Insightful (NASDAQ:IFUL)
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Insightful Corporation (NASDAQ:IFUL), a leading provider of predictive
analytics and reporting solutions, today announced its operating results
for the second quarter ended June 30, 2008.
Insightful reported total revenues of $5.4 million for the second
quarter of 2008, a decrease of 2% compared to revenues of $5.5 million
for the second quarter of 2007. For the second quarter of 2008,
Insightful reported a net loss of $0.5 million, or $0.04 per share,
compared to a net loss of $1.3 million, or $0.10 per share, for the
second quarter of 2007. Included in operating results for the second
quarter of 2008 are $0.8 million in expenses directly related with the
proposed acquisition of the company by TIBCO Software Inc.
Non-GAAP operating results, which exclude stock-based compensation
expense, were a loss of $0.3 million, or $0.03 per share, for the second
quarter of 2008, compared to a loss of $1.1 million, or $0.08 per share,
for the second quarter of 2007. As described in the section below
entitled “Use of Non-GAAP Financial Measures,”
non-GAAP earnings or loss differs from net income or loss reported under
accounting principles generally accepted in the United States (GAAP) due
to the exclusion of stock-based compensation expense. The reconciliation
of Insightful’s GAAP net loss to its non-GAAP
operating results for the quarters ended June 30, 2008 and 2007 are set
forth at the end of this release.
“We are pleased that, excluding costs directly
associated with the proposed acquisition by TIBCO, we were profitable
for the quarter,” said Jeff Coombs, president
and CEO of Insightful.
Insightful’s cash, cash equivalents, and short
and long-term investments totaled $11.5 million at June 30, 2008, up
from $11.0 million at December 31, 2007.
On June 19, 2008, Insightful announced that it had signed a definitive
agreement to be acquired by TIBCO Software Inc. (NASDAQ:TIBX) in a
transaction valued at approximately $25 million, including the value of
certain assumed options. Under the terms of the agreement, following the
closing, Insightful stockholders will receive $1.87 in cash for each
outstanding share of common stock they own. On July 24, 2008, Insightful
filed a definitive proxy statement related to the proposed acquisition
with the Securities and Exchange Commission (SEC). Insightful will hold
a special meeting of stockholders to vote on the proposed transaction at
9:00 a.m. Seattle time on August 29, 2008, at the offices of RR
Donnelly, 999 Third Avenue, Suite 3201, Seattle, Washington 98104.
Stockholders at the close of business on July 8, 2008, the record date,
will be entitled to vote on the transaction.
Quarterly Financial Highlights
Software license revenues were $1.7 million in the second quarters of
both 2008 and 2007. License revenues declined slightly domestically
and increased slightly internationally.
Maintenance revenues were $2.3 million in the second quarter of 2008,
compared to $2.0 million in the second quarter of 2007. Maintenance
revenue increased primarily as a result of increases in our
maintenance renewal rates and the late renewal of a number of
maintenance contracts that had expired in earlier quarters.
Professional services and other revenues were $1.4 million in the
second quarter of 2008, compared to $1.8 million in the second quarter
of 2007. The entire decline in professional services revenues was in
the company’s domestic segment.
Domestic revenues were $2.5 million in the second quarter of 2008,
compared to $2.9 million in the second quarter of 2007. International
revenues were $2.9 million in the second quarter of 2008, compared to
$2.6 million in the second quarter of 2007.
Funded research, which is an offset to research and development
expense in the company’s income statement,
was $250,000 in the second quarter of 2008, compared to $511,000 in
the second quarter of 2007. The decline was due to several billable
research employees moving to our data analysis product group in 2007
and several others leaving Insightful in 2007 and 2008.
Total operating expenses were $4.8 million in the second quarter of
2008, including $0.8 million in expenses directly related to the
proposed acquisition of the company by TIBCO Software Inc., compared
to $5.4 million in the second quarter of 2007.
Gross profit margin was 77% in the second quarter of 2008 compared to
72% in the second quarter of 2007. The increase resulted from a
smaller percentage of the company’s total
revenues coming from lower-margin professional services revenues in
2008 than in 2007.
Use of Non-GAAP Financial Measures
The non-GAAP financial measure of loss included in this press release is
different from the GAAP measure of net loss, as this non-GAAP measure
excludes certain expenses otherwise included in the computation of net
loss. Insightful believes this non-GAAP measure is useful to enhance an
overall understanding of its past financial performance and also its
prospects for the future. These adjustments to the company’s
GAAP results are presented with the intent of providing both management
and investors a more complete understanding of Insightful’s
underlying operating results and trends. This non-GAAP measure is among
the primary indicators management uses as a basis for planning and
forecasting of future periods.
The expenses excluded from Insightful’s GAAP
results for the second quarters of 2008 and 2007 include stock-based
compensation expense. Stock-based compensation expense has no current
effect on cash or the future uses of cash. Insightful’s
stock-based compensation expense fluctuates with changes in the company’s
stock price and interest rates. For this reason, changes in stock prices
and interest rates could mask variation and trends in Insightful’s
GAAP operating results that may otherwise be important to an
understanding of the company’s results. For
these reasons, management believes that exclusion of stock-based
compensation expense may be important to an understanding of Insightful’s
ongoing operating performance.
Reconciliations of GAAP to non-GAAP results are as follows (in
thousands, except share data):
Three-Month
Three-Month
Period Ended
Period Ended
June 30, 2008
June 30, 2007
Diluted
Diluted
EPS
EPS
Net loss as reported
$
(499)
$
(0.04)
$
(1,258)
$
(0.10)
Add Back - Stock Compensation Expense
Professional services and other cost of services
4
3
Sales and marketing
47
43
Research and development
22
17
General and administrative
78
117
151
0.01
180
0.01
Non-GAAP loss
$
(348)
$
(0.03)
$
(1,078)
$
(0.08)
ABOUT INSIGHTFUL CORPORATION
Insightful Corporation (NASDAQ:IFUL) is a provider of predictive
analytics and reporting solutions. Insightful products S-PLUS®,
Insightful Miner™ and S-PLUS®
Enterprise Server allow companies to perform sophisticated statistical
data analysis and data mining and create high-quality graphics and
reports. Insightful has been delivering industry-leading, high-ROI
solutions to thousands of companies in financial services, life
sciences, telecommunications, and manufacturing, plus government and
research institutions, for 20 years. Headquartered in Seattle,
Insightful has offices in New York, North Carolina, the United Kingdom,
Switzerland, France and Hong Kong, with distributors around the world.
For more information, visit www.insightful.com,
email info@insightful.com or
call 1-800-569-0123.
NOTE TO INVESTORS: FORWARD-LOOKING STATEMENTS
Forward-looking statements include, but are not limited to, statements
about the expected closing of the proposed acquisition by TIBCO and
other statements that are not historical facts. Words such as “expects,”
“believe,” “plan,”
“anticipate,” and
similar expressions are intended to identify forward-looking statements,
but their absence does not necessarily mean that the statement is not
forward-looking. Forward-looking statements are based on the judgment
and opinions of management at the time the statements are made. These
statements are not guarantees of future performance, and inaccurate
assumptions and known and unknown risks and uncertainties can affect
their accuracy. Actual results could differ materially from those
expressed or implied by the forward-looking statements for a number of
reasons, including, but not limited to, the risk that the proposed
acquisition by TIBCO does not close as expected. More detailed
information regarding these and other factors that could affect our
actual results is set forth in our filings with the Securities and
Exchange Commission, including our most recent report on Form 10-Q. You
should not unduly rely on these forward-looking statements, which apply
only as of the date of this release. We undertake no obligation to
update publicly any forward-looking statements to reflect new
information, events or circumstances after the date of this release or
to reflect the occurrence of anticipated events.
NOTE TO INVESTORS: SECURITIES LAW DISCLOSURE
Insightful has filed with the Securities and Exchange Commission (the “SEC”)
a definitive proxy statement and other relevant materials in connection
with the merger. The proxy statement has been mailed to the stockholders
of Insightful. Before making any voting or investment decision with
respect to the merger, investors and stockholders of Insightful are
urged to read the proxy statement and the other relevant materials when
they become available because they will contain important information
about the merger, Insightful and TIBCO. Investors and security holders
may obtain free copies of these documents and other documents filed with
the SEC at the SEC’s web site at www.sec.gov.
In addition, investors and security holders may obtain free copies of
the documents filed with the SEC by Insightful at Insightful’s
corporate website at www.insightful.com
(under Investors).
Insightful and its officers and directors may be deemed to be
participants in the solicitation of proxies from Insightful stockholders
with respect to the acquisition. A description of any interests that
these officers and directors have in the acquisition is available in the
proxy statement. Information concerning Insightful’s
directors and executive officers also is set forth in the definitive
proxy statement. The definitive proxy statement is available free of
charge at the SEC’s web site at www.sec.gov
or at Insightful’s corporate website at www.insightful.com
(under Investors).
INSIGHTFUL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
June 30,
December 31,
2008
2007
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
5,530
$
6,663
Trade accounts receivable, net
3,168
4,181
Short-term investments
4,499
1,899
Other receivables
294
303
Prepaid expenses and other current assets
433
558
Total current assets
13,924
13,604
Long-term investments
1,510
2,405
Property and equipment, net
2,111
2,457
Goodwill
800
800
Other assets
111
109
Total assets
$
18,456
$
19,375
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable
395
630
Accrued expenses and other current liabilities
2,181
1,900
Deferred revenue - short term
5,455
5,861
Total current liabilities
8,031
8,391
Deferred revenue - long term
143
152
Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $0.01 par value:
Authorized - 1,000,000 shares
Issued and outstanding-none
—
—
Common stock, $0.01 par value:
Authorized - 30,000,000 shares
Issued and outstanding-13,014,636 and 12,979,925 shares at June 30,
2008 and December 31, 2007
130
130
Additional paid-in capital
39,183
38,873
Accumulated deficit
(28,788
)
(27,916
)
Other accumulated comprehensive loss
(243
)
(255
)
Total stockholders’ equity
10,282
10,832
Total liabilities and stockholders’ equity
$
18,456
$
19,375
INSIGHTFUL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three months ended
June 30,
2008
2007
Revenues:
Software licenses
$
1,703
$
1,718
Software maintenance
2,305
2,043
Professional services and other
1,382
1,758
Total revenues
5,390
5,519
Cost of revenues:
Software related
256
242
Professional services and other
1,007
1,276
Total cost of revenues
1,263
1,518
Gross profit
4,127
4,001
Operating expenses:
Sales and marketing
1,944
2,753
Research and development
1,144
2,054
Less—Funded research
(250
)
(511
)
Research and development, net
894
1,543
General and administrative
1,929
1,123
Total operating expenses
4,767
5,419
Loss from operations
(640
)
(1,418
)
Other income, net
143
171
Loss before income taxes
(497
)
(1,247
)
Income tax expense
(2
)
(11
)
Net Loss
$
(499
)
$
(1,258
)
Basic and diluted net loss per share
$
(0.04
)
$
(0.10
)
Basic and diluted weighted average common shares outstanding
12,983
12,886