Interwoven Announces Record Fourth Quarter and Year-End Financial Results
Fourth Quarter Revenue Growth of 11%; Full Year Non-GAAP Net Income Growth of 23%
San Jose, Calif. - January 23, 2009 - Interwoven, Inc. (NASDAQ: IWOV), a global leader in content management solutions, today announced financial results for the three months and year ended December 31, 2008.
Interwoven reported total revenues of $69.8 million for the fourth quarter of 2008, an increase of 11% from total revenues of $62.9 million for the fourth quarter of 2007. Net income for the fourth quarter of 2008, calculated in accordance with generally accepted accounting principles, was $10.7 million, or $0.23 per share, compared to net income of $10.7 million, or $0.23 per share, for the same period in 2007. On a non-GAAP basis, Interwoven reported a net income of $10.8 million for the fourth quarter of 2008, or $0.23 per share, compared to non-GAAP net income of $8.2 million, or $0.18 per share, for the fourth quarter of 2007.
For the year ended December 31, 2008, Interwoven reported total revenues of $260.3 million, an increase of 15% from total revenues of $225.7 million for 2007. Net income for the year ended December 31, 2008, calculated in accordance with generally accepted accounting principles, was $32.0 million, or $0.69 per share, compared to a net income of $23.7 million, or $0.51 per share, for 2007. On a non-GAAP basis, Interwoven reported net income of $34.8 million for the year ended December 31, 2008, or $0.74 per share, compared to non-GAAP net income of $28.3 million, or $0.61 per share, for 2007.
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 below 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.
As of December 31, 2008, cash and cash equivalents and short-term investments totaled $185.2 million and deferred revenues totaled $74.7 million.
"The fourth quarter capped off another year of solid performance for Interwoven, a year in which we posted record revenues, earnings, and cash flows," said Joe Cowan, CEO at Interwoven. "What's most remarkable, however, is the continued customer momentum we experienced, with over 400 new customers added in 2008 alone. I'd like to thank our customers, partners, and stockholders for their continued support, and recognize the accomplishments of our team. I'm proud of their contributions to our business."
Customer Success Highlights
During the quarter, Interwoven added 129 customers, bringing the company's total to over 4,700 customers worldwide.
Notable customer orders included: adidas, Aetna Inc., Allstate Corporation, AON Services Corporation, Avon Corporation, Bank of America, ENI S.p.A., Citibank, DLA Piper, Epson Singapore, Fuji Electric Japan, Georgia-Pacific, Hilton Hotels, Loma Linda University Adventist Health, Meridian, Morgan Cole, National Instruments, Nikon Corporation, Ping An Insurance Company of China, Plesner Svane Gronborg, Reed Elsevier, Inc. (LexisNexis), Rogers Communications, SJ Berwin, Tesco, and The Carphone Warehouse Group.
During the quarter, Interwoven announced that Akin Gump Strauss Hauer & Feld LLP, a leading international law firm with more than 900 lawyers and advisors in the United States, Europe, Asia and the Middle East, selected the full Interwoven suite of legal industry solutions to create and deliver a unified and comprehensive information management system. Akin Gump - known for its innovation and forward-thinking - will leverage Interwoven's proven approach to drive firm productivity and growth.
Also during the quarter, executives with AvisBudget Group, Inc., parent of Avis Rent A Car, and Interwoven partner Roundarch presented information on the upcoming re-launch of AVIS.com. The new site is leveraging Interwoven technology to deliver a richer consumer experience and increase revenues. Presentations were delivered to Forrester's Consumer Forum as well as Interwoven's well attended annual Analyst Day program.
Product News and Industry Leadership Highlights
Interwoven DevNet Developer Community Crosses 25,000 Member Mark - In the fourth quarter, Interwoven announced that its DevNet developer community surpassed the 25,000 membership mark. DevNet was created in 2001 to provide the global community of Interwoven developers and customers with a knowledge-sharing forum to exchange ideas with community peers, showcase skills, and gather new techniques and best practices. In addition, Interwoven launched the TeamSite SitePublisher Component Contest, challenging DevNet members to build creative, flexible, and reusable Website components.
Interwoven Included in Gartner Marketscope for E-Discovery Software Product Vendors - For the first time, Interwoven was included in analyst firm Gartner's eDiscovery Marketscope. In the report, Gartner wrote: "(Interwoven's) purchase of Discovery Mining is consistent with the company's overall strategy of fielding best-of-breed offerings for particular vertical and horizontal content-based applications."
Interwoven Received Top Honors in Law Technology News Awards - In December, Law Technology News (LTN) announced that Interwoven had won Gold and Silver awards in LTN's sixth annual Technology Awards. This was the second straight year that Interwoven has won a top honor.
Interwoven Composite Application Provisioning Solution Enhanced - In the fourth quarter, Interwoven announced an enhanced version of the 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 delivers enhanced usability and additional automated code release capabilities.
Business Highlights
Interwoven Added to Standard & Poor's U.S. Index - In November, Standard and Poor's added Interwoven to its SmallCap 600 index. The Index includes companies meeting certain guidelines including requiring the company be based in the U.S., have a minimum market capitalization of $250 million, and have four consecutive quarters of positive earnings.
Interwoven Announces Definitive Agreement to be Acquired by Autonomy - On January 21st Interwoven entered into a definitive agreement to be acquired by Autonomy, the clear leader in enterprise search and the front runner in Meaning-Based Computing. We believe this acquisition will bring together two quality, high-performing software companies who share a vision to fundamentally change the way organizations discover, analyze and manage information. The combined company is expected to have more than 2,000 employees and 20,000 customers. For more information on the acquisition, please refer to the company's proxy statement, when it becomes available, and other relevant materials filed by Interwoven with the Securities and Exchange Commission.
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, 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.
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 related to the proposed acquisition of Interwoven by Autonomy. Actual results could differ materially from our current expectations as a result of many factors including: the risk that the proposed acquisition of Interwoven by Autonomy is not consummated; 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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