CTRA Centra Software (MM)

Centra Software, Inc. (NASDAQ: CTRA), a leading provider of software and services for online learning and training, today announced financial results for the fourth quarter and year ended December 31, 2005. Fourth Quarter 2005 Results Revenues for the fourth quarter of 2005 were $9.8 million, compared with $9.4 million in the third quarter of 2005 and $10.5 million in the fourth quarter of 2004. Software license revenue for the fourth quarter of 2005 was $2.9 million, or 29 percent of total revenues, compared with $2.6 million in the third quarter of 2005 and $3.7 million in the fourth quarter of 2004. Software services revenues were $2.8 million for the fourth quarter of 2005, or 28 percent of total revenues, compared with $2.5 million in the third quarter of 2005 and $2.7 million in the same period last year. Maintenance and professional services revenues were $4.2 million in the fourth quarter of 2005, or 43 percent of total revenues, compared with $4.3 million in the third quarter of 2005, and $4.1 million in the fourth quarter of 2004. Net income for the fourth quarter was $1.0 million, or $0.04 per basic share, including charges of approximately $620,000 or $0.02 per share, for merger-related costs associated with the prospective business combination with Saba Software, Inc. This compares with net income of $795,000, or $0.03 per share, in the third quarter of 2005, including charges of approximately $310,000, or $0.01 per share, for merger-related costs associated with the prospective business combination with Saba Software, Inc. Net loss for the fourth quarter a year ago was $1.3 million, or $0.05 per share. Gross margin percentage for the fourth quarter of 2005 was 82.7 percent, compared with 81.8 percent in the third quarter of 2005 and 81.0 percent in the fourth quarter of 2004. Centra's cash, cash equivalents and short- and long-term investments totaled $26.6 million as of December 31, 2005, compared with $24.5 million as of September 30, 2005 and $25.9 million as of December 31, 2004. The Company's days sales outstanding (DSO) was 60 days at the end of the fourth quarter, compared with 55 days at the end of the third quarter of 2005 and 68 days at the end of the fourth quarter of 2004. 2005 Results Revenues for 2005 were $38.5 million, compared with $38.1 million reported in 2004. Net income for 2005 was $990,000, or $0.04 per basic share. This compares with a net loss of $11.1 million, or $0.41 per share in 2004. About Centra Online learning and training solutions from Centra create workforce efficiencies and enable organizations to share and exchange business-critical information with geographically distributed customers, partners, prospects and employees. Centra enables groups to work faster and more effectively by automating critical learning and training initiatives online through virtual classrooms, online meetings and Web conferences. From enterprise-application training and support to workforce development and more, Centra's software and services help organizations deliver critical information and skills to support their most challenging business initiatives. Currently available in nine languages, Centra solutions can be deployed as on-site software or through its ASP service. Organizations across every major industry and market sector choose Centra, including Wyndham International, Weyerhaeuser, Underwriters Laboratories, BMW and Stanford University. Headquartered in Lexington, Massachusetts, Centra serves a worldwide customer base throughout the Americas, Europe, Asia and Australia. For more information, visit www.centra.com. Centra is a registered trademark of Centra Software, Inc. All other trademarks referenced herein are the property of their respective owners. -0- *T CENTRA SOFTWARE, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in thousands) (Unaudited) December December 31, 31, 2004 2005 Assets Current assets Cash, cash equivalents and short-term investments $25,135 $26,568 Restricted cash 233 - Accounts receivable, net 7,887 6,598 Prepaid expenses and other current assets 1,374 1,967 ------- ------- Total current assets 34,629 35,133 Property and equipment, net 1,440 999 Long-term investments 743 - Restricted cash 400 400 Other assets 16 15 ------- ------- Total assets $37,228 $36,547 ======= ======= Liabilities and stockholders' equity Current liabilities Current maturities of long-term debt $ 1,049 $ 709 Accounts payable 939 376 Accrued expenses 5,677 4,288 Deferred revenue 14,360 14,175 ------- ------- Total current liabilities 22,025 19,548 Long-term debt, net of current maturities 1,012 618 Total stockholders' equity 14,191 16,381 ------- ------- Total liabilities and stockholders' equity $37,228 $36,547 ======= ======= CENTRA SOFTWARE, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS For the Three- and Twelve-Months Ended December 31, 2004 and 2005 (Amounts in thousands, except per share data) (Unaudited) Three Months Twelve Months ended December ended December 31, 31, 2004 2005 2004 2005 Revenues License $ 3,678 $ 2,859 $ 11,650 $10,514 Software services 2,667 2,816 10,338 10,689 Maintenance and professional services 4,125 4,172 16,076 17,331 ------- ------- -------- ------- Total revenues 10,470 9,847 38,064 38,534 ------- ------- -------- ------- Cost of revenues License 83 136 277 551 Amortization of acquired developed technology - - 233 - Software services 602 552 2,386 2,226 Maintenance and professional services 1,305 1,017 4,549 4,271 ------- ------- -------- ------- Total cost of revenues 1,990 1,705 7,445 7,048 ------- ------- -------- ------- Gross profit 8,480 8,142 30,619 31,486 ------- ------- -------- ------- Operating expenses Sales and marketing 5,681 3,099 22,496 13,586 Product development 2,140 2,041 10,029 8,757 General and administrative 2,047 2,201 8,630 8,753 Restructuring charges - - 788 - ------- ------- -------- ------- Total operating expenses 9,868 7,341 41,943 31,096 ------- ------- -------- ------- Operating (loss) income (1,388) 801 (11,324) 390 Other income, net 67 206 219 600 ------- ------- -------- ------- Net (loss) income $(1,321) $ 1,007 $(11,105) $ 990 ======= ======= ======== ======= Basic net (loss) income per share $ (0.05) $ 0.04 $ (0.41) $ 0.04 Diluted net (loss) income per share $ (0.05) $ 0.03 $ (0.41) $ 0.03 ------- ------- -------- ------- Weighted average shares outstanding Basic 27,567 28,277 27,367 27,953 ------- ------- -------- ------- Diluted 27,567 28,885 27,367 28,777 ------- ------- -------- ------- *T