SAN JOSE, Calif., Oct. 23 /PRNewswire-FirstCall/ -- Interwoven,
Inc. (NASDAQ:IWOV), a global leader in content management
solutions, today announced financial results for the three and nine
months ended September 30, 2008. (Logo:
http://www.newscom.com/cgi-bin/prnh/20071205/INTWOVLOGO) Interwoven
reported total revenues of $65.9 million for the third quarter of
2008, an increase of 19% from total revenues of $55.5 million for
the third quarter of 2007. Net income for the third quarter of
2008, calculated in accordance with generally accepted accounting
principles, was $7.7 million, or $0.16 per share, compared to net
income of $4.1 million, or $0.09 per share, for the same period in
2007. On a non-GAAP basis, Interwoven reported a net income of $8.4
million for the third quarter of 2008, or $0.18 per share, compared
to non-GAAP net income of $7.3 million, or $0.16 per share, for the
third quarter of 2007. For the nine months ended September 30,
2008, Interwoven reported total revenues of $190.5 million, an
increase of 17% from total revenues of $162.8 million for the same
period in 2007. Net income for the nine months ended September 30,
2008, calculated in accordance with generally accepted accounting
principles, was $21.3 million, or $0.45 per share, compared to a
net income of $13.0 million, or $0.28 per share, for the same
period in 2007. On a non-GAAP basis, Interwoven reported net income
of $24.0 million for the nine months ended September 30, 2008, or
$0.52 per share, compared to non-GAAP net income of $20.1 million,
or $0.43 per share, for the same period in 2007. Reconciliations of
net income and net income per share calculated in accordance with
generally accepted accounting principles and non-GAAP net income
and non-GAAP net income per share are provided in the tables
immediately following the consolidated statements of operations.
Additional information about the company's non-GAAP financial
measures can be found under the caption "Non-GAAP Financial
Information" below. "Our third quarter performance -- in which we
delivered the largest top line revenues in our company's history --
represents the 20th consecutive quarter of year-over-year revenue
growth for Interwoven," said Joe Cowan, CEO at Interwoven. "We have
continued to perform from a position of strength, with a large and
growing customer base, strong balance sheet, recognized leadership
position, and solutions that deliver much needed business impact.
Now more than ever, our customers view Interwoven's solutions as
key to helping them win new business and get the maximum value from
their content." Customer Success Highlights -- During the quarter,
Interwoven added 114 new customers, bringing the total to over
4,600 customers worldwide. -- Notable customer orders included:
Akin Gump Strauss Hauer & Feld LLP, Blue Cross Blue Shield of
Tennessee, Caterpillar Inc., Cox Communications, Digi-Key
Corporation, Hunton & Williams LLP, ICICI Bank, J&A
Garrigues, Kao Corporation, Kawasaki Motor Corporation, Lathrop
& Gage LC, Montgomery, McCracken, Walker & Rhoads LLP, and
The Carphone Warehouse Group PLC. Product News -- Interwoven
Enhances Flagship Offerings for Maximizing Online Business
Performance -- In the third quarter, Interwoven announced the
general availability of enhanced versions of Interwoven TeamSite
and Interwoven LiveSite. These versions provide a wide range of
innovations that allow marketers to more rapidly create and refresh
Website content, and to more easily target that content to a
broader set of Website visitors. -- Interwoven Continues to
Redefine Web Optimization with Launch of Adaptive Targeting --
Earlier this week, Interwoven announced the availability of
Interwoven Optimost Adaptive Targeting, dramatically enhancing the
ability of businesses to identify the best combination of content
for each Web visitor based on a wide-range of audience
characteristics and behaviors. Adaptive Targeting joins
Interwoven's current solutions to create the industry's most
comprehensive set of targeting offerings, providing an unequaled
ability to identify new audience segments, continually refine
existing segments, and deliver optimized content to every visitor.
-- Interwoven Delivers Enhanced Digital Asset Management to
Increase Business Agility and Speed -- Earlier this week,
Interwoven announced the general availability of an enhanced
version of Interwoven MediaBin, the company's Digital Asset
Management solution. The new version of MediaBin gives marketers
increased speed, interactivity, and control for managing and
deploying rich media assets. -- Interwoven and Lexis Nexis Team Up
to Introduce Integrated Solution -- In the third quarter,
Interwoven announced that it has entered into an agreement with
global business information solution provider LexisNexis to
integrate and launch Lexis(R) Search Advantage, a new search
enrichment offering, with Interwoven Universal Search. The
integration of Lexis Search Advantage with Interwoven Universal
Search combines the market leading enterprise search solution for
professional service firms with content and services from
LexisNexis(R) to provide lawyers with a single destination to
efficiently find and leverage internal work product and trusted
content from LexisNexis. -- Interwoven RecordsManager Enhanced --
In the third quarter, Interwoven announced enhancements to
Interwoven RecordsManager, which significantly expands upon
Interwoven's strategy of delivering an integrated governance
solution for electronic documents and physical records. The new
capabilities in Interwoven RecordsManager simplify the management
of records centers, ease the implementation and configuration of
the solution, and provide key stakeholders in the records process a
user experience finely tuned to their specific roles. Business
Highlights -- Interwoven Acquires Discovery Mining -- On August 4,
Interwoven announced that it completed the acquisition of Discovery
Mining, a leading provider of software and services for eDiscovery
to professional services firms and corporations. The acquisition of
Discovery Mining extends Interwoven's offering -- the legal
industry's de facto standard for organizing, finding, and governing
matter content -- by adding a service for managing eDiscovery. In
the two months following the acquisition, Interwoven is seeing
increasing demand and participation in a larger number of
opportunities. -- Interwoven Web Solutions Gain Traction with Key
Customer Wins -- In the last three months, Interwoven announced
several strategic wins that showcase how businesses are turning to
Interwoven to transform their online presence and engage with
customers. These include American Medical Association, CPS Energy,
Discovery Communications, Premier Farnell, Shutterfly, and T. Rowe
Price. For example, Discovery Communications is using Interwoven's
Web Solutions to power PlanetGreen.com, the online counterpart of
Discovery's Planet Green television network launched this summer.
Interwoven's Web Solutions enable Discovery to provide a compelling
and dynamic online experience to the community of environmental
enthusiasts that visit PlanetGreen.com every day. -- Interwoven
Names Jeff Kissling Senior Vice President of Engineering -- On
August 19, Interwoven announced that Jeff Kissling has been
appointed senior vice president of engineering. Kissling brings
nearly 30 years of experience in leading engineering teams in the
development of enterprise-class technologies. Most recently,
Kissling served as senior vice president of technology transition
for JDA Software Group, Inc. Kissling came to JDA as a result of
the company's 2006 acquisition of Manugistics Group, Inc., where he
was chief technology officer and was responsible for the entire
lifecycle of Manugistics' products and services. Prior to
Manugistics, Kissling was the chief technology officer at both BAAN
(now a unit of SSA Global Technologies, Inc.) and Invensys
Manufacturing and Process Systems. Non-GAAP Financial Information
To supplement the company's consolidated financial statements
presented in accordance with generally accepted accounting
principles, Interwoven uses measures of operating results, net
income, net income per share, and shares used in the net income per
share calculation, which are adjusted to exclude restructuring and
excess facilities charges and recoveries, stock-based compensation
expense, amortization of intangible assets, recoveries from amounts
held in escrow related to the settlement of certain claims
associated with the acquisition of Scrittura, costs associated with
the company's completed voluntary review of historical stock option
grant procedures and related accounting, expenses incurred
associated with the Company's new corporate headquarters while in
the process of completing tenant improvements and the related tax
impact of these adjustments. These non-GAAP results are not in
accordance with, or an alternative for, results prepared in
accordance with accounting principles generally accepted in the
United States of America, and the company's non-GAAP measures may
be different from non-GAAP measures used by other companies.
Interwoven believes that the presentation of non- GAAP results
provides useful information to management and investors regarding
underlying trends in its consolidated financial condition and
results of operations. Interwoven also believes that where the
adjustments used in calculating non-GAAP net income and non-GAAP
net income per share are based on specific, identified charges that
impact different line items in the consolidated statements of
operations (including cost of revenues-license, cost of
revenues-support and service, sales and marketing, research and
development, general and administrative expenses and provision for
income taxes), it is useful to investors to know how these specific
line items in the consolidated statements of operations are
affected by these adjustments. For its internal budgets,
Interwoven's management uses consolidated financial statements that
do not include restructuring and excess facilities charges and
recoveries, stock-based compensation expense, amortization of
intangible assets, recoveries from amounts held in escrow related
to the settlement of certain claims associated with the acquisition
of Scrittura, costs associated with the company's completed
voluntary review of historical stock option grant procedures and
related accounting, expenses incurred associated with the Company's
new corporate headquarters while in the process of completing
tenant improvements and the related tax impact of these
adjustments. Interwoven uses these non-GAAP measures in assessing
corporate performance and determining incentive compensation.
Readers are advised to review and consider carefully the financial
information prepared in accordance with accounting principles
generally accepted in the United States of America contained in
this press release and Interwoven's periodic filings with the
Securities and Exchange Commission. Conference Call Information
Interwoven's 2008 third quarter financial results, its financial
outlook for the fourth quarter of 2008 will be discussed today,
October 23, 2008 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern
Time). Conference Call Details: Date: Thursday, October 23, 2008
Time: 2:00 p.m. PDT (5:00 p.m. EDT) Live Dial-in #: 877-723-9502 or
719-325-4834 Replay Dial-in #: 888-203-1112 or 719-457-0820 Replay
Passcode: 4131260 Audio Webcast instructions will be available on
Interwoven's Website at http://www.interwoven.com/investors. The
call replay will be available starting on October 23, 2008 at
approximately 5:00 p.m. Pacific Time (8:00 p.m. Eastern Time) for a
limited time period. Cautionary Statement Regarding Forward-Looking
Statements This press release contains "forward-looking"
statements, including statements about historical results that may
suggest trends in our business. These statements are based on
estimates and information available to us at the time of this press
release and are not guarantees of future performance. Our
forward-looking statements include statements about customer
demand. Actual results could differ materially from our current
expectations as a result of many factors including: factors beyond
our control such as general geopolitical and economic conditions;
conditions in the financial services markets; the overall demand
for enterprise software and services and general political and
economic developments; our ability to develop new products,
services, features and functionality successfully and on a timely
basis; customer acceptance of our solutions; changes in customer
spending on enterprise content management initiatives; our ability
to cross-sell and up- sell additional products into our installed
base of customers; our ability to successfully acquire businesses
and technologies and to successfully integrate and operate these
acquired businesses and technologies; the timing and impact of
acquisition-related costs or amortization costs for acquired
intangible assets; the success of our strategic business alliances;
intense competition in our markets; changes in key personnel; the
introduction of new products or services by competitors; and the
ongoing consolidation in our markets. These and other risks and
uncertainties associated with our business are described in our
most recent Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Forms 8-K, which are on file with the
Securities and Exchange Commission and available through
http://www.sec.gov/. About Interwoven Interwoven is a global leader
in content management solutions. Interwoven's software and services
enable organizations to maximize online business performance and
organize, find, and govern business content. Interwoven solutions
unlock the value of content by delivering the right content to the
right person in the right context at the right time. Over 4,600 of
the world's leading companies, professional services firms, and
governments have chosen Interwoven, including adidas, Airbus,
Avaya, BT, Cisco, Citi, Delta Air Lines, DLA Piper, the Federal
Reserve Bank, FedEx, Grant Thornton, Hilton Hotels, Hong Kong Trade
and Development Council, HSBC, LexisNexis, MasterCard, Microsoft,
Samsung, Shell, Qantas Airways, Tesco, Virgin Mobile, and White
& Case. Over 20,000 developers and over 300 partners enrich and
extend Interwoven's offerings. To learn more about Interwoven,
please visit http://www.interwoven.com/. INTERWOVEN, INC.
Consolidated Balance Sheets (In thousands) Assets September 30,
2008 December 31, 2007 (Unaudited) Current assets: Cash and cash
equivalents $71,185 $68,453 Short-term investments 91,682 88,896
Accounts receivable, net 44,373 39,000 Prepaid expenses and other
current assets 10,237 8,252 Total current assets 217,477 204,601
Property and equipment, net 15,963 16,247 Goodwill 237,056 217,777
Other intangible assets, net 29,548 20,960 Deferred tax assets
4,202 5,895 Other assets 1,811 2,878 Total assets $506,057 $468,358
Liabilities and Stockholders' Equity Current liabilities: Accounts
payable $3,717 $4,378 Accrued liabilities 31,352 30,707
Restructuring and excess facilities accrual 1,099 1,618 Deferred
revenues 68,535 60,957 Total current liabilities 104,703 97,660
Accrued liabilities 8,072 7,816 Restructuring and excess facilities
accrual 1,206 2,016 Deferred revenues 1,529 1,020 Total liabilities
115,510 108,512 Commitments and contingencies Stockholders' equity:
Preferred stock - - Common stock 46 45 Additional paid-in capital
777,100 766,660 Accumulated other comprehensive income (663) 415
Accumulated deficit (385,936) (407,274) Total stockholders' equity
390,547 359,846 Total liabilities and stockholders' equity $506,057
$468,358 INTERWOVEN, INC. Consolidated Statements of Income (In
thousands, except per share amounts) (Unaudited) Three Months Ended
Nine Months Ended September 30, September 30, 2008 2007 2008 2007
Revenues: License $24,160 $21,225 $69,510 $61,856 Support and
service 41,705 34,228 120,974 100,927 Total revenues 65,865 55,453
190,484 162,783 Cost of revenues: License 1,587 1,859 5,531 5,905
Support and service 16,743 13,915 48,255 40,548 Total cost of
revenues 18,330 15,774 53,786 46,453 Gross profit 47,535 39,679
136,698 116,330 Operating expenses: Sales and marketing 22,311
19,000 67,018 59,008 Research and development 10,513 9,552 30,145
27,928 General and administrative 6,251 6,812 17,332 17,742
Amortization of intangible assets 734 814 2,070 2,470 Restructuring
and excess facilities charges 18 1 14 65 Total operating expenses
39,827 36,179 116,579 107,213 Income from operations 7,708 3,500
20,119 9,117 Interest income and other, net 878 2,199 3,305 6,973
Income before provision for income taxes 8,586 5,699 23,424 16,090
Provision for income taxes 849 1,638 2,086 3,096 Net income $7,737
$4,061 $ 21,338 $12,994 Basic net income per common share $0.17
$0.09 $0.46 $0.29 Shares used in computing basic net income per
common share 45,951 45,293 45,662 44,995 Diluted net income per
common share $0.16 $0.09 $0.45 $0.28 Shares used in computing
diluted net income per common share 47,133 46,538 46,696 46,555
INTERWOVEN, INC. Impact of Non-GAAP Adjustments on Reported Net
Income (In thousands, except per share amounts) (Unaudited) Three
Months Ended Three Months Ended September 30, 2008 September 30,
2007 As reported Adjustments Non-GAAP As reported Adjustments
Non-GAAP Revenues: License $24,160 $- $24,160 $21,225 $- $21,225
Support and service 41,705 - 41,705 34,228 - 34,228 Total revenues
65,865 - 65,865 55,453 - 55,453 Cost of revenues: License (1) 1,587
(619) 968 1,859 (977) 882 Support and service (1) (2) 16,743 (733)
16,010 13,915 (169) 13,746 Total cost of revenues 18,330 (1,352)
16,978 15,774 (1,146) 14,628 Gross profit 47,535 1,352 48,887
39,679 1,146 40,825 Operating expenses: Sales and marketing (2)
22,311 (803) 21,508 19,000 (450) 18,550 Research and development
(2) 10,513 (493) 10,020 9,552 (213) 9,339 General and
administrative (2) (3) 6,251 (705) 5,546 6,812 (2,783) 4,029
Amortization of intangible assets (1) 734 (734) - 814 (814) -
Restructuring and excess facilities charges (4) 18 (18) - 1 (1) -
Total operating expenses 39,827 (2,753) 37,074 36,179 (4,261)
31,918 Income from operations 7,708 4,105 11,813 3,500 5,407 8,907
Interest income and other, net 878 - 878 2,199 - 2,199 Income
before provision for income taxes 8,586 4,105 12,691 5,699 5,407
11,106 Provision for income taxes (5) 849 3,466 4,315 1,638 2,138
3,776 Net income $7,737 $639 $8,376 $4,061 $3,269 $7,330 Diluted
net income per common share $0.16 $0.18 $0.09 $0.16 Shares used in
computing diluted net income per common share 47,133 47,133 46,538
46,538 (1) For the three months ended September 30, 2008,
adjustments reflect the reversal of amortization of purchased
technology of $619,000 in cost of revenues -- license and $379,000
in cost of revenues -- support and service. For the three months
ended September 30, 2007 adjustments reflect the reversal of
amortization of purchased technology of $1.0 million in cost of
revenues -- license and none in cost of revenues -- support and
service. For the three months ended September 30, 2008 and 2007,
adjustments reflect the reversal of $734,000 and $814,000,
respectively, associated with the amortization of intangible
assets. (2) For the three months ended September 30, 2008 and 2007,
adjustments reflect the reversal of stock-based compensation
expense of $354,000 and $169,000, respectively, in cost of revenues
-- support and service, $803,000 and $450,000, respectively, in
sales and marketing, $493,000 and $213,000, respectively, in
research and development and $705,000 and $469,000, respectively,
in general and administrative. (3) For the three months ended
September 30, 2007, adjustment reflects the reversal of $2.3
million in expenses incurred in connection with the Company's
voluntary review of historical stock option grant procedures and
related accounting. (4) For the three months ended September 30,
2008 and 2007, adjustments reflect the reversal of $18,000 and
$1,000, respectively, in adjustments associated with the Company's
restructuring and excess facilities accrual. (5) For the three
months ended September 30, 2008 and 2007, adjustments reflect an
additional hypothetical tax provision of $3.5 million and $2.1
million, respectively, associated with the non-GAAP adjustments.
INTERWOVEN, INC. Impact of Non-GAAP Adjustments on Reported Net
Income (In thousands, except per share amounts) (Unaudited) Nine
Months Ended Nine Months Ended September 30, 2008 September 30,
2007 As reported Adjustments Non-GAAP As reported Adjustments
Non-GAAP Revenues: License $69,510 $- $69,510 $61,856 $- $61,856
Support and service 120,974 - 120,974 100,927 - 100,927 Total
revenues 190,484 - 190,484 162,783 - 162,783 Cost of revenues:
License (1) 5,531 (2,475) 3,056 5,905 (3,429) 2,476 Support and
service (1) (2) 48,255 (2,086) 46,169 40,548 (460) 40,088 Total
cost of revenues 53,786 (4,561) 49,225 46,453 (3,889) 42,564 Gross
profit 136,698 4,561 141,259 116,330 3,889 120,219 Operating
expenses: Sales and marketing (2) 67,018 (2,436) 64,582 59,008
(1,325) 57,683 Research and development (2) 30,145 (1,287) 28,858
27,928 (651) 27,277 General and administrative (2) (3) 17,332
(2,598) 14,734 17,742 (6,455) 11,287 Amortization of intangible
assets (1) 2,070 (2,070) - 2,470 (2,470) - Restructuring and excess
facilities charges (recoveries) (4) 14 (14) - 65 (65) - Total
operating expenses 116,579 (8,405) 108,174 107,213 (10,966) 96,247
Income from operations 20,119 12,966 33,085 9,117 14,855 23,972
Interest income and other, net (5) 3,305 - 3,305 6,973 (472) 6,501
Income before provision for income taxes 23,424 12,966 36,390
16,090 14,383 30,473 Provision for income taxes (6) 2,086 10,287
12,373 3,096 7,265 10,361 Net income $21,338 $2,679 $24,017 $12,994
$7,118 $20,112 Diluted net income per common share $0.45 $0.52
$0.28 $0.43 Shares used in computing diluted net income per common
share 46,696 46,696 46,555 46,555 (1) For the nine months ended
September 30, 2008, adjustments reflect the reversal of
amortization of purchased technology of $2.5 million in cost of
revenues -- license and $1.1 million in cost of revenues -- support
and service. For the nine months ended September 30, 2007
adjustments reflect the reversal of amortization of purchased
technology of $3.4 million in cost of revenues -- license and none
in cost of revenues -- support and service. For the nine months
ended September 30, 2008 and 2007, adjustments reflect the reversal
of $2.1 million and $2.5 million, respectively, associated with the
amortization of intangible assets. (2) For the nine months ended
September 30, 2008 and 2007, adjustments reflect the reversal of
stock-based compensation expense of $949,000 and $460,000,
respectively, in cost of revenues -- support and service, $2.4
million and $1.3 million, respectively, in sales and marketing,
$1.3 million and $651,000, respectively, in research and
development and $2.6 million and $996,000, respectively, in general
and administrative. (3) For the nine months ended September 30,
2007, adjustments reflects the reversal of $4.7 million in expenses
incurred in connection with the Company's completed voluntary
review of historical stock option grant procedures and related
accounting and the reversal of $758,000 in expenses incurred
associated with the Company's new corporate headquarters while in
the process of completing tenant improvements. (4) For the nine
months ended September 30, 2008 and 2007, adjustments reflect an
increase of $14,000 and a reversal of $65,000, respectively, in
adjustments associated with the Company's restructuring and excess
facilities accrual. (5) For the nine months ended September 30,
2007, adjustment reflects the reversal of recoveries from amounts
of $472,000 held in escrow related to the settlement of certain
claims associated with the acquisition of Scrittura, Inc. (6) For
the nine months ended September 30, 2008 and 2007, adjustments
reflect an additional hypothetical tax provision of $10.3 million
and $7.3 million, respectively, associated with the non-GAAP
adjustments.
http://www.newscom.com/cgi-bin/prnh/20071205/INTWOVLOGO
http://photoarchive.ap.org/ DATASOURCE: Interwoven, Inc. CONTACT:
Investor Relations, Keren Ackerman, +1-408-953-7284, , or Media
Relations, Randy Cairns, +1-408-953-7111, , both of Interwoven,
Inc. Web site: http://www.interwoven.com/
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