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PR Contact |
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For public relations
inquiries, please contact:
Melissa Stahley
Consona Corporation
317.249.1270
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Press Release
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Cupertino, CA, May 9, 2006 - KNOVA Software (OTC Bulletin Board:
KNVS), a leading provider of Service Resolution Management (SRM) applications, today
announced the financial results for the first quarter ended March 31, 2006.
For comparative purposes, please note that due to the merger of ServiceWare and
Kanisa on February 8, 2005, the results of Kanisa from January 1, 2005 through February
7, 2005 are not included in the results for the first quarter of 2005.
Revenue for the first quarter of 2006 was $7.0 million, a 90% increase over first
quarter 2005 revenue of $3.7 million. Revenue for the quarter was comprised of $2.8
million of software license revenue and $4.2 million of services and maintenance
revenue compared to $1.4 million of software license revenue and $2.3 million of
services and maintenance revenue for the first quarter of 2005.
The net loss for the first quarter of 2006, in accordance with United States Generally
Accepted Accounting Principles (GAAP), was $0.5 million or $0.05 per share. This
compares to a net loss of $3.5 million or $0.49 per share for the first quarter
of 2005. GAAP net loss in the first quarter of 2006 includes stock based compensation
charges of approximately $405,000 reflecting the company's adoption of Statement
of Financial Standards No. 123R ("SFAS 123R") on January 1, 2006.
On an adjusted non-GAAP basis, net income for the first quarter of 2006 was $0.2
million or $0.02 per share. This compares to an adjusted non-GAAP net loss of $1.6
million or $0.22 per share for the first quarter of 2005. Adjusted non-GAAP net
income excludes non-cash amortization, restructuring charges and stock based compensation
expense. Please see the Use of Adjusted Non-GAAP Financial Measures section below
for a reconciliation of the GAAP to adjusted non-GAAP financial results.
Commenting on the financial results, Bruce Armstrong, president and CEO of KNOVA
Software, stated, "Q1 was another good quarter for KNOVA with strong revenue growth,
continued large deals in our target verticals and a significant number of follow-on
deals with our current customers."
First Quarter Highlights
Highlights of KNOVA's first quarter include:
- 5 new customer deployments in key target markets, including telecommunications,
financial services and high technology
- 27 follow-on deals with existing customers
- Sham Chotai, business intelligence and data warehousing veteran, joined KNOVA as
vice president of engineering
- Several industry awards, including CRM Magazine's 2006 Service Leader award for
Web Self-Service, Contact Center World awards for Best KM solution and Self-Service
solution, and SearchCRM.com's award for Best Online Self-Service
- Patricia Seybold Group recommended KNOVA as a "Strong Solution for Web Self-Service
and Support"
- Announced award of new patent on context-based search and knowledge management technology,
further strengthening KNOVA's strategic portfolio of patents
-
Mark Angel, KNOVA's CTO, headlined two sessions at HDI's Annual Conference
"As customer service organizations seek greater productivity and competitive differentiation,
KNOVA's applications have become an increasingly critical strategic investment that
delivers satisfying and profitable customer experiences," continued Armstrong. "The
industry's recognition of KNOVA's successful product vision and strong execution
is ultimately a reflection of our ability to make our customers successful."
Financial Guidance and Business Outlook
The company is reaffirming its previously announced 2006 guidance. As previously
outlined in the Q4 and 2005 year-end results, the company expects to grow total
revenue to a range of $25 million to $27 million in 2006.
Conference Call Information:
KNOVA will present its first quarter earnings in a teleconference today at 5:00
p.m. Eastern (2:00 p.m. Pacific). Domestic callers can join the teleconference by
dialing 1. 800.591.6945 (domestic), providing the company name, "KNOVA" and the
following conference ID pass code: 93561627. International callers can access the
broadcast by dialing 1.617.213.8059, providing the company name and same pass code.
The teleconference also can be accessed online by clicking on the Investor Relations
area of KNOVA's Web site, http://www.KNOVA.com/ir. Participants are asked to call
the assigned number approximately 10 minutes before the conference call begins.
If you are unable to participate, an audio digital replay of the call will be available
beginning two hours after the call and will be available until 11:59 p.m. on May
16, 2006 by dialing 1.888.286-8010 (domestic) or 1.617.801.6888 (international)
using the pass code 45895003. KNOVA will also provide a replay of the conference
call on the Investor Relations page of its Web site.
Use of Adjusted Non-GAAP Financial Measures
KNOVA is providing adjusted non-GAAP historical financial measures presented below
as the company believes that these figures are helpful in allowing individuals to
better assess the ongoing nature of KNOVA's core operations. An "adjusted non-GAAP
financial measure" is a numerical measure of a company's historical or future financial
performance that excludes amounts that are included in the most directly comparable
measure calculated and presented in the GAAP statement of operations. Adjusted non-GAAP
net income (loss) and adjusted non-GAAP net income (loss) per share (non-GAAP),
as we present them in the financial data below included in this press release, have
been normalized to exclude the net effects of the amortization of purchased technology,
in-process research and development and intangible assets, restructuring charges
and non-cash compensation charges. Management believes that these normalized non-GAAP
financial measures better reflect its operating performance. Management believes
that these charges are not necessarily representative of underlying trends in the
company's performance and their exclusion provides individuals with additional information
to compare the company's results over multiple periods. The company uses the adjusted
non-GAAP financial measures internally to focus management on period-to-period changes
in the company's core business. Therefore, the company believes that this information
is meaningful in addition to the information contained in the GAAP presentation
of financial information. KNOVA's utilization of non-GAAP measurements is not meant
to be considered in isolation or as a substitute for income from operations, net
loss, cash flow and other measures of financial performance prepared in accordance
with GAAP. Adjusted non-GAAP results are not a GAAP measurement and KNOVA's use
of it may not be comparable to similarly titled measures employed by other companies
in the technology industry.
In accordance with the requirements of Regulation G issued by the Securities and
Exchange Commission, the table below presents the most directly comparable GAAP
financial measure and reconciles the adjusted non-GAAP financial metrics to the
comparable GAAP measures.
KNOVA Software, Inc.
(in thousands except per share data)
(Unaudited)
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March 31, 2006 |
March 31,2005 |
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GAAP net loss
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$(463)
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$(3,508) |
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Restructuring charge
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-
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1,355
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Intangible assets amortization |
70 |
47
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Purchased technology amortization |
142
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95
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In-process research and development |
-
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421 |
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Stock based compensation |
410 |
37 |
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Adjusted non-GAAP net income (loss) |
$159 |
$(1,553) |
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Adjusted non-GAAP net income (loss) per share |
$0.02
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$(0.22) |
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Shares used in per share calculation |
8,735 |
7,183
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About KNOVA Software
KNOVA Software is a leading provider of service resolution management applications
that reduce service costs, increase revenues and improve customer satisfaction.
Built on a next-generation search and knowledge management platform, KNOVA's suite
of knowledge-empowered customer service applications automate the resolution process
across multiple channels including contact centers, help desks, email and self-service
sites. Industry leaders including EDS, Ford, HP, H&R Block, Novell, Merrill Lynch,
McAfee, Reuters and QUALCOMM rely on KNOVA's award-winning solutions to deliver
world-class customer service. KNOVA Software is headquartered in Cupertino, Calif.
For more information, visit www.knova.com.
KNOVA Software, KNOVA Contact Center, KNOVA Self-Service, KNOVA
Forums, KNOVA Field Service, KNOVA Knowledge Desk, KNOVA 6 and KNOVA 6.5 are trademarks
of KNOVA Software, Inc. All other trademarks are properties of their respective
owners.
Under the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995, statements in this press release that are not historical facts, including
those statements that refer to KNOVA Software's plans, prospects, expectations,
strategies, intentions, hopes and beliefs and the expected benefits of the use of
KNOVA's products are forward-looking statements. These forward-looking statements
are not historical facts and are only estimates or predictions. Actual results may
differ materially from those projected as a result of risks and uncertainties including,
but not limited to, risks related to our software strategy, fluctuations in customer
demand, performance of outside distributors and resellers, use of the Web as a delivery
vehicle for customer support solutions, risks resulting from new product introductions,
integration of acquired products with current offerings, and customer acceptance
of new products, rapid technological change, risks associated with competition,
continued growth in the use of the Internet, our ability to retain and increase
revenue from existing customers and to execute agreements with new customers, unforeseen
expenses, our ability to attract and retain qualified personnel and to secure necessary
financing for our operations and business development, and other market conditions
and risks detailed from time to time in our Securities and Exchange Commission filings.
Any forward-looking statements are based on information available to the company
today and the company undertakes no obligation to update publicly any forward-looking
statements, whether as a result of future events, new information, or otherwise.
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