Onyx Software Reports Q4 and 2005 Results; 26% Year Over Year License Revenue Growth.BELLEVUE Bellevue (bĕl`vy ).1 City (1990 pop. 30,982), Sarpy co., E Nebr., a suburb of Omaha, on the Missouri River; inc. 1855. , Wash. -- Onyx onyx (ŏn`ĭks), variety of cryptocrystalline quartz, differing from agate only in that the bands of which it is composed are parallel and regular. (R) Software Corporation (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 :ONXS) today announced results for the fourth quarter and full year ended December December: see month. 31, 2005. 2005 Fourth Quarter Total revenue in the fourth quarter of 2005 was $15.4 million, compared with $14.9 million in the fourth quarter last year and $15.5 million in the third quarter of 2005. License revenue in the fourth quarter of 2005 was $4.7 million, compared with $4.1 million in the fourth quarter last year. License revenue in the third quarter of 2005 was $4.4 million. For the fourth quarter of 2005, the company reported a net loss of $143,000, or a loss of $0.01 per share, compared with net loss of $1.4 million, or a loss of $0.10 per share, in the same period last year. The 2005 fourth quarter results include an income tax expense of approximately $300,000 which provides for a 100 percent allowance of deferred tax assets in one of the company's foreign subsidiaries. For the fourth quarter of 2005, non-GAAP net income, which excludes the amortization of acquired technology, was $113,000, or $0.01 per share. For the fourth quarter of 2004, non-GAAP net loss, which excluded 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 , loss on 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 assets and valuation adjustments of outstanding warrants, was $202,000, or a loss of $0.01 per share. Onyx believes that supplementary disclosure regarding non-GAAP operating results assists in comparing current operating results with those of past periods. A reconciliation of non-GAAP operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (loss) to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). operating income (loss) is included with the financial tables that follow this release. Use of non-GAAP results should not be considered a substitute for Onyx's GAAP financial results. On December 31, 2005, Onyx had cash and cash equivalents of $21.6 million compared with $14.4 million on December 31, 2004. The December 2005 balance includes net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $7.9 million from the company's private placement announced in May 2005 as well as positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses in the second, third and fourth quarters. Business Summary "We are pleased with our achievements in 2005, the first profitable year in the company's history," said Janice P. Anderson Anderson, river, Canada Anderson, river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic , chair and chief executive officer of Onyx. "We outpaced industry growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. with our 26 percent year-over-year increase in license revenue. We believe our unique integration of customer management and process solutions differentiates Onyx and creates additional opportunities for growth in this consolidating marketplace. "We are focused on increasing our market share by expanding our marketing and partner programs. The early results of these initiatives are encouraging and we expect to see the revenue benefit in the second half of 2006." Anderson said, "2005 was also our most prolific year in terms of product releases as we enhanced our portfolio to fulfill 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. more of our customers' needs. In addition, we feel we made significant progress in raising awareness Raising awareness is a common phrase advocacy groups use to justify a particular event, brochure or even the entire organization. Raising awareness refers to alerting the general public that a certain issue exists and should be approached the way the group desires. of Onyx as a provider of customer management and process solutions. We are gratified grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. by the validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. we have received from leading industry analysts, trade publications and customers. Major firms including Gartner (Gartner, Inc., Stamford, CT, www.gartner.com) The largest information technology consulting firm that specializes in research and analysis. Founded in 1979 by Gideon Gartner, it has grown through acquisitions, including Dataquest in 1995 and Techrepublic in 2000. , Forrester Forrester is a surname. It may refer to
Ventana Medical is one of the world’s leading developers and manufacturers of medical diagnostic instrument and reagent systems providing leading-edge automation technology for use in slide-based diagnosis of cancer and infectious disease. Research have all characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. Onyx as an alternative that companies should consider." In the fourth quarter, 52 customers representing organizations in each of Onyx's key segments -- 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. , insurance, health care, government, and business and customer services -- made license purchases. Existing Onyx customers accounted for approximately three quarters of license revenue. New customers included AIG AIG addressee indicator group (US DoD) AIG American International Group, Inc AiG Answers in Genesis (religious group in defense of Scripture) AIG Artificial Intelligence Group AIG Australian Industry Group Edison Edison, township (1990 pop. 88,680), Middlesex co., NE N.J., inc. 1870 as Raritan Township, renamed 1954. Edison's varied manufactures include light trucks, chemicals, metal products, electrical and electronic equipment, machinery, and instruments. , American Home For the American mortgage lender, see . The American Home is a center of intercultural exchange located in Vladimir, Russia. The home is designed to model a typical American suburban home and its main focus is the ESL school that provides lessons for Russian students. Assurance Company (Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). ), AIG Imperial -- A.I. Credit Corp., Lifeline life·line n. 1. a. An anchored line thrown as a support to someone falling or drowning. b. A line shot to a ship in distress. c. A line used to raise and lower deep-sea divers. 2. Systems, Scan Health and Tyler Technologies. Geographically, 64 percent of total revenue in the fourth quarter was generated in the Americas and 36 percent internationally. 2005 Financial Summary Total revenue for 2005 was $60.4 million compared with $57.6 million in 2004. License revenue for 2005 was $17.2 million compared with $13.7 in 2004. Net income for 2005 was $991,000, or $0.06 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. This compares with a net loss for 2004 of $2.8 million, or a loss of $0.19 per share. Recent Highlights --Onyx introduced Onyx Process Manager 5.1 with new and enhanced features including Process Cloning cloning: see clone. To make a product that functions like another. See clone. See also cloning software. , Process Migration, enhanced Service Enhanced service is service offered over commercial carrier transmission facilities used in interstate communications, that employs computer processing applications that act on the format, content, code, protocol, or similar aspects of the subscriber's transmitted information; Level Agreement (SLA (1) (StereoLithography Apparatus) See 3D printing. (2) (Service Level Agreement) A contract between the provider and the user that specifies the level of service expected during its term. ) enforcement and support for Onyx Process Manager in international markets. --During the fourth quarter, Onyx added two new partners to its Global Alliance Program. Metric One, a provider of CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. implementation and development services, joined in October. WCI WCI Western Climate Initiative WCI Wright Center of Innovation WCI Whale Conservation Institute WCI Waterloo Collegiate Institute WCI Warren Correctional Institution (Warren, OH) WCI Warrior Concepts International Consulting, a business intelligence and systems integration solutions provider, became an Onyx Global Alliance Partner in December to provide complete customer management and analytics solutions in Onyx's key market segments -- financial services, insurance, health care, government, and business and customer services companies. --Onyx initiated the Onyx Migration program for Siebel, PeopleSoft, J.D. Edwards (J.D. Edwards & Company, Denver, CO, www.jdedwards.com) A developer of multinational, integrated enterprise software for distribution, finance, human resources, manufacturing and supply chain management. or Vantive CRM systems customers and secured its first major sale, to a large international life insurance company that selected Onyx to support its ongoing Customer Relationship Management (CRM) strategy and business growth, replacing a Siebel implementation. Business Outlook While a wide range of outcomes are possible Onyx currently expects to generate revenue growth in 2006, however, total revenue in the first quarter of 2006 is expected to be down approximately 20 percent sequentially. The company expects total expenses for the first quarter of 2006 will be approximately the same as the fourth quarter of 2005, except for an estimated additional $500,000 in stock compensation expense resulting from the adoption of FAS 123R. Onyx Software Conference Call Onyx will host its quarterly call to discuss fourth quarter results today at 4:30 p.m. ET (1:30 p.m. PT). Investors may participate in the call by telephone at 800-591-2731 (domestic) or 617-614-3528 (international). The passcode is 83677484. Additionally, a live broadcast of the call will be available online at www.onyx.com and www.earnings.com, where it will be archived for approximately 30 days. A telephonic replay of the call will be available at 617-801-6888 from 6:30 p.m. ET, February 14, 2006 to 11:59 p.m. ET, March 7, 2006. The passcode for the replay is 53525953. About Onyx Software Onyx Software Corporation (NASDAQ:ONXS) is a worldwide leader in customer management and process software for enterprise-caliber customers. Onyx provides flexible solutions that enable organizations to automate To turn a set of manual steps into an operation that goes by itself. See automation. , manage, and evolve their customer processes quickly and cost-effectively for strategic advantage. By providing an integrated suite of customer process automation applications encompassing customer management, process management, and analytics capabilities, Onyx enables enterprises to reduce costs, increase productivity and grow revenue. Major companies are aligning a·lign v. a·ligned, a·lign·ing, a·ligns v.tr. 1. To arrange in a line or so as to be parallel: align the tops of a row of pictures; aligned the car with the curb. their customer-facing departments and managing their customer processes with Onyx software -- companies such as Amway Corporation, Delta Dental Delta Dental is the largest and oldest dental plan system in the United States. The Delta Dental Plans Association is comprised of 39 independent Delta Dental member companies operating in all 50 states, the District of Columbia and Puerto Rico. , Mellon Financial  This article or section may contain a proseline.Please help [ convert this timeline] into prose or, if necessary, a . Corporation, The Regence Group and State Street Corporation. More information can be found at (888) ASK-ONYX, info@onyx.com or http://www.onyx.com. Forward-Looking Statement 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. This press release contains forward-looking statements, including statements about the potential benefits of our products and services and our expectations for future financial performance and growth. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. The words "predict," "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could affect Onyx's actual results include, but are not limited to, the success of our ongoing marketing programs, our ability to generate sufficient sales pipeline, our sales effectiveness, our ability to control expenses, our ability to retain customers on our maintenance and product support program, the expansion of our partner network and the ability of these partners to effectively sell our products and the "Important Factors That May Affect Our Business, Our Results of Operations and Our Stock Price" described in our quarterly report on form 10-Q Form 10-Q See 10-Q. for the period ended September 30, 2005. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Onyx undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release or to reflect the occurrence of unanticipated events. Onyx is a registered trademark of Onyx Software Corporation 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 other countries. Other product or service names mentioned herein are the trademarks of their respective owners.
FINANCIAL TABLES FOLLOW
Onyx Software Corporation
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
2005 2004 2005 2004
------- ------- ------- -------
Revenue
License $ 4,682 $ 4,087 $17,224 $13,666
Service 10,710 10,837 43,173 43,968
------- ------- ------- -------
Total revenue 15,392 14,924 60,397 57,634
Costs of revenue
Cost of license 417 371 1,579 984
Amortization of acquired technology 256 - 1,024 -
Cost of service 4,561 4,969 17,876 18,614
------- ------- ------- -------
Total cost of revenue 5,234 5,340 20,479 19,598
Gross margin 10,158 9,584 39,918 38,036
Operating Expenses
Sales and marketing 4,875 5,017 19,261 19,354
Research and development 2,405 2,640 9,813 10,613
General and administrative 2,725 2,239 9,956 8,600
Restructuring and other-related
charges - - - 442
Amortization of other acquisition-
related intangibles - - - 627
Severance Charges - 996 - 996
------- ------- ------- -------
Total operating expenses 10,005 10,892 39,030 40,632
------- ------- ------- -------
Operating income (loss) 153 (1,308) 888 (2,596)
Other income (expense), net 76 15 107 (340)
Investment losses and impairment - (403) - (403)
Change in fair value of outstanding
warrants - 199 (2) 513
------- ------- ------- -------
Income (loss) before income taxes 229 (1,497) 993 (2,826)
Income tax provision (benefit) 372 (145) 108 (57)
Minority interest in consolidated
subsidiary - 50 (106) (15)
------- ------- ------- -------
Net income (loss) $ (143) $(1,402) $ 991 $(2,754)
======= ======= ======= =======
Basic and diluted net income (loss)
per share $ (0.01) $ (0.10) $ 0.06 $ (0.19)
======= ======= ======= =======
Shares used in computation of basic
net income
(loss) per share 17,967 14,554 16,725 14,364
======= ======= ======= =======
Shares used in computation of
diluted net income
(loss) per share 17,967 14,554 16,846 14,364
======= ======= ======= =======
Onyx Software Corporation
Supplemental Non-GAAP Information:
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
-------- ------- --------- -------
Operating income (loss) $ 153 $(1,308) $ 888 $(2,596)
Adjustments to reconcile
operating income (loss)
in the financial
statements to non-GAAP
operating income (loss):
Restructuring and other-related
charges
Facilities - - - 155
Severance - - - 287
-------- ------- --------- -------
Total restructuring and other-
related charges - - - 442
Amortization of acquired
technology 256 - 1,024 -
Amortization of other
acquisition-related
intangibles - - - 627
Severance - 996 - 996
-------- ------- --------- -------
Non-GAAP operating income
(loss) $ 409 $ (312) $ 1,912 $ (531)
======== ======= ========= =======
Net income (loss) $ (143) $(1,402) $ 991 $(2,754)
Adjustments to reconcile net
income (loss) in the
financial statements to non-
GAAP net income (loss):
Restructuring and other-related
charges
Facilities - - - 155
Severance - - - 287
-------- ------- --------- -------
Total restructuring and other-
related charges - - - 442
Amortization of acquired
technology 256 - 1,024 -
Amortization of other
acquisition-related
intangibles
Intangibles - - - 627
Severance - 996 - 996
Investment losses and
impairment - 403 - 403
Change in fair value of
outstanding warrants - (199) 2 (513)
Deferred income tax associated
with acquisitions - - - (213)
-------- ------- --------- -------
Non-GAAP net income (loss) $ 113 $ (202) $ 2,017 $(1,012)
======== ======= ========= =======
Non-GAAP basic and diluted net
income (loss)
per share $ 0.01 $ (0.01) $ 0.12 $ (0.07)
======== ======= ========= =======
Shares used in computation of
non-GAAP basic
net income (loss) per
share 17,967 14,554 16,725 14,317
======== ======= ========= =======
Shares used in computation of
non-GAAP diluted
net income (loss) per share 18,126 14,554 16,846 14,317
======== ======= ========= =======
Onyx Software Corporation
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
December 31, December 31,
2005 2004
----------- ------------
Assets
Current Assets:
Cash and cash equivalents $ 21,574 $ 14,393
Accounts receivable, net 11,533 10,509
Prepaid expenses and other current assets 2,015 1,968
Current deferred tax asset - 89
----------- ------------
Total current assets 35,122 26,959
Property and equipment, net 2,709 3,711
Purchased technology, net 3,071 4,095
Goodwill, net 9,204 10,306
Deferred tax asset - 35
Other assets 556 450
----------- ------------
Total Assets $ 50,662 $ 45,556
=========== ============
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $ 2,054 $ 1,205
Salary and benefits payable 1,760 1,937
Accrued liabilities 3,118 2,453
Income taxes payable 87 217
Current portion of restructuring-related
liabilities 208 731
Current portion of term loan 167 167
Deferred revenue 15,211 17,050
----------- ------------
Total current liabilities 22,605 23,760
Long-term deferred revenue 1,032 1,923
Long-term restructuring-related liabilities
- warrants - 52
Long-term purchased technology obligation 908 1,842
Long-term deferred rent 639 914
Term loan 56 222
Minority interest in joint venture - 106
Shareholders' Equity
Common stock 154,277 144,736
Accumulated deficit (129,978) (130,969)
Accumulated other comprehensive income 1,123 2,970
----------- ------------
Total shareholders' equity 25,422 16,737
----------- ------------
Total Liabilities and Shareholders' Equity $ 50,662 $ 45,556
=========== ============
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