Centra Reports 2004 Fourth Quarter and Year End Results.LEXINGTON, Mass. -- Revenues Increased 8% Sequentially; Contract Bookings and Backlog Reached Record Levels in Q4; Company Plans to be Profitable and Cash Flow Positive for the 2005 Year Centra Software, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CTRA CTRA Canadian Therapeutic Recreation Association CTRA College Terrace Residents' Association CTRA Canadian Telecommunications Resellers Alliance CTRA Committee To Restore America ), a leading provider of specialized application software and services for online business collaboration, today announced financial results for the fourth quarter and year ended December 31, 2004. Fourth Quarter 2004 Results Revenues for the fourth quarter were $10.5 million, up 8 percent from $9.7 million in the third quarter of 2004. Software license revenue for the fourth quarter was $3.7 million, or 35 percent of total revenues, representing a 32 percent increase over the previous quarter. Software services revenues were $2.7 million for the fourth quarter, or 26 percent of total revenues, which is equivalent to last quarter. Maintenance and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. revenues were $4.1 million in the fourth quarter, or 39 percent of total revenues, representing a slight decline of 2 percent from the third quarter of 2004. Net loss for the fourth quarter of 2004 was $1.3 million, or $0.05 per share. This compared with a net loss of $1.8 million, or $0.07 per share, for the third quarter of 2004. Gross margin percentage for the fourth quarter of 2004 remained strong at 81 percent. Centra's cash, cash equivalents, and investments totaled $25.9 million as of December 31, 2004, compared with $26.6 million at the end of September 2004. The Company's days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSO See CSO. ) was 68 days at the end of the quarter. 2004 Results Revenues for 2004 were $38.1 million, down 11 percent from $43.0 million reported in 2003. Net loss for 2004 was $11.1 million, or $0.41 per share. This compares with a net loss of $7.9 million, or $0.30 per share in 2003. 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. Comments "We are making good progress on our plan to transition Centra into a leading provider of value-added specialized applications to Global 5000 enterprises, large education institutions and government agencies," said Paul R. Gudonis, president and CEO of Centra. "During 2004, we revised our sales approach, reduced our operating costs operating costs npl → gastos mpl operacionales , focused our product efforts on developing specialized applications, and introduced our Enterprise Advantage Subscription (EAS (Electronic Article Surveillance) A security system for preventing theft in retail stores that uses disposable label tags or reusable hard tags attached to the merchandise. ) multi-year, term-based pricing model. As a result, we have increased the size of our sales orders The sales order, sometimes abbreviated as SO, is an order received by a business from a customer. A sales order may be for products and/or services. Given the wide variety of businesses, this means that the orders can be fulfilled in several ways. , achieved a record level of deferred revenues and contract backlog, reduced our cost structure to achieve profitability at a lower breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations point, made solid progress on our new specialized applications and realized early success with our EAS pricing model. For the fourth quarter, we achieved record contract bookings of $14.1 million, resulting in a record contract backlog of approximately $20 million at December 31, 2004. We sold nine subscription contracts worth approximately $4.1 million over three years, which is an increase from the five contracts we sold in the third quarter worth approximately $2.4 million. With this record level of contract backlog and a higher percentage of our revenues being generated on a recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. basis, we have improved our revenue visibility and enter 2005 with a more predictable revenue base." "In addition, we continue to develop specialized applications for online collaboration to solve major business problems," Gudonis added. "In the second half of 2004, we signed agreements with several technology suppliers, including EMC's Documentum unit, for integration into our new solution sets. Our new Enterprise Application Rollout and Sales Effectiveness solutions are on plan for release during the second quarter of 2005, and we are in the process of recruiting customers to serve as pilot sites for these enhanced solutions." "Looking ahead, in 2005 our top priorities are to be profitable and cash flow positive. For the first quarter of 2005, our plan is for revenues to be higher than revenues in the first quarter of 2004. We also plan for the first quarter loss per share to improve sequentially and be cash flow neutral, now that we are operating at a lowered breakeven level. For the full year of 2005, we plan to achieve revenue growth in the range of 10 to 20 percent over 2004, depending on the revenue mix of software licenses In computing, software that is copyrighted and licensed under a software license is done under a variety of licensing schemes. For end-users there are proprietary licenses and there are free software licenses, and there are proprietary Within these schemes are further classifications. , multi-year subscriptions and ASP services. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. are targeted to be lower than 2004 levels, reflecting the full-year impact from our 2004 cost-reduction initiatives. In addition, our plan is to be profitable and cash flow positive for the overall year." Fourth Quarter Highlights --Centra added 42 new customers in the fourth quarter, including major accounts such as Food Lion Food Lion LLC is an American grocery store company headquartered in Salisbury, North Carolina that operates approximately 1,300 supermarkets in 11 Southeast and Mid-Atlantic states under the Food Lion, Harveys, Bloom, Bottom Dollar, and Reid's nameplates. , Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. , the University of
Kentucky The University of Kentucky, also referred to as UK, is a public, co-educational university located in Lexington, Kentucky. , the United States Marine Corps United States Marine Corps (USMC)Separate military service within the U.S. Department of the Navy (see U.S. Navy), charged with providing marine troops for seizure and defense of advanced bases and with conducting operations on land and in the air in connection with and Samsung. The Company also expanded sales to its installed base, including additional contracts with Avon, Ericsson and Royal Bank of Canada Bank of Canada Canada's central bank, established under the Bank of Canada Act (1934). It was founded during the Great Depression to regulate credit and currency. The Bank acts as the Canadian government's fiscal agent and has the sole right to issue paper money. . --Leading CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. provider Siebel Systems Siebel is a brand name of Oracle Corporation. Siebel Systems, Inc., founded by Thomas Siebel in 1993, was principally engaged in the design, development, marketing and support of CRM applications. selected Centra to provide Collaborative Learning Collaborative learning is an umbrella term for a variety of approaches in education that involve joint intellectual effort by students or students and teachers. Collaborative learning refers to methodologies and environments in which learners engage in a common task in which each capabilities to their customers, partners and employees. --In the fourth quarter, Centra signed nine Enterprise Advantage Subscription (EAS) contracts with a total contact value that was 71 percent greater than the value of EAS contracts signed in the previous quarter. The Enterprise Advantage Subscription pricing model is typically a multi-year, fixed fee, term-based volume licensing program designed to enable large organizations to meet increasing demand for online collaboration solutions across an entire organization. --Centra received a Process Innovation Award sponsored by Kinetic kinetic /ki·net·ic/ (ki-net´ik) pertaining to or producing motion. ki·net·ic adj. Of, relating to, or produced by motion. kinetic pertaining to or producing motion. Information based on Centra's superior Enterprise Application Rollout solution and implementation at Wyndham International. --In the fourth quarter, Centra's ASP hosted its 200,000th online event since inception. In addition, annual usage minutes increased to 71 million in 2004, up from 45 million in 2003. --SumTotal Systems, Inc., a business performance and learning technology provider, began including Centra as part of its new SumTotal Enterprise 7.0 learning Suite, closing its first Centra software sale in the fourth quarter. Fourth Quarter Conference Call Centra will host a conference call on Thursday, February 3, 2005 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy to discuss these results in more detail. The call will be simultaneously Webcast over the Internet with an accompanying slideshow presentation. To access the Webcast, go to the Company's Web site at www.centra.com/investorrelations. About Centra Online business collaboration solutions from Centra create workforce efficiencies and enable organizations to share and exchange business-critical information with geographically distributed customers, partners, prospects and employees. Centra's solutions integrate real-time collaboration and departmental business processes with specialized applications that increase sales effectiveness, improve collaborative learning and accelerate enterprise application rollouts and customer acquisition initiatives. Currently available in 12 languages, Centra solutions can be deployed as on-site software or through its ASP service and are supported by an active ecosystem of value-added partners, including Siebel, PeopleSoft, SAP and Deloitte Consulting. Organizations across every major industry and market sector choose Centra, including Wyndham International, Weyerhaeuser, Underwriters Laboratories Underwriters Laboratories Inc. is a U.S. not-for-profit, privately owned and operated product safety testing and certification organization. Based in Northbrook, Illinois, UL develops standards and test procedures for products, materials, components, assemblies, tools and , BMW BMW in full Bayerische Motoren Werke AG German automaker. Founded as an aircraft engine manufacturer in 1916, the company assumed the name Bayerische Motoren Werke and became known for its high-speed motorcycles in the 1920s. and Stanford University Stanford University, at Stanford, Calif.; coeducational; chartered 1885, opened 1891 as Leland Stanford Junior Univ. (still the legal name). The original campus was designed by Frederick Law Olmsted. David Starr Jordan was its first president. . Headquartered in Lexington, Massachusetts Lexington is a town in Middlesex County, Massachusetts, United States. The population was 30,355 at the 2000 census. The town is famous for being the site of the opening shots of the Battles of Lexington and Concord, the first engagement of the American Revolution. , Centra serves a worldwide customer base throughout the Americas, Europe, Asia and Australia. For more information, visit www.centra.com. 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. Statement Regarding 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. With the exception of the historical information contained in this release, the matters described herein contain forward-looking statements within the meaning of 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 of 1995, including but not limited to, statements about the beliefs and expectations of management regarding the Company's future performance, the Company's strategic initiatives, its ability to achieve and maintain a leadership position in real-time conferencing See teleconferencing. and collaboration, demand for the Company's software services and management's goals and objectives regarding future results of operations. These statements reflect management's beliefs and expectations as of the date of this statement, and involve risk and uncertainties that may cause actual results, events and performance to differ materially. These risk factors include, but are not limited to, risks associated with the Company's ability to successfully execute its strategic plan, the effect of the Company's cost-cutting measures on its operations, acceptance by customers of the Company's Enterprise Advantage Subscription pricing model, customer fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. of the entire term of multi-year subscription contracts, uncertainty of market reaction to the Company's sales and marketing efforts, product demand for and market acceptance of the Centra 7 collaboration platform An emerging category of computer software, collaboration platforms are unified electronic platforms that support synchronous and asynchronous communication through a variety of devices and channels. , the Company's ability to sell and deliver its Enterprise Application Rollout and Sales Effectiveness solutions and other future products, the effect of economic conditions generally on the market for IT spending and for the Company's products, the results of future research and development activities, the impact of competitive products and pricing, technological difficulties and/or other factors outside the control of the Company. There is no assurance that the Company will be able to implement its growth and operating plans as anticipated, or achieve its revenue and earnings goals. For a description of additional risks, and uncertainties, please refer to the Company's filings with the SEC, including its 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. for the year ended December 31, 2003 and its Form 10-Q Form 10-Q See 10-Q. for the three months ended September 30, 2004, which are available at http://www.centra.com/investorrelations. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Centra is a registered trademark of Centra Software, Inc. All other trademarks referenced herein are the property of their respective owners.
CENTRA SOFTWARE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31, December 31,
2003 2004
Assets
Current assets
Cash, cash equivalents and short-term
investments $ 28,888 $ 25,135
Restricted cash - 233
Accounts receivable, net 7,832 7,887
Prepaid expenses and other current
assets 979 1,374
---------- ----------
Total current assets 37,699 34,629
Long-term investments 5,888 743
Property and equipment, net 1,664 1,440
Restricted cash 433 400
Other assets 111 16
Intangible assets, net 233 -
---------- ----------
Total assets $ 46,028 $ 37,228
========== ==========
Liabilities and stockholders' equity
Current liabilities
Current maturities of long-term debt $ 1,711 $ 968
Accounts payable 904 939
Accrued expenses 6,195 5,677
Deferred revenue 12,340 14,360
---------- ----------
Total current liabilities 21,150 21,944
Long-term debt, net of current maturities 553 1,093
Total stockholders' equity 24,325 14,191
---------- ----------
Total liabilities and stockholders' equity $ 46,028 $ 37,228
========== ==========
CENTRA SOFTWARE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
For the Three and Twelve Months Ended December 31, 2003 and 2004
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Twelve Months
ended December 31, ended December 31,
2003 2004 2003 2004
Revenues
License $ 5,917 $ 3,678 $ 20,342 $ 11,650
Software services 2,186 2,667 8,235 10,338
Maintenance and
professional services 3,754 4,125 14,464 16,076
-------------------- --------------------
Total revenues 11,857 10,470 43,041 38,064
-------------------- --------------------
Cost of revenues
License 155 83 581 277
Amortization of acquired
developed technology 175 - 700 233
Software services 589 602 2,320 2,386
Maintenance and
professional services 1,048 1,305 4,218 4,549
-------------------- --------------------
Total cost of
revenues 1,967 1,990 7,819 7,445
-------------------- --------------------
Gross profit 9,890 8,480 35,222 30,619
-------------------- --------------------
Operating expenses
Sales and marketing 5,988 5,681 22,146 22,496
Product development 2,749 2,140 11,513 10,029
General and administrative 2,243 2,047 9,736 8,630
Restructuring charges - - - 788
-------------------- --------------------
Total operating
expenses 10,980 9,868 43,395 41,943
-------------------- --------------------
Operating loss (1,090) (1,388) (8,173) (11,324)
Other income, net 51 67 262 219
-------------------- --------------------
Net loss $ (1,039)$ (1,321) $ (7,911)$ (11,105)
==================== ====================
Basic and diluted net loss
per share $ (0.04)$ (0.05) $ (0.30)$ (0.41)
Weighted average shares
outstanding
Basic and diluted 26,880 27,567 26,502 27,367
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