KNOVA was granted U.S. Patent No. 7,028,250, entitled "System and Method for Automatically Classifying Text," which describes KNOVA's unique methods for classifying, tagging and adding structure to unstructured text and data. This brings KNOVA's total number of patents to 6 with more patents pending Financial Guidance and Business Outlook
Based on the Company's first half 2006 results, KNOVA is raising its annual revenue guidance. Revenue for 2006 is expected to be in the range of $26 million to $29 million.
Conference Call Information:
KNOVA presented its second quarter earnings in a teleconference on August 8, 2006. The teleconference can be accessed online by clicking on the Investor Relations area of KNOVA's Web site, http://www.KNOVA.com/ir.
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)
For the three months For the six months ended June 30 ended June 30 -------------------- -------------------- 2006 2005 2006 2005 in in in in thousands thousands thousands thousands
GAAP net (loss) income $ (476) $ 64 $ (937) $ (3,444) Restructuring charge - - - 1,355 Intangible assets amortization 70 70 140 117 Purchased technology amortization 142 142 284 237 In-process research and development - - - 421 Stock based compensation 488 102 894 139
--------- ---------- --------- --------- Adjusted net income (loss) $ 224 $ 378 $ 381 $ (1,175) ========= ========== ========= ========= Shares used in per share calculation - basic 8,745 8,723 8,740 7,953 Shares used in per share calculation - diluted 8,745 8,776 8,740 7,953 Net income (loss) per share, basic $ 0.03 $ 0.04 $ 0.04 $ (0.15) Net income (loss) per share, diluted $ 0.03 $ 0.04 $ 0.04 $ (0.15)
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.
KNOVA Software, Inc. CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except per share amounts)
June 30, December 31, 2006 2005 ----------- ----------- (Unaudited) Assets Current assets Cash and cash equivalents $ 8,280 $ 6,731 Marketable securities 2,071 5,461 Accounts receivable, less allowance for doubtful accounts of $118 at June 30, 2006 and $126 at December 31, 2005 7,790 6,442 Prepaid expenses and other current assets 804 781 ----------- ----------- Total current assets 18,945 19,415 Non current assets Property and equipment Office furniture, equipment, and leasehold improvements 1,518 1,518 Computer equipment 5,611 5,166 ----------- -----------
Total property and equipment 7,129 6,684 Less accumulated depreciation (6,495) (6,319) ----------- ----------- Property and equipment, net 634 365 Intangible assets, net of amortization of $1,202 at June 30, 2006 and $778 at December 31, 2005 4,179 4,604 Goodwill 14,485 14,485 Other noncurrent assets 92 123 ----------- ----------- Total noncurrent assets 19,390 19,577 ----------- ----------- Total assets $ 38,335 $ 38,992 =========== =========== Liabilities and Stockholders' Equity Current liabilities Accounts payable 1,009 1,636 Accrued compensation and benefits 924 1,003 Deferred revenue - licenses 220 1,571 Deferred revenue - services 5,115 5,114 Accrued restructuring charges - 261 Line of credit - short term 3,250 3,600 Current portion of capital lease obligations 24 40 Current portion of equipment loan 268 - Other current liabilities 1,941 795 ----------- ----------- Total current liabilities 12,751 14,020 Noncurrent deferred revenue 316 182 Other non-current liabilities 69 89 Long term portion of equipment loan 343 - Capital lease obligations 27 35 ----------- ----------- Total liabilities 13,506 14,326 Commitments and Contingencies Stockholders' equity Common stock, $0.01 par; 50,000 shares authorized, 8,819 and 8,744 shares outstanding at June 30, 2006 and December 31, 2005, respectively 88 87 Additional paid in capital 102,558 101,472 Treasury stock, 26 shares at June 30, 2006 and December 31, 2005 (151) (151) Deferred compensation - (5) Warrants 6,549 6,549 Accumulated other comprehensive loss (3) (12) Accumulated deficit (84,212) (83,274) ----------- ----------- Total stockholders' equity 24,829 24,666 ----------- ----------- Total liabilities and stockholders' equity $ 38,335 $ 38,992 =========== ===========
See accompanying condensed notes to unaudited interim consolidated financial statements
KNOVA Software, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share amounts) (Unaudited)
Three months ended Six months ended June 30, June 30, 2006 2005 2006 2005 -------- -------- -------- -------- Revenues Licenses $ 3,210 $ 2,824 $ 5,967 $ 4,201 Services 4,262 4,518 8,520 6,840 -------- -------- -------- -------- Total revenues 7,472 7,342 14,487 11,041 -------- -------- -------- -------- Cost of revenues Cost of licenses 221 257 413 420 Cost of services 2,195 2,220 4,732 3,848 -------- -------- -------- -------- Total cost of revenues 2,416 2,477 5,145 4,268 -------- -------- -------- -------- Gross margin 5,056 4,865 9,342 6,773 Operating expenses Sales and marketing 2,600 2,042 4,938 3,705 Research and development 1,896 1,317 3,481 2,840 General and administrative 977 1,420 1,740 2,399 Intangible assets amortization 70 70 140 117 Restructuring charges - - - 1,355 -------- -------- -------- -------- Total operating expenses 5,543 4,849 10,299 10,416 -------- -------- -------- -------- (Loss) income from operations (487) 16 (957) (3,643) Other income (expense) Interest expense (19) (2) (37) (3) Other, net 30 50 57 202 -------- -------- -------- -------- Other income (expense), net 11 48 20 199 -------- -------- -------- -------- Net (loss) income ($ 476) $ 64 ($ 937) ($ 3,444) ======== ======== ======== ========
Net (loss) income per common share, basic ($ 0.05) $ 0.01 ($ 0.11) ($ 0.43) Net (loss) income per common share, diluted ($ 0.05) $ 0.01 ($ 0.11) ($ 0.43)
Shares used in computing per share amounts, basic 8,745 8,723 8,740 7,953 ======== ======== ======== ======== Shares used in computing per share amounts, diluted 8,745 8,776 8,740 7,953 ======== ======== ======== ========
See accompanying condensed notes to unaudited interim consolidated financial statements
Contact:
Michele Mehl KNOVA Software, Inc. 425-205-9444 Email Contact
SOURCE: KNOVA Software