Centra (NASDAQ:CTRA)
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Centra Software, Inc. (NASDAQ: CTRA), a leading provider
of specialized application software and services for online business
collaboration, today announced financial results for the first quarter
of 2005 ended March 31, 2005.
First Quarter 2005 Results
Revenues for the first quarter were $9.0 million, compared with
$8.6 million in the first quarter of 2004. Software license revenue
for the first quarter was $2.1 million, or 23 percent of total
revenues. This compares with software license revenue of $2.5 million
in the first quarter of 2004. Software services revenues were $2.7
million for the first quarter, or 30 percent of total revenues,
representing a 15 percent increase over the same period last year.
Maintenance and professional services revenues were $4.2 million in
the first quarter, or 47 percent of total revenues, representing a 13
percent increase from the first quarter of 2004.
Net loss for the first quarter of 2005 was $960,000, or $0.03 per
share, which consists of $600,000 from operations and a severance
charge of $360,000 related to the departure of the Company's former
CFO. This compares with a net loss of $3.1 million, or $0.12 per
share, for the first quarter of 2004. Gross margin percentage for the
first quarter of 2005 was 80 percent.
Centra's cash, cash equivalents and short- and long-term
investments totaled $26.3 million as of March 31, 2005, an increase of
$455,000 from the total at December 31, 2004 of $25.9 million. The
Company's days sales outstanding (DSO) was 47 days at the end of the
quarter.
CEO Comments
"Last week I returned to Centra on a full-time basis," said Leon
Navickas, Centra's Chairman and Chief Executive Officer. "I am pleased
to report that the cost reduction initiatives implemented in 2004
enabled the Company to significantly improve its operating results in
the first quarter of 2005. While the Company met its financial
objectives for the first quarter as stated in its 2004 fourth quarter
and year end results earnings release, we had planned to achieve even
higher software license sales and to close more Enterprise Advantage
Subscription (EAS) contracts than we actually did. Sales cycles
continue to lengthen, particularly as we target larger, multi-year
contracts, and as increased competition in the collaboration
marketplace is leading to a more extensive evaluation process by our
customers. As a result, sales orders totaling more than $1.0 million
that we had targeted to close in March actually closed in April.
"In the first quarter of 2005, the Company signed one EAS
contract, bringing the total number to 15 since its introduction last
summer. We have a number of EAS prospects identified, which we plan to
close during the rest of the year and believe that EAS is an
attractive pricing model for customers that want unlimited access to
Centra across a division or organization. For Centra, the EAS
contracts provide revenue visibility and allow us to develop a more
predictable revenue base.
"On the operations side, the Company improved its net loss
sequentially and increased its cash balance. Net loss for the first
quarter, excluding a severance charge of $360,000, improved by
$721,000 sequentially and by $2.5 million from a year ago. In
addition, we increased our cash and investment balance by $455,000 in
the first quarter.
"During the quarter, the Company made progress integrating its
first add-on modules to enhance its Enterprise Application Rollout
solution. Centra is implementing its first customer pilot site, and
the customer will be presenting the product's benefits next week at
Centra Summit 2005. The next release of Centra, planned to be
available in June 2005, and the new add-on modules, will enable us to
differentiate ourselves as a leader in providing specialized solutions
that integrate collaborative eLearning to solve our customers'
critical business problems.
"In the second quarter of 2005, we plan to increase revenues
sequentially and improve the net loss, as we strive toward
profitability. Last week when the Centra Board asked me to return to
day-to-day management of Centra, I agreed to do so enthusiastically.
The market opportunity for solutions that integrate learning and
training with critical business processes is significant. Centra has
the product leadership, deep domain expertise and a world-class
customer services organization to become a profitable company. I look
forward to working closely with the entire senior management team to
make this happen," said Mr. Navickas.
First Quarter Highlights
-- Centra added 25 new customers in the first quarter, including
major accounts such as Cincinnati Financial, the Federal
Aviation Administration and Duke University. The Company also
expanded sales to its installed base, including additional
contracts with the Internal Revenue Service, Schering Plough
and Network Appliance.
-- Centra was recognized by a leading research firm IDC as a
leader in the Worldwide Conferencing Applications Software
Market.
-- Centra announced the promotion of Michelle Caggiano to Chief
Financial Officer.
-- Centra announced enhancements to its core technology platform
with Centra Live. The new graphical interface provided by
Centra Live will deliver streamlined, intuitive menus and
improved tools and features for live sessions that promote
higher end-user adoption.
-- Centra announced a partnership with Surgient, Inc., that will
enable customers to leverage Surgient's Virtual Training
Management System and Centra's business collaboration
solutions in an integrated environment. Siebel Systems is the
first customer to take advantage of this technology
partnership.
First Quarter Conference Call
Centra will host a conference call on Thursday, May 5th at 10:00
a.m. EST to discuss these results in more detail. The call will be
simultaneously Webcast over the Internet. 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
nine languages, Centra solutions can be deployed as on-site software
or through its ASP service.
Organizations across every major industry and market sector choose
Centra, including Wyndham International, Weyerhaeuser, Underwriters
Laboratories, BMW and Stanford University. Headquartered in Lexington,
Massachusetts, Centra serves a worldwide customer base throughout the
Americas, Europe, Asia and Australia. For more information, visit
www.centra.com.
Safe Harbor Statement Regarding Forward-Looking Statements
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 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
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, significant changes in our
senior management team, customer fulfillment 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, 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 for the year ended December 31, 2004 which is 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.
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CENTRA SOFTWARE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31, March 31,
2004 2005
Assets
Current assets
Cash, cash equivalents and short-term
investments $ 25,135 $ 25,589
Restricted cash 233 233
Accounts receivable, net 7,887 4,662
Prepaid expenses and other current assets 1,374 1,693
--------- ---------
Total current assets 34,629 32,177
Property and equipment, net 1,440 1,319
Long-term investments 743 744
Restricted cash 400 400
Other assets 16 23
--------- ---------
Total assets $ 37,228 $ 34,663
========= =========
Liabilities and stockholders' equity
Current liabilities
Current maturities of long-term debt $ 1,049 $ 921
Accounts payable 939 883
Accrued expenses 5,677 4,153
Deferred revenue 14,360 14,422
--------- ---------
Total current liabilities 22,025 20,379
Long-term debt, net of current maturities 1,012 854
Total stockholders' equity 14,191 13,430
--------- ---------
Total liabilities and stockholders' equity $ 37,228 $ 34,663
========= =========
CENTRA SOFTWARE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2004 and 2005
(Amounts in thousands, except per share data)
(Unaudited)
Three Months
ended March 31,
2004 2005
Revenues
License $ 2,531 $ 2,072
Software services 2,371 2,735
Maintenance and professional services 3,734 4,202
-------- --------
Total revenues 8,636 9,009
-------- --------
Cost of revenues
License 77 132
Amortization of acquired developed technology 175 -
Software services 636 576
Maintenance and professional services 976 1,120
-------- --------
Total cost of revenues 1,864 1,828
-------- --------
Gross profit 6,772 7,181
-------- --------
Operating expenses
Sales and marketing 5,155 3,568
Product development 2,759 2,320
General and administrative 1,978 2,321
-------- --------
Total operating expenses 9,892 8,209
-------- --------
Operating loss (3,120) (1,028)
Other (expense) income, net (18) 68
-------- --------
Net loss $(3,138) $ (960)
======== ========
Basic and diluted net loss per share $ (0.12) $ (0.03)
Weighted average shares outstanding
Basic and diluted 27,151 27,721
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