)
goodwill impairment charges and 5) credits from the reversal of income
tax accruals. Pro forma net loss and pro forma cost of revenues and
operating expenses reconcile to the comparable amounts under generally
accepted accounting principles as follows (unaudited, in thousands):
Three Months Ended Nine Months Ended
Sept. 30, Jun. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2005 2004 2005 2004
--------- --------- --------- --------- ---------
Net income (loss),
generally accepted
accounting
principles $(14,537) $ (2,914) $ 23,380 $(14,532) $ 21,021
========= ========= ========= ========= =========
Pro forma
adjustments:
Restructuring
charges (credits) 245 309 (25,454) (150) (24,205)
Business
combination costs 977 - - 977 -
Impairment of
assets 13,198 - - 13,198 -
Revaluation of
warrant (523) (732) - (3,019) -
Reversal of income
tax accruals (709) - - (2,707) -
--------- --------- --------- --------- ---------
Pro forma net loss $ (1,349) $ (3,337) $ (2,074) $ (6,233) $ (3,184)
========= ========= ========= ========= =========
Cost of revenues and
operating expenses,
generally accepted
accounting
principles $ 28,372 $ 17,581 $ (5,852) $ 63,805 $ 37,426
Pro forma
adjustments:
Restructuring
(charges) credits (245) (309) 25,454 150 24,205
Business
combination costs (977) - - (977) -
Impairment of
assets (13,198) - - (13,198) -
--------- --------- --------- --------- ---------
Pro forma cost of
revenues and
operating expenses $ 13,952 $ 17,272 $ 19,602 $ 49,780 $ 61,631
========= ========= ========= ========= =========
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