Company Settles Significant Long-Term Lease Obligations and Records a $25.7 Million Restructuring Credit
REDWOOD CITY, Calif., Oct. 20 -- BroadVision, Inc. (NASDAQ:BVSN) , a global provider of self-service web applications, today reported financial results for its third quarter ended September 30, 2004. Revenues for the third quarter of 2004 were $17.2 million, compared with revenues of $20.1 million for the second quarter ended June 30, 2004 and $18.6 million for the third quarter of 2003. License revenue for the quarter totaled $4.7 million versus $7.1 million in the second quarter of 2004 and $5.1 million in the comparable quarter of 2003.
In the third quarter of 2004, BroadVision posted net income on a generally accepted accounting principles (GAAP) basis of $23.7 million, or $0.69 per diluted share, which included a restructuring credit of $25.7 million attributable to the settlement and elimination of certain long-term lease obligations. The GAAP net income for the quarter compares with a GAAP net loss of $1.5 million, or $0.04 per diluted share, for the second quarter of 2004, and a GAAP net loss of $10.3 million, or $0.31 per diluted share, in the third quarter of 2003.
Pro forma net loss for the third quarter of 2004 was $2.1 million, or $0.06 per diluted share, compared with a pro forma net loss of $813,000, or $0.02 per diluted share, in the second quarter of 2004 and a pro forma net loss of $5.5 million, or $0.17 per diluted share, in the third quarter of 2003. Pro forma results exclude a restructuring credit of $25.7 million in the third quarter of 2004, and restructuring charges of $679,000 in the second quarter of 2004 and $4.5 million in the third quarter of 2003. A reconciliation of pro forma results to GAAP results is provided in the financial information attached to this press release. Management believes the pro forma results provide useful information because they reflect BroadVision`s financial performance excluding certain charges and restructuring expenses that management believes are not indicative of its ongoing operations.
During the third quarter of 2004, BroadVision closed 26 license transactions including four licenses of its new product, BroadVision(R) Process(TM). BroadVision Process enables organizations to transform offline, people-intensive processes and collaborations into web-based self-service processes and deploy them into existing websites.
"Our third quarter revenue, within the range of preliminary expectations announced in early October, is indicative of a sales environment that is difficult and seasonally soft in the third quarter -- particularly in Europe," said Dr. Pehong Chen, BroadVision president and CEO. "Certain transactions that we expected to close in Q3 did not close, largely due to the impact of a North American sales force reorganization and customer delays due to increased controls over purchasing approval processes. We are optimistic that we will close certain delayed transactions in the fourth quarter, and hence we believe we have improved near-term visibility. We were able to increase the number of BroadVision Process transactions, and we continue to build our pipeline for this important, new product.
"Also in recent weeks, we have terminated excess real estate lease obligations related to four facilities, comprising over 85% of our outstanding commitments and over $3 million of quarterly cash," continued Dr. Chen. "We believe the settlements for less than 30 cents on the dollar are favorable for the Company and remove significant impediments to our growth and cash flow goals for 2005."
During the third quarter of 2004, BroadVision closed new and repeat business in all key vertical markets with companies such as Air Miles Travel Company, Epic Link Spa, General Systems, Iberia, Lord Abbett & Co., and Pitney Bowes.
BroadVision will hold a conference call to discuss this press release and related matters at 5:00 pm Eastern Time, October 20, 2004. The call, hosted by Dr. Pehong Chen, can be accessed live by dialing 1-800-435-1261; pass code 75621572 or live and thereafter by visiting the investor relations section of the Company`s website at www.broadvision.com/ir.
Information Concerning Forward-Looking Statements
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, including, but not limited to, our ability to finalize revenue transactions in future quarters and our ability to generate growth and positive cash flows in 2005, 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 which could cause or contribute to such differences include, but are not limited to: lack of market acceptance of BroadVision`s existing and new products or services; BroadVision`s inability to continue to develop competitive new products and services on a timely basis; introduction of new products or services by competitors; general economic conditions and BroadVision`s inability to attract and retain qualified employees. These and other factors and risks associated with BroadVision`s business are discussed in its most recent annual report on Form 10-K and in BroadVision`s quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission.
BroadVision is a global provider of personalized self-service web applications. Our integrated suite of process, commerce, portal, and content solutions helps customers rapidly increase revenues and reduce costs. Over 1,000 organizations -- including Circuit City, Vodafone, Cardinal Health, Hewlett-Packard, Toyota, Japan Airlines and the U.S. Air Force -- serving nearly 60 million registered users, rely on BroadVision`s open solutions to power and personalize their mission-critical web initiatives
For more information about BroadVision, Inc., call 650-542-5100, email firstname.lastname@example.org or visit www.broadvision.com.
NOTE: BroadVision and BroadVision Process are trademarks or registered trademarks of BroadVision, Inc. in the United States and other countries.