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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, Calif., November 7, 2006 - KNOVA Software, Inc.™ (OTC
Bulletin Board: KNVS), a leading provider of Intelligent Customer Experience applications,
today announced the financial results for the third quarter ended September 30,
2006.
Revenue for the third quarter of 2006 was $5.8 million, a 1.4 percent increase over
third quarter 2005 revenue of $5.7 million. Revenue for the quarter was comprised
of $2.1 million of software license revenue and $3.7 million of services and maintenance
revenue compared to $2.2 million of software license revenue and $3.5 million of
services and maintenance revenue for the third quarter of 2005.
The GAAP net loss for the third quarter of 2006 was $2.1 million or $0.24 per share.
This compares to a net loss of $942,000 or $0.11 per share for the third quarter
of 2005. GAAP net loss in the third quarter of 2006 includes stock based compensation
charges of approximately $524,000 reflecting the company’s adoption of Statement
of Financial Standards No. 123R ("SFAS 123R") as of January 1, 2006.
On an adjusted non-GAAP basis, net loss for the third quarter of 2006 was $1.3 million
or $0.14 per share. This compares to an adjusted non-GAAP net loss of $682,000 or
$0.08 per share for the third 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.
Revenue for the nine-months ending September, 30, 2006 was $20.3 million, an increase
of 21 percent over the same period in 2005. Software license revenue for the nine
month period was $8.1 million, representing a 26 percent increase over the same
period last year.
Commenting on the financial results, Bruce Armstrong, president and CEO of KNOVA
Software, stated, "In what has traditionally been a challenging quarter for KNOVA,
our third quarter delivered continued year-over-year growth, with additional penetration
into our target markets. We added seven new customers during the third quarter including
Siemens, Informatica and Spansion. The release of KNOVA 7 in the third quarter is
the beginning of a new product cycle for the company, and with its personalization,
powerful analytics, and advanced search optimization, has been met with outstanding
customer and analyst feedback."
"We are also excited about our acquisition of Active Decisions and the new functionality
it brings to our application suite," continued Armstrong. "We expect these new capabilities,
combined with the release of KNOVA 7, will help us deliver on our vision to provide
an intelligent experience throughout the entire customer lifecycle."
Third Quarter Highlights
Highlights of KNOVA’s third quarter include:
- 7 new customer deployments in key target markets, including telecommunications,
medical equipment and high technology
- 17 follow-on deals with existing customers
- KNOVA acquired Active Decisions , a leading provider of multi-channel Guided Selling
solutions for retail, manufacturing, finance and telecommunications industries -
broadening the scope of KNOVA’s application suite
- KNOVA announced General Availability of the KNOVA 7 platform, representing a consolidation
of the former Kanisa and ServiceWare product lines, after successful deployment
of a Limited Availability release at several customers beginning in June
- KNOVA’s worldwide user conference, Discovery 2006, attracted more than 250 attendees
with keynote speakers Patricia Seybold; John Ragsdale, VP of Research for the SSPA;
and Brad Maybee, VP of Customer Support for Research in Motion
- KNOVA was positioned in the Visionaries Quadrant in Gartner’s Magic Quadrant report
on Information Access for the third consecutive year
- Baseline magazine named KNOVA the fourth fastest-growing software company in its
October 2006 report
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Andy Feit joined KNOVA as chief marketing officer, bringing more than 20 years of
technology marketing and sales experience to the company
"We feel that our visionary technology and products, highly referenceable customers,
and strong management team will sustain our leadership position in this market",
continued Armstrong. "We expect that this leadership, combined with continued innovation
and execution will enable us to execute our financial plan and achieve profitable
growth."
Financial Guidance and Business Outlook
Based on the results for the first nine months of 2006, the company maintained its
annual guidance. Revenue for 2006 is expected to be in the range of $26 million
to $29 million.
Conference Call Information:
KNOVA will present its third 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 1.866.825.3209 (domestic), providing the company name, "KNOVA" and the following
conference ID pass code: 29496189, International callers can access the broadcast
by dialing 1.617.213.8061 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 November
14, 2006 by dialing 1.888.286.8010 (domestic) or 1.617.801.6888 (international)
using the pass code 58531123. 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.
About KNOVA Software
KNOVA Software is a leading provider of Intelligent Customer Experience™ solutions
that maximize the value of every interaction throughout the customer lifecycle.
Built on an adaptive search and knowledge management platform, KNOVA’s suite of
applications helps companies increase revenues, reduce service costs and improve
customer satisfaction. Industry leaders including AOL, Ford, H&R Block, HP, McAfee,
Novell and Reuters rely on KNOVA’s award-winning Service Resolution Management,
Interactive Brand Optimization and Guided Selling applications to power an intelligent
customer experience on their Web sites, and within their contact centers. 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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