Interwoven Announces Record Fourth Quarter and Year-End Financial Results
Fourth Quarter License Revenue Growth of 19%; Full Year Non-GAAP Net Income Growth of 47%
SAN JOSE, Calif., - January 31, 2008 - Interwoven, Inc. (NASDAQ: IWOV), a global leader in content management solutions, today announced financial results for the three months and year ended December 31, 2007.
Interwoven reported total revenues of $62.9 million for the fourth quarter of 2007, an increase of 17% from total revenues of $53.9 million for the fourth quarter of 2006. Net income for the fourth quarter of 2007, calculated in accordance with generally accepted accounting principles, was $10.7 million, or $0.23 per share, compared to net income of $4.3 million, or $0.10 per share, for the same period in 2006. On a non-GAAP basis, Interwoven reported a net income of $8.2 million for the fourth quarter of 2007, or $0.18 per share, compared to non-GAAP net income of $6.3 million, or $0.14 per share, for the fourth quarter of 2006.
For the year ended December 31, 2007, Interwoven reported total revenues of $225.7 million, an increase of 13% from total revenues of $200.3 million for 2006. Net income for the year ended December 31, 2007, calculated in accordance with generally accepted accounting principles, was $23.7 million, or $0.51 per share, compared to a net income of $6.4 million, or $0.15 per share, for 2006. On a non-GAAP basis, Interwoven reported net income of $28.3 million for the year ended December 31, 2007, or $0.61 per share, compared to non-GAAP net income of $19.3 million, or $0.44 per share, for 2006.
Reconciliations of net income and net income per share calculated in accordance with generally accepted accounting principles and non-GAAP net income and non-GAAP net income per share are provided in the tables immediately following the consolidated statements of operations. Additional information about the company's non-GAAP financial measures can be found under the caption "Non-GAAP Financial Information" below.
On November 1, 2007, Interwoven completed the acquisition of Optimost LLC and the results of Optimost have been included in the company's financial statements since that date. Since November 1, Optimost's subscription revenues were $1.5 million, with an operating loss of approximately $250,000.
In the fourth quarter of 2007, net income in accordance with GAAP includes a tax benefit of approximately $4.2 million resulting from the reversal of a portion of the company's valuation allowance against its deferred tax assets.
As of December 31, 2007, cash, cash equivalents and investments totaled $157.3 million and deferred revenues totaled $62.0 million.
"Across the board, we turned in a tremendous fourth quarter and full-year performance," said Joe Cowan, CEO at Interwoven. "Our fourth quarter and full-year revenues and earnings were the highest we've ever recorded, and add to our strong foundation for continued growth. Now more than ever, organizations are putting Interwoven at the core of their efforts to grow their business, increase profitability and business agility, and improve customer relationships."
Customer Success Highlights
During the quarter, Interwoven added 108 customers, bringing the company's total to over 4,200 customers worldwide.
Notable customer orders included: adidas, American Medical Association, Bank of America, Bobcat Corporation, CalPERS, Canadian Broadcasting Corporation, Cendant, Chunghwa Telecom, CNBC, Cummins Inc, Drinker Biddle & Reath LLP, Digi-Key, DLA Piper, Education Management Corporation, Edward Nathan Sonnenbergs, ENI, Macy's, Northrop Grumman, Philips International, Plesner Svane Gronborg, Postecom, Qantas Airways, Reed Smith LLP, Rohm & Haas, Royal Bank of Canada, State of New South Wales, T. Rowe Price, and Wachovia.
Recent Company Highlights
Interwoven Acquires Optimost and Builds Market Momentum - On November 1, Interwoven announced that it completed the acquisition of Optimost LLC, a pioneer of software and services for Website optimization. The acquisition combines Optimost's real-time multivariable testing and Website optimization capabilities with Interwoven's content management solutions to provide marketers with the industry's most complete set of capabilities for creating, deploying, testing, analyzing, and optimizing targeted content to Website visitors. In the two months following the acquisition, Interwoven generated strong momentum and demand for the Optimost solution, with key wins at Amnesty International, Butlins, and Digi-Key.
NASDAQ Selects Interwoven to Join New Internet Index - During the fourth quarter, Interwoven announced that it was selected by NASDAQ for inclusion in its recently launched Internet Index (NASDAQ: QNET). The Index tracks the performance of companies engaged in a broad range of internet-related services including internet access providers, internet search engines, web hosting, website design, and internet retail commerce. Other companies selected for the index include Amazon, eBay, Google, Priceline.com, and Shutterfly.
Product News and Industry Leadership Highlights
Interwoven Composite Application Provisioning Solution Enhanced - In the fourth quarter, Interwoven announced an enhanced version of the Interwoven Composite Application Provisioning (CAP) solution. The Interwoven CAP solution is designed to allow businesses to automate and standardize the deployment of custom Web applications, resulting in improved efficiency and time-to-market. The new version, Interwoven CAP 3.0, provides improved end-to-end automation, graphical reporting, and a more intuitive user interface.
Interwoven Universal Search Gains Traction with Key Customer Wins - During the fourth quarter, sales of the recently launched Interwoven Universal Search - Professional Services Edition gained momentum with several customer transactions. For example, DLA Piper, a leading international law firm, selected Interwoven Universal Search to enable staff in Europe, the Middle East, and Asia to search the organization's knowledge repositories, and to provide fee-earners with immediate and highly accurate results for ensuring optimal sharing of firm expertise.
Interwoven Recognized in the Forrester Wave: Marketing Asset Management, Q1 2008 - In January 2008, the independent research firm Forrester released a new report evaluating providers of marketing asset management solutions. The report names Interwoven a "strong performer" and states "Interwoven brings together a unique and compelling set of offerings." The report also states "Interwoven's recent acquisition of Optimost, a Website testing and optimization company, offers a tantalizing glimpse of how different parts of the marketing content supply chain can integrate."
Non-GAAP Financial Information To supplement the company's consolidated financial statements presented in accordance with generally accepted accounting principles, Interwoven uses measures of operating results, net income, net income per share, and shares used in the net income per share calculation, which are adjusted to exclude restructuring charges, retirement benefit costs associated with the retirement of the company's former chief executive officer recorded in the first quarter of 2006, stock-based compensation, amortization of intangible assets and the related tax impact of these adjustments, and the costs associated with the company's voluntary review of historical stock option grant procedures and related accounting. These non-GAAP results are not in accordance with, or an alternative for, results prepared in accordance with accounting principles generally accepted in the United States of America, and the company's non-GAAP measures may be different from non-GAAP measures used by other companies. Interwoven believes that the presentation of non-GAAP results provides useful information to management and investors regarding underlying trends in its consolidated financial condition and results of operations. Interwoven also believes that where the adjustments used in calculating non-GAAP net income and non-GAAP net income per share are based on specific, identified charges that impact different line items in the consolidated statements of operations (including cost of revenues-license, cost of revenues-support and service, sales and marketing, research and development, and general and administrative expenses), it is useful to investors to know how these specific line items in the consolidated statements of operations are affected by these adjustments. For its internal budgets, Interwoven's management uses consolidated financial statements that do not include restructuring and excess facilities charges, retirement benefit costs associated with retirement of the company's former chief executive officer, stock-based compensation, amortization of intangible assets, and the related tax impact of these adjustments, and the costs associated with the company's voluntary review of historical stock option grant procedures and related accounting. Interwoven uses these non-GAAP measures in assessing corporate performance and determining incentive compensation. Readers are advised to review and consider carefully the financial information prepared in accordance with accounting principles generally accepted in the United States of America contained in this press release and Interwoven's periodic filings with the Securities and Exchange Commission.
Conference Call Information Interwoven's 2007 fourth quarter and full-year results and its financial outlook for the first quarter of 2008 will be discussed today, January 31, 2008 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).
Conference Call Details: Date: Thursday, January 31, 2008 Time: 2:00 p.m. PT (5:00 p.m. ET) Live Dial-in #: 888-747-4632 or 913-312-0969 Replay Dial-in #: 888-203-1112 or 719-457-0820 Replay Passcode: 1410918
Audio Webcast instructions will be available on Interwoven's Website at http://www.interwoven.com/investors. The call replay will be available starting on January 31, 2008 at approximately 5:00 p.m. Pacific Time for a limited time period.
Cautionary Statement Regarding Forward-Looking Statements This press release contains "forward-looking" statements, including statements about historical results that may suggest trends in our business. These statements are based on estimates and information available to us at the time of this press release and are not guarantees of future performance. Our forward-looking statements include statements about customer demand. Actual results could differ materially from our current expectations as a result of many factors including: our ability to develop new products, services, features and functionality successfully and on a timely basis; customer acceptance of our solutions; changes in customer spending on enterprise content management initiatives; our ability to cross-sell and up-sell additional products into our installed base of customers; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; the success of our strategic business alliances; intense competition in our markets; changes in key personnel; the introduction of new products or services by competitors; and the ongoing consolidation in our markets. These and other risks and uncertainties associated with our business are described in our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Forms 8-K, which are on file with the Securities and Exchange Commission and available through www.sec.gov.
Interwoven, Inc. (NASDAQ: IWOV) is a global leader in content management solutions. Interwoven's software and services enable organizations to maximize online business performance and organize, find, and govern business content. Interwoven solutions unlock the value of content by delivering the right content to the right person in the right context at the right time. Over 4,700 of the world's leading companies, professional services firms, and governments have chosen Interwoven, including Airbus, Amnesty International USA, Avaya, BT, Cisco, Citi, Delta Air Lines, DLA Piper, FedEx, Grant Thornton, Hilton Hotels, HKMP LLP, Hong Kong Trade and Development Council, HSBC, LexisNexis, MasterCard, Microsoft, Samsung, Shell, Sky Italia, Qantas Airways, Tesco, Virgin Mobile, and White & Case. A community of over 25,000 developers and over 300 partners enrich and extend Interwoven's offerings. To learn more about Interwoven, please visit www.interwoven.com.
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