InfoVista reports solid financial results for Q4 and FY09 in tough economic environment

Total revenues for the quarter were €11.5 million, up 4% from the €11.1 million reported for the comparable quarter last year. For the year ended June 30, 2009, total revenues increased 1% to €45.2 million. Operating profit increased to €1.4 million for the fourth quarter and €2.1 million for the fiscal year, as compared to breakeven and €0.8 million respectively for the same periods last year. InfoVista posted a net profit for the fourth quarter of €1.2 million versus €0.7 million in the comparable quarter last year, while for the full year InfoVista recorded a net profit of €2.2 million versus a net loss of €1.3 million in the previous fiscal year.

Commenting on the Company’s performance, Philippe Ozanian, Chief Executive Officer, said: 

• In EMEA, despite lower revenues in traditional European markets, total revenues were sustained by good momentum in emerging markets for the fourth quarter and fiscal year.
• Notwithstanding the improvement achieved in Q4, the underlying environment remained very tough in North America. In the quarter, InfoVista recorded €0.8 million in revenues related to the final portion of the multi-year license agreement with Microsoft signed in December 2006. No revenues from Microsoft had been recorded in the comparable quarter last year. InfoVista recorded €4.2 million and €3.7 million, respectively, of license revenues for fiscal year 2009 and 2008 from the Microsoft deal. On a constant dollar basis, total revenues for the Americas would have decreased year on year by 4% and 11% for the quarter and full year, respectively, as compared to similar periods in the prior year. 
• Solid execution in the Asia-Pacific region, especially in Southeast Asia and Australia, helped InfoVista improve its operational performance for the fourth quarter and fiscal year.
• In the fourth quarter, InfoVista derived the majority of its revenues from its direct sales channel, which accounted for 69% of the total. The service provider market generated 68% of total revenues for the quarter.

• Gross margin in the fourth quarter stood at 79% of total revenues, unchanged from the same quarter of the prior year. Gross margin for the fiscal year was 78% versus 79% for the previous fiscal year. The slight drop in gross margin for the full year primarily reflects the growing contribution of services to total revenues.

Operating Expenses

• The sharp drops in total operating expenses in the quarter and full year reflect the well-executed cost-reduction program announced in January 2009.
• Sales & marketing costs represented 33% and 34% of total revenues for the fourth quarter and full year, respectively. The decline in sales & marketing expenses primarily reflects lower personnel costs following the cost-reduction program initiated in the third quarter, along with ongoing cost optimization.
• Research & development costs represented 20% and 22% of total revenues for the fourth quarter and full year, respectively. For the fiscal year, savings arose from a French R&D tax credit benefit of €0.8 million claimed for past periods as well as the improved management of development costs.  For the quarter, research and development costs benefited from €0.3 million in tax credit, along with cost reduction from the January 2009 plan.
• General & administrative costs represented 12% and 13% of total revenues for the fourth quarter and full year, respectively. Lower executive management costs, along with other cost-reduction initiatives, accounted for the decline.
• As at June 30, 2009, InfoVista had 229 employees.

• Days Sales Outstanding (DSO) stood at 65 days for the fourth quarter, as compared to 97 days in the comparable year-earlier quarter. This improvement resulted from stronger cash collections in the fourth quarter as compared to the prior year.
• As at June 30, 2009, the Company’s cash, cash equivalent and current financial assets amounted to €28.6 million, as compared to €23.0 million at the end of the prior quarter and €21.9 million at June 30, 2008. The €6.7 million annual increase is primarily due to positive operating cash flow, despite €1.1 million paid in the second half for restructuring and €1.7 million used on the company stock-buyback program, primarily in the first half of the fiscal year. In the fourth quarter, InfoVista recorded particularly strong positive cash flow of €5.6 million, with approximately €1 million in net cash received for R&D tax credits along with significant cash collections.
• As at June 30, 2009, InfoVista had a total of 18,007,329 and 17,466,173 shares issued and outstanding, respectively. During the fourth quarter, the board of directors cancelled 650,000 treasury shares. In July 2009, our board of directors demonstrated their confidence in the value of the Company’s strategy by renewing its stock buyback program. As a result, the Company is able to purchase up to 10% of its total shares, which represents up to 1,259,576 shares as of June 30, 2009.

• InfoVista launched WAN optimization assurance and unification of network and application performance management. The launch incorporated the announcement of two new products, 5View Service Data Manager (including Application Usage Manager) and Application Optimization Manager. 
• InfoVista also announced the release of VistaInsight® for Networks 3.1 along with two new Knowledge Packs for Mobile and Broadband operators. These new products extend InfoVista’s capabilities beyond the core network, while supporting additional network equipment vendors.

Download the CONSOLIDATED INCOME STATEMENTS and CONSOLIDATED BALANCE SHEETS (pdf)